Opinion
21529.
SUBMITTED JANUARY 9, 1962.
DECIDED FEBRUARY 8, 1962.
Injunction. Crisp Superior Court. Before Judge Horne.
Wright Reddick, for plaintiff in error.
John R. Rogers, contra.
1. In construing a power of sale contained in a deed to secure debt, the words employed to express the intention of the parties will be given their ordinary signification, and where the language of the document is plain, its meaning will not be extended by interpretation.
2. Where both the husband and wife were designated in a deed to secure debt by singular number as "party of the first part," the individual debt owed to the bank by the husband alone was not the debt of the "party of the first part," which fell within the operation of the deed's drag-net clause.
3. There was no showing that a deed of gift from husband to wife was made to hinder, delay, and defraud the bank where the petition does not disclose that the husband was insolvent at the time the deed was executed, or that the wife was aware or had reason to suspect that the husband had other outstanding debts with the bank.
4. Where the relief sought was not the cancellation of a deed to secure debt, but rather the surrender of the deed upon payment by the plaintiff of the original debt and interest, the petition is based on a statutory right, and it is not essential that the husband, the other grantor of the security deed, be made a party to the suit.
SUBMITTED JANUARY 9, 1962 — DECIDED FEBRUARY 8, 1962.
Mattie Powers, defendant in error, filed her petition in equity against Cordele Banking Company, plaintiff in error, in the Superior Court of Crisp County to enjoin and restrain the defendant bank from selling certain real estate described in a deed to secure debt executed by the plaintiff and her husband, Jack Powers, given to secure a loan in an original amount of $7,000.00 in favor of the bank.
The plaintiff alleged that, on February 17, 1959, she, together with her husband, borrowed from the bank $7,000.00, jointly executing therefor a promissory note in a like amount and of even date, bearing a maturity date of January 1, 1960; that she together with her husband, executed as a part of the same transaction and as security for the loan a deed to secure debt to real estate therein described, of which they were common owners, bearing the same date and in an even amount, a copy of which she attached to her petition as an exhibit. She alleged that subsequently to this transaction she and her husband, on September 21, 1959, executed another note to the defendant in the amount of $6,000.00, and that there was only a balance due of $2,197.00, including interest, which she had tendered to the bank and upon their refusal to accept the sum that she paid it into the registry of the court upon filing her petition.
The plaintiff further alleged that, on December 10, 1959, her husband individually executed to the bank a promissory note in the amount of $1,500.00, and again, on November 13, 1959, another promissory note for $2,400, of which she had no knowledge; that subsequently to all of the above transactions with the bank by both her and her husband, he had made to her a deed, reciting as consideration "love and affection," to all of his interest in said lands on January 21, 1960.
The plaintiff alleged that the bank was advertising the purported one-half undivided interest of her husband, for which she was in no way liable, and she attached as an exhibit the deed to secure debt, executed by both of them, to support her contention. She also set out that the bank was proceeding to advertise her one-half undivided interest in the lands under the power of sale contained in the deed and attached the separate advertisements as exhibits. The plaintiff prayed that the defendant be temporarily and permanently enjoined from selling the real estate described in the deed to secure debt, and be required to surrender to her, marked satisfied, the deed upon her payment of $2,197.00.
The defendant bank filed its general demurrers on the grounds that the petition did not set forth a cause of action; that the allegations did not set out any facts entitling the plaintiff to relief; that there was no equity in the petition and the plaintiff had a complete and adequate remedy at law. At the same time the defendant filed special demurrers to the petition. The court passed an order overruling the general demurrers and overruling and sustaining certain of the special demurrers, and allowed the plaintiff time within which to amend. The court also orally granted a temporary restraining order, although no order was passed thereon.
The plaintiff filed an amendment to meet the special demurrers by attaching copies of the deed of gift from her husband and also a copy of the note executed by Jack and Mattie Powers to the bank. The defendant filed its demurrers to the petition as amended renewing all of its original general demurrers and demurring further upon the following grounds:
(1) That the petition as amended does not set forth any cause of action against this defendant, because it affirmatively appears that the note which was attached by amendment was executed contemporaneously with the security deed, and is in law and in fact a joint and several obligation and undertaking by the plaintiff and her husband. Furthermore, it affirmatively appears from the language set forth in the body of the note that the defendant was expressly authorized to retain the security or the proceeds thereof belonging to either of the plaintiffs and apply the same to this or any other debt or liability of either of them.
(2) Because it affirmatively appears upon the face of the petition as amended that the deed of gift from Jack Powers to Mattie Powers, attempting to convey with warranty of title by deed of gift the property in question, which conveyance was made subsequently to the date of the deed to secure debt in favor of the bank, and is an attempt on the part of the plaintiffs to hinder, delay, and defraud creditors and in law the petition as amended having failed to make the plaintiff's co-signer, her husband, a party to the suit, the action should be dismissed.
The demurrers came on for hearing and by order dated October 23, 1961, each and every ground of the demurrers was overruled. On this order the defendant assigns error and brings to this court its bill of exceptions.
1. The bank contends that it was empowered under the drag-net clause of the deed Mrs. Mattie Powers and her husband, Jack Powers, executed to secure the payment of a note they both signed to sell under a power of sale contained in the deed, a one-half interest of the land therein described as property of Jack Powers to satisfy notes which he alone owed the bank, as against a deed of gift Powers had subsequently made to his wife.
