Court Opinion

ID: 3399592
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:10:43.866539+00
Date Added: 2024-06-11T14:03:01.877229
License: Public Domain

1. The transactions by which Medford reacquired the land here involved were simultaneous, and hence it can not be correctly said that any one conveyance preceded the other in point of time. Therefore Medford did not reacquire *Page 562 
title to the fee, but only an equity subject to the Federal Land Bank deed securing the purchase-money and the excess loaned to him. Given the most liberal interpretation that its language will permit, Code § 29-111 is still limited in its application to the actual title, no more and no less, subsequently acquired. That section was never intended to refer to the fee-simple title when in fact the subsequently acquired title is to the equity only. This view is sustained in Raleigh State Bank v. Williams,150 Miss. 766 (117 So. 365). There it was held that it was immaterial whether the amount secured by the deed to secure debt given by the owner to the purchaser at the foreclosure sale constituted purchase-money or not, since the principle of law whereby the title of the owner inured to the benefit of the second deed gave to the latter no better right than that acquired by the owner. To the same effect see Home Owners Loan Corporation v. Guaranty Title Trust Co., 168 Tenn. 118 (76 S.W.2d 109).
2. At the beginning of division 2 of the majority opinion a sound statement of law defining the consequences upon the title of a sale under a power of sale is made. It is there said that such a sale "not only extinguishes the right of redemption, but divests all junior mortgages and other junior incumbrances on the property." That opinion goes on to state that such junior liens are detached from the property sold and attach to any proceeds from the sale in excess of the first lien. Having thus stated the law that is plain and explicit, and which enables every one to ascertain with certainty the condition of the title after such sale and eliminates all necessity for giving further attention to junior liens, the majority opinion then proceeds to obliterate this certainty by writing into the opinion a will o'the wisp, thereby placing the title to such property in doubt and uncertainty so long as the debts represented by junior liens have not been paid. There can be no dissent from the assertion that an unambiguous Code section must be given the meaning that its language clearly implies and that the legislative intent as indicated by the language of the statute must be given effect. Every word of section 29-111 manifests a clear legislative intent to require a grantor to live up to his word and to estop him from profiting by his own wrong. Nothing in that section indicates a legislative intent or purpose to impose any restriction or obligation upon a grantor who has been guilty of no *Page 563 
wrong, and who has conveyed only property which he had a right to convey, and whose conveyance has never been challenged. Medford purported by his deed to the Bank of Lenox to convey an equity of redemption in the lands therein described. His deed has not been challenged, nor has his right to execute the same, nor indeed can the grantee therein at this time deny that it received everything that the deed purported to convey. Yet the majority opinion, claiming authority under the above Code section, deals with Medford as if he had been guilty of wrong, by imposing an unauthorized restriction upon his right to subsequently become the owner of that property.
Medford conveyed to the Bank of Lenox, not the legal title to the land described, but only the equity of redemption therein.Hockenhull v. Oliver, 80 Ga. 89 (4 S.E. 323, 12 Am. St. Rep. 235); Chapman v. Ayer, 95 Ga. 581 (23 S.E. 131);Williams v. Foy Mfg. Co., 111 Ga. 856 (36 S.E. 927);Citizens Bank of Moultrie v. Taylor, 155 Ga. 416
(117 S.E. 247); Exchange National Bank of Fitzgerald v. Pearsons-TaftCo., 159 Ga. 168 (125 S.E. 377); Smith v. Farmers Bank ofGlenwood, 165 Ga. 470 (2) (141 S.E. 203). The warranty clause in that deed applies to the property which the deed conveyed (equity of redemption). Sweet v. Brown, 53 Mass. 175 (45 Am. D. 243); Merritt v. Harris, 102 Mass. 326; Van Rensselaer v.
