Mitchell v. West End Park Co.

• Decision Date: 10 December 1930
• Docket Number: 7803.
• Citation: 156 S.E. 888,171 Ga. 878
• Parties: MITCHELL v. WEST END PARK CO. et al.
• Court: Georgia Supreme Court

156 S.E. 888

171 Ga. 878

MITCHELL v. WEST END PARK CO. et al.

No. 7803.

Supreme Court of Georgia

December 10, 1930

Motion to Rehear Denied February 14, 1931.

Syllabus by the Court.

Vendor's title under deeds securing purchase money is generally superior to liens against purchaser at time or subsequently acquired; liens under deeds securing loan to purchaser made with vendor's knowledge and used to pay part of purchase money and erect dwellings held superior to lien under vendor's deeds securing purchase money; senior grantee in security deed may waive priority of lien in favor of junior security deed; senior grantee under security deed may waive lien in favor of person loaning money to improve premises; grantee in senior security deed may be estopped to assert priority against subsequent security deed when assertion would be unconscionable; without agreement, there may be circumstances indicating intention to give priority to one of two security deeds recorded at same time.

Where the owner of lots in a subdivision conveyed two of them by deed to a purchaser, and simultaneously took from the latter a deed to each lot to secure a balance of the purchase money the title of the vendor to the lots embraced in these security deeds would generally be superior to any liens existing against the buyer at the time, or subsequently obtained against him.

(a) Where these security deeds contained an agreement between the owner and the purchaser, whereby the latter was to erect to completion a residence on each lot within six months from its date, and upon completion of the same the owner agreed to subordinate its unmatured and unpaid notes for the purchase money of each of the lots to a lien to secure a first loan upon such residence and lot, not to exceed 60 per cent. of the appraised value of the house and lot, with the provision that if said residence was not erected to completion prior to six months from the date of the agreement, then the owner was to be automatically released from its agreement to subordinate said notes, time being of the essence of the above agreement, and where the purchaser, with the knowledge and consent of the owner, procured from a lender a temporary loan on each lot amounting to $2,500, to enable the purchaser to erect on each lot a dwelling house, and executed to her a deed to each of said lots to secure such loan, from the proceeds of which the initial payment of $250 on the purchase money of each lot was paid to the owner, and the balance of the loan was used in payment for labor employed and material furnished in the erection of such houses, the lien of the lender under her security deeds is superior to the lien of the owner under its deeds to secure the purchase money although the purchaser failed to fully complete the dwelling on each lot.

(b) A senior grantee in a security deed has an unquestionable right to waive his priority of lien thereunder in favor of a junior security deed. Such senior grantee may waive his lien in favor of a person who advances money to the vendor therein to enable him to improve the property thereby conveyed, the enhanced value of the property being sufficient consideration to sustain such waiver.

(c) A grantee in a senior security deed may be estopped to assert the priority of his lien as against a grantee in a subsequent security deed, when it would be unconscionable to enforce the security of the former to the prejudice of the subsequent incumbrancer.

(d) Without any agreement, there may be facts and circumstances which indicate an intention to make one of two security deeds recorded at the same time prior to the other.

Priority of lender's lien under loan deeds over liens of vendor's security deeds held not dependent upon prior contract of purchase set out in vendor's security deeds.

The right of the lender to enforce the liens of her loan deeds in preference to the liens of the company under its security deeds does not depend upon the contract between the purchaser and the company, which is set out in each of its security deeds; but the lender is undertaking to enforce her liens under her contract with the purchaser, which was authorized by the company, and from which the company derived substantial payments on the purchase money of each of these lots.

Where vendor's lien for purchase money was postponed to liens of deeds securing loan to improve premises, lender was entitled to preference from proceeds of premises to full amount of her liens.

It is not inequitable to permit the lender to receive the whole of the proceeds of the sale of these lots, to the exclusion of the company. The liens of the company were postponed to her liens; and when the lots as improved were sold and were purchased by her, she was entitled to be paid in preference to the company the amount of her liens in full.

