Court Opinion

ID: 9570737
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:25:47.92866+00
Date Added: 2024-06-11T12:15:28.634273
License: Public Domain

Hill, Justice,
concurring specially.
In this case we follow Georgia case law which makes the home buyer (or buyer of other real property) responsible for some debts of the former owner which are incurred by the former owner after the sale of the property. Vidalia Production Credit Assn. v. Durrence, 94 Ga. App. 368 (94 SE2d 609) (1956); Reisman v. Jacobs, 107 Ga. App. 200 (129 SE2d 338) (1962). See also Coursin v. Atkinson & Griffin, Inc., 230 Ga. 643 (198 SE2d 675) (1973).1 This problem is critical in this state because we have no means for closing "open end” or "dragnet” clauses in security deeds upon the transfer of the real estate or the grant of a "second mortgage.”
The weight of authority in this country would bar *523priority to the grantee of an "open end” security deed if such grantee chooses to make further advances to the original grantor after receiving notice of the second mortgage or of the grantor’s transfer of the property to another. Annot. 138 ALR 566 (1942); American Law of Property, § 16.74 (1952); Thompson on Real Property, § 4747 at nn. 80, 82 (1958); 55 AmJur2d 915, Mortgages, § 1090; Note, 21 Okla. L. R. 79 (1968). Some jurisdictions allow the constructive notice of recording to subordinate subsequent advances, others require actual notice to the senior lienholder while Vermont requires that the senior lienholder be expressly notified that no further advances are to be made on the first security. Patch & Co. v. First Nat. Bank, 90 Vt. 4 (96 A 423) (1916). Without such notice provisions, Georgia law provides no clear means of protecting buyers who assume the "open end” obligations of the present owner in purchasing a home. Refinancing of "open end” security obligations and inability to make second mortgages with other lenders is the practical consequence of this inflexible Georgia rule.
Code Ann. § 67-1316 allows only obligations in contract (as distinguished from ex delicto) and between the original parties to fall within the "open end” clause. This modest restriction does not afford home buyers a means of protecting themselves from unnecessary foreclosure. A means of obtaining such protection is sorely needed.

 This rule is also applicable to personal property transactions. Rose City Foods, Inc. v. Bank of Thomas County, 207 Ga. 477 (62 SE2d 145) (1950); Cantwell v. Fulton Nat. Bank, 113 Ga. App. 358 (148 SE2d 95) (1966). See also Code Ann. § 109A-9—204 (5). Rose City Foods, Inc. v. Bank of Thomas County, supra, as well as Vidalia Production Credit Assn. v. Durrence, supra, have been limited in some respects by Code Ann. § 67-1316, discussed below.