Opinion
20274.
ARGUED NOVEMBER 10, 1958.
DECIDED JANUARY 12, 1959.
Injunction. Berrien Superior Court. Before Judge Huxford. September 27, 1958.
L. J. Courson, J. C. McDonald, for plaintiff in error.
Jack Knight, H. W. Lott, contra.
The petition stated a cause of action for some of the relief prayed.
ARGUED NOVEMBER 10, 1958 — DECIDED JANUARY 12, 1959.
On December 21, 1957, M. J. Luke filed a petition in equity against B. H. Crumley, and alleged: The plaintiff desired to purchase described property from his mother, which had been set aside to her as a year's support out of the estate of his father, John Luke, and he approached the defendant with reference to borrowing $5,000 to pay the purchase price, which the defendant agreed to lend him. On August 20, 1957, his mother, Mrs. Martha L. S. Luke, conveyed the property to the plaintiff in consideration of $5,000, the property being subject to a deed to secure debt executed by John Luke to Prudential Insurance Company of America, dated December 9, 1955, in the original amount of $5,000. A copy of the deed from his mother to the plaintiff is attached as an exhibit to the petition. Immediately after the property was conveyed to the plaintiff by his mother, he executed a deed to secure debt to the defendant, covering the same property, to secure an indebtedness of $5,000 (the amount lent to the plaintiff to purchase the property from his mother), which was to be payable over a period of five years, beginning one year after date, and $1,000 plus interest was to be paid annually until the indebtedness to the defendant had been repaid. The defendant has never recorded the deed to secure debt, and the plaintiff can not, therefore, attach a copy to the petition. Later in the same day the plaintiff executed the deed to secure debt to the defendant, the defendant approached the plaintiff and told him that, since the property had been set aside to the plaintiff's mother as a year's support, some question might be raised as to the title, and he wanted the plaintiff to sign another paper as further security. The plaintiff never went beyond the first grade in school, he can not read, and can not write except to sign his name. He is not familiar with legal forms, and he thought that the defendant was merely wanting additional security for his debt, and with this understanding he went to the offices of an attorney in Nashville, who drew the papers for the defendant. The paper was not read to the plaintiff, and he executed a paper which he thought was merely additional security for the debt he owed the defendant. Within the past week the plaintiff has discovered that the second paper which he executed on August 20, 1957, was a warranty deed. A copy made from the deed records of Berrien County is attached. This deed states a consideration of $6,000, but it was actually made without any consideration. Since the plaintiff can not read and write, and the paper was not read to him, the action of the defendant in obtaining his signature on the warranty deed amounted to a fraud. The plaintiff was in possession of the described property, cultivating it for his mother, at the time she conveyed the property to him, and he has been in actual possession of the property ever since his mother made the deed to him. The plaintiff had no idea that the defendant had a warranty deed to his property until about December 9, 1957, when the defendant went to the plaintiff's home located on the described property, and notified his wife that she and her husband and family would have to move from the premises because the property belonged to the defendant. Subsequently, on the same date, the plaintiff met the defendant and the defendant told the plaintiff that the property was the defendant's that he had a deed to it, and he wanted the plaintiff and his family to get out immediately, and if they did not get out, he would take proper steps to have them removed from the premises. "He told the plaintiff, however, that, if plaintiff would get off the place and work and get him another job and pay him the $1,000 which would be due next year, he would then let the plaintiff have the farm and the property back." The plaintiff is not the tenant of the defendant, and unless the defendant is enjoined, he will attempt to oust the plaintiff and his family by dispossessory warrant or other legal proceedings. The defendant still retains possession of the notes and deed to secure debt made by the plaintiff to him, and these are ample security for his indebtedness. The warranty deed constitutes a cloud upon the title of the plaintiff, and should be delivered up and canceled.
