Thomas v. American Freehold Land & Mortgage Co.

• Citation: 47 F. 550
• Parties: THOMAS v. AMERICAN FREEHOLD LAND & MORTGAGE CO. OF LONDON, Limited.
• Decision Date: 16 July 1891
• Court: U.S. District Court — Southern District of Georgia

47 F. 550

THOMAS v. AMERICAN FREEHOLD LAND & MORTGAGE CO. OF LONDON, Limited.

United States Circuit Court, S.D. Georgia, Eastern Division.

July 16, 1891

Frank H. Miller, for the motion.

William E. Simmons, opposed.

SPEER J.

The American Freehold Land & Mortgage Company of London, Limited brought suit in this court against J. Pinckney Thomas, a citizen of this district, for the sum of $5,816.66 on a certain promissory note, which reads as follows '$5,000.00. WAYNESBORO, Ga., January 13, 1883.

'On the first day of December, 1887, I promise to pay J. K. O Sherwood, or order, at the office of the Corbin Banking Company, New York city, $5,000.00, with interest from this date at the rate of eight per cent. per annum, payable annually, as per five notes herewith attached. Value received. * * * Should any of said interest not be paid when due, it shall bear interest at the rate of eight per cent per annum from maturity, as stipulated in said interest notes; and upon failure to pay any of said interest within thirty days after due, said principal sum may, at the option of the holder of this note, be declared due, without notice, and may thereupon be collected at once, time being of the essence of this contract; and, in case this note is collected by suit, I agree to pay all costs of collection, including ten per cent. of the principal and interest as attorney's fees.

(Signed) 'J. Pinckney Thomas. 3977.

'No. 32,220.'

Indorsed: 'Without recourse. J. K. O. Sherwood.'

Copies of the interest notes are attached. On the 9th day of April, 1888, the following judgment by default was taken:

'There being no defense filed on oath in this case, judgment is rendered by the court for the plaintiff vs. the defendant for $5,000.00 as principal, $990.47 as interest to this date, $599.04 attorney's fees, and $11.35 for cost of suit, to be taxed by the clerk, this 9th day of April, 1888.

(Signed) 'Emory Speer, Judge.' After said judgment was rendered by the court, without having submitted the case or any evidence therein to a jury, Mr. Fred Lockhart, the plaintiff's attorney, entered a judgment, signing the same, as attorney, for the principal, interest, and attorney's fees, to be levied upon the land, tenements, and hereditaments of the defendant, and especially upon 1,150 acres, more or less, in Burke county, Ga. Then followed a description, the boundaries being given, of the land. Execution was issued in accordance with the judgment last above mentioned. The marshal was commanded to levy generally upon the lands, etc., of the defendant and especially upon the 1,150 acres described in the judgment entered by the plaintiff's attorney. On the 4th day of December, 1888, this property was sold by the marshal in the usual manner of marshal's sales, and was bought in by William C. Wheeler for the sum of $431,36, and the marshal's deed made in pursuance of said sale. On the 6th of August, 1890, Turner C. Thomas, the administrator of J. Pinckney Thomas, made a motion in writing, giving notice thereof to the plaintiff in the original suit, to vacate the award and judgment, the execution issued thereon, and the sale made in pursuance thereof; and also asked for leave to file the pleas described in the motion. The grounds of the motion which it is important to consider for the purposes of this decision, are as follows: (1) That the defendant, J. Pinckney Thomas, died prior to the final adjournment of the term of court at which the judgment by the court was entered, and that no representative was appointed for the estate until the 5th day of April, 1890. (2) That the award granted April 9, 1888, was granted without jurisdiction, because suit was brought upon a conditional contract, and the verdict of a jury was required before judgment could be lawfully entered. (3) Because the judgment entered on the award does not conform to the pleadings in the case, nor to the award of the court. (4) Motion is made to set aside the execution, because it did not conform to the award of the court, and was issued to enforce a special lien only. (5) To vacate the sale, because Wheeler, the purchaser, was an officer of the plaintiff, who acted for and in its behalf; and that the sale, under the circumstances as disclosed by the record, and the deed pursuant to the sale, made by the marshal to said Wheeler, amounted to 'chilling' the bid by the plaintiff in fi. fa. Plaintiff made application to be permitted to file pleas to the jurisdiction of the court, and to the effect that the note so sued on was actually given for a loan of $4,000, though nominally for $5,000, $1,000 being retained by the payee at the time of giving the note and making the loan, and was therefore usurious. There were other grounds upon which it was sought to vacate the judgment, execution, levy, and sale, which appear in the record. The American Freehold Mortgage Company of London, Limited, transferee of the contract, and the plaintiff in the original suit, objects to the motion above set forth upon the following material grounds, and others which appear in the record: (1) Because, after a circuit court has adjourned without a day, it cannot set aside any of its own judgments on motion, such judgments being binding until reversed for error. (2) The grounds of the motion ought to have been urged before judgment; and the movant, being in laches, cannot be heard now. (3) Because it appears from the pleadings that the court had jurisdiction, and it is too late now to deny it. (4) Because sale under an execution cannot be set aside after the consummation and distribution of the proceeds thereof. (5) Because the pleas ought to have been filed before the rendition of the judgment.