Lien for material furnished to erect dwellings after record of loan deeds held inferior to liens of lender; liens for material furnished to erect dwellings held superior to liens for purchase money of land under security deeds requiring improvement of premises; judgment for materialman cannot be reviewed where not excepted to by him judgment for materialman not excepted to by him could not be excepted to by another lien claimant not showing subrogation nor assignment to rights of materialman.

A lien for material furnished after the record of the loan deeds and used in the erection of the dwellings on these lots, is inferior to the lien of the lender; but it is superior to the liens of the vendor company under its deeds to secure the purchase money of the lots, as these security deeds contain agreements requiring the purchaser to improve these lots by the erection of dwellings thereon.

(a) As the materialman does not except to the judgment rendered in his favor, we cannot pass upon the question whether he was entitled to a different and better judgment in his favor than the one rendered.

(b) As the lender does not in her pleadings allege facts which show that she was subrogated to the rights of the materialman under his lien, and does not pray that this lien be foreclosed for her benefit, and as the evidence does not disclose that she had by assignment or subrogation become entitled to his rights under his lien, she made no case which would authorize her to except to the judgment rendered in his favor and to which he took no exception.

Error from Superior Court, Fulton County; E. D. Thomas, Judge.

Proceedings by Ella Mitchell against the West End Park Company and others. Judgment for defendants, and plaintiff brings error.

Reversed.

George G. Finch and Breen, Finch & Padgett, all of Atlanta, for plaintiff in error.

Tye, Thomson & Tye, J. W. DeLoach, Roy S. Drennan, C. L. Padgett, and E. G. Jackson, all of Atlanta, for defendants in error.

HINES J.

On January 9, 1929, the West End Park Company, by contracts in writing, agreed to sell to Black lots 25 and 26 of that company, for a consideration of $1,750 each of which $250 was to be paid in cash upon the purchase money of said lots, and monthly notes for $25 each were to be given for the balance of the purchase money of each of the lots. Each of said contracts contained this provision: "It is hereby agreed by parties of the second (W. End Pk) part hereto that upon completion of house on above-described property, to be erected by party of first part (Black), that they will subordinate the balance of $1500.00 to a first mortgage loan to be placed by party of the first part, not to exceed 60% of the appraised value of house and lot. Said second mortgage to be secured by purchase-money security deed. Party of first part to pay expense such as recording, etc., which may be incurred. Appraisal to be made by a reputable company and approved by parties hereto. Sold subject to usual restrictions in this subdivison." On January 10, 1929, the company executed its warranty deeds to Black to each of said lots, and simultaneously therewith Black executed to the company his deed to each of said lots to secure the sum of $1,500, being the balance of the purchase money thereof, and represented by monthly notes of $25 each. These deeds contained a provision that if any note became as much as 30 days past due, the entire series might be declared due at the option of the holder; and this additional provision: "It is specifically understood and agreed between the grantor and grantee herein that the grantor (Black) herein agrees to erect to completion a residence on the above-described lot within six months from date, and upon the completion of same the grantee herein agrees to subordinate any unmatured, unpaid notes, secured by this deed, to become a lien, subject only to a first loan not exceeding sixty per cent. of the appraised value of said house and lot; said appraisal to be made by George A. Campbell and George J. Morris of Atlanta, Georgia. If said residence is not erected to completion prior to six months from this date, then the grantee herein automatically shall be released from its agreement to subordinate said notes hereby secured in accordance with the terms of the above, time being of the essence of the above. In consideration of this provision of this deed, the grantor agrees to erect said residence at a cost of not less than $4000."

On January 16, 1929, Black executed to Mrs. Ella Mitchell his deed to each of said lots, to secure a loan of $2,500 on each. The above deeds from the company to Black, the loan deeds from Black to the company, and the loan deeds from Black to Mrs. Mitchell, were filed for record simultaneously on January 16, 1929, at 4 p. m. The cash payments of $250 on the purchase price of each of said lots were made by Black to the company out of the proceeds of the loans made by Mrs....