Home Bldg. & Loan Ass'n of La Grange v. Hester

• Court: Georgia Supreme Court
• Writing for the Court: HAWKINS; DUCKWORTH; DUCKWORTH
• Citation: Home Bldg. & Loan Ass'n of La Grange v. Hester, 99 S.E.2d 87, 213 Ga. 393 (Ga. 1957)
• Decision Date: 03 July 1957
• Docket Number: No. 19731,19731
• Parties: HOME BUILDING & LOAN ASSOCIATION OF LA GRANGE v. Mary D. HESTER, Administratrix.

Page 87

99 S.E.2d 87

213 Ga. 393

HOME BUILDING & LOAN ASSOCIATION OF LA GRANGE v. Mary D. HESTER, Administratrix.

No. 19731.

Supreme Court of Georgia.

July 3, 1957.

Syllabus by the Court.

The trial court erred in sustaining the general demurrer to the petition, and the Court of appeals properly reversed that judgment.

Wyatt & Morgan, L. M. Wyatt, and James R. Lewis, LaGrange, for plaintiff in error.

Thomasson & Thomasson, J. T. Thomasson, and Jas. T. Thomasson, Jr., LaGrange, for defendant in error.

HAWKINS, Justice.

This case is here on certiorari to the Court of Appeals. A statement of the allegations of the petition will be found in the decision of that court in Hester v. Home Building & Loan Association, 95 Ga.App. 321, 98 S.E.2d 58, and need not be repeated in detail here. It appears from a copy of the deed from Mrs. Hill to Hester, attached to the petition as an exhibit, that she conveyed the property to him, 'subject to a deed to secure debt made by the grantor to the Home Building & Loan Asso., said deed being recorded in Deed Book 85, page 471, on July 21, 1951, Troup County records.' 'A recital in a conveyance that the deed is made subject to a specified loan against the property is not an agreement to assume and pay the encumbrance. There must be words importing a promise to pay the debt, in order to render the grantee personally liable.' National Bondholders Corp. v. Parris, 190 Ga. 513(1), 9 S.E.2d 741. See also Alsobrook v. Taylor, 184 Ga. 10, 181 S.E. 182. Here the obligation of Mrs. Hill, the original debtor, was not extinguished, but continued, since the record discloses that the power of sale contained in her deed was exercised by the Association, and the property was sold as that of Mrs. Hill, and not as the property of Hester. The allegations of the petition that the Loan Association transferred the loan on its books to Hester, and issued to him a loan pass book, are insufficient to establish the relationship of debtor and creditor between Hester and the Association, for the reason that under the Statute of Frauds the promise to pay the debt of another must be in writing. Code, § 20-401(2); Cold-well Co. v. Cowart, 138 Ga. 233, 75 S.E. 425. It follows, therefore, that the relation of debtor and creditor did not exist as between Hester and the Loan Association, and for this reason the Loan Association would have no insurable interest in the life of Hester which would permit it to obtain and maintain a policy of insurance on his life payable to it as beneficiary. Code, § 56-812; Gulf Life Ins. Co. v. Davis, 52 Ga.App. 464, 183 S.E. 640; Guaranty Life Ins. Co. v. Graham, 58 Ga.App. 767, 199 S.E. 829. However, the petition as amended and exhibits attached thereto disclose that Hester, the plaintiff's intestate, did have an equity in the property described in the deed from Mrs. Hill to him, in order to protect which it was necessary that he pay off the unpaid balance of the Hill loan secured by the loan deed executed by her to the defendant, although he had not assumed the debt under the deed to him, and so far as the petition discloses had not agreed in writing to do so. The petition alleges that it was to his interest and to that of the Loan Association that a term life-insurance policy be secured to cover the balance due on the loan, which would furnish additional security for the loan; that the Loan Association customarily performed this service for its borrowers, and through its duly authorized agent agreed to secure for Hester a term insurance policy on his life covering the amount due on the loan; to collect from Hester and remit to the insurance company the premium therefor; that the executive officer of the Loan Association informed Hester that...