Citizens & Southern Bank v. Farr , 164 Ga. 880 ( 1927 )

Atkinson, J.

1. “A deed to lands in this State must be in writing, signed by the maker, attested by at least two witnesses, and .delivered to the purchaser, or some one for him, and be ma'de on a valuable or good consideration.” Civil Code (1910), § 4179. A seal is not an essential requisite "to a deed. Atlanta, Knoxville &c. Ry. Co. v. McKinney, 124 Ga. 929 (5) (53 S. E. 701, 6 L. R. A. (N. S.) 436, 110 Am. St. R. 215); Patterson v. Burns, 150 Ga. 198 (103 S. E. 241); Bank of Manchester v. Birmingham Trust &c. Co., 156 Ga. 486 (3) (119 S. E. 603). “No prescribed form is essential to the validity of a deed to lands or personalty. If sufficient in itself to make known the transaction between the parties, no want of form will invalidate it.” Civil .Code (1910), § 4182. The paper set forth in the statement of facts, executed by Farr to Burnett and Burnett, is sufficient in form and substance to constitute a deed to secure debt.

2. In addition to the description of the land and covenants as to conveyance of title to secure debt, the instrument just referred to contains the following: “It is understood between the party of the first part and the party of the second part, that this security deed is given subject to a security deed in the sum of three thousand ($3000.00) dollars, and this security deed is given as part of the purchase-price of said above-described lot with premises thereon, purchased this day by the party of the first part from Burnett and Burnett; said party of the first part paying for the said described premises by assuming the above-described three thousand ($3000.00) dollar loan and executing the above-mentioned notes to the amount of two thousand ($2000.00) dollars.” If the paper containing this clause had been signed also by Claude T. Burnett, it would have been a good conveyance to Farr of said Burnett’s title to the land; but as it was not signed by him, it was not a good conveyance of Burnett’s title to the land.

3. “The mere registration of derivative conveyances is no notice that title has passed out of the original grantor, viz.: If A sell to B, and B to C, and C to D, the record of the two latter deeds is no notice that the title had been conveyed by A.” Felton v. Pitman, 14 Ga. 530 (3); Coursey v. Coursey, 141 Ga. 65 (80 S. E. 462); Hinton v. McBride, 147 Ga. 603 (95 S. E. 1). Record of the instrument referred to in the preceding note, while unsigned by Claude T. Burnett, would not affect the status of subsequent purchasers of the land from Claude T. Burnett, with notice of Farr’s interest in the land.

4. The written transfer of Burnett and Burnett by Claude T. Burnett to the Citizens and Southern Bank, duly executed, as a deed to land is required by law to be executed, described the instrument and purported to “sell, assign, transfer, and set over” the instrument, “and also the debt in said mortgage described and thereby secured, together with all our right, title, and interest in and to said mortgage, the property therein described, and the debt thereby secured.” This was an express conveyance by Claude T. Burnett to the bank of “the property therein described,” which was his first conveyance of the legal title to the land described in the security deed. In virtue of the security deed and notes and this transfer, the bank became vested with legal title to the debt and to the land as security for the debt, prior to the several transactions between Claude T. Burnett with Mrs. Brigham, Mrs. Quinn, or Mr. Crane.

5. But as the instrument of assignment to the bank was never recorded, the said subsequent purchasers were not charged with constructive notice of the bank’s title.

No. 5725. October 1, 1927.

6. It was'alleged in paragraph 13 of the petition: “That the defendants had actual and constructive notice of rights, interests, and equities of both petitioner and the said R. E. Earr under said contract of sale transferred to petitioner as aforesaid and duly recorded' on April 6th, ' 1925, and in the property therein described.” This was amended by alleging “that actual notice was obtained by defendants as to the sale and transactions between defendants Burnett and Earr, from and in conversations had with said Burnett previous to the subsequent transactions between Burnett and the other defendants herein.” These, as against a general demurrer, were sufficient allegations of actual notice to the subsequent purchasers, of the parol contract between Burnett and Earr; and this would make the title of Earr which went into the bank, and also the title of the bank, superior to the title of subsequent purchasers from Burnett.

7. “The bona fide holder for value of a bill, draft, or promissory note, or other negotiable instrument, who receives the same before it is due, and without notice of any defect or defense, shall be protected from any defenses set up by the maker, acceptor, or indorser, except the following: 1. Non est factum. 2. Gambling, or immoral and illegal consideration. 3. Fraud in its procurement.” Civil Code (1910), § 4286. The petition alleges that the bank purchased the notes for value before their maturity. The petition does not on its face disclose any defense upon the part of Earr to the notes.

8. The petition alleged causes of action against each of the defendants, and it was erroneous to sustain the general demurrers.

Bills and Notes, 8 C. J. p. 464, n. 15; p. 720, n. 17; p. 767, n. 16; p. 770, n. 39; p. 789, n. 93; p. 879, n. 60.

Deeds, 18 C. J. p. 162, n. 44; p. 170, n. 71; p. 171, n. 72, 87; p. 190, n. 28; p. 191, n. 51; p. 193, n. 76; p. 194, n. 95; p. 196, n. 17; p. 203, n. 67; p. 247, n. 54 New.

Mortgages, 41 C.‘J. p. 670, n. 52; p. 680, n. 60; p. 683, n. 78.

Judgment reversed.

All .the Justices concur, except Bill, J., absent, and Gilbert, J., disqualified. Paul T. Chance, for plaintiff. W. D. Lanier, A. JR. Williamson, Callaway & Howard, E. Foster Brigham, and Abram Levy, for defendants.