lawskills
Loading
Did you know you can download our entire database for free?


Resources
[more] 

Georgia Caselaw:
Browse
Greatest Hits

Georgia Code: Browse

(external) Findlaw Georgia Law Resources


This site exists because of donors like you.

Thanks!


Lawskills.com Georgia Caselaw
VERNER v. McLARTY, Executor, et at.
McLARTY, Executor v. VERNER et al.
19774.
19799.
Equitable petition. Before Judge Vaughn. DeKalb Superior Court. May 9, 1957.
HEAD, Justice.
The trial judge did not err in overruling the demurrers to count one, and in sustaining the demurrers to count two of the petition.
Robert P. McLarty, as the duly qualified executor of Julian L. MeYere, who died on May 31, 1956, filed an equitable petition in two counts against Harry Verner and Wall Brothers Realty Company. In substance, count one as amended alleged:
On January 25, 1954, Victor R. Yates conveyed to Julian L. MeYere described real estate, subject to a deed to secure debt from Yates to DeKalb County Federal Savings & Loan Association, dated March 2, 1952. This deed was also subject to a second deed to secure debt given by Yates to M. P. Bostick on March 27, 1952, both deeds to secure debt being duly recorded, and copies of each being attached as exhibits. On November 21, 1952, the deed to secure debt from Yates to Bostick was transferred to Harry Verner, a copy of the transfer being attached as an exhibit. Monthly payments on both deeds to secure debt were due on the first of each month. MeYere made payments for 27 months, between the 6th and 16th days of each month, most of the payments being made around the 10th of each month. MeYere and the holders of the indebtedness mutually departed front the terms of payment, and the payments were accepted without penalty. The last payments made were on April 12, 1956, and were duly accepted. On April 27, 1956, MeYere entered Georgia Baptist Hospital due to a heart condition, from which he died in the hospital on May 31, 1956. During the time the deceased was in the hospital, he was physically unable to make any monthly payments, and this fact was known by the defendant Harry Verner, as was the fact of his death on May 31. Within a few hours after the death of the deceased, Harry Verner declared the entire indebtedness secured by the second deed to secure debt due and payable, without notice of any kind. This declaration by Verner was illegal and void. On June 5, Verner purchased the deed to secure debt from Yates to DeKalb County Federal Savings & Loan Association, and on the same date declared the entire indebtedness secured by the deed due and payable. This declaration was illegal and void. Verner advertised the property for sale in the Fulton County Daily Report on June 8, 15, 22, and 29, 1956, a copy of the advertisement being attached as an exhibit. The advertisement failed to mention the conveyance to the deceased, and this was done with the intention to chill the bidding at the sale, in that the heirs and those interested in the estate of the deceased would have no notice of the foreclosure.
The last will and testament of the deceased was found on June 24, and filed for record in the court of ordinary on June 25, 1956. On July 6, 1956, the petitioner was informed that Harry Verner had bid in the property on July 3, 1956, for $3,000. The fair and reasonable market value of the property on July 3, 1956, was $15,500. The property was under lease for a monthly rental of $150, which was being collected by Wall Brothers Realty Company. The monthly rental was in excess of the monthly installments on both deeds to secure debt. On July 6, 1956, the petitioner called Harry Verner and offered to pay the entire indebtedness, together with all expenses incurred by Verner. Verner referred the petitioner to his attorney, G. Starr Peck. The petitioner called the attorney and again offered to pay the entire indebtedness, including all expenses incurred by Verner. The attorney called the petitioner back and said that Verner would not accept payment by the petitioner, that Verner had purchased the property and wanted to keep it as an investment. Veneer had no right to declare the indebtedness secured by the first deed due on June 5, 1956, the date it was purchased by him. This deed to secure debt provided for a 30-day grace period, which would not have expired until June 10, 1956. The declaration by Verner that the entire indebtedness under the second deed to secure debt was due and payable on June 5, 1956, was null and void, the debt not being due.