The drag-net clause referred to reads: "one note dated 2/17/59, due 1/1/60 for $7,000.00 as well as to secure the payment of any other indebtedness now or hereafter owing to said second party by said first party either as sole debtor, joint promisor, endorser, guarantor, or otherwise, not exceeding in the aggregate $12,000.00."
The language of the power of sale contained in the deed is:
"In the event the said first party fails to pay promptly at maturity any of said notes or any interest thereon or any part of the taxes as they accrue against said property before delinquency thereof, or any other lawful charges against said property, or fails to keep said property insured in an amount of at least $ ____ for the benefit of the said second party, its successors or assigns, then the entire debt secured by this deed shall become due and payable at once at the option of the holder thereof, time being of the essence thereof, and the Grantee in this deed, its successors and assigns, is hereby authorized at its or their option to sell as attorney in fact for the undersigned at public outcry before the courthouse door in the County of Georgia in which the property is located, to the highest bidder for cash all or any part of said property to pay said indebtedness, with interest thereon and the expenses of this proceeding after having advertised the same for sale in the official organ or any newspaper having general circulation in the County or Counties where said land lies, once a week for four weeks, with the right of said second party, its successors or assigns, to purchase said property at such sale."
Powers of sale contained in deeds to secure a debt and instruments of similar nature are strictly construed and must be fairly exercised. Code Ann. § 37-607; Doyle v. Moultrie Banking Co., 163 Ga. 140 ( 135 S.E. 501). In construing such instruments the words employed to express the intention of the parties will be given their ordinary signification, and where the language of the document is plain, its meaning will not be extended by interpretation. Wolverine Ins. Co. v. Jordan, 213 Ga. 299, 302 ( 99 S.E.2d 95).
2. The deed executed by the plaintiff and her husband, Jack Powers, to secure a debt due the defendant bank designates the plaintiff and her husband by singular number as "party of the first part" and throughout the instrument, whenever alluded to, they are called "party of the first part." Hence, according to the pronouncements of Americus Finance Co. v. Wilson, 189 Ga. 635 ( 7 S.E.2d 259), and Bank of LaFayette v. Giles, 208 Ga. 674 ( 69 S.E.2d 78), an individual debt owed to the bank by Mr. Powers alone was not the debt of the "party of the first part" which fell within the operation of the deed's dragnet clause, quoted in the preceding division of this opinion, that the bank was authorized to collect through the exercise of the power of sale contained in the deed.
The bank contends that the case at bar is distinguishable from the Giles case, supra, because in the Giles case the note signed by the grantors of the deed given to secure its payments was the joint obligation of the signers, whereas the note secured by the deed executed by the Powers in this case is their joint and several undertaking. The point is not well taken, because in both instances the secured note appears to be joint and several promises to pay. In the Giles case it is held (p. 678): "It is a general rule, that where two or more persons sign a promissory note providing that `I promise to pay,' the obligation is joint and several. Code § 14-217 (7). The note, however, does not change the terms and provisions of the deed to secure debt, which comes within the rule that `powers of sale in deeds of trust, mortgages, and other instruments shall be strictly construed and shall be fairly exercised.' Code § 37-607; Doyle v. Moultrie Banking Co., 163 Ga. 140 ( 135 S.E. 501); Cadwell v. Swift Co., 174 Ga. 313 ( 162 S.E. 814); Delray, Inc. v. Reddick, 194 Ga. 676 ( 22 S.E.2d 599, 143 ALR 519); Holbrook v. Dickson, 195 Ga. 821 ( 25 S.E.2d 671)."
The only distinction that we observe in the cases is that the deed in the present case more clearly and definitely describes the grantors as a unit, than does the deed in the Giles case. The Powers in the deed made by them, as were the makers of the deed in the Wilson case, supra, are designated in singular number as "party of the first part" and "grantor," while in the Giles case the deed refers to the makers of the deed as "grantors" and "first parties."
3. The petition did not, as the bank insists, disclose that the deed made by Powers to his wife, the plaintiff, was made to hinder, delay, and defraud the bank. As in the case of Brown v. Spivey, 53 Ga. 155, the petition does not intimate that Powers was insolvent at the time the deed was executed. It was held in the Brown case, supra, p. 155 (2): "A voluntary conveyance made by a husband, solvent at the time, to his wife and children, is binding as against creditors."
Moreover, from the averments of the petition it does not appear that the plaintiff, Mrs. Powers, was aware or had reason to suspect any purpose of her husband to delay or defeat the bank in the collection of any debt due by him. In fact, it does not appear from the petition that she had reason to suspect he owed any debt to the bank except the note described in the deed delivered to the bank and that she signed with him. Elder v. Hewitt, 33 Ga. App. 410 (8) ( 126 S.E. 848).
4. The defendant's contention that Jack Powers was a necessary party to the case is not well taken. The same point was raised in the Giles case, 208 Ga. 674 (2) supra, where it was held: "Upon payment of the amount due under the terms of a deed to secure debt, it is the duty of the grantee in such deed to surrender and deliver it to the grantor with a proper entry showing payment, and the grantor may thereafter have it `satisfied' of record. A petition seeking to have the above rule complied with by the grantee is based upon a statutory right." As was further pointed out, the petition did not pray for cancellation of the deed to secure debt, but the relief prayed for was the surrender of the deed to secure debt upon payment by the plaintiff of the original debt and interest. Hence, the other grantor was not an essential party to the suit.
Judgment affirmed. All the Justices concur.