Howard v. Gresham

By the Court.

Lumpkin J.

delivering the opinion.

The record in this case is so defective, that a satisfactory judgment can hardly be rendered upon it. We have no copy of the mortgage or of the note, upon which it is founded. We cannot tell whether Gresham’s deed was recorded before the transfer was made to Howard, nor whether Gresham was in possession of the land at that time. Indeed, neither the bill of exceptions, nor the transcript of the record, shows whether the mortgage note, together with the security, were transferred to Howard by Lightfoot before or after the sale by Brown to Gresham.- It is assumed in the charge of the Court, and that charge is not complained of, that the transfer was subsequent to Gresham’s purchase, and the case is argued on both sides, upon that, hypothesis.

The first question made is, whether the land bought by Gresham, and which was included in the mortgage, could be released by parol from the lien of the mortgage ? In Johnson against Worthey, (17 Ga. Rep., 420,) this Court held, that a parol rescission of a contract in writing and under seal for the sale of land, may be admitted as sufficient evidence of such release, if the rescinding contract has been executed. And so the Court ruled here, viz: that if Gresham had paid to Lightfoot the money for that portion of the mortgaged land bought by Gresham of Brown, that then the parol release by Lightfoot, the mortgagee, was good.

We think this proof was admissible in another aspect of it. And that is, that it was a satisfaction juro tanto, of the mortgage debt. Suppose the whole debt had been paid, would not the mortgage lien have been ipsojacto discharged ? No release would have been necessary. Well, if the value of this piece of land, contained in the mortgage, was paid by Gresham to Lightfoot, and accepted by him, was it not a satisfaction of the mortgage, juro tanto ? And would not a Court of Equity protect that part of the land from the mortgage ?

It is argued, that in as much asflGresham bought of Brown, and the mortgage has been foreclosed as to Brown, Gresham is estopped, because a privy in estate with Brown. We suppose that the mortgage was only™ foreclosed for the balance due, after crediting the payment made by Gresham to Light-foot. But be that as it may, this Court decided in Jackson against Stanford, (19 Ga. Rep 14,) and in several other cases, before and since, that the judgment of foreclosure does not bar the rights of any person except the mortgagor, his heirs and legal representatives. And that one who had acquired a title or claim to the mortgaged property, might.assert his rights whenever disturbed by the mortgage execution.

But the main point in this case is this. If Lightfoot, the mortgagee, while he owned the notes and mortgage, given to secure them, agreed to accept from Gresham the payment of a certain sum of money, and release the lien on Gresham’s land, and after that, and after the notes were due, transferred the notes and mortgage to Howard, can Gresham set up this equity against Howard ? Why may he not ? Why, because a note is secured by mortgage, is it to be taken out of the operation of the rule regulating other paper ? But for the mortgage, there can be no doubt this equity would come in. Why should the fact of the mortgage exclude it ? Shall it be replied, that a note secured by mortgage, is not expected to be paid at maturity; and that the failure to pay such a note punctually, attaches no dishonor to it ? We do not concede the distinction. Mercantile paper, even bank debts, are sometimes secured by mortgage.

But grant that this were so, had Brown satisfied this debt in toto, would he not be entitled to make this defence against Howard, the assignee? It is not disputed, but that he could. Why should not Gresham, who purchased a part of the mortgage land, settled with Lightfoot for it, be entitled to the same right ? Is not Gresham upon as good a footing, if not better, than Brown? We think so.

Judgment affirmed.