The prayers were: for process; that the defendant be temporarily and permanently restrained from evicting the plaintiff; that the warranty deed from the plaintiff to the defendant be canceled; that it be determined by the court that the only interest the defendant has in the plaintiff's property is the claim that he holds under the deed to secure the indebtedness of $5,000; and for further relief.
Temporary injunction was granted. On January 3, 1958, the defendant filed a general demurrer to the petition, and tendered into court the deed to secure debt from the plaintiff to the defendant.
On September 27, 1958, the plaintiff filed an amendment to his petition and alleged: Since the filing of his petition, the defendant has furnished him with a copy of the deed to secure debt executed by him. He now finds that he executed a deed to secure debt to secure a note of $5,300 due in thirty days. The deed contains the following provision, "Before the expiration of this 30 days a new note and security deed will be executed." This provision did not state the true agreement between the parties. It was understood and agreed by and between the parties that, at the expiration of the period of thirty days from August 20, 1957, the plaintiff would have the right to execute five notes of equal amount to evidence the amount borrowed by the plaintiff from the defendant, which would bear interest from date at the rate of 8 percent per annum, and would be due one, two, three, four, and five years after date, respectively, and would be secured by a deed to secure debt embracing the same property described in the deed to secure debt dated August 20, 1957. It was a mutual mistake that this provision was not inserted in the deed to secure debt. "When plaintiff told defendant that he would pay him his money . . . , defendant told plaintiff that he couldn't pay it because he made him a deed in settlement of the debt and he didn't owe him anything and wouldn't accept any money and defendant insisted on plaintiff removing himself and family from said described lands."
The prayers of the amendment were that the amendment be allowed; the court determine that the defendant does not have the absolute title to the property in question but that he holds the title merely as a security for debt; the deed to secure debt dated August 20, 1957, be reformed so as to speak the true intention of the parties; the warranty deed referred to be declared merely a security for debt; the rights of the parties be determined, and a decree be entered that whatever right, title, or claim the defendant has in the land described be merely as security for debt; the court declare the equities between the parties and mold a decree whereby both will be fully protected, and grant to the plaintiff such other and further relief as may be in accord with equity and justice; and, if the court should determine that the plaintiff is not entitled to a reformation of the deed to secure debt, the court provide a time and place whereby the plaintiff can pay all amounts owing by him to the defendant, with the further provision in the decree that, if the amounts are not paid within the time fixed by the court, the property be sold by a master appointed by the court for that purpose, to pay off the indebtedness due by the plaintiff to the defendant, with any overplus to be paid to the plaintiff, and the decree further providing that the plaintiff may at any time pay off the amount due before the sale is finally consummated.
The defendant renewed his general demurrer, and filed an additional demurrer to the petition as amended. The demurrers were sustained and the petition was dismissed. The exception is to that judgment.
"`A general demurrer to a petition will not be sustained if the facts entitle the plaintiff to any of the substantial relief prayed.' Arteaga v. Arteaga, 169 Ga. 595 (4) ( 151 S.E. 5)." Wallace v. Wallace, 213 Ga. 96 (2) ( 97 S.E.2d 155); Bowles v. White, 206 Ga. 433 ( 57 S.E.2d 547); Lowery v. Browning, 212 Ga. 586 ( 94 S.E.2d 413); Security Feed Seed Co. of Thomasville v. NeSmith, 213 Ga. 783 (2) ( 102 S.E.2d 37).
The demurrer to the original petition was a general demurrer on the ground that the petition did not state a cause of action. After the amendment to the petition was filed, the defendant renewed his demurrer, and filed an additional demurrer, in which he "moves to dismiss the same because said petition as amended does not show a cause of action against this defendant to entitle the plaintiff to the relief sought and prayed for, because the plaintiff is seeking to cancel a deed and said petition does not show that the consideration has been tendered to the defendant before the suit was filed asking for a rescission of the contract." "A demurrer which thus assails a petition in its entirety is a general demurrer, notwithstanding it may allege specific reasons why the petition as a whole should be dismissed." Saliba v. Saliba, 202 Ga. 791, 795 ( 44 S.E.2d 744).
