Waters v. Tillman

1. A vendor can compel specific performance in equity, where the vendee would be entitled to that remedy; and the vendor's relief may include the execution and delivery of an agreed mortgage or security deed. The vendor also may recover a money verdict for the balance due on the purchase-price, with a special lien on the property, where the agreed lien obligation would mature during the pendency of the suit.

2. If a verdict for the plaintiff is rendered after refusal of a nonsuit, and the general grounds of the defendant's motion for new trial complain that the verdict is unsupported by evidence, an exception to the refusal of a nonsuit will not be considered.

3. Since, under the Federal farm-mortgage act as amended, Federal agencies are authorized to lend money for the purchase of land for agricultural purposes, besides for the liquidation and consolidation of debts, and since the taking of a second lien by the seller, subordinate to the first mortgage of the Federal agency, is not prohibited by the act unless before or at the time of the Federal loan the seller has agreed to accept its proceeds as full payment of the purchase-price, and the evidence as to any such agreement in this case was in conflict, the jury were not compelled to find for the defendant sellers on the ground that any contract for a second lien was contrary to public policy.

4. The special grounds, relating to alleged erroneous charges and an admission of testimony, are without merit.

5. The court properly refused a new trial to the defendant purchasers.

No. 14166. SEPTEMBER 21, 1942. J. G. Tillman, a vendor, brought a petition for specific performance of an alleged contract of sale against Morgan Waters and Otis Waters as vendees, to require them to execute a security deed, subordinate to the lien of the Federal Land Bank of Columbia and the Land Bank Commissioner, for an alleged balance due to the plaintiff on the purchase of a 202-acre tract of land. The petition as amended alleged, that in December, 1937, the parties agreed on a price of $3000; that the defendants obtained the Federal loan of $2500, which was closed on May 15, 1940; that on that date, after crediting the defendants with the net proceeds of that loan and another payment to the plaintiff, there was due on the contract price, with eight per cent. interest from date as agreed, a balance of $1184.28, for which the defendants had agreed to execute a note due on May 15, 1941, and a security deed second to the Federal lien; that although the plaintiff executed his deed to the defendants, they had failed to execute the agreed instruments; that they are insolvent; and that the plaintiff is without an adequate remedy at law. He prayed for specific performance by execution of the instruments. By amendment he prayed for recovery of the alleged balance of the contract price, with a special lien on the land, subject to the outstanding Federal lien; the alleged agreed instruments maturing during the pendency of the suit.

The defendants in their answer denied that the agreed purchase-price was $3000, and alleged, that it was $2500; that they had paid more than that amount by cash payments and the clearing of liens against the property; that before the closing of the Federal loan the local representative of the Federal Land Bank had informed them in the presence of plaintiff's attorney that no second lien would be allowed on the property; otherwise the bank would foreclose "the next day." By amendment they set up counterclaims against the plaintiff, as follows: 544 bushels of corn at 50 cents a bushel; 2 loads of hay, 5670 pounds, at $20 a ton; 67 loads of logs at $10 a load; the total of which with interest amounted to $1247.90. They alleged that the plaintiff had received from them and sold 21 bales of cotton, raised on the property in 1938; and that these proceeds had paid for all carrying charges on the agreed $2500 purchase-price.

At a first trial in April, 1941, the jury returned a verdict of $999.18 for the plaintiff; and the court granted a new trial. On this second trial the jury returned a verdict for the same amount; and the defendants excepted to the refusal of a new trial. The verdict awarded to the plaintiff $1184.28 (the amount sued for), "less credits of $56.70 for hay and $128.40 for corn — leaving balance due plaintiff $999.18." The judgment provided that it should be "a special lien" on the land, subject to that of the Federal agencies.

