Auld v. Cobb Exchange Bank

Under the facts disclosed by the record, the trial judge did not err in sustaining a general demurrer to the petition as amended.

Nos. 16504, 16518. FEBRUARY 14, 1949. William M. Auld filed his petition in equity against Cobb Exchange Bank, alleging: That the defendant bank is proceeding to advertise for sale described real estate and personal property under a power of sale contained in a security deed executed by the plaintiff. The note and deed were executed for the sum of $8,927.77, on January 13, 1948, and under an agreement were to be paid at the rate of $150 per month for eleven months, and the balance to be due and payable January 13, 1949. Under the agreement the note was to be secured by the deed to the described real estate only, and certain mortgages then held by the defendant bank against the plaintiff were to be canceled and paid. The note and deed "were signed by plaintiff in blank and the schedule of repayments, as now shown in said note and security deed, were not in said note and security deed when the petitioner signed same and do not conform to the agreement which petitioner had with the defendant at the time said papers were executed, which agreement was that the consecutive monthly instalments due under said note would be $150, payable February 13, 1948, and monthly thereafter for eleven months and that the remainder of the principal amount of said note would mature one year after date." It was then alleged that the note and deed under which the sale was being advertised, in violation of the agreement between the parties, included the personal property that was to be excluded, and the monthly instalments were $250 instead of $150; and that there was no sufficient description of the property as to both the real and personal property. The prayers were: that the sale be enjoined; that the note and deed be reformed to conform to the agreement between the parties; that the bills of sale to the personal property be canceled; that the cases foreclosing the bills of sale and this case be consolidated; and for general relief.

When the petition was presented to the trial judge, a temporary restraining order was granted. Upon a subsequent hearing on October 2, 1948, the trial judge passed the following order: "The foregoing case coming on for hearing on the rule nisi for an interlocutory injunction, and after hearing evidence and argument, it is considered, ordered and adjudged that the restraining order heretofore granted be continued in effect until further order, conditioned upon the plaintiff paying to the clerk of this court at this time, payments now in arrears on the note secured by the security deed herein referred to computed at the rate of $150 a month, as contended by plaintiff, and the further sum of $54.50 insurance on the property involved, and the further sum of $30 cost of advertising, and shall continue such payments into court of the sum of $150 per month, as same shall mature, until the maturity of the entire note. This order shall be effective until further order of the court on notice to counsel." On October 6, 1948, the trial judge passed the following order: "The restraining order entered in this case on October 2, 1948, having been conditioned upon the plaintiff making the payments therein specified, and the plaintiff having failed to make the said payments, and upon notice to counsel for the plaintiff, it is considered, ordered and adjudged that the restraining order heretofore granted be and the same is hereby dissolved, with the right in the defendant to proceed with the advertisement of the property for sale under the power contained in its security deed."

The plaintiff, on October 29, 1948, filed an amendment to his petition, alleging that the property was again being advertised for sale under the power, and prayed that this sale be enjoined. In this amendment the additional allegation was made that there was no acceleration clause contained in the note or deed. The trial judge set the matter down for a hearing on November 1, 1948, and on that date passed the following order: "The within amendment having been presented, allowed and filed, after hearing evidence the prayers thereof are hereby denied and the temporary injunction previously granted is hereby dissolved and the plaintiff is allowed to proceed with said foreclosure." On the same date the trial judge sustained a general demurrer to the petition as amended.

The direct bill of exceptions assigns error on the judgment denying an injunction, and the judgment sustaining the general demurrer and dismissing the petition. By a cross-bill the defendant excepts to the action of the trial judge in refusing to pass upon a plea in abatement, and to the judgment overruling one ground of the general demurrer. It is a well-recognized maxim of equity that the doors of a court of equity will not be opened to a plaintiff until he himself does equity. Under this principle, a borrower who seeks to enjoin the lender from exercising a power of sale in a security deed must offer to do equity by paying the secured debt admittedly due. Smith v. Bukofzer, 180 Ga. 209, 212 (178 S.E. 641); Latimer v. Lyon, 177 Ga. 888 (171 S.E. 562); Oliver v. Slack, 192 Ga. 7 (14 S.E.2d 593).

In the present case the petition admits that $150 per month was due under the terms of the note and security deed, even under the contentions of the plaintiff. Admittedly he had not made payment of the amounts he conceded to be due.

On the question of tender, the petition contains the following allegations: "On or about June 28, 1948, petitioner tendered to defendant through its president, Mr. R. N. Little, the sum of $100, representing the balance of the instalment maturing June 13, 1948, in accordance with petitioner's agreement with defendant as to the amounts of the monthly instalments, which tender was refused by said Little. On Monday, August 16, 1948, petitioner tendered to defendant through its president, Mr. R. N. Little, the amount past due on said note dated January 13, 1948, as contended by defendant, which said Little refused to accept. Petitioner herewith tenders and offers to pay into court the instalments due on said note of January 13, 1948; and if the court should hold that petitioner is obligated to pay instalments of $250 a month, then to do complete equity petitioner tenders the amounts due under such instalments and makes this a continuing tender of such instalments as they fall due."

Irrespective of whether or not these allegations are sufficient to allege tender (in this connection, see McKown v.Heery, 200 Ga. 819, 38 S.E.2d 425), we do not think, under the peculiar facts appearing from the record in this case, that the trial judge committed error in sustaining the general demurrer. This is true for the reason that the trial judge afforded to the plaintiff in the court below an opportunity to do equity by paying into court the amount he admitted to be due, and upon his failure to do so sustained the general demurrer.

The allegation of a continuous tender, under the facts in this case, must fall. When the trial judge by order allowed the plaintiff the opportunity to comply with his own allegation of a continuous tender and he refused to do so, the judge, even in passing upon a demurrer, was not required to shut his eyes to what was happening in his presence; but on the contrary could take judicial notice of the fact that the plaintiff, "upon notice to counsel for the plaintiff," had refused to do equity by paying into court the amount he admitted to be due.

In Wardlaw v. Woodruff, 178 Ga. 240 (173 S.E. 98), the procedure was identical with that followed in the instant case. There the court said: "The court further allowed the plaintiffs time within which to pay into the registry of the court the amount admitted by the plaintiffs to be due; failing which the court made a final order dismissing the petition. In Barnett v.Terry, 42 Ga. 283, 288, it was said: `When tender is set up in bar of an action pending, the court may call on the party tendering to pay the money into court. It is an admission of so much money due; and if the party relies on it as a plea to release him from interest, it is not error to call on him to comply with his offer, for the plea sets up he is then and has been ready to pay that sum admitted to be due. If he desires advantage from it, he must be ready to perform when called on by the court.' In Brantley v. Wood, 97 Ga. 755, 759 (25 S.E. 499), it was said: `We do not now decide whether the plaintiffs were or were not entitled to an injunction under the evidence submitted. But assuming that they were, the court very properly required, as a condition precedent to the granting of this relief, that they should first pay the principal and interest legally due on the debt secured by the mortgage. This requirement rests upon the time-honored maxim that "he who seeks equity must do equity."' In this case on the former occasion it was held: `Before a borrower who has executed a deed infected with usury can have affirmative relief, such as injunction to prevent exercise of the power of sale by the grantee in such security deed, he must pay or tender to the grantee the principal sum due.' 175 Ga. 515, 517, supra, and cit. The judge did not err in dismissing the petition on demurrer."

It follows from what has been said above that the trial court did not commit error in sustaining the general demurrer and dismissing the petition. It is unnecessary to rule on the other assignments of error.

Judgment affirmed on the main bill of exceptions; cross-billdismissed. All the Justices concur, except Hawkins, J.,disqualified.