On July 25, 1956, Verner filed an action against Wall Brothers Realty Company, in the Civil Court of Fulton County, seeking to collect the rents from the property for the months of June and July. The petitioner has made demand upon Wall Brothers Realty Company for the rents. Verner's conveyance of the property to himself is based upon his void and illegal exercise of the powers contained in the deeds to secure debt. The Civil Court of Fulton County has no jurisdiction to declare the purported sale by Verner void or to set it aside. Equity should enjoin the suit in the civil court, and cause the rentals to be paid into the registry of the court.
Verner's general and special demurrers to count one were overruled, and to this judgment he excepts in the main bill. Verher's general demurrers to count two, which attacked the advertisement of the property for sale, were sustained, and by cross-bill the petitioner assigns error on this judgment.
1. Where parties depart from the tends of a contract and receive or pay money under the departure, reasonable notice must be given to the other party of the intention to rely upon the exact terms of the contract before there can be any recovery for failure to comply with its exact terms. Until notice, such departure is a quasi new agreement. Code 20-116; Eaves & Collins v. Cherokee Iron Co., 73 Ga. 459; Hasbrouck v. Bondurant & McKinnon, 127 Ga. 220 (56 S. E. 241); McNatt v. Clarke Bros., 143 Ga. 159, 160 (84 S. E. 447); Kennedy v. Walker, 156 Ga. 711, 712 (3) (120 S. E. 105).
In the present case the petition and exhibits show that the deceased; J. L. MeYere, acquired the equity of redemption refining in Victor R. Yates, after the execution of the two deeds to secure debt described in the petition, on January 25, 1954. Count one of the petition as amended alleges that the first payment made by the deceased after he acquired the interest of Yates was on February 12, 1954; that no subsequent payment by the deceased was made on the due date; that all payments were made days after the due date; that in two instances the payments were not made until the 16th day of the month, and that the last payment made by the deceased before he died was on April 12, 1956. The allegations of fact of count one, which must be considered as true for the purposes of the general demurrer, show such a mutual departure from the original contract as would entitle the deceased to reasonable notice of the intention to return to the terms of the contract before declaring the entire debt due, and advertising the property for sale. Byrd v. Prudential Ins. Co. of America, 182 Ga. 800 (3) (187 S. E. 1)
A deed to land to secure debt and the note executed in connection therewith may be transferred and assigned. Hightower v. Haddock, 153 Ga. 160 (111 S. E. 413); Redwine v. Frizzell, 184 Ga. 230 (190 S. E. 789). A purchaser who acquires such note after default as to one of its installments is not a holder in due course, but takes the instrument with notice of its dishonor, and subject to any defense or equity which could be pleaded as against the original payee. Code 14-502, 14-508; Crandall v. Shepard, 166 Ga. 889 (144 S. E. 772); Beasley Hardware Co. v. Stevens, 42 Ga. App. 114 (155 S. E. 67); Archibald Hardware Co. v. Gifford, 44 Ga. App. 837 (163 S. E. 254).
In the deed to secure debt from Yates to DeKalb County Federal Savings & Loan Association it is provided that, upon failure "to pay any instalment due on said indebtedness within thirty days after the same matures," the grantee or its assigns may "without notice, declare the entire indebtedness due." There having been such a mutual departure from the exact terms of the contract between MeYere and DeKalb County Federal Savings & Loan Association as to require notice by the association of its intention to rely upon the exact terms of the contract, Verner, as purchaser after default, could not declare the entire indebtedness due and payable because of the default existing at the time the note and deed were assigned to him.
2. Under the powers contained in a deed to secure debt, authorizing sale after "first giving four weeks' notice of the time, terms, and place of such sale, by advertisement once a week in a newspaper published in said county [italics ours]," a sale may be made without reference to the number of days which may elapse between the day of the first advertisement and the day of sale. Smith v. Associated Mortgage Cos., 186 Ga. 121 (197 S. E. 222); Heist v. Dunlap & Co., 193 Ga. 462 (18 S. E. 2d 837).
