Summary
In Holland v. Sterling, 214 Ga. 583, 585 (105 S.E.2d 894), the Georgia Supreme Court set forth the well recognized rule that "powers contained in a deed to secure debt are matters of contract, and will be enforced as written.
Summary of this case from Hilton v. Millhaven Company, Inc.Opinion
20256.
SUBMITTED OCTOBER 16, 1958.
DECIDED NOVEMBER 7, 1958.
Petition for interpleader. Fulton Superior Court. Before Judge Pharr. August 7, 1958.
Preston L. Holland, for plaintiff in error.
Dan Copland, Scott Walters, Jr., Jas. L. Thomason, Thos. L. Thompson, Nall, Miller, Cadenhead Dennis, B. Carl Buice, contra.
The petition for interpleader was properly dismissed on general demurrer.
SUBMITTED OCTOBER 16, 1958 — DECIDED NOVEMBER 7, 1958.
The plaintiff in error filed a petition for interpleader. In substance, the petition as amended alleged: The petitioner, as a member of the Bar, was employed by Central Builders Supply Company, Inc., to foreclose a loan deed executed by John Sterling to Citizens Bank of Hapeville, the holder of the deed being the transferee of the bank. The transferee paid to the bank $2,737.42, which the bank contended was due under the loan deed. (Copies of the note, deed, and transfer were attached, showing the principal amount of the loan to be $2,500, bearing interest at 6% per annum.) The deed was executed on May 17, 1956, and the transfer was made on November 29, 1956. The payments on the note being "in arrearage", the holder declared a default, under the terms of the deed, and after advertisement once a week for four weeks prior to the sale, the property was sold within the legal hours of sale to the highest bidder for cash on the first Tuesday in February, 1957, for $5,010. The loan deed has been satisfied. There was due the transferee $3,745.33, leaving an excess of $1,264.67. In addition to the amount paid to the grantee in the deed, Central Builders Supply Company, Inc., retained its account of $588.87, $338.30 as attorney's fees, and $24 as advertising costs. John Sterling, the maker of the first loan deed, and Louis J. Stovall, the holder of another loan deed, have each demanded the excess over the amount retained by Central Builders Supply Company, Inc., in satisfaction of its claims. T. M. King is the holder of a loan deed in the amount of $600, and is demanding payment out of the sum received, in excess of the debt of Central Builders Supply Company, Inc. Hapeville Concrete Block Company claims that it is entitled to $349.53 on open account. The petitioner is in the position of a disinterested stakeholder, claims no interest in the funds, is not in position to know the true facts concerning the claims of the various claimants, and is not in collusion with any person in respect to the funds in his possession. Because of the conflicting claims, the petitioner is placed in a position of uncertainty and insecurity with respect to his rights, and is uncertain as to which of the conflicting claims are meritorious. He tenders into court $1,264.67.
The prayers were: for process; that the defendants be required to interplead and set up their respective claims; that the petitioner be allowed to pay the excess into the registry of the court and be discharged of further liability; and for further relief.
The general demurrer of T. M. King to the petition as amended was sustained, and the petition dismissed. The exception is to that judgment.
The plaintiff in error was employed as an attorney by Central Builders Supply Company, Inc., as assignee of Citizens Bank of Hapeville, to foreclose a deed to secure debt executed by John Sterling to the bank. The plaintiff in error has not cited any authority to sustain a petition for interpleader under the facts of this case.
"Powers of sale in deeds of trust, mortgages, and other instruments, shall be strictly construed and shall be fairly exercised. . . ." Code § 37-607 as amended, Ga. L. 1937, p. 481. Powers contained in a deed to secure debt are matters of contract, and will be enforced as written. Plainville Brick Co. v. Williams, 170 Ga. 75 ( 152 S.E. 85); Miron Motel v. Smith, 211 Ga 864 (3) ( 89 S.E.2d 643). Central Builders Supply Company, Inc., as assignee, can not claim the right to exercise the powers contained in the deed to secure debt conferred upon the grantee, and escape the duties and obligations resting upon the grantee in such deed. The deed from Sterling to the bank provides that the grantee, or assigns, from the proceeds of a foreclosure sale, after reserving therefrom the principal, interest, and any other amounts due, "shall pay any overplus to the grantor, or to the heirs or assigns of grantor as provided by law."
The deed from Sterling to the bank was duly recorded in the office of the clerk of the superior court, and this was constructive notice to the world of the terms and provisions of the deed, from the date of its record. Clark v. C. T. H. Corporation, 181 Ga. 710 ( 184 S.E. 592); Poore v. Poore, 210 Ga. 371, 372 ( 80 S.E.2d 294). It appearing from the petition for interpleader that the grantor, John Sterling, has claimed the amount derived from the sale, in excess of the amount claimed by the assignee, Central Builders Supply Company, Inc., the assignee was legally bound under the terms of the contract to pay this overplus to him, in the absence of proper proceedings by one or more of the alleged claimants to the fund to prevent such payment.
In the present case the petition could not be maintained even if brought by Central Builders Supply Company, Inc. One who seeks the aid of a court of equity by petition for interpleader must claim no right in opposition to the claimants to the fund. Manufacturers Finance Co. v. Jones Co., 141 Ga. 619, 621 ( 81 S.E. 1033). The petition seeks to charge the grantor in the security deed with $338.30 as attorney's fees. It contains no allegations of any compliance, or attempted compliance, with the requirements of Code § 20-506 as amended by Ga. L. 1953, p. 545. "Attorney's fees specified in a promissory note can be collected only on the statutory terms; . . ." Byrd v. Equitable Life Assurance Society, 185 Ga. 628 (5) ( 196 S.E. 63); Walton v. Johnson, 213 Ga. 108 ( 97 S.E.2d 310).
The promissory note and debt secured by the deed is in the principal sum of $2,500, dated May 17, 1956, and was transferred on November 29, 1956. The note bears interest at the rate of 6% per annum, and had run for approximately six and one-half months. The amount of annual interest at 6% on $2,500 would be $150. No explanation is made of how the bank was entitled to demand and collect $237.42 as accrued interest at the time of the assignment. Since the assignee of the deed would be accountable to the grantor for the disposition of the proceeds of the sale, it may not, in order to assert that its open account comes under the provisions of the deed and is secured thereby, pay to the grantee in the deed interest in excess of the amount due.
Under the facts of this case, the assignee could not maintain an action for interpleader, and certainly its attorney can not do so. The judge of the superior court properly sustained the general demurrer and dismissed the petition.
Judgment affirmed. All the Justices concur.