The motion for new trial contains the general grounds and five special grounds. One ground is that it was error to refuse to grant a nonsuit, because the plaintiff's case as made was too "uncertain, vague, and indefinite to be made a matter of specific performance." Another ground is that the verdict "is contrary to the doctrine of public policy," under the contention that any agreement to give a second lien, additional to that of the Federal agencies, was invalid. Exception is taken to the admission of testimony of Cohen Anderson, the attorney who prepared the loan papers, on the ground that it was error to "admit testimony of [him], when no agency or relationship of an attorney to defendant in error was established." Exception is further taken to this instruction: "If you believe from the testimony that this contract has been proven by the plaintiff, by a preponderance of the testimony, so clearly and distinct that there can be no mistake about it, then it will be your duty to render a verdict in favor of the plaintiff for the full amount sued for, to wit $1184.28, unless you find that certain credits should be credited on that amount. . ." The ground of exception is that this charge was "contrary to law, since defendant admitted that he did not know what the credits should have been, and, depending entirely on third parties to establish this fact, this was clearly uncertain and indefinite and should not have been charged as a matter of law. There is also an exception that "the court failed to charge the law of specific performance complete and sufficient enough to intelligently inform the jury upon the trial of the case in order for them to understand that such a contract must be complete, definite, and certain."

The judge fully charged the contentions of the parties under their pleadings; and charged the law as to specific performance of an oral contract accompanied by part payment and possession, as involved in this case. As to proof of the alleged contract, he charged that in order to find for the plaintiff the jury must find "by a preponderance of the evidence, so clearly and strongly and so satisfactorily as to leave no reasonable doubt, that there was an express contract entered into" between the parties, as alleged by the plaintiff; and that "this contract was begun and was a continuous contract as contended for" by the plaintiff, that the defendants were to execute the second deed to secure debt on the date the loan through the Federal Land Bank was closed, and that there was then "a complete and full agreement between the parties on the terms of this contract, that is, that the deed to secure debt should be executed on that day, that the note [secured by] this deed should bear interest at 8 per cent. per annum, and that the note should be due and payable one year after date."

As to the existence of the contract alleged by the plaintiff, there was sufficient testimony by him and by other witnesses to authorize the verdict in his favor, as to both the existence of the contract and the absence of any set-off for items, as pleaded by the defendants, in excess of those allowed in the verdict; although there was testimony for the defendants to the contrary — that there was no contract as alleged by the plaintiff, and that he was indebted to them as pleaded in their answer.

On the special ground that any contract for a second security deed, subordinate to the Federal lien, was contrary to public policy, the evidence was as follows: The plaintiff vendor did not sign the application to the Federal agencies for the loan, or any agreement or statement that there should be no second lien on the land, or that the proceeds of the Federal loan received by him should be in full payment of the purchase-price of the land. While reference is made in the brief for the defendants to drafts, indorsed by the plaintiff as well as by them, containing language to the effect that the amount was received as in full payment of the amount due to the plaintiff, no such draft or check appears in the record. The undisputed testimony showed that no statement was made by any representative of the Federal agencies to the plaintiff himself, before or at the time the Federal loan was closed, that no second security deed or lien would be allowed on the property. Upon the defendants' contention that such information was given to the plaintiff through his attorney, the attorney who prepared the loan papers in the application for the Federal loan testified: One of the defendants and his father "came to me to prepare an abstract of title for the Federal Land Bank for a loan. . . They engaged me to make the abstract. I made it. I never did see anything of [plaintiff] during the time I was preparing the abstract. . . Ottis Waters, Morgan Waters, and Russ Waters, myself and my daddy [a deceased attorney] and [plaintiff] were present. . . The understanding was had that morning in my office that [defendants] would execute to [plaintiff] a second security deed for the unpaid balance from the date the loan was closed, at the rate of 8 per cent. . . I went ahead and drew up the second deed with a note drawing 8 per cent. and due in one year. . . I made [a note], but I didn't get it executed by [defendants]. I did not get the second deed executed." The $2500 loaned was not sufficient to take care of outstanding liens. "The loan was closed May 15, 1940. . . I never did see [plaintiff] from the time he came in and had this agreement with the Waters boys until the loan was closed. As to whether or not they employed me to represent them to get this deed to secure debt signed, I wasrepresenting [defendants] in closing that loan. It was necessary for them to get a deed from [plaintiff and his brother] before they could ever close that loan, and it was necessary for me astheir attorney to get [plaintiff and his brother] to sign that deed, and I got [plaintiff] . . to execute that deed, the warranty deed. As to whether or not [plaintiff] asked me to look after his interest in that thing, he told me he wanted to get a second security deed at that time. As to whether or not I would have been representing Mr. Tillman [plaintiff] at that time, I was making it for Mr. Joe Tillman [plaintiff]. As to whether or not I was representing the Waters [defendants], yes, sir, very much. . . When [defendants' father] came to me, he employed me to abstract the title and close the loan to the Federal Land Bank. As to whether or not that was the limit of his employing me, no, it was necessary for me to get certain papers for him, the warranty deed which he did not have. As a part of thatemployment I was also supposed to get from him for Mr. Tillman [plaintiff] a security deed for the balance. The loan should never have been closed until I got that second paper. I took the rap by taking [defendants' father's] word. As to whether or not I was ever employed by Mr. Tillman [plaintiff], the only connection I ever had with [him] was the day I called him into my office and had the thorough and distinct understanding how the loan was supposed to be closed out."

