Opinion
16195.
MAY 13, 1948.
Complaint on note; intervention. Before Judge Lilly. Thomas Superior Court. January 3, 1948.
C. E. Hay, for plaintiff.
Alexander, Vann Lilly, for defendants.
The general rule is that intervenors pro interesse suo (according to his interest) are not known in common-law suits.
(a) An exception to the general rule is where the intervenor sets up some right which would be directly affected by the judgment. But to come within the exception the interest of the intervenor must be of such a direct and immediate character that he will either gain or lose by the direct effect of the judgment; and must be created by the claim in suit, or a claim to a lien upon the property, or some part thereof, which is the subject-matter of the litigation.
(b) The instant case comes within the general rule, and it was error to allow the intervention over the objections urged.
No. 16195. MAY 13, 1948.
Ola Sampson, on June 30, 1947, brought suit in Thomas Superior Court against Mitchell Sampson upon a promissory note, dated March 20, 1920, for the principal sum of $15,255 with interest at the rate of 8% per annum from March 20, 1930. In her petition it was alleged that the note sued on first matured March 20, 1925, at which time all interest to that date was paid and the due date was extended to March 20, 1930, by an entry on the note to that effect signed by the maker and payee. It was further alleged that the defendant, as security for the payment of his note, conveyed to the plaintiff certain described real estate by deed dated March 20, 1920, which was recorded in Thomas County on August 4, 1922, and at the time the maturity date of the note was extended for five years, or until March 20, 1930, an entry, signed by both parties, was accordingly made upon the security deed. She prayed judgment for her principal, interest, and for a special lien upon the real estate conveyed by the security deed. The defendant was personally served July 1, 1947, and filed no defense. On October 15, 1947, T. K. Vann presented his petition for leave to intervene in the cause. Briefly the petition for intervention, as amended, alleged: On March 1, 1943, the defendant, Mitchell Sampson, leased to the intervenor for five years, with the right of renewal for a like period, the ground floor of that two-story brick building which he had previously conveyed by security deed to the plaintiff. The intervenor had complied with all the terms of his lease contract and had given the lessor (Mitchell Sampson) notice of his election to renew it for an additional five-year period. Since the security deed to Mrs. Sampson and the record of same antedate the intervenor's lease and describe the same, as well as other property, if judgment is rendered against the defendant and declared a special lien upon the property conveyed thereby, as prayed in the plaintiff's petition, it will adversely affect and prejudice the intervenor's leasehold interest in the property. The grounds for intervention were: (1) under the act of 1941 (Ga. L. 1941, p. 487), title to the property involved reverted to the defendant after the expiration of twenty years from the date of the security deed; (2) under section 4 (b) of an act approved December 27, 1937 (Ga. L. Ex. Sess., 1937-38, p. 156), the plaintiff's right to sue upon the note is barred because of her wilful failure to list it with the State Revenue Commission for taxation for each and every year since the passage of the act; (3) under section 3-703 of the Code, any right to sue on the note is barred by the statute of limitations, since suit was brought more than twenty years after its maturity date and there was no valid renewal or extension of the obligation; (4) the obligation sued on is without consideration; (5) the security deed referred to in the petition was executed with an intent to defraud creditors and subsequent purchasers, and the intervenor is a subsequent purchaser; (6) the security deed involved was a voluntary conveyance, and the intervenor is a subsequent bona fide purchaser from the grantor without notice of its voluntary character; (7) the note sued on has been paid in full; and (8) the plaintiff is estopped to assert against the intervenor the lien of the security deed referred to.
In the petition for intervention it was further alleged that the value of the property conveyed by the security deed was less than the amount the plaintiff sought to recover. The intervenor had been unable to locate any other property in Thomas County owned by the defendant, and for that reason he believed that the defendant was insolvent, and he "apprehends" that the defendant will collect the rents from the property and dispose of them so that they will be beyond the reach of the plaintiff, the intervenor, and the court. In equity and good conscience, said rents should be collected, conserved, and if it be established as a just claim, applied toward the indebtedness due the plaintiff, in order to preserve the intervenor's leasehold in the property. To accomplish this, the court should appoint a receiver to take charge of the property, collect the rents, and to hold, conserve, and administer it under direction of the court.
It was further alleged that, since the defendant had filed no defense, the case was in default; that it was the plaintiff's intention to take a default judgment at the next term of the court; and that the court should, in order to protect the rights of the intervenor, restrain the plaintiff from taking judgment until the further order of the court.
It was further alleged by amendment that intervention should be allowed because the defendant has failed, though required to do so, to keep the building involved in a state of good repair. As a consequence of the defendant's breach of duty in this respect, the intervenor's merchandise located therein has been damaged in the approximate sum of $350, and further damage to the same is anticipated. The defendant is insolvent, and a receiver should be appointed to take charge of the property so that the rents therefrom can be applied to its repair and upkeep. The appointment of a receiver for this purpose would prevent a multiplicity of suits, which it will be necessary for the intervenor to bring against the defendant for damage to his merchandise.
On presentation of the petition the court granted a rule nisi and restrained the plaintiff from taking judgment until the further order of the court.
