Alropa Corp. v. Pomerance

• Citation: 8 S.E.2d 62,190 Ga. 1
• Decision Date: 25 March 1940
• Docket Number: 13050
• Parties: ALROPA CORPORATION v. POMERANCE.
• Court: Supreme Court of Georgia

8 S.E.2d 62

190 Ga. 1

ALROPA CORPORATION v. POMERANCE.

13050

Supreme Court of Georgia

March 25, 1940

Syllabus by the Court.

1. The action is founded on alleged breach of covenant to assume and pay an outstanding debt secured by a mortgage on land in the State of Florida. The case is for decision on demurrer to the petition. The petition does not set forth the laws of Florida applicable to the case. Held:

(a) This court cannot take judicial cognizance of the laws of the State of Florida.

(b) If the State of Florida had been one of the original thirteen States of the Union, or had been carved out of the territory of one of the original States, it would be presumed that the common law of England, in so far as pertinent, was of force in that State, and the case would be decided with reference to the common law of England. Eubanks v. Banks, 34 Ga. 407; Selma, Rome & Dalton Railroad Co. v. Lacy, 43 Ga. 461; Woodruff v. Saul, 70 Ga. 271; Jones v Rice, 92 Ga. 236, 18 S.E. 348; Patillo v Alexander, 96 Ga. 60, 22 S.E. 646, 29 L.R.A. 616; Massachusetts Benefit Life Ass'n v. Robinson, 104 Ga. 256, 276, 30 S.E. 918, 42 L.R.A. 261; Patillo v Alexander, 105 Ga. 482, 30 S.E. 644; McIntyre v Moore, 105 Ga. 112, 31 S.E. 144; Coyle v. Southern Railway Co., 112 Ga. 121, 37 S.E. 163; Ellington v. Harris, 127 Ga. 85, 56 S.E. 134, 119 Am.St.Rep. 320; Lay v. Nashville, Chattanooga & St. Louis Railway Co., 131 Ga. 345, 62 S.E. 189; Georgia, Florida & Alabama Railway Co. v. Sasser, 4 Ga.App. 276, 286, 61 S.E. 505; Hill v. Chattanooga Railway & Light Co., 21 Ga.App. 104, 93 S.E. 1027.

(c) However, as the State of Florida was not one of the original thirteen States and not carved out of one of them, but was a part of the Spanish possessions on this continent before becoming a part of the Union, it will not be presumed that the common law of England prevailed in that State. If it prevails there, it must be by virtue of some statutory provision of which this court cannot take judicial notice. Trustees of Jesse Parker Williams Hospital v. Nisbet, 189 Ga. 807(1), 7 S.E.2d 737.

(d) As no Florida law was alleged in the petition, the case must be decided on the law of this State. Flato v. Mulhall, 72 Mo. 522; Brown v. Wright, 58 Ark. 20, 22 S.W. 1022, 21 L.R.A. 467; Wharton on Evidence (3d Ed.) 274, § 314; 15 C.J.S., Conflict of Laws, 876, § 9, notes 96, 97; Pritchard v. Norton, 106 U.S. 124, 1 S.Ct. 102, 27 L.Ed. 104.

2. It is declared in the Code, § 29-102: 'When a grantee accepts a deed and enters thereunder, he will be bound by the covenants contained therein, although the deed has not been signed by him.'

(a) Warde, having title to land, encumbered it by mortgage to Mack to secure his notes to Mack, aggregating $3000. Afterwards in a different transaction, Warde executed a warranty deed conveying the land to Pomerance. The deed contained a recital that as part of the consideration Pomerance agreed to assume and pay the mortgage debt to Mack. Pomerance accepted the deed, but did not enter actual possession of the land thereunder. Held, that in these circumstances the recital contained in the deed as to assumption and payment of the debt of Warde to Mack does not, in virtue of the Code section just quoted, bind Pomerance as a covenant to pay the debt of Warde to Mack.

(b) This does not mean that if Pomerance had also signed the deed, or had otherwise in writing or parol expressly promised Warde as part of the consideration of the deed to pay Warde's debt to Mack, or had entered into actual possession of the land, he would not be bound by his promise after the promisee on the basis thereof had acted to his injury by executing the deed.

3. The petition did not allege a cause of action for breach of covenant under the deed.

4. Contemporaneously with the execution of the deed mentioned above, Pomerance executed a mortgage on the same land back to Warde, to secure his notes to Warde aggregating $1500. The mortgage expressly refers to an outstanding 'first mortgage in the sum of three thousand ($3000) dollars,' on the land, and contains a promise 'to pay all * * * liabilities, obligations, and incumbrances of every nature on said described property.' Held:

(a) The promise thus expressed in the mortgage is a sufficient promise by Pomerance over his own signature to obligate him to pay the debt owed by Warde to Mack which was secured by mortgage and was an outstanding encumbrance on the land.

