Court Opinion

ID: 5586074
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:53:53.709605+00
Date Added: 2024-06-11T08:36:15.060515
License: Public Domain

Atkinson, J.,
dissenting. The distinguishing feature in this instrument is the clause “that when said note together with all accrued interest and costs, shall have been fully paid, this deed is to become void, and the clerk of the superior court of Barrow County is hereby granted authority to cancel this deed of record.” As the so-called deed is to become void by payment of the note, payment will completely extinguish all interest of the grantee under this instrument, and consequently the clause is a defeasance clause.
In Scott v. Hughes, 124 Ga. 1000 (supra), decided by all the Justices, it was held: “A paper in the usual form of a warranty deed, but containing a clause providing that should the grantor pay to the grantee a stated sum of money by a given date, the instrument ‘shall be void, otherwise in full force/ is a mortgage, and not a deed.” In the opinion it was said by Presiding Justice *78Cobb.: “It is often a question difficult of solution as to whether a paper executed for the purpose of securing the payment of a debt passes title to the grantee, or is a mere mortgage. In Burckhalter v. Planters Bank, 100 Ga. 432 (supra), Mr. Justice Atkinson said: 'The test, then, whether an instrument be a deed or' mortgage is necessarily whether the interest acquired by the holder of an instrument is such an interest as can be extinguished by the voluntary act of the debtor alone. If it can be, the instrument is defeasible, and does not pass . . an absolute title/ The ordinary mortgage is usually in the form of a conveyance of an absolute title, but with a defeasance clause added. That the defeasance clause is not in the usual form or usual place does not make it any the less a defeasance clause. It is distinctly provided in the paper in question that if the amount which is specified as the consideration of the deed is paid by a given date, the instrument 'shall be void, otherwise in full force/ The language of this deed as to what will operate to defeat it is almost in terms the defeasance clause usually found in a technical mortgage. The paper was a mortgage, and not a deed. See Ward v. Lord, 100 Ga. 407 [28 S. E. 446]; Lubroline Oil Co. v. Athens Bank, 104 Ga. 380 [30 S. E. 409].” All of the foregoing is plainly applicable, to the question now for decision, and is sufficient to require a ruling that the instrument under consideration is a mortgage, and not a deed.
In the recent case of Sims v. Jones, 158 Ga. 384 (supra), decided by all the Justices of this court as now constituted, it was held: “Where an instrument is executed and made payable in the State of North Carolina between citizens of that State, which is in the form of a deed conveying standing timber in this State, to secure a debt, but which has a defeasance clause declaring the instrument null and void on the payment by the debtor of the sum due, such instrument under the law of Georgia is a mortgage and not a deed, and does not convey the title to the timber, but creates a lien thereon.” It was said in the opinion by Mr. Justice Hill: “The instrument under consideration, while purporting in one portion of it to convey the title, has a defeasance clause in the following language: 'Provided, however, that if the parties of the first part, or their legal representatives, shall pay over to the party of the third part, or to its assigns, the full sum of $21,300, *79according to the terms and conditions named in the note hereby secured, then and in that event this deed shall be utterly null and void; but if default shall be made in the payment of said note at maturity, or at such time thereafter as may be agreed upon by the parties in writing, then and in that event it shall be lawful, and the party of the second part, demand having been made upon him by the holder of said note, shall proceed to sell the property hereby conveyed at public outcry at the court-house door. . .5 In such a case it has been held that such an instrument is a mortgage and not a deed, and does not convey the title. Loftis v. Alexander, supra; Burchhaller v. Planters Bank, 100 Ga. 428, 432 (28 S. E. 236); Scott v. Hughes, 124 Ga. 1000 (53 S. E. 453)After saying this much, the opinion proceeds by quoting approvingly the above excerpt from the decision in Scott v. Hughes, supra. The test laid down in the foregoing decisions for determining the character of the instrument clearly distinguishes those cases, and the case now under consideration, from the case of Pitts v. Metier, 115 Ga. 281 (supra), in which the instrument involved contained the clause, “reconveyance of said property to be made upon fulfillment of all the conditions of this instrument.” This clause shows that title was intended to pass, otherwise there would be nothing to “reconvey;” also that the grantee would be required to do something in order to place the title back in the grantor. There is no conflict in principle in the eases, but only different results from application of the same principles to instruments that differed essentially. The principle was also recognized in Penton v. Hall, 140 Ga. 235, 238 (78 S. E. 917), where it was said: “It was provided that any increase in personalty should become the property of Penton, the vendor, ‘until the notes and obligations herein specified of said parties of the second part are paid in full.5 This form of words, containing a provision that property which had never belonged to the creditor should be his until the notes were paid, was appropriate for the creation of a mortgage.55 See also McCurry v. Hartwell Bank, 236 Fed. 556 (2).
Hill, J., concurs in the foregoing dissent.