The constitution of the state of Georgia (section 4, par.7; Code, Sec. 5145) provides:

'A court shall render judgment without the verdict of a jury in all civil cases founded on unconditional contracts in writing where an issuable defense is not filed under oath or affirmation.'

The plaintiff's attorney taking the judgment in this case followed the practice of the state courts, and took his judgment in conformity with the rule of the superior courts of the state, No. 39; a rule adopted in consonance with the clause of said constitution quoted above. Two important questions depending upon this action have been evoked by the motion: Does the jurisdiction in this court to give the judgment affirmatively appear in the record? Is the judgment void, in view of the law of the state, because it was rendered, not upon an unconditional, but upon a conditional, contract in writing, as insisted by the movant? The cause was pending at law, and it is insisted by the movant that the judgment granted was tantamount to the foreclosure and enforcement of an equitable lien in the nature of a mortgage, to do which is not within the jurisdiction of a law court of the United States, but is the exercise of a power belonging to a court of equity. The lien in question is created by sections 1969 and 1970 of the Code of Georgia, which provides as follows:

'Sec. 1969. Whenever any person in this state conveys any real property by deed to secure any debt to any person loaning or advancing said vendor any money, or to secure any other debt, and shall take a bond for titles back to said vendor upon the payment of such debt or debts, or shall in like manner convey any personal property by bill of sale, and take an obligation binding the person to whom said property was conveyed to reconvey said property upon the payment of said debt or debts, such conveyance of real or personal property shall pass title of said property to the vendee, provided that the consent of the wife has been first obtained, till the debt or debts which said conveyance was made to secure shall be fully paid, and shall be held by the courts of this state to be an absolute conveyance, with the right reserved by the vendor to have said property reconveyed to him upon the payment of the debt or debts intended to be secured agreeably to the terms of the contract, and not a mortgage.

'Sec. 1970. When any judgment shall be rendered in any of the courts of this state upon a note or other evidence of debt which such conveyance of realty was made and intended to secure, it shall and may be lawful for the vendee to make and file, and have recorded in the clerk's office of the superior court of the county wherein the land lies, a good and sufficient deed of conveyance to the defendant for said land; and, if the said obligor be dead, then his executor or administrator may in like manner make and file such deed without obtaining an order of the court for that purpose, whereupon the same may be levied on and sold under said judgment, as in other cases: provided, that the said judgment shall take lien upon the land prior to any other judgment or incumbrance against the defendant.'

It will be observed that the machinery provided by these statutes belongs to the state courts, where there are no distinctions between the practice and procedure at law and in equity. And it is urged by the movant that the proceeding on the part of the plaintiff in the suit at common law, to have defined and enforced the lien provided by the sections of the Code above quoted, presents a matter not within the jurisdiction of the circuit court sitting as a court of law. That proposition was held to be true by this court in the case of Mortgage Security Co. v. Gay, 33 F. 636, and after a more careful consideration of the authorities in the recent case, decided at this term, of Alexander v. Mortgage Co., 47 F 131. The judgments of a court of law usually take rank and effect in accordance with the date when they were rendered or granted. The judgments provided for by the special statutes above quoted...