Opinion
22273.
ARGUED JANUARY 15, 1964.
DECIDED FEBRUARY 6, 1964.
Ejectment. DeKalb Superior Court. Before Judge Guess.
Llop Long, Nick Long, Jr., for plaintiffs in error.
Clifford Oxford, Eugene S. Taylor, contra.
Where a deed to secure debt given to secure a note for $1,000 payable in 60 monthly installments of $18.88 authorizes a sale under power contained therein if the debt is not paid promptly when due, and it is shown that the secured debt had an acceleration clause whereby the holder could accelerate the entire indebtedness in the event of default in the installments, and a sale thereunder occurred after default and acceleration of the entire indebtedness by the holder of the deed and note: the purchaser at such sale acquired a title which divests the maker of the security deed and note of title.
ARGUED JANUARY 15, 1964 — DECIDED FEBRUARY 6, 1964.
This is an ejectment action brought by the grantor in a certain security deed which is inferior to a first loan deed on the property, seeking to eject parties in possession of the property who allegedly hold under deeds obtained when the grantee in the above referred to inferior deed foreclosed under the power of sale contained therein, advertised the property and sold the property in accordance with the law in such cases. However, the security deed was a "short-form" instrument which contained no acceleration clause or covenant that time was of the essence, and the sale under the power occurred before the final maturity date of the note as set out in the deed, which note was payable monthly in a stated amount. The answer of the defendants alleged that not only did the petitioner not have any interest in the property by reason of the sale under the power but that he was ousted from the property after the sale when a dispossessory warrant was filed against him, and he vacated the premises and abandoned the property without filing any objections or counter claims to said property "nor did he legally or equitably oppose said dispossessory warrant," and that he is equitably estopped from claiming any right, title or interest, or right of possession in the aforesaid property, and that he is guilty of laches now some four or five years after abandoning the property in seeking to oust these defendants who have had peaceable and bona fide possession of said property. Numerous demurrers were filed to this answer, and after a hearing certain were overruled and certain sustained, striking from the answer the allegations of laches, the claim of title under the security deed, the default and subsequent sale under the power contained therein, the dispossession of the petitioner under the dispossessory warrant who vacated and abandoned the property and failed to legally or equitably oppose the same, and the allegations of estoppel, on the grounds of irrelevancy, immateriality and conclusions of the pleader. The ruling on the demurrers gave a stated time to amend, but no amendment was filed, and these paragraphs were ordered stricken from the answer.
Thereafter, certain depositions were taken showing the default in installments of the indebtedness, the failure of the petitioner to make any payments during the past four or five years on the indebtedness due the holder of the first security deed and note, the security deed and the note with an acceleration clause and "time is of the essence" clause, a letter showing that the holder elected to accelerate the entire indebtedness and notification of the intention to advertise and sell the property, the receipt of part of the proceeds of the sale under the power by the petitioner, which he denied, the subsequent purchase of the property by the defendants, the agreement of the grantor to pay rent after the sale, and his dispossession under a dispossessory warrant without filing any defenses thereto.
On motion for summary judgment as to the right of possession of the real property, brought by the petitioner and after consideration thereof, together with the pleadings and depositions and argument thereon, the same was sustained. The exceptions are to the sustaining of the demurrers and to the granting of the summary judgment in favor of the petitioner.
The secured not is for $1,000 payable monthly at the rate of $18.88 beginning January 1, 1951, and refers to the security deed to secure the same of even date and contains this provision: "Should any installment not be paid when due . . . the entire unpaid principal sum evidenced by this note, with all accrued interest, shall, at the option of the holder, and without notice to the undersigned, become due and may be collected forthwith." The security deed definitely describes the note and contains this clause: "In case this debt is not paid promptly when due, I authorize said second party, its successors or assigns, at option, to sell said described property at public outcry before the courthouse door in DeKalb County, Georgia, to the highest bidder for cash to pay said debt, with interest thereon and expenses of the proceedings." Thus is plainly presented a note which by its terms became due at the option of the holder when an installment was not paid when due, and the deed securing the same authorizing a sale to pay the debt thus becoming due. There is no dispute in this record but that the installments were past due; the holder elected to declare the entire debt due, and he exercised the power of sale in conformity with the terms of the deed. This makes a prima facie case of good title in the purchaser at the sale.
Perhaps the petitioner is relying upon a paragraph in Verner v. McLarty, 213 Ga. 472, 478 (3) ( 99 S.E.2d 890), where, at page 478, it is said: "The deed . . . contains no acceleration clause in case of default of any monthly installment, nor does the deed provide that time is of the essence of the contract. Under these facts, there could be no valid exercise of the power of sale, since the debt was not due and could not properly be declared to be due." We have carefully reviewed that ruling (Division 3). We consider it unsound and expressly disapprove and overrule it. But the case previously pointed out that there had been a mutual departure from the stated time for payment of the installments and no notice of an intention to return to the terms of the note in that respect; also, that the deed required advertisement of the sale for four weeks, which would be 28 days, whereas the advertisement was for only 25 days. These rulings required a holding that an acceleration of the maturity of all payments could not be made because one payment was not made on the date stated in the note, and also that the sale was void for want of advertisement as required by the deed. Under these facts, there could be no valid exercise of the power of sale since the debt was not due and could not properly be declared to be due. We have here a note in plain terms providing for its maturity upon default in any installment payment, and a deed expressly authorizing a sale upon such maturity. The sale under the power conformed to the note and deed and was therefore valid and vested title in the purchaser at that sale.
This ruling renders unnecessary any ruling on the questions raised by the answer, the sustaining of the demurrers to the answer, laches, abandonment of the property, or estoppel by accepting the proceeds from the sale as shown by the defendants. The undisputed evidence demanded a judgment in favor of the defendants, and it was error to render summary judgment in favor of the petitioner.
Judgment reversed. All the Justices concur.