When any real estate is sold on foreclosure without legal process, no action may be taken to obtain a deficiency judgment unless the judge of the superior court of the county in which the land lies confirms and approves the sale as bringing its true market value on such foreclosure sale. The court may likewise order its resale for good cause shown, which may be the inadequacy of the price received for the property.
S. Scott Sheffield and Walter Sheffield, Jr., after the foreclosure and sale of certain property of the defendant Robert F. Davie, under the powers contained in a deed to secure debt to the subject real estate, applied to the Superior Court of Clayton County for an order of the court confirming the sale for a purchase price of $27,000, which is alleged to be the true market value of the property, which was considerably less than the indebtedness due the plaintiffs by the defendant. The petition further alleged that the sale of the property was fairly exercised in accordance and after compliance with all the terms and conditions set forth in the deed to secure debt.
At the hearing, the evidence was not reported by a court reporter, and a transcript of evidence of the proceedings was prepared from recollection in narrative form upon agreement of counsel for all parties. This transcript and stipulation of the parties states that the notice of foreclosure, and the foreclosure itself, were all executed pursuant to law; the subject property was bought in by the plaintiffs at the foreclosure sale for the price of $27,000; and the sole issue of fact to be determined by the trial court was the market value of the land in question. Thereafter the transcript, prepared from recollection, shows conflicting testimony as to the actual value of the property conveyed. The judge ruled that the property was worth in excess of what the plaintiffs had purchased it for, and he proceeded to order and adjudge that the sale not be confirmed and that the property be re-sold in accordance with the law and the powers of sale contained in the deed to secure debt.
The appeal is from this final judgment, with error enumerated only as to that portion of the order providing that "the property be re-sold." Appellant contends as follows: 1. The order is without evidence to support it as there was no evidence as to the impropriety of the notice, advertisement or irregularity of the sale previously conducted. 2. That the parties had stipulated that the notice of foreclosure and the foreclosure itself were all done pursuant to law. 3. That the order was contrary to law in that the trial court was powerless to order a re-sale unless the court determined there was improper notice or advertisement or irregularity of sale. 4. That the order was contrary to law in that the trial court had no discretion in this case to order a re-sale of the property because there was no "good cause" shown by the evidence authorizing such re-sale.
Prior to 1935 there was no statute in Georgia requiring confirmation of sales by foreclosure and permitting the person instituting the foreclosure proceedings to seek a deficiency judgment where the mortgaged property sold for less than the amount of the debt. But in 1935 the General Assembly enacted such statute (Ga. L. 1935, pp. 381-382), which has been codified in the Georgia Code Annotated by the publishers, as Code Ann. 67-1503, 67-1504, 67-1505 and 67-1506. The first three sections appear in the published Ga. Laws of 1935 as Section 1.
Section 1 empowers the court, on application for confirmation of the sale, (1) to consider whether the property was sold for its true market value, and (2) to pass upon the legality of the notice, advertisement, and regularity of the sale. The last sentence of Sec. 1 is: "The court may, for good cause shown, order a resale of the property." Obviously this means that for any of the above reasons, including failure to sell for its true market value, the court may order a re-sale.
Appellant in the case at bar contends that a resale may not be ordered unless there is fault found with the "notice, advertisement, and regularity of the sale" and argues that only these three items appear in Code Ann. 67-1505, which empowers the court to order a re-sale. But as we point out above, Code Ann. 67-1505 divides the language through the work of the publishers, not through the work of the General Assembly. The General Assembly clearly placed all of these matters, including failure of the property to bring its true market value, in Sec. 1, and then provided that the "court may, for good cause shown, order a resale of the property."
The appellate courts of Georgia have time and again held that mere inadequacy of price is not a sufficient reason for ordering a re-sale of property sold at public outcry. But it will be noted that these decisions are premised on earlier decisions which had their origin prior to 1935. For the first time, in 1935, the General Assembly provided that a re-sale could be had for mere inadequacy of price, and the appellate courts simply failed to take the 1935 statute into consideration in any holdings after that date which provide that mere inadequacy of consideration is not enough to require a re-sale of property.
It might be argued that a third person may become the purchaser of the property where it is knocked off to the high bidder at public auction, and that the 1935 statute seems to concern only the creditor and debtor (the maker and holder of the deed to secure debt), and does not contemplate a re-sale where such third person has become the purchaser. We can only say in reply that the purchaser at public outcry, whether a party to the debt, or a third person, bids at the sale with full knowledge of enactment of Ga. L. 1935, pp. 381-382, which clearly contains the language that "The court may, for good cause shown, order a resale of the property." And he is bound by this language in the statute.
Accordingly, the court did not err in ordering a re-sale where there is evidence supporting his finding that the price received at the sale was inadequate, and the statute authorizes such re-sale.
Judgment affirmed. Jordan, P. J., and Quillian, J., concur.