Cummings v. Johnson, 21839

• Court: Georgia Supreme Court
• Writing for the Court: HEAD
• Citation: Cummings v. Johnson, 129 S.E.2d 762, 218 Ga. 559 (Ga. 1963)
• Decision Date: 14 January 1963
• Docket Number: No. 21839,21839
• Parties: James Lamar CUMMINGS v. Ruth B. JOHNSON.

Page 762

129 S.E.2d 762

218 Ga. 559

James Lamar CUMMINGS v. Ruth B. JOHNSON.

No. 21839.

Supreme Court of Georgia.

Jan. 14, 1963.

Bell & Baker, Cairo, for plaintiff in error.

Cain & Smith, Cairo, for defendant in error.

Syllabus Opinion by the Court

HEAD, Presiding Justice.

James Lamar Cummings filed a petition for specific performance against Mrs. Ruth B. Johnson. It was alleged: Mrs. F. G. Clay at the time of her death owned described property, subject to a deed to secure debt. Her only heirs at law were her husband, F. G. Clay, and three children, Mrs. Eddis Johnson, Mrs. Wynelle DeAngelo, and James L. Fuller. Subsequently James L. Fuller died, leaving a widow, Mrs. Mary Fuller, and two minor children. The petitioner negotiated with the named heirs of Mrs. Clay and Mrs. Mary Fuller for the purchase of the property, which they desired to sell. The attorney for the petitioner discussed with them 'possible methods of perfecting the title of the minors' interest' in the property, and it was mentioned that Mrs. Agnes E. Hoffman, the mother of Mrs. Mary Fuller, held a recorded deed to secure debt on the property. The attorney 'discussed with them the possibility of Mrs. Hoffman selling said property under the power of sale in said deed to secure debt, her bidding the property in at the foreclosure sale and then holding the title under foreclosure deed for the benefit of all of the common owners of the land, and her making a deed to petitioner at any time during the life of the option when he was ready to pay the purchase price agreed on, at which time, Mrs. Hoffman could be paid her secured indebtedness and the costs of the foreclosure sale, and the remainder of the purchase price then distributed out to the common owners of the property.' Upon the agreement that title would be perfected in the above manner, or in some other legal form, the heirs of Mrs. Clay and Mrs. Mary Fuller, 'as administrator of the estate of James L. Fuller, deceased,' executed an option to the petitioner for the purchase of the property at an agreed price, obligating themselves to perfect title. Thereafter Mrs. Hoffman foreclosed her deed to secure debt, and bid in the property at the same amount as the purchase price in the option contract. Subsequently the defendant, Mrs. Ruth B. Johnson, acting through her husband and agent, R. E. Johnson, began negotiations with Mrs. Hoffman for the purchase of the property, and on the same date the petitioner received notice of the approval of a loan application made by him, a deed was made by Mrs. Hoffman to the defendant, the purchase price being the same as that in the option of the petitioner. R. E. Johnson, acting as agent for the defendant, had ample knowledge of the option of the petitioner, but nevertheless prevailed upon the optionors to disregard their option with the petitioner and sell the property to Mrs. Johnson. HELD:

1. A duly filed and recorded deed to secure debt is notice of all the rights which the grantee has thereunder. Mattlage v. Mulherin's Sons & Co., 106 Ga. 834, 32 S.E. 940. The record of a security deed is constructive notice to subsequent grantees. Leffler Co. v. Lane, 146 Ga. 741, 92 S.E. 214. 'Constructive notice is notice to the world.' Clark v. C. T. H. Corp., 181 Ga. 710(1), 184 S.E. 592; Poore v. Poore, 210 Ga. 371, 372, 80 S.E.2d 294. In the present case the attorney for the petitioner had actual knowledge, and the petitioner constructive knowledge, of the deed to secure debt from Mrs. F. G. Clay to Mrs. Agnes E. Hoffman, which the petition and exhibits thereto disclose was duly recorded in the Deed Records of Grady County.

2. 'A deed of conveyance to secure a debt, under the provisions of Code § 67-1301, passes the title to the property conveyed until the debt is fully paid.' Lively v. Oberdorfer, 216 Ga. 673(1), 119 S.E.2d 27, and citations. Mrs. Agnes E. Hoffman being the holder of a deed to secure debt executed by Mrs. F. G. Clay during her lifetime, the optionors had no title to the property described in the deed to secure debt at the time of the execution of the option.

3. A sale under the powers contained in a deed to secure debt divests the grantor of all title, and right of equity of redemption, to the lands described in the deed. Carrington v. Citizens Bank of Waynesboro, 144 Ga. 52(3), 85 S.E. 1027; West Lumber Co. v. Schnuck, 204 Ga. 827(2), 51 S.E.2d 644.

4. 'If, after notice that another has made a contract for the purchase of land, a third person cuts in, buys it, and takes a conveyance, such person stands in the place of his vendor, and a court of equity, if it would decree a specific performance of the contract against the latter, will render a like decree against the former. [Italics ours.]' Bryant v. Booze, 55 Ga. 438. See also Grooms v. Grooms, 141 Ga. 478(2), 81 S.E. 210; Finney v. Blalock, 206 Ga. 655(1), 58 S.E.2d 429. In the present case the optionors did not have title to the property described in the option at the time it was executed, nor did they ever acquire title thereto. On the contrary, all interest of the optionors in the property was divested by the foreclosure of the deed to secure debt by Mrs. Agnes E. Hoffman. While the petition alleges that Mrs....