Kearney, 52 U.S. 297 (13 L. ed. 703); Zandri v. Tendler,123 Conn. 117 (193 A. 598, 111 A.L.R. 1280); White v.Stewart, 131 Ga. 460 (62 S.E. 590); Dailey v.Springfield, 144 Ga. 395 (87 S.E. 479, Ann. Cas. 1917D, 943). In Zandri v. Tendler, supra, it is said: "If the title purporting to be conveyed is an equity of redemption, the warranty and estoppel arising out of it will extend no further than to protect the grantee from loss of that title." In ruling on the same question, our own court in White v. Stewart, supra, said: "If a deed purport to convey the right, title, and interest of the grantor in and to certain described realty, instead of conveying the realty itself, the covenants in the deed will be limited to the right or interest which the grantor has in the property." The principle announced in that ruling is that the warranty clause of the deed is limited solely to the property which the deed conveys. This principle can not be avoided by an argument that the deed there under consideration purported to convey only the right, title, and interest of the grantor *Page 564 
in the land. Such an interest might be property, and if so the rule makes the warranty clause applicable thereto. Where, as in the present case, the interest conveyed is the equity of redemption, under the above rule the warranty clause of the deed applies only to the equity of redemption. In Dailey v.Springfield, supra, it was held that the deed conveying "a bare contingency or possibility" was void; and this court said: "A covenant of warranty in such deed will not inure to the benefit of the vendee, or his heirs, so as to subject after-acquired property of the vendor to such covenant." In the deed there considered certain lands were described, but instead of purporting to convey the described lands the terms of the deed restricted it to a bare possibility or expectant interest in such lands. The grantor subsequently acquired the identical land described in the deed; but it was held that the warranty clause in the deed not applying to the land itself would not cause his subsequently acquired title to inure to the benefit of the grantee.
The above authorities establish the rule that the warranty clause applies only to the property conveyed by the deed; and I assume that the majority will not dissent from this principle. But the majority contend that the deed from Medford to the Bank of Lenox conveyed the legal title to the land therein described free from incumbrance and that the warranty clause contained therein therefore applies to the land itself. They concede that the deed makes some reference to the pre-existing deed to Metropolitan Life Insurance Company, but assert that the language of the Bank of Lenox deed does not make it subject to the pre-existing lien. The deed to the Bank of Lenox contains the following clause: "It is agreed and understood that the Metropolitan Life Insurance Company holds first mortgage deed on the above described tract in the amount of $6000." The cardinal rule to be applied in construing deeds is that effect must be given to the intention of the parties as disclosed by the provisions of the deed as a whole. Code, § 29-109; Huie v.McDaniel, 105 Ga. 319 (31 S.E. 189); Cobb v. Wrightsville Tennille Railroad Co., 129 Ga. 377 (58 S.E. 862); Keith
v. Chastain, 157 Ga. 1 (121 S.E. 233); Simpson v. Brown,162 Ga. 529 (134 S.E. 161); Henderson v. Sawyer, 99 Ga. 234
(25 S.E. 312). Measured by this rule of construction, what does the deed here under consideration mean? The first and controlling factor is the intention of the parties. The majority make the futile attempt to *Page 565 
escape the compelling weight of this rule of construction, as it is clearly stated in § 29-109, supra, in the following language, "but the intention of the parties, from the whole instrument, should, if possible, be ascertained and carried into effect," by citing Code, § 85-503, and quoting an excerpt therefrom. That section, while declaring that a conveyance should be construed to convey the fee unless a less estate is mentioned, further asserts that if a less estate is expressly limited, "the court shall not by construction increase such estate into a fee, but, disregarding all technical rules, shall give effect to the intention of the maker of the instrument, as far as the same is lawful, if the same can be gathered from its contents; and if not, the court may hear parol evidence to prove the intention." Thus the very section cited by the majority makes the intention of the parties the ultimate and controlling consideration and goes so far as to provide that this intention may be shown by parol evidence. There is no room for a reasonable doubt as to the intention in the present case. The parties to the deed removed all possibility of doubt by writing into the face of the deed their intention. It is there written that those parties agreed and that those parties understood that there was a prior deed for $6000 on the land described. If both the grantor and the grantee understood this fact and if they both agreed that it was a fact, as declared in the deed, then this attitude of the parties is irreconcilable with the theory that either of them intended that the deed conveyed something that they both understood and agreed that it could not convey. In an attempt to answer this argument, the opinion resorts to the assertion that the grantor inserted this clause to avoid a possible criminal prosecution for cheating and swindling, under the Code, §§ 26-7401, 26-7410, 61-9901. By such argument the majority assert that the grantor, knowing he had no right to convey the fee and having made this fact clear to the grantee, yet intended to and actually did by the deed convey that which they both agreed that he did not own. They place the grantor in the ridiculous position of seeking in the one case to carefully guard against any possible future criminal prosecution and at the same time recklessly and carelessly intending to commit the very act which alone could constitute a basis for such prosecution. Their construction of the deed makes both the grantor and grantee intend to do the perfectly useless act of conveying something that could not be conveyed, by *Page 566 
ignoring the plain statement of those parties to the contrary as appears in the deed itself. How is it possible for any one to conclude that after agreeing that there was another deed and that it was a prior deed, the parties intended to make the deed then being executed a first or prior deed? In my judgment a construction of this deed to the effect that it was not made expressly subject to the prior deed sacrifices substance for theory and is a refusal to recognize the unambiguous language found in that deed. In Henderson v. Sawyer, supra, it is said: "Since the adoption of the Code, a mere repugnance in words will not authorize a court to hold that there is a real repugnance in a deed, and consequently to annual the latter of two inconsistent clauses therein, when the actual intention ofthe maker, viewing the instrument as a whole, can be arrived atwithout serious difficulty." (Italics mine.) Courts are not authorized to refuse to give full effect to the intention of the parties to a deed when that intention can be ascertained from the deed as a whole. In Beckcom v. Small, 152 Ga. 149
(108 S.E. 542), the second security deed stated that "There is a prior claim for $25,000.00 in favor" of a named person, the grantee in the first deed, and this court construed that clause to mean that the deed containing it was subject to the prior deed referred to therein. I am unable to see how, in the face of such previous rulings of this court together with the language of the clause in the present deed above quoted, it can be held that the Bank of Lenox deed is not expressly subject to the prior deed to the Metropolitan Life Insurance Company. If this fact be conceded, then the controlling rulings of the majority on this issue are untenable on principle.
