Bank of LaFayette v. Giles

• Decision Date: 29 January 1952
• Docket Number: No. 17562,17562
• Citation: 69 S.E.2d 78,208 Ga. 674
• Parties: BANK OF LA FAYETTE v. GILES.
• Court: Georgia Supreme Court

Page 78

69 S.E.2d 78

208 Ga. 674

BANK OF LA FAYETTE v. GILES.

No. 17562.

Supreme Court of Georgia.

Jan. 29, 1952.

Rehearing Denied Feb. 14, 1952.

Syllabus by the Court.

1. The indebtedness stipulated, for which the deed to secure debt would stand as security, is a described note, 'or any other present or future indebtedness or liability of first parties to second party.' Two notes thereafter signed by only one of the 'first parties' and a third person, are not obligations of 'first parties' within the terms of the deed to secure debt.

2. Upon payment of the amount due under the terms of a deed to secure debt, it is the duty of the grantee in such deed to surrender and deliver it to the grantor with a proper entry showing payment, and the grantor may thereafter have it 'satisfied' of record. A petition seeking to have the above rule complied with by the grantee is based upon a statutory right.

3. The allegations of the petition as to the statements of the president of the bank, that a tender would be refused if made, were sufficient as against the demurrers of the bank.

4. In order to avoid the payment of future interest, a tender must be continuous.

5. Where a promissory note which recites, 'We promise to pay,' is signed by two or more persons, and there is nothing to show that the signers are not principal makers, the note prima facie is a joint, and not a joint and several, undertaking. An action can not be maintained against one of the makers alone, where it does not appear that the others can not be served.

Mrs. Elma T. Giles filed a petition against Bank of LaFayette, and in substance alleged: In April, 1948, she and her husband, T. C. Giles, borrowed $2700 from the bank and executed their joint promissory note and deed to secure debt, securing the indebtedness. The note was renewed four times, the last renewal being held by the bank. On the date of the execution of the deed, she and her husband were owners in common of the real estate described in the deed, but subsequently, on February 2, 1949, her husband conveyed his interest in the real estate to her. Prior to the last renewal of the note, she advised the bank that she had acquired the interest of her husband in the real estate, and requested that she be permitted to renew the note in her name only. She was advised that, since the original indebtedness had been contracted by both parties, it would be necessary for the renewal note to have the signature of both parties, and she secured the signature of her husband. She is not indebted to the bank in any sum except the note of $2700. When the note became due, she was advised by the president of the bank that the note would not again be renewed. She asked for time to secure the money to pay the indebtedness, and was advised by the president of the bank that, if she tendered the entire amount due, the bank would not accept it, as the bank held other indebtedness against her husband, and would hold the deed until all other indebtedness had been paid in full. The other indebtedness of her husband is a note of $900, dated in November, 1948, and a note of $2500, dated in January, 1949, both notes being signed by her husband and J. A. Loughridge, Jr. She is in no way obligated to pay either of said notes, and had no part in creating the indebtedness evidenced by them. The bank is now advertising her property for sale at public outcry, as shown by copy of advertisement attached, and unless enjoined and restrained, the bank will sell her property. The value of the real estate is greatly in excess of her indebtedness to the bank, and if permitted to proceed with the sale, the bank will apply the proceeds from the sale to indebtedness for which she is not liable. The deed executed by the plaintiff and her husband to the bank (copy being attached, marked Exhibit 'A') contains the following: 'This conveyance is made to secure a debt of $2700 under Title 67, Section 1301 of the Code of Georgia of 1933, or any other present or future indebtedness or liability of first parties to second party. The debt hereby secured is described as follows: One promissory note of even date herewith for the principal sum of $2700, bearing interest at the rate of six (6%) per cent. per annum, due ninety (90) days after date.' Under the provisions of the deed, the only indebtedness secured is her indebtedness of $2700; but, if the deed could be construed to secure 'any other present or future indebtedness or liability of first parties to second party,' there is no other indebtedness of first parties to the bank. She does not owe any other debt to the bank, and is not jointly liable with her husband for any other debt to the bank. She is willing to pay the entire indebtedness secured by the deed and promissory note for $2700, and she now makes a continuous tender and offer of payment, although she is advised that the bank will not accept payment and mark the security deed 'satisfied.'