Although there was testimony from the local representative of the Federal Land Bank, that before the Federal loan was closed, he had informed the attorney that there could be no second lien on the property, the attorney denied that he had been so informed.

The judge submitted to the jury the question whether or not the attorney was the agent or attorney of the plaintiff, in determining the issue whether or not the plaintiff had thus received notice that a second lien was prohibited. There is no exception to any instruction on this subject. 1. Generally the right to specific performance is mutual; when one party can compel performance, so can the other; and the decree can compel the execution and delivery of deeds or other instruments, including a mortgage.Clark v. Cagle, 141 Ga. 703, 706 (82 S.E. 21, L.R.A. 1915A, 317), and cit.; Woodall v. Williams, 176 Ga. 343,344 (167 S.E. 886). Accordingly, where, as here alleged, a contract for the purchase of land provided that the purchaser, upon obtaining a deed from the seller, would execute a deed to secure an unpaid balance of the purchase-price, and the seller's deed was delivered, but the purchaser refused to execute the security deed, equity would have jurisdiction of a suit by the seller for specific performance, to enforce the terms of the purchaser's agreement. Upon proper proof of such a contract and its terms, a money verdict for the seller, with a special lien on the land, could be rendered, as was here taken, where under the averments and evidence the agreed obligation would have matured before the trial; and in seeking such relief, the suit was not changed into one at law, where the amount recovered was not sought and allowed as damages for a breach of contract, but as the balance due under the contract of sale and agreed lien. See Code, § 37-801; 58 C. J. 1236, note 99, and cit. Under the conflicting testimony as to the existence of the alleged contract, and as to what if any amounts had been paid thereon by the defendant purchasers, the verdict in favor of the plaintiff seller was authorized.

2. It is well settled that an exception to the refusal of a nonsuit will not be considered, where, after a verdict for the plaintiff, the general grounds of the defendant's motion for new trial complain that the verdict is contrary to the evidence and without evidence to support it. Southern Ry. Co. v. Slaton,178 Ga. 314, 316 (173 S.E. 161), and cit.; Foremost DairyProducts Inc. v. Sawyer, 185 Ga. 702 (5), 716 (196 S.E. 436). Accordingly, since the question as to the sufficiency of the plaintiff's evidence was raised by the defendant's general grounds, the exception to the refusal of a non-suit will not be considered.