The majority correctly hold that, under the Code, § 29-111, if the grantor expressly or impliedly asserts that his deed or mortgage is a first lien when in fact there is an outstanding prior lien on the property, his after-acquired title will inure to the benefit of the grantee. But, not content with announcing this sound interpretation of the meaning of the Code section, that opinion goes further and erroneously asserts that the section applies where the second security deed expressly recites that it is subject to a prior security deed. As authority for this ruling they quote from Bowlin v. Hemphill, 180 Ga. 435
(supra), and cite Caffey v. Parris, 186 Ga. 303 (supra),Horton v. Johnson, 187 Ga. 9 (supra), and Perkins v.Rhodes, 192 Ga. 331 (15 S.E.2d 426). In my opinion only *Page 567 
the first and last cases relied upon are applicable to the ruling made. The second and third cases dealt with different questions and are not authority for the ruling made. Bowlin v.Hemphill, supra, was a Per Curiam decision, with Justices Bell and Hutcheson dissenting. There the majority cited, for support of the ruling, Hill v. O'Bryan, 104 Ga. 137 (2) (30 S.E. 996), where it was merely held that where one gives a mortgage on land in his possession, to which he has no title, his subsequently acquired title inures to the benefit of the grantee; and Isler v. Griffin, 134 Ga. 192 (4) (67 S.E. 854), where it was merely held that a remainderman who executed a deed during the lifetime of the life-tenant, purporting to convey his interest as a remainderman, would not be permitted to repudiate and avoid his deed at the death of the life-tenant. Thus it is clear that the cases relied upon do not in language or principle support the ruling made. On the other hand, the dissenting opinion cited Williams v. Foy Mfg. Co., 111 Ga. 856 (3) (36 S.E. 927), which held that when the owner of land conveys it by security deed he retains only an equity of redemption, and that a second deed from such grantor conveys that equity of redemption and that only; White v. Stewart, supra, which held that the warranty clause in a deed applies only to the property conveyed thereby; and Daily v. Springfield, supra, which held that the warranty applies only to the property conveyed by the deed containing the warranty. Thus the cases cited by the minority abundantly support their position and demonstrate the unsoundness of the ruling made by the majority. The decision in Perkins v.Rhodes, supra, was not by a full bench, and is unsound for the same reasons stated in this dissent.
