Salter v. Bank Of Commerce, 12955.

• Decision Date: 29 November 1939
• Docket Number: No. 12955.,12955.
• Citation: 6 S.E.2d 290
• Parties: SALTER. v. BANK OF COMMERCE.
• Court: Georgia Supreme Court

6 S.E.2d 290

SALTER.

v.BANK OF COMMERCE.

No. 12955.

Supreme Court of Georgia.

Nov. 29, 1939.

Error from Superior Court, Sumter County; W. M. Harper, Judge.

Suit by E. J. Salter against the Bank of Commerce to enjoin the sale of realty under a security deed. To review a judgment in favor of the defendant, the plaintiff brings error.

Judgment affirmed.

On January 12, 1931, E. J. Salter executed a deed conveying three described lots of land to the Bank of Commerce as security for an existing promissory note for $637.10. The deed was duly recorded. It contained the clause: "This conveyance is also made with the understanding and agreement that it shall operate as security for any and all renewals of indebtedness herein described, and shall also operate as security for any and all other indebtedness which the grantor herein may now owe or may hereafter owe to grantee, its successors, transferees, and assigns, before the surrender and cancellation of this deed by the grantee or its or their heirs, successors, or assigns." It contained a power of sale exercisable "upon default in the payment of said indebtedness, any renewal thereof, or any other indebtedness now due or which may hereafter become due by grantor." The note was renewed in September, 1933, by giving a new note for the sum of $786.33. Two other loans during the year 1934 were made, for which notes were given. Four other loans were made respectively in April, June, July, and December, 1935, for which notes were given. Each of these notes, except the two for the June and July loans, recites that it is executed "with the understanding and agreement that it is given for the purpose of renewing balance of loan secured with deed recorded in the office of the clerk, * * * book No. 11, page 478, Jan. 12, 1931." Several other loans were made in 1936, for which notes were given, one of them dated March 24, for $263.45. This note was secured by a separate deed identical with the first security deed, except as to date, amount, and property, conveying land other than that conveyed by the deed executed in 1931. Under exercise of the power of sale in the security deed of 1931, the bank, at the October, 1938, sales day, exposed to public sale the land described in that deed, and became the purchaser at a price less than the indebtedness evidenced by the first and subsequent notes secured by that deed. The amount of the price was applied to payment of taxes and costs of sale, and the balance to retirement of five of the outstanding notes (returned to the maker), and as a credit on one of the remaining notes, thus leaving a substantial deficiency. The bank did not within thirty days after the sale apply to the judge of the superior court for consummation of the sale as under the act approved March 28, 1935 (Ga.L. 1935, p. 381), but nevertheless it proceeded under the power contained in the security deed of March 4, 1936, to advertise for sale in March, 1939, other land of Salter which was given in that deed, as security for the $263.45 note, reciting in the advertisement that the deed was given "to secure note of even date therewith for $263.45, as well as any and all other indebtedness due by grantor to grantee before the cancellation of deed."

On the day before the advertised date of sale, Salter presented his petition for injunction to prevent the sale, alleging substantially what is stated above, and the following: "While a portion of this indebtedness was created and said security deed of 1931, above referred to, to wit, Jan. 10, 1931, and which was prior to the passage of said act, and while the Supreme Court has held that said act of 1935, requiring the confirmation of sale made under power of sale in the security deed, in so far as it affected prior obligations, was unconstitutional and did not apply to said prior contracts, your petitioner shows and contends that by the terms of the security deed itself it secured any and all indebtedness that now or that may hereafter be made; that with the exception of an item of $754.43, which was a renewal ofa note dated January, 1931, all of the indebtedness of petitioner, including the sum of $263.45 contracted for in May, 1936, were all obligations made, contracted, and assumed by your petitioner with said defendant on and after the passing of said act of 1935, and that by the terms of the additional contracts themselves said security deed was novated by special writing in said notes, so as to include said new loans and new contracts to the extent of approximately eighteen or nineteen hundred dollars and for the payment of said increased indebtedness which by contract in writing made, secured by said security deed dated January 19, 1931, and by so including said new indebtedness said security deed executed in 1931 by your petitioner was by operation of law brought within the terms of said act of 1935, and that accordingly said defendant, having sold the property of your petitioner to pay said indebtedness created of [after] March, 1935, was under obligation to make application to the judge of the superior court of Sumter County, where said land was sold, for a confirmation of said sale; and that [as] said defendant failed to make application within thirty days after said sale, as required by said act, as for the same unpaid balance of said indebtedness so concerned,...