3. While it was held in Robinson v. Reynolds, 194 Ga. 324 (21 S.E.2d 214), where there was in effect an express agreement by a lienholder that the amount received from a Federal loan would satisfy his lien, that the beneficent purpose of loans by Federal agencies under the emergency farm-mortgage act was to enable persons in debt and without ability to make payment to constitute such agencies the sole creditors, thereby eliminating by way of compromise all other creditors; and while such is the dominant purpose of the act, it is not the sole purpose, since express provision is made, not only for the adjustment and consolidation of prior indebtedness, but specifically "for the purchase of land for agricultural uses" and for other purchases and improvements. 12 U.S. Code Ann. §§ 771 (4), 1016, and Cum. Supp. with amendment of 1937. Under the act of 1933 as amended, even with respect to prior indebtedness, the land bank commissioner is authorized to make loans where the prior lienholder has agreed to the satisfaction of the commissioner to limit his right to proceed against the debtor and his farm property for a default as to the principal; this provision being as follows: "No loan shall be made under this section, unless the holder of any prior mortgage or instrument of indebtedness secured by such farm property arranges to the satisfaction of the land bank commissioner to limit his right to proceed against the farmer and such farm property for default in payment of principal." U.S. Code Ann. § 1016 (2). Accordingly, even with respect to prior mortgages, it is not necessarily true that, under the dominant purpose and intention of the act, all prior mortgages shall be satisfied and extinguished so as to preclude the taking of a subordinate lien. Johnstown Bank v. Runnels,65 Ohio App. 504 (30 N.E.2d 709), and cit.; Holien v. Staveteig, 70 N. Dak. 36 (291 N.W. 541), and cit. See also, to like effect, decisions under the home owners loan act of 1933 as amended (12 U.S. Code Ann., §§ 1462, 1463): Bay City Bank v. White, 238 Mich. 267 (277 N.W. 888); Sirman v. Sloss Realty Co., 198 Ark. 534 (129 S.W.2d 602); Council v. Cohen,303 Mass. 348 (21 N.E.2d 967). As to cases where the lienholder's taking of a second lien was in contravention of his express agreement to satisfy his indebtedness, see Robinson v.Reynolds, supra, and cit.

In the instant case the loan was not made to liquidate a prior indebtedness of the borrower, but was negotiated for the purpose of enabling the borrower to purchase land for agricultural uses, as expressly authorized under the terms of the Federal statute. In such a case, it is clear that in the absence of any agreement or understanding on the part of the vendor, who is the plaintiff in this case, to accept the proceeds of the loan from the Federal agency as in full of the agreed purchase-price, he would not be required to do so under the terms of the statute; and that an agreement by the borrower to negotiate a second lien for the balance of the purchase-price would be a valid and binding obligation. On the issue as to whether or not any such agreement or understanding by the vendor was had, the evidence was in conflict, and the jury were authorized to find that there was no such agreement or understanding.

4. There is no merit in any of the special grounds. The court sufficiently charged the jury as to the necessity for the proof to show a complete, definite, and certain contract, and even charged, favorably to the defendants, that the evidence should "leave no reasonable doubt." The exception to the instruction as to a finding for the plaintiff seller, if the jury believed the contract proved "by a preponderance of the testimony, so clearly and distinct that there can be no mistake about it," for the amount sued for, less credits, on the ground that this charge was "contrary to law," because "defendant admitted that he did not know what the credits should have been and [depended] entirely on third parties to establish that fact," fails to show error, since it does not negative the existence of such testimony by the "third parties," and since it is covered by the general grounds. The exception that it was error to "admit testimony" of the attorney who handled the loan transaction with the Federal agency, "when no agency or relationship of an attorney to [the plaintiff seller] was established," can not be considered, because the ground does not show the testimony or objection thereto. But even if the exception were sufficient, under the preceding ruling the testimony as to whether the attorney represented the plaintiff as well as the defendants in obtaining the loan from the Federal agency was not such as to demand a finding in favor of either side, but all such testimony was properly admitted and left for determination by the jury.

5. Under the preceding rulings, the court did not err in refusing a new trial to the defendants.

Judgment affirmed. All the Justices concur.