A petition alleging that the defendant grantees in security deeds published, prior to the maturity date of the note secured by the deeds, a statement of their intention to exercise their powers of sale under the deeds because of the plaintiff grantors' default in payment, and that the plaintiffs' credit was so impaired thereby as to cause the loss of their business, set out a cause of action sufficient to withstand a general demurrer.

DECIDED FEBRUARY 20, 1963 — REHEARING DENIED MARCH 6, 1963.

Each of these two separate actions was brought in four counts against the defendants, Planters Citizens Bank of Camilla and its president, E. J. Vann, III, by Sale City Peanut Milling Company, Inc., and by its president, Ira L. Watson. The petitions, which were materially identical, alleged substantially as follows: On or about November 24, 1959, plaintiff Watson executed, both individually and as president, and delivered to the defendant bank a promissory note for $34,453.94, together with security deeds to the plaintiffs' individual and corporate properties, as security for the note. In counts 1 and 3, it is alleged that, although the plaintiffs had complied with all the conditions of the note and security deeds, the defendants maliciously began foreclosure proceedings against the plaintiffs on May 7, 1960, by a publication in the Camilla Enterprise, in which they falsely and maliciously stated that the plaintiffs had defaulted in an installment payment due on the note and that the property given as security would be sold at public outcry on the first Tuesday in June, 1960. It was also alleged that the defendants knew at that time that no part of the indebtedness was due before October 1, 1960, and that they began the foreclosure proceedings with the intent of forcing the plaintiffs to either pay the debt before the due date or forfeit the security and that such conduct was so stubbornly litigious and in bad faith as to entitle the plaintiffs to reasonable attorney's fees. In counts 1 and 2 it is alleged that, solely because of these acts of the defendants, the plaintiffs lost the property securing the indebtedness.

In counts 2 and 4 the same acts of the defendants are alleged, but there are no allegations that the defendants knew that no part of the indebtedness was due, or that the acts were done with any malicious intent, as there were in counts 1 and 2. In counts 3 and 4 it is alleged that, as a result of the widespread notice given to the defendants' actions preparatory to foreclosure, the plaintiffs could not obtain any further credit with which to carry on their business and that they were forced to cease their business operations due to their business and personal creditors beginning to press for payment. In all four counts it is alleged that the plaintiffs were compelled by the defendants' proceedings to employ counsel at an expense of $50, and exemplary damages of $100,000 are sought.

In addition to a number of special demurrers, the defendants filed a general demurrer to the petition and each count thereof, on the grounds that no cause of action, either legal or equitable, is alleged against the defendants, that it is not alleged that the foreclosure proceedings terminated in favor of the plaintiff, and that it is not alleged that (1) an arrest of a person, or (2) seizure of property or (3) other special injury occurred. To the judgment sustaining the general demurrer the plaintiff excepts.

FELTON, Chief Judge.

It is contended by the defendants in error that any recovery under the petition must be based on either a malicious abuse of process or a malicious use of process, and that since neither is shown, no cause of action is alleged. This contention is unfounded, for the reason that a foreclosure under a power of sale contained in security deeds is not a judicial proceeding. "This power of sale is nothing more than a remedy given to the creditor by the debtor for enforcing the payment of the debt without resorting to the courts for this purpose. Its evident intention was to save both time and expense in the collection of the debt, should there be default in its payment. It is a remedy, therefore, by contract intended to substitute the remedy by law, should the creditor see fit to avail himself of the power conferred upon him by his debtor." Moseley v. Rambo, 106 Ga. 597, 600 ( 32 S.E. 638); Gurr v. Gurr, 198 Ga. 493, 509 ( 32 S.E.2d 507). That it is not a judicial proceeding, hence not involving either use of abuse of process, can clearly be seen from the wording of Code § 37-608, which requires confirmation and approval of the superior court judge before any action may be taken to obtain a deficiency judgment "[w]hen any real estate is sold on foreclosure, without legal process, under powers contained in security deeds, mortgages or other lien contracts, and at such sale said real estate does not bring the amount of the debt secured by such deed, mortgage, or contract . . ." (Emphasis supplied.)

"Powers of sale in deeds to secure debt are matters of contract, and they must be strictly construed, and will be enforced as written." Verner v. McLarty, 213 Ga. 472, 477 ( 99 S.E.2d 890); Miron Motel, Inc. v. Smith, 211 Ga. 864 (3) ( 89 S.E.2d 643); Code Ann. § 37-607. In the present case, the provisions of the security deeds granting the power of sale were, in effect, contracts which gave the grantee the right to exercise the power of sale upon default in payment, and not before such default. It is alleged that the defendants published their statement to the effect that the plaintiffs were in default and that the property covered by the security deeds would be sold at public outcry prior to the maturity date of the note and hence before there was a default in payment. Although the petition does not allege that there was an actual sale under the power of sale, and therefore under the rules of construction we can assume that there was none, it does allege that the defendants knowingly published an untrue and derogatory statement concerning the plaintiffs' financial conditions and that damages were sustained as a direct result of this publication. We are of the opinion that the petition alleged facts which showed a breach of duty toward the plaintiffs by the defendants and hence set out a cause of action good as against a general demurrer.

The court erred in sustaining the general demurrers to the petitions. The special demurrers, which were not ruled on by the trial court, are not considered here.

Judgments reversed. Eberhardt and Russell, JJ., concur.