(b) The binding effect of this obligation is not dependent upon application of § 29-102, quoted above.

5. There was a series of transfers of the notes and security held by Mack. Alropa, the last transferee, was holder of the notes and security, and occupied the position of Mack had he retained the notes and security. All of the parties to the deeds notes, and mortgages and instruments of transfer were residents of the State of Florida, except Pomerance, who was a resident of Richmond County, Georgia. In these circumstances Alropa could maintain a suit in equity for a personal judgment against Pomerance in the county of his residence, upon his assumption of Warde's debt to Mack, as expressly promised by the language of his mortgage. Bell v. McGrady, 32 Ga. 257; Sheppard v. Bridges, 137 Ga. 615, 74 S.E. 245.

6. In such an action, the promise of Pomerance being contained in the mortgage which was executed by Pomerance under seal, the applicable statute of limitations would be Code, § 3-703, limiting the time to twenty years from the time the right of action accrued. Kytle v. Kytle, 128 Ga. 387, 57 S.E. 748; Brice v. National Bondholders Corp., 187 Ga. 511(2), 1 S.E.2d 426. The action in the instant case, based on the promise contained in the mortgage, was not barred by the statute of limitations.

7. Relatively to the demand based on the promise expressed in the mortgage from Pomerance to Warde, the petition alleged a cause of action, and was not subject to any of the grounds of demurrer. It was erroneous to dismiss the action in its entirety.

On April 14, 1925, Paul C. Warde and Nan C. Warde (hereinafter referred to as Warde) in Miami, Florida, executed to Charles D. Mack (hereinafter referred to as Mack) two promissory notes for $1500 each, payable respectively one and two years after date, and contemporaneously therewith a mortgage on described realty in the City of Miami. Opposite the names of the makers of each note was the word 'Seal,' but there was no mention of 'seal' in the body of the instruments. On the next ensuing August 31, 1925, Warde executed a warranty deed under seal conveying the same land to A. Pomerance (hereinafter called Pomerance). The consideration expressed was 'ten dollars ($10.00) and other good and valuable considerations.' Following the description of the land was the clause: 'This deed is made subject to a first mortgage in the sum of three thousand ($3000.00) dollars, from Paul C. Warde, and wife, to Chas. D Mack, which as part of the consideration for this conveyance grantee assumes and agrees to pay.' Contemporaneously with this deed Pomerance executed to Warde three promissory notes for $500 each, payable respectively on or before one, two and _____ years after date, and also a mortgage on the same land as security for the notes. This mortgage contained the recitals that mortgagor is 'now seized and possessed, and in actual possession' of the land, also: 'This mortgage is a second mortgage, subject to a first mortgage in the sum of $3000.00;' also the mortgagors 'hereby covenant and agree. * * * 2. To pay all and singular the taxes, assessments, levies, liabilities, obligations and encumbrances of every nature on said described property. * * * 6. To perform, comply with and abide by each and every the stipulations, agreements, conditions and covenants in said promissory note and in this deed set forth.' On the back of the first above mentioned two notes from Warde to Mack were entries: 'Nov. 14-25 Int Pd 60.00.' This was followed by the endorsement 'without recourse (signed) Charles D. Mack.' On January 28, 1938, Mack executed an instrument purporting to transfer to L. P. Kaufman, Inc. (hereinafter referred to as Kaufman), the first above mentioned mortgage from Warde. The consideration was recited in this instrument of transfer as 'ten dollars and other valuable considerations.' Upon a similar purported consideration Kaufman executed March 24, 1938, an instrument of transfer of the mortgage and notes assigning the same to Alropa Corporation (hereinafter referred to as Alropa). On August 24, 1938, Alropa instituted an equitable action in the superior court of Richmond County, Georgia, against Pomerance. The petition set forth copies of the several notes, mortgages and other instruments above mentioned and alleged that all the parties to them except Pomerance are residents of the State of Florida, and that the latter is a resident of Richmond County, Georgia. The petition was in one count. The suit was to recover a personal judgment for the balance due on the two notes executed by Warde to Mack. Alropa was suing as remote transferee of the notes and mortgage securing them. The alleged liability of Pomerance was his assumption and agreement to pay the notes made by Warde to Mack. The alleged assumption and agreement to pay was based (1) on the quoted recitals in the deed from Warde to Pomerance and (2) on the quoted recitals contained in the mortgage from Pomerance to Warde. The prayers were for a general judgment for the amount of principal, interest and attorneys' fees due under the notes; also that it be decreed that the defendant Pomerance assumed the indebtedness and is liable therefor. Also for process and general relief. The defendant demurred to the petition on the grounds (1-2) of nonjoinder of specified...