The petition, as amended, was demurred to upon the grounds: (1) its allegations are insufficient to show any right to intervene; (2) that the plaintiff's action is barred by the statute of limitations, is a defense personal to the defendant and constitutes no ground for intervention by a third person; (3) the act of 1941, which provides that title conveyed by a security deed reverts to the grantor after twenty years from date, has no retroactive effect; (4) the defense made available to the defendant under the act approved December 27, 1937, for wilful failure to list intangibles for taxation is (a) a personal one to the defendant, and (b) the act under stated provisions of the Constitution can be given no retroactive effect; (5) that the note had not been legally renewed and that it was without consideration, are (a) defenses purely personal to the defendant and constitute no ground for intervention by a stranger to the contract, and (b) the defendant was in default and concluded thereby before the petition for intervention was presented; (6) that the note was executed with an intent to defraud subsequent purchasers, should be stricken, because (a) the security deed and the record thereof antedate the intervenor's alleged lease, and (b) it affirmatively appears that the intervenor took his lease contract with notice of the outstanding security deed; (7) that the note had been paid in full, should be stricken, because (a) such defense is purely personal to the defendant, and (b) it is not alleged how, when, and to whom the note was paid; (8) that the plaintiff is estopped from asserting her lien under the security deed, is a conclusion of the pleader, with no facts alleged upon which to base the same; (9) no facts are alleged which would authorize the appointment of a receiver; and (10) paragraph four of the amendment, alleging that the intervenor has been damaged by the negligent acts of the defendant in failing to keep the leased premises in good repair, should be stricken, because (a) it is in no wise germane to the subject-matter of the cause in which intervention is sought, and (b) the intervenor will not be heard to set up in the original case a new cause against the defendant.
The court overruled all of the grounds of demurrer, except those which attacked the allegations of the petition as amended as being insufficient to show a proper cause for the appointment of a receiver. These were sustained and the prayer for receivership denied. In the order disposing of the demurrers, the court allowed the intervention, opened the default as to the intervenor, and fixed a time for filing defensive pleadings by him, but expressly declined to open the default as to the defendant. To that portion of the order which was adverse to her the plaintiff excepted and brought the case here for review.
The question presented by the writ of error is whether or not the trial judge erred in allowing the intervention over the objection urged thereto. We think that he did.
The plaintiff's case is one at law to recover a judgment for the amount of principal and interest alleged to be due her by the defendant on a promissory note, and this is true notwithstanding the fact that the petition contained a prayer that the judgment be declared a special lien upon the property described in a deed which the defendant had executed and delivered to her as security for the obligation sued on. The prayer for a special lien is surplus age, and does not have the effect of changing the character of the action from one at law to one in equity, since all that is essential to the enforcement of the lien created by security deed is the rendition of a general judgment, reconveyance of title by the vendee to the defendant for the land embraced therein, and proof aliunde that such judgment was rendered upon the secured debt. Code, § 67-1501; Edenfield v. Bank of Millen, 7 Ga. App. 645 ( 67 S.E. 896); Carlton v. Reeves, 157 Ga. 602 (3) ( 122 S.E. 320); Burgess v. Ohio National Life Insurance Co., 177 Ga. 48, 52 ( 169 S.E. 364).
The general rule at common law is that persons who are not parties to a suit can not file an intervention therein. Tanner v. American National Bank, 145 Ga. 512 ( 89 S.E. 515). Our Code, § 81-1303, declares: "No amendment adding a new and distinct cause of action or new and distinct parties shall be allowed unless expressly provided for by law." It was said by this court in Delaney v. Sheehan, 138 Ga. 510, 513 ( 75 S.E. 632), that "Intervenors pro interesse suo [according to his interest] are not known in ordinary common-law suits." And in Tanner v. American National Bank, supra, this court held that a stranger cannot come in the case merely for the purpose of contesting the plaintiff's right to recover. That strangers, as a general rule, are not permitted to intervene in actions at law in this State, is well settled by the decisions of this court. Delaney v. Sheehan, supra; Tanner v. American National Bank, supra; Potts v. Wilson, 158 Ga. 316 ( 123 S.E. 294); First National Bank of Bainbridge v. Knowles, 179 Ga. 377 ( 175 S.E. 791); Travelers Insurance Co. v. Bumstead, 182 Ga. 692 ( 186 S.E. 742); Johnson v. Peoples Bank of Lithonia, 183 Ga. 742 ( 189 S.E. 590). However, the general rule is not without exception. Rust v. Woolbright, 54 Ga. 310; Potts v. Wilson, supra. In the Potts case, after stating the general rule that persons not parties to a suit can not file an intervention therein, it was said: "There are some exceptions to the general rule, as where the intervenor sets up some right that would be directly affected by the judgment. . . In such a case the interest of the intervenor must be of such a direct and immediate character that he will either gain or lose by the direct effect of the judgment; and must be created by the claim in suit, or a claim to a lien upon the property, or some part thereof, which is the subject-matter of the litigation." In Johnson v. Peoples Bank of Lithonia, supra, where the facts are in effect the same as here, except that the intervenor's lease contract predated the security deed, the court held: "It does not appear from the facts alleged that Mrs. Johnson was entitled to intervene in this proceeding. It does not appear that any effort was being made to deprive her of any alleged right in the portion of land leased to her by the defendant. The plaintiff was merely seeking to reduce to judgment the indebtedness of the defendant on the two notes secured by deed, and to have the judgment established as a special lien on the land conveyed. The intervenor would not be bound or concluded by any judgment in such law action against the defendant or against the premises, as affecting her leasehold estate in the portion of the premises on which she resides." In the present case, if the prayers contained in the plaintiff's petition are granted in toto, she will in law have only a money judgment against the defendant by virtue thereof. Her rights under the security deed will be unaffected thereby, and that being true, the intervenor will neither gain nor lose by the direct effect of the judgment. In these circumstances the case falls within the general rule that a stranger may not intervene in a pending cause, and not within any exception thereto, and for that reason the court erred in allowing the intervention over objection.
Judgment reversed. All the Justices concur.