The prayers were that the bank be temporarily and permanently enjoined from selling the real estate described in the deed to secure debt, and that the bank be required to mark 'satisfied' the deed and note, upon payment of $2700 with accrued interest.

The bank filed general and special demurrers to the petition, and an answer, in which it sought to have T. C. Giles made a party. In so far as germane to the rulings here made, the answer of the bank was in effect: The allegation of the petition, that the plaintiff advised it that she was the sole owner of the real estate at the time of the last renewal of the note, is admitted, but it had no other notice that she had acquired the sole title to the property. The president of the bank advised the plaintiff that it would accept payment of the note of $2700 and interest, but would not satisfy the deed and note; but would continue to hold the deed for the two notes of $900 and $2500, signed by T. C. Giles and J. A. Loughridge, Jr. The original deed to secure debt secured the two notes of T. C. Giles in the amounts of $900 and $2500, respectively, and the one-half interest of T. C. Giles in the property was security for the two notes described. There has never been any tender of payment, and the bank has never advised the plaintiff that it would not accept the $2700 and interest. She is not entitled to a temporary restraining order or injunction. The bank is entitled to proceed to advertise and sell the property described in the deed. In the event the temporary restraining order is not vacated, the bank is entitled to a verdict and judgment foreclosing its special lien on the property, and a general judgment against all the property of the plaintiff and her husband for the principal sum of $2700 with interest. The purported deed made by her husband to the plaintiff was a voluntary deed, and was made for the purpose of hindering, delaying, and defrauding his creditors. On the date of the purported deed the husband was insolvent, and she knew of the insolvency of her husband. T. C. Giles is interested with her on the issue of whether or not the deed executed to the bank can be held for the indebtedness of the husband in the amounts of $900 and $2500.

The prayers were: (a) that the temporary restraining order be vacated and the bank be permitted to proceed to advertise and sell the property described in the deed to secure debt; (b) that, in the event the prayers in paragraph (a) should not be granted, a decree be entered declaring the property subject to the notes of $900 and $2500, executed by the husband to the bank, to the extent of his one-half interest in the property; (c) that, in the event the cause proceeds to trial, judgment be rendered in favor of the bank against the plaintiff and her husband, foreclosing its special lien on the property for the indebtedness of $2700 and interest, as provided in the note and deed, and a general judgment be rendered against all the property of the plaintiff and her husband for the indebtedness of $2700 principal, and interest thereon at six per cent per annum from July 10, 1949, and costs of court; (d) that the purported deed executed by the husband to the wife, purporting to convey the property described in the deed to secure debt, be canceled and set aside; (e) that the husband be made a party, and a rule be issued requiring him to show cause why he should not be made a party in the cause; and (f) for other relief.

The bill of exceptions assigned as error: (a) the refusal of the court to make T. C. Giles a party; (b) the refusal to dismiss the petition because the debt of $2700 and interest were not tendered into court; (c) the overruling of the bank's demurrer to the plaintiff's petition; (d) the sustaining of the plaintiff's demurrer to the bank's answer; (e) the overruling of an oral motion to dismiss the case at the trial; (exceptions pendente lite were filed to the above rulings); (f) the overruling of the motion for new trial.

In the opinion the plaintiff in error will be referred to as the bank, and the petitioner in the court below as the plaintiff.

Gleason & Painter, Rossville, Fariss & Fariss, LaFayette, for plaintiff in error.

Shaw & Shaw and G. W. Langford, all of LaFayette, for defendant in error.

HEAD, Justice.

1. The primary question in this case is whether or not the deed to secure debt of the husband and wife to the bank secures two subsequent notes signed by T. C. Giles (the husband of the plaintiff) and J. A. Loughridge, Jr., in addition to the original loan of $2700.

The bank insists that the promissory note signed by the husband and wife was a joint and several obligation, and that the deed to secure debt would therefore secure individual obligations of either of the two joint makers. It is a general rule that, where two or more persons sign a promissory note providing that 'I promise to pay.' the obligation is joint and several. Code, § 14-217(7). The note, however, does not change the terms and provisions of the deed to...