Court Opinion

ID: 5582905
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:44:49.466553+00
Date Added: 2024-06-11T08:36:08.429126
License: Public Domain

Beck, P. J.
(After stating the foregoing facts.) Under the evidence in the case the direction of a verdict in favor of the defendant on the second trial was error. The decision made when the case was here before is not controlling upon the question now involved under the evidence; for the plaintiff himself testified that he had no notice whatever, at the time of taking the transfer of the bond for title, that the bank had any other claim against Loomis than that for which his promissory note in the sum of $560 had been given on March 24, 1914, and therefore had no notice that on May 25, 1915, Loomis had executed to the bank his promissory nóte for the sum of $2,000, stipulating therein that “said bank is hereby expressly authorized to retain any general or special deposit, collateral, real or personal security, or the proceeds thereof, belonging to either of us, now or hereafter in possession of it during the time this note remains unpaid, and before or after maturity hereof may apply the same to this or any other debt or liabilities of either of us to- said bank, due or to become due.” If Patterson had been put upon notice of the existence of the $2,000 note just referred to, or there had been any stipulation in the bond for title or on the face of it that the deed had been executed to secure any other indebtedness, that fact would have been sufficient to bring the case within the ruling made in the case of McClure v. Smith, 115 Ga. 709 (42 S. E. 53), where it was held that under somewhat similar circumstances the purchaser of property which had been conveyed to secure a debt was bound by the status existing between the maker and holder of the security deed at the time he bought. But in the case just cited it appeared that a written notation had been ihade on the bond for title of the subsequent loan; and that made a case differing in a very material particular from the present one. And this case differs very materially from the case as made at the former trial, in that there was, as appears from the report of that case, a distinct allegation, in the plea which was stricken, to the effect that Patterson, the transferee of the bond for title, took with full notice of the loan of $2,000; but on the last trial, evidence was submitted that the transferee did not *666have notice of the $2,000 loan for which was given the note containing the stipulation recited above. We have the case of one holding a bond for title as a transferee, in which the obligor has undertaken absolutely to execute a deed of conveyance upon payment of a specified debt, and the transferee has no notice that prior to taking the assignment of the bond for title any other loan has been made to the original obligee in the bond; and it can not be held that the obligor in the bond could make further advances to the obligee, agreeing with him that a subsequent loan shall be secured by the former deed, so as to bind a subsequent transferee of the bond for title, who had no notice of this new encumbrance upon the property, for the conveyance of which the bond ivas given. It may Avell be that if one conveys by,a warranty deed an absolute title to another, and the deed, though absolute in form, is merely to secure a debt, the grantor in such deed upon borrowing other sums from the grantee, his creditor, may agree that the repayment of the further loan shall be secured by -the same deed formerly executed, and that this Avill be binding between them; but if the grantee in such a deed executes and delivers to his grantor a bond, for title conditioned to reconvey upon the payment of a specified sum, he can not aftenvards, though the debtor agreed in Avriting that it should be secured by the deed referred to, set up, as against the transferee without notice of the bond for title, the fact of the additional loan, and thereby defeat a demand for specific performance.

Judgment reversed.

All the Justices concur.