In the present case the deed to DeKalb County Federal Savings & Loan Association provides that, in case of default, the association, its successors or assigns, may sell the property at public auction before the courthouse door of the county "after first giving four weeks' notice of the time, place and tends of the sale in some newspaper published in said county, all other notice being hereby waived." The power of sale does not provide for four weeks' notice "by advertisement once a week" for four weeks, so as to bring the authority granted within the rules applicable to judicial sales under Code 39-1102, and as construed and applied by this court in Smith v. Associated Mortgage Cos., supra, and similar cases.
In Plainville Brick Co. v. Williams, 170 Ga. 75, 80 (152 S. E. 85), it was said: "If the provision relating to advertising had been merely giving four weeks notice of the time, etc., it would seem to be plain that the sale must have been advertised at least 28 days, or four weeks of seven days each." Powers of sale in deeds to secure debt are matters of contract, and they must be strictly construed, and will be enforced as written. Code (Ann.) 37-607. In the present case the contract provides for four weeks' notice. Such a requirement has been construed by this court. In Conley v. Redwine, 109 Ga. 640, 643 (35 S. E. 92, 77 Am. St. R. 398), it was held in part: "Prior to the passage of the act of 1891, when the law required sheriff's sales to be advertised for four weeks, it was held that the word 'week' meant a period of time consisting of seven days, and that to comply with the law it was necessary that twenty-eight days should elapse between the date of the first advertisement and the date of the sale; . . ." See also Boyd v. McFarlin, 58 Ga. 208; Carter v. Copeland, 147 Ga. 417 (94 S. E. 225).
The first advertisement appeared on June 8, and the purported sale was had on July 3. Only 25 days elapsed between the dated of the first advertisement and the date of sale, and this was insufficient to comply with the contract. A power of sale must be executed in accordance with the intention of the parties as indicated in the provision conferring the power. Cadwell v. Swift & Co., 174 Ga. 313 (162 S. E. 814).
The debt described in the deed is "one note in the amount of $4400 payable $48.85 per month, beginning May 1, 1952, and on the 1st day of each month thereafter, until principal and interest have been paid in full." It is then provided: "In case this debt is not paid promptly when due, I authorize said second party, its successors or assigns, at option, to sell said described property at public outcry before the court house door in Fulton County, Georgia." The deed does not provide that the terms and conditions of the note are a part of the contract as if incorporated in the deed; and if there should be a conflict between the deed and the note as to terms and conditions, the terms of the deed would control. Bank of LaFayette v. Giles, 208 Ga. 674, 678 (69 S. E. 2d 78). The deed from Yates to Bostick contains no acceleration clause in case of default of any monthly instalment, nor does the deed provide that time is of the essence of the contract. Under these facts, there could be no valid exercise of the power of sale, since the debt was not due and could not properly be declared to be due.
The purported sale of the property by Verner to himself conveyed no title, and McLarty, as the personal representative of the deceased, had the right to disapprove the purported sale. Burgess v. Simmons, 207 Ga. 291 (61 S. E. 2d 410).
4. In the petition filed by Verner against Wall Brothers Realty Company, in the nature of an action for a deficiency judgment, to require payment to him of certain rents held by the realty company, it is nowhere alleged that the purported sale of the property before the courthouse door had been confirmed in the manner provided by law; and, in the absence of such an allegation, Verner's action against the realty company could not be maintained. Code 37-608; Powers v. Wren, 198 Ga. 316, 321 (31 S. E. 2d 713).
In so far as the special demurrers to count one may have been meritorious, they were met by amendment.
6. Count two of the petition alleges that the advertisement of sale did not show how the property was to be sold, and that the advertisement was too vague and indefinite. The demurrers to this count of the petition were properly sustained.
Judgment affirmed on both the main bill and cross-bill of exceptions. All the Justices concur.
Marion A. Sams, Alford Wall, contra.
Eugene R. Simons, for plaintiff in error on cross-bill.
Eugene R. Simons, Alford Wall, Wall & Maddox, contra.
Marion A. Sams, for plaintiff in error.
ARGUED JULY 9, 1957 -- DECIDED SEPTEMBER 6, 1957.
Saturday May 23 01:55 EDT


This site exists because of donors like you.

Thanks!


Valid HTML 4.0!

Valid CSS!





Home - Tour - Disclaimer - Privacy - Contact Us
Copyright © 2000,2002,2004 Lawskills.com