Court Opinion

ID: 5577371
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:28:26.762082+00
Date Added: 2024-06-11T08:35:58.779835
License: Public Domain

Holden, J.,
dissenting. I can not concur in the judgment of the other members of the court, but must dissent therefrom. The deed in question expressly states that it was made “in order to indemnify them, the said indorsers, against loss by reason of said indorsement,” and further declares, “the intention of this deed being for the express purpose of vesting the title of the property herein conveyed in the said parties of the second part, for the use and benefit of them, the said indorsers.” The indorsers were not creditors of the grantor. The fact that authority was given-for a sale-of the property and the payment of the proceeds thereof to the pajree of the note did not make the deed one of Ssignment. The cardinal rule of construction of instruments in writing is to arrive *834at the intention of the parties. The intention of the parties to this instrument was that the deed should operate merely as a security to the indorsers. As before stated, the deed expressly declares that it is made “in order to indemnify them, the said indorsers, against loss by reason of said indorsement,” and the Civil Code, § 2983, provides: “If the principal executes any mortgage or gives other security to the surety or indorser to indemnify him against loss by reason of his suretyship, the surety or indorser may proceed to foreclose such mortgage, or enforce such other lien or security, as soon as judgment shall be rendered against him on his contract.” In Importers Bank v. McGhees, 88 Ga. 702, 708 (16 S. E. 27), in discussing the section just quoted, the court says: “We think this prescribes a rule which was intended to be general, and that it comprehends all cases of the class mentioned. By clear implication it negatives any right of foreclosure until the surety or indorser has paid something on the debt, or judgment has been rendered against him on his contract. In the present case neither of these events has occurred. The indorser is consequently without any right to inaugurate any proceeding to foreclose the mortgage. As to him the mortgage is immature, there has been no breach of its condition, it is not yet due and payable and may never become so. Tt logically follows that the creditor can not proceed on his own behalf to enforce the mortgage, although the petition 'alleges that the indorser, as well as the principal debtors, is insolvent. Notwithstanding decisions of some other courts to the contrary, there is manifestly no element of trust in a mortgage of this character. It does not by its own vigor devote or appropriate the property embraced in it to the payment of the debt, but only to the indemnity of the indorspr in the event he should sustain loss by reason of his indorsement, and it is recited that he indorsed the notes for accommodation.” Under the code section above quoted, the indorsers would have no right to exercise the power of sale contained in the deed to them until judgment had been rendered against them, or until they had paid the debt, or some part thereof. The deed recited that it was made “in order to indemnify them, the said indorsers, against loss by reason of said indorsement,” and further recited, “the intention of this deed being for the express purpose of vesting the title of the property herein conveyed in the said parties of the second part, for the use and benefit of them, the *835said indorsers.” In view of these statements in the deed, and the provision of the code section above quoted (the meaning of which is that the power of sale could not be exercised until judgment has been rendered against the indorsers, or until they have paid the debt, .or some part thereof), the deed, properly construed, conveyed the title to the property simply for the purpose of indemnifying the indorsers, and can not properly be held to be an assignment for the benefit of any creditor or creditors of the maker of the deed.