Sampson v. Vann

1. (a) Under the provisions of the Declaratory Judgment Act, such a decision is available in a case of actual controversy to settle and afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations.

(b) The trial court did not err in overruling the general demurrer to the petition.

(c) Where a special demurrer is well taken, and the court overrules it, the error is presumed to be harmful, but if the reviewing court can with reasonable certainty say that no harm or injury has resulted to the complaining party, the error will not be considered as a reversible one.

2. (a) Where a lien creditor accepts a deed to the property from the debtor in satisfaction of the lien, such transaction is a novation; it has the same legal effect as if there had never been a lien, and that the vendee had bought the property from the vendor and paid cash for it.

(b) The judgment of the trial court in favor of the plaintiff for a declaratory judgment and his right of possession under the terms of the lease, subject to its conditions, in the instant case, is without error.

DECIDED FEBRUARY 10, 1949. The defendant in error, T. K. Vann Sr., hereinafter referred to as the plaintiff, filed a petition in the Superior Court of Thomas County against the plaintiff in error, Mrs. Ola Sampson, hereinafter referred to as the defendant, for a judgment in conformity with the declaratory judgment act as provided for in the Code (Ann. Supp.), Ch. 110-11, declaring and clarifying the rights of the parties to possession of a certain store building located in the City of Thomasville.

The petition alleges substantially: that Mitchell Sampson Sr. entered into a lease agreement with plaintiff covering the ground floor of said store building for a term commencing on March 1, 1943 and ending on February 28, 1948, with the option to plaintiff to extend said lease for an additional 5 years at the same price and upon the same terms; that said lease is dated February 1, 1943, and was recorded in the office of the clerk of the superior court on February 3, 1943, a copy being attached to the petition and made a part thereof and showing upon its face that it is subject to any existing security deed; that plaintiff entered into possession of the premises on March 1, 1943, and has remained in possession thereof from that time until the filing of his suit during which plaintiff complied with all the terms of the lease; that on January 13, 1948, plaintiff notified the said Mitchell Sampson Sr. in writing of his intention to exercise his option to extend said lease for an additional 5 years; that on July 26, 1948, Mitchell Sampson Sr. conveyed to the defendant said premises by warranty deed, a copy of which is attached to the petition and made a part thereof, which recites that the real consideration for the deed is the settlement of the judgment obtained by the grantee against the grantor, reference to which judgment is hereinafter made, and on July 29, 1948, the defendant gave plaintiff written notice to vacate the premises on or before September 30, 1948.

The petition further alleges that an actual controversy exists between the parties; that plaintiff contends he is entitled to retain possession of said premises for a period of 5 years from February 29, 1948, subject to future compliance with the terms of said lease, and that defendant contends that she is entitled to possession of said premises from and after October 1, 1948.

The petition was filed on September 3, 1948, and prays for a declaration of the plaintiff's right in order that he may be guided as to future transactions, whether he should surrender possession of said premises to the defendant on October 1, 1948, or retain possession thereafter under the lease agreement.

The defendant demurred to the petition, and thereafter excepted pendente lite to the judgment of the trial court overruling same.

Thereupon defendant filed her answer to the petition in which she alleged in substance: that on May 20, 1920, Mitchell Sampson Sr. executed and delivered to this defendant a promissory note in the principal sum of $15,255 payable 5 years from its date; also he executed and delivered to the defendant a deed to secure said debt covering the premises in question which was recorded August 4, 1922; that on June 30, 1947, plaintiff filed suit on said note and on July 19, 1948, procured a judgment against Mitchell Sampson Sr. for the principal sum of said note and $28,543.80 interest and on July 26, 1948, Mitchell Sampson Sr. executed the deed to the defendant referred to in plaintiff's petition which recited that it was in settlement of said judgment. These allegations of the answer were demurred to by the plaintiff, and the court entered judgment sustaining the same.

The case, by consent of the parties, was tried by the judge without the intervention of a jury at the October term, 1948, of the Superior Court of Thomas County, on an agreed statement of facts which, when compared to the allegations of the petition, substantially stipulates the truth thereof, except the part alleging such a controversy as authorizes an action for declaratory judgment, and the allegations as to how long the plaintiff and his deceased father had operated this business at the same location, the inconvenience the plaintiff would be put to if required to move and the lack of suitable space available for his business in the same locality.

The trial judge entered judgment in favor of the plaintiff for declaratory judgment and right of possession to the premises under the lease of 5 years, from February 29, 1948, subject to future compliance with the terms thereof.

The exceptions are to the judgment of the trial court overruling the demurrer of the defendant to the plaintiff's petition; to the judgment of the trial court sustaining the demurrer of the plaintiff to the defendant's answer; and to the final judgment in favor of the plaintiff. 1. (a) The petition was demurred to because it was contended that it failed to set forth a cause of action for a declaratory judgment.