While some of the allegations of the amendment are inconsistent with the allegations of the original petition, there was no special demurrer on the ground of duplicity, and a general demurrer does not raise that question. Farmers Merchants Bank of Manchester v. Gibson, 211 Ga. 270 (2) ( 85 S.E.2d 513), and cases cited.
The copies of deeds attached to the pleadings in this case present an unusual situation. On the same date the plaintiff executed to the defendant two deeds covering the same property. One deed was a deed to secure debt, executed in Tift County; and the other was a warranty deed in form, executed in Berrien County. The plaintiff alleges that he can not read, and can not write except to sign his name, and that the defendant perpetrated a fraud on him in inducing him to sign the warranty deed on the representation that it was a paper to provide the defendant with additional security for his debt.
Since the plaintiff alleges that there was no valid consideration for the warranty deed, the petition is not subject to general demurrer on the ground that the consideration recited in the deed was not tendered to the defendant before the petition was filed. The defendant in his brief, in consideration of this question, points out the fact that the warranty deed recites that it was "given subject to a deed to secure debt executed by John Luke to the Prudential Insurance Company of America . . . in the original amount of $5,000," and that the plaintiff does not show that a payment has not become due and had to be paid by the defendant. The deed does not recite any assumption by the grantee of the indebtedness represented by the deed to secure debt given by the plaintiff's father conveying the property which is the subject matter of this action. It recites that it is subject to the prior deed, which is a word commonly used in security deeds or mortgages. Hobbs v. Houston, 195 Ga. 571, 579 ( 24 S.E.2d 884). When a deed to secure debt has been executed and duly recorded, any subsequent conveyance of the same property must be subject to the first security deed, whether or not the fact of such deed is mentioned in the subsequent conveyance. The recital in the warranty deed in regard to a security deed given by a predecessor in title of the plaintiff was not a recital of a consideration for the deed. Under the allegations of the petition, as amended, the plaintiff was under no duty to tender any consideration recited in the warranty deed in order to maintain his action. Compare Jackson v. Jackson, 202 Ga. 634 ( 44 S.E.2d 250).
"Instruments conveying land, however clear and unambiguous, can always be shown by parol evidence to have been made to secure debt, where the vendor remains in possession." Hand v. Matthews, 153 Ga. 75 (1) ( 111 S.E. 408); Sims v. Sims, 162 Ga. 523 ( 134 S.E. 308). The plaintiff asserts that he has remained in possession of the property at all times since the execution by him of the warranty deed. He is, therefore, entitled to prove, if he can do so by competent evidence, that the deed conveying absolute title was executed by him as additional security for the debt owed by the plaintiff to the defendant.
The copy of the deed to secure debt attached to the amendment to the petition shows that the terms of this deed are uncertain. It is stated therein that it is executed to secure a debt "evidenced by one (1) note due thirty (30) days from date. Before the expiration of this thirty days a new note and security deed will be executed." Under these ambiguous terms of the deed, it can not be determined whether any amount was due by the plaintiff at the time his action was filed. He seeks to reform the terms of the deed, and asserts that by mutual mistake the true agreement of the parties was not inserted in the deed.
It is alleged that the defendant has stated that he will not accept payment of the debt, since he holds the title to the property as the absolute owner, and not as security for debt. The petition is not, therefore, subject to demurrer for failure to show that a tender was made of any indebtedness due, since the defendant's contentions and declarations are equivalent to a refusal to accept the tender if made. Ansley v. Hightower, 120 Ga. 719 ( 48 S.E. 197); Tolbert v. Short, 150 Ga. 413, 414 ( 104 S.E. 245). The petition stated a cause of action for some of the relief prayed, and it was error to sustain the general demurrers.
Judgment reversed. All the Justices concur.