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Lawskills.com Georgia Caselaw
BARNARD v. BARNARD.
35508.
Complaint. Before Judge Atkinson. Chatham Superior Court. October 4, 1954.
CARLISLE, J.
Where, in a written "acknowledgment of indebtedness," given by the defendant to the plaintiff in consideration of the plaintiff's execution of a warranty deed to the defendant to certain described real property, the defendant acknowledges his indebtedness to the plaintiff and agrees that the sum owed shall become due and payable if and when the defendant "should sell, exchange, or otherwise dispose of said property," and the plaintiff brings an action for the sum acknowledged to be owed, in which it is alleged that the sum is due and payable by virtue of the defendant's having executed and delivered to a third person a warranty deed to the property to secure a loan by such third person to the defendant on such property, thereby fulfilling the condition of the acknowledgment of indebtedness, the petition in such action shows upon its face that no cause of action exists and is subject to general demurrer. The provisions of the acknowledgment of indebtedness are clear, concise, and unambiguous, and it is provided therein that the debt shall become due and payable in the event the defendant "should sell, exchange, or otherwise dispose" of the property. As used in the acknowledgment of indebtedness, the words "sell," "exchange," and "dispose" are ejusdem generis; that is to say, as used in the acknowledgment of indebtedness the words "exchange" and "dispose" are synonymous with the word "sell"; and, since the ordinary legal connotation of "sell" is to divest one's self of all rights and interest in the thing sold, the words "exchange" and "dispose" carry that connotation in the acknowledgment of indebtedness. It is manifestly clear from the terms of the acknowledgment of indebtedness that the parties intended that the sum acknowledged to be owed should become due and payable only in the event the defendant divested himself of all rights and interest in the property, and it is clearly and certainly the law that one does not divest himself of all rights and interest in property by merely executing and delivering to another a warranty deed to secure a debt on the property. While Code 67-1301 makes it exceedingly plain that deeds to secure debt do pass title to the property by which the debt is secured, such a deed does not divest the grantor in such deed of all his rights and interest in the property. Pusser v. Thompson, 132 Ga. 280 (64 S. E. 75, 22 L. R. A. (NS) 571); Chason v. O'Neal, 158 Ga. 725 (124 S. E. 519); House v. Tennessee Chemical Co., 159 Ga. 306 (125 S. E. 446); Capps v. Smith, 175 Ga. 795 (166 S. E. 234); and see especially Lindsey v. Robinson, 180 Ga. 648, 653 (180 S. E. 106), where the Supreme Court, in discussing a power of sale in a deed of trust, and after holding the words "sale" and "dispose" to be synonymous, said: "A security deed is not employed when it is intended to convey title out of the grantor without any reservation of a right to again become vested with the title upon the payment of the debt which is secured thereby," and in which case the court held that, while the trustee was empowered to sell and dispose of the property, he was not empowered to execute deeds to secure debt thereon. While the grantor in a security deed may divest himself of all rights and interest in the property covered by the deed by conveying his equitable estate therein (Chason v. O'Neal, supra), or he may be under some circumstances divested of all his rights and interest by the exercise of the power of sale contained in the security deed, it is not made to appear in the present petition that either of these eventualities has occurred, and the petition fails, therefore, to show that the amount owed has become due and payable by the occurrence of the eventuality upon which payment was conditioned in the acknowledgment of indebtedness. It follows that the trial court erred in overruling the general demurrer to the petition, and consequently all further proceedings were nugatory.
On February 9, 1954, Bernice L. Barnard brought an action against his brother, William R. Barnard, on the following "acknowledgment of indebtedness":
"Know all men by these presents: That whereas Bernice L. Barnard purchased from Siena B. Collat and Meyer L. Collat Lots Numbers 53, 54, 55, and 56 Gibbons Ward, City of Savannah, said State and county, and "Whereas, said Bernice L. Barnard entered the armed services before said property had been fully paid for and the undersigned William R. Barnard completed the payments and accepted the deed in the name of said Bernice L. Barnard, the said Bernice L. Barnard having paid seven hundred ninety ($790.00) dollars of the principal indebtedness for the purchase price of said property, and
"Whereas, said Bernice L. Barnard has this day executed and delivered to me a warranty deed conveying said property to me, and I have not paid said sum of seven hundred ninety ($790.00) dollars.
"Now, therefore, in consideration of the premises I do hereby acknowledge an indebtedness to said Bernice L. Barnard of seven hundred ninety ($790.00) dollars to be paid by me to him without interest if and when I sell, exchange or otherwise dispose of said property.
"Witness my hand and seal this 30th day of August 1945.
"William R. Barnard."
It is alleged in the petition that this acknowledgment of indebtedness was duly recorded in the office of the Clerk of the Superior Court of Chatham County, and that on September 8, 1953, the defendant executed and delivered to Home Federal Savings & Loan Association of Savannah a warranty deed to secure debt on the lots enumerated in the acknowledgment of indebtedness. The giving of the security deed, the plaintiff alleges, caused the indebtedness, under the terms of the acknowledgment of indebtedness, to become due and payable, and the defendant has refused to make payment upon demand.
The defendant's general demurrer to the petition was overruled by the trial court on June 7, 1954. Upon the trial the case, the defendant moved to dismiss the petition on various grounds in the nature of general demurrers. The trial court in overruling this motion passed the following order in which, after relating the allegations of the petition, it said:
"To this petition, defendant filed a general demurrer on February 26, 1954, and the demurrer coming on to be heard at the June Term, on June 7, 1954, the general demurrer was considered and then overruled, there being a written order to that effect of record. The June term of court expired on September 1, 1954, by operation of law (Georgia Laws 1953, p. 3312). There was no written exception filed to the order overruling the demurrer during the June term, nor within sixty (60) days of the overruling of the general demurrer. There was no bill of exceptions filed within the time provided by law.
"Judgment and order: First: It is the opinion of the court that the judgment overruling the general demurrer signed and filed June 7, 1954, is now beyond the recall of this court. The judgment was in the breast of the court during the June term but that term has now passed into history.
"Second: The court is also of the opinion that the judgment overruling the general demurrer was in order.
"This plaintiff sold real estate to defendant. Defendant made an agreement that if he sold or otherwise disposed of the real estate, he would, upon selling or otherwise disposing of the property, pay the $790.00 indebtedness. He did convey the property for $2000 by warranty deed to secure debt and he refused to pay the $790.00. The deed to secure debt gave title to the property and impairs the security of the $790.00 indebtedness and the court is of the opinion that the plaintiff is entitled to recover his money. If a person be permitted to make a conveyance by deed to secure debt, he may make the deed for the entire value or a large part thereof and thus defeat the purpose of the original agreement.
"Thereupon, the said motion to dismiss is overruled and denied."
On the trial of the case, the court, after the plaintiff and the defendant had each closed his case, directed a verdict for the plaintiff.
The defendant assigns error on each of the trial court's three rulings, to wit: the overruling of the general demurrer to the petition, the overruling of the motion to dismiss in the nature of a general demurrer, and the direction of the verdict for the plaintiff.
Edward J. Goodwin, contra.
Edwin Maner, Jr., for plaintiff in error.
DECIDED FEBRUARY 18, 1955.
Saturday May 23 02:47 EDT


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