The petition in the instant case shows an actual controversy between the petitioner and the defendants as to who would be entitled to the possession of the premises on October 1, 1948, the petition having been filed prior to that date. The petition alleges such a condition of uncertainty and insecurity with respect to the rights and status of the parties that a final declaratory judgment would terminate and settle. It follows that a proper case for a declaratory judgment is alleged. See Greene v. Golucke, 202 Ga. 494 (4) (43 S.E.2d 497); Felton v.Chandler, 75 Ga. App. 354 (2) (43 S.E.2d 742).

(b) The petition was demurred to because it was contended it was incumbent upon the plaintiff to plead and set up the defendant's security deed referred to in the statement of facts as having been executed and delivered to her by her husband in 1920, the plaintiff's lease reciting that the lessee's rights shall be subject to any bona fide mortgage or deed to secure a debt which is now placed upon the premises by the lessor. This security deed was set up in the answer of the defendant and the court sustained the demurrer of the plaintiff striking the same therefrom. That judgment was excepted to and will be dealt with in the next division of this decision. For the reasons there set forth it was not error for the trial court to overrule the demurrer to the petition on this ground.

(c) A special demurrer was interposed to certain paragraphs of the petition alleging how long the plaintiff and his deceased father before him had operated a retail-food store either on these premises or nearby, the injury he would sustain if required to move, the lack of other suitable space available in the same locality, and the attendant insecurity and uncertainty in the operation of his business by reason of these facts. These allegations of the petition should have been stricken as they are immaterial and irrelevant. The rights of the parties in this litigation are neither controlled nor influenced by the amount of inconvenience which either might suffer should the relationship of landlord and tenant be legally terminated between them. However, the failure of the trial court to strike these allegations of the petition is harmless error and does not require a reversal of the case. In Wrightsville Tennille R.Co. v. Vaughan, 9 Ga. App. 371, 372 (5) (71 S.E. 691), it is held in part as follows: "Where a special demurrer is well taken, and the court overrules it, the error is prima facie harmful, but not necessarily so. If the reviewing court can with reasonable certainty say that no harm or injury has resulted to the complaining party, a new trial will not be granted, notwithstanding an error of this nature may appear in the record. . ."

2. (a) The plaintiff demurred to the answer of the defendant wherein the defendant pleaded the security deed executed by her husband to her. This security deed was duly recorded at the time of the execution of the plaintiff's lease by the husband of the defendant. The lease recites that the lessee's rights thereunder are subject to any bona fide mortgage or deed to secure a debt which is now placed upon the premises by the lessor. The defendant contends that when she obtained a judgment against her husband based on the notes, the payment of which was secured by the security deed covering the leased premises, and obtained a deed from her husband reciting that the same was given in consideration of the settlement of said judgment, that she acquired the property free from the encumbrance of the plaintiff's lease which recites in effect that it is subject to her security deed. The plaintiff did not foreclose her security deed nor did she have an execution issued and levied on the premises. In either such event the property would have been sold at public outcry. The plaintiff and others would have been accorded an opportunity to bid upon the property. The plaintiff would have thus been given the opportunity to have protected himself by buying in the property or procuring a purchaser who would recognize the continuation of his lease. The transaction between the defendant and her husband by the terms of which he deeded her the property in question in satisfaction of the judgment which she had obtained against him is one whereby, she, a lien creditor, purchased the property from her debtor. This is a novation. It has the same legal effect as if there had never been a security deed or a judgment, but that the defendant bought the property from her husband and paid cash for it. See Booze v. Neal, 6 Ga. App. 279 (64 S.E. 1104); MacIntyre v.Ferst, 101 Ga. 682 (28 S.E. 989); Deariso Co. v.Lawrence, 3 Ga. App. 580 (60 S.E. 330). If the law were otherwise the holder of a first lien could get together with the debtor and deprive subordinate lien-holders of any opportunity to protect their interest in encumbered property. The defendant had the opportunity to foreclose her security deed. Had she done so the plaintiff would have had the opportunity of protecting his lease. Had he failed to do so the purchaser of the property in such foreclosure, proceedings would have acquired title free from the lease of the plaintiff in accordance with its recitations; but the plaintiff, having elected to accept a deed from her husband, its legal effect was that of a straight purchase of the property, and she, having both actual and constructive notice of the plaintiff's lease took the property subject to it.

The trial court, therefore, did not err in sustaining the demurrer to the answer of the defendant wherein it was sought to set up an immaterial and irrelevant security deed.

(b) For the reasons hereinbefore set out the final judgment of the trial court in favor of the plaintiff for declaratory judgment and his right of possession under the terms of the lease, and subject thereto, is without error.

Judgment affirmed. MacIntyre, P. J., and Gardner, J.,concur.