1. A transferee of a grantee named in a security deed occupies the position of the grantee as against the grantor and those claiming under him. Accordingly, a grantor who has no standing to protest a transfer of a security deed by his grantee likewise has no standing to protest a transfer made by the grantee's transferee.
2. An assignee of an instrument conveying realty which contains a power of sale coupled with an interest, after default occurs and sale ensues, as agent may validly pass the grantee's title to the purchaser.
In a condemnation proceeding, this appeal was brought by the guardian ad litem of Grant, a 59-year-old incompetent, claiming a portion of condemnation proceeds sufficient to compensate her for the value of her life estate in property condemned by the Atlanta Housing Authority. The appeal was originally brought in the Supreme Court and was transferred to this court. The condemnation was not contested, nor was Grant's competency at the time she signed the note on a bank loan for repair purposes and executed the deed to secure debt with power of sale.
In 1959 Grant (prior to her nervous breakdown) and Wimberly, the remainderman, borrowed $1,000 from the Georgia Savings Bank & Trust Company, on a long-term note secured by a deed to real estate which contained a power of sale. In 1960, Andrews purchased the indebtedness, notes, and all rights thereunder from the bank. Andrews' purchase occurred after the debt was in default, the bank had declared it due, and was proceeding to advertise foreclosure. Thereafter, Andrews purchased the remainder interest from Wimberly for the sum of $500. No issue is presented as to whether the Georgia Savings Bank & Trust Company should have paid the recording tax imposed on long-term notes secured by real estate. When Andrews purchased the property, he tendered payment of any intangible taxes due to the clerk of the superior court and to the Intangible Tax Division of the State of Georgia. These agencies declined to accept any tax payment and stated that no tax was due from the bank or from him because the bank had declared the debt due and had sold it. Thereafter, Andrews exercised the power of sale contained in the loan deed and sold the property at public auction to John F. Oakey (deed recorded April 6, 1960). The guardian ad litem for Grant claims that the sale to Oakey was barred by the Intangible Property Tax Act of 1953, as amended, because while the bank was not obligated to pay the tax, the transferee was obligated and his failure to pay it barred his exercise of the power of sale in the loan deed, under Section 11 of the Act, Code Ann. 92-171.
The trial court awarded all of the condemnation proceeds to Oakey, and plaintiff in error excepted to this judgment on the grounds that (1) the judgment of the court misconstrued and misapplied the Intangible Tax Act which barred the foreclosure under the power of sale since the pleadings and the evidence clearly showed that no intangible tax was paid on the transfer of the indebtedness and security instrument to Andrews by an exempt state bank; and, that (2) the evidence further showed that Andrews, after conveyance to him of the bank's interests, purchased the remainder interest from Wimberly, thus merging the lien title with the fee simple title, which plaintiff in error contends amounted to accord and satisfaction of the debt of the remainderman and the life tenant.
1. The controlling factor in this case is not whether the nonexempt transferee of the long-term note secured by real estate, after default in payment but before the exempt State bank exercised the power of sale, was obligated to pay the recording tax imposed by the Intangible Tax Act of 1953, nor is it whether the exercise of the power of sale contained in the security deed, by a transferee from an exempt holder, was barred by nonpayment of the tax under Code Ann. 92-171. This is true for the reason that, "A transferee of the grantee named in the security deed occupies the position of such grantee as against the grantor and those claiming under him." Gilliard v. Johnston & Miller, 161 Ga. 17 (2) (129 SE 434); West Lumber Co. v. Schnuck, 204 Ga. 827, 835 (51 SE2d 644).
It is undisputed that Grant was a grantor in the deed to the exempt bank and that Andrews was the transferee of the bank's rights and interests in the deed. The bank's right to transfer to Andrews is not questioned. It is acknowledged that the deed contained a power of sale. Accordingly, when the bank transferred to Andrews, the latter occupied the position of the bank as against Grant, and she cannot complain that Andrews did what the bank, admittedly, could have done, i.e., after default occurred to sell the property.
Clearly, the bank, being exempt from the payment of the tax, was not subject to the bar against the collection of the debt as provided in Code Ann. 92-171. Washington Loan &c. Co. v. Golucke, 212 Ga. 98 (90 SE2d 575)
. Since the bank was exempt from the payment of the tax, Grant, as the bank's grantor, could not have protested the sale of the property by the bank to Oakey in reliance on the bar of the Code section. Obviously, as Grant had no standing to protest a transfer by the bank, she can have no standing to protest a transfer by the bank's transferee who as to her occupied the position of the bank. Gilliard v. Johnston, 161 Ga. 17
It should be borne in mind that Code Ann. 92-171 and similar provisions are designed primarily to assure the collection of the tax when due and not for the protection of a debtor. Since no governmental taxing agency is a party to this case, we wish to make it clear that we expressly refrain from ruling on the validity of any purported administrative interpretation of the Intangible Tax Act and on any question as to whether Andrews or anyone else identified in this case owes these taxes to the county or State. These questions are not presented by this appeal.
2. Although we have some doubt as to the precise theory the plaintiff in error's second ground espouses, it is not necessary for us to pierce the veil of illusion, for under no theory suggested could it have merit.
There is no issue raised contesting the fact that Grant, the life tenant, and Wimberly, the remainderman, as grantors, each conveyed his respective interest in the realty to the bank as grantee. Nor is it implied that this deed to secure debt is an exception to the rule stated for the Supreme Court by the late Mr. Justice Warren Grice to the effect that an assignee of an instrument conveying realty which contains a power of sale coupled with an interest, after default occurs and sale ensues, as agent may validly pass the grantee's title to the purchaser. Gurr v. Gurr, 198 Ga. 493, 504 (4) (32 SE2d 507). It was through an instrument such as this that John F. Oakey acquired his title from Andrews, the assignee. Insofar as the record reveals, it is a good title. Obviously, Oakey is entitled to the proceeds derived from the condemnation of the property.
Of the arguments advanced by the plaintiff in error--"merger," "extinguishment of the debt," "accord and satisfaction,"--none are involved here.