The majority cite a number of decisions from other jurisdictions. Admittedly courts of other jurisdictions are not agreed upon the question here under consideration, but I think an examination of the published decisions will disclose that none are better considered and contain sounder reasoning than Zandriv. Tendler, supra. There it is pointed out by the Connecticut court that many of the decisions of other jurisdictions announcing the other view contain obiter, are controlled by statute, or go off on points other than the main question here under consideration, and therefore are not persuasive as authority. The majority cite Ayer v. Philadelphia c. Brick Co.,157 Mass. 57, 31 N.E. 717; but an examination of the *Page 568 
opinion in that case discloses that the decision was predicated upon the peculiar language of the warranty clause. In the granting clause there dealt with, the land conveyed was stated to be conveyed subject to a certain right of drainage, a certain easement, and "the mortgage hereinafter named." The warranty clause provided that the grantor "shall warrant and defend the same to the said grantees, and their heirs and assigns, forever, against the lawful claims and demands of all persons, except the right of drainage and the easement aforesaid." In the opinion it was said: "If the granting part of the deed stood as now, and was followed by general covenants with no exceptions, the warranty would be held to be limited to what purported to be conveyed, — that is, to the land subject to the mortgage." Thus it is clearly demonstrated that the decision there was predicated upon the fact that the warranty expressly eliminated two of the three conditions stated in the granting clause, but omitted to withdraw from the warranty clause the first mortgage; and, as stated by the court, had this not been true, a diametrically opposite conclusion would have been reached. In Otter v. Lord Vaux, 43 Eng. Rep. 1381, the court expressly placed its decision upon the construction it gave to the reacquiring by the owner of the property from the first lienholder. The court construed this conduct of the grantor to be tantamount to his merely paying the debt secured by the first lien, thereby allowing the second lien to become a first lien; and the court stated expressly that a different case would have been made if this had not been true and if the property had been reacquired through a third person. The majority in commenting on the decision in Murray v. Newsom,111 Fla. 193 (149 So. 387), state that although the language of the warranty is not disclosed, yet it is apparent from the decision that the instrument conveyed only such interest as the grantor had in the premises. Whether this observation be justified or not, the Florida court there held that the title acquired after the foreclosure of the first lien did not inure to the benefit of the junior lien, and in concluding the opinion it was said: "Mickler, as the purchaser of the land at foreclosure sale, acquired the Greys' title divested of the two liens. Acquiring the title from Mickler afterwards was no act of bad faith. It was not the setting up of an outstanding after-acquired title which was not affected by the mortgage. The Greys did not impeach or nullify their deed of mortgage. There *Page 569 
was no element of fraud in the transaction nor did the title subsequently acquired by the Greys directly or impliedly contradict their solemn affirmations in their mortgage to Hanan." Another case which the majority opinion relies upon, with the comment that it "seems almost identical in all respects as to the question under discussion," is Martin v. Raleigh State Bank,146 Miss. 1 (111 So. 448, 51 A.L.R. 442). I have examined the decision in that case, and find that it expressly recites that the Mississippi Code provides that a conveyance without warranty shall operate as a statutory quitclaim and release, and that a quitclaim and release shall estop the grantor and his heirs from asserting a subsequently-acquired title to the land conveyed. This provision of the statute of the State of Mississippi not only authorized but required the ruling there made, and it demonstrates that the decision is no authority whatever for the majority ruling, since Georgia has no such statute. I am confident, in view of the authorities above cited, that the reacquirement of the title to the land involved did not inure to the benefit of the Bank of Lenox, the grantee in the second security deed.
3. The further ruling by the majority that on principles of equity, under the Code, § 20-1006, the Bank of Lenox as the holder of a junior lien was entitled to be heard on the question of applying the $1400 previously paid to the Federal Land Bank, is unsound and can find no support in equitable principles. The fallacy of the majority ruling is found in its treatment of the question as if the fund were subject to some lien or some claim of the Bank of Lenox. That money was the private property of Medford, and he had a perfect right voluntarily to apply it to the legitimate and legal claims of the Federal Land Bank. The Bank of Lenox had no title to or interest in any part of that fund. That bank made no effort to collect any part of that money for application to its claim against Medford, but stood idly by while the Federal Land Bank, diligently and energetically looking after its own interests and affairs, made the collection from its debtor. In Newton v. Nunnally, 4 Ga. 356, it was held: "A plaintiff having two executions which are liens on money, in the hands of the sheriff, arising from the sale of defendant's property, can not apply the fund to either fi. fa. at his option;but the law will appropriate the proceeds of the debtor'sproperty to the older lien." (Italics mine.) *Page 570 
In Riverside Milling  Power Co. v. Bank of Cartersville,141 Ga. 578 (3-a) (81 S.E. 892), it was said: "In this case the other debtors who took no part in the contract, or in the making and application of the payment, have no ground for complaint." I repeat, the Bank of Lenox, which took no part in the collection of this fund, has no right to be heard on the question of applying that payment to legal claims of the Federal Land Bank. The only parties having an interest therein and hence a right to be heard on the question of application are Medford and the Federal Land Bank. Therefore, instead of a case where a third person is entitled to be heard, as the majority rules, this presents a simple matter between the debtor and creditor, with no third parties entitled to speak; and in such a case it can not be successfully denied that the law will apply the payment to the lesser secured or older claim. High Co. v. Arrington, 45 Ga. App. 392
(supra). If the other rulings of the majority are to stand, thereby rendering the money advanced by the Federal Land Bank, in excess of the amount required to repurchase the land, inferior in rank to the deed held by the Bank of Lenox, then on application of the above principles this excess, being the least secured, is the portion of the claim to which a court of equity should apply the payments in question. For all of the reasons stated, I am unable to agree with the majority, and feel justified in stating fully the grounds of my dissent, because of the importance of the questions involved.