Semmes v. Moses

By the Court. Lumpkin, J. delivering the opinion. We do not design in this opinion to disturb, either the doctrine in Cumming and others, in 3d. Kelly, or Lawton and others in 18. Ga. Reports. Those cases are consistent with each other; and neither of them conflict with this. The difficulty in this case, originates in the doubt as to what the purchasers supposed they were buying: and that fact will depend in a great measure — in this, as in any other case, where property is sold under a lien — upon the price paid for it. One of the grounds of equitable interposition here is, the probability from the statements and professional opinion entertained and expressed at the time of the sale, that the trust debt would have to be collected out of the property remaining unsold in the hands of the debtor, and hence they were induced to pay more for it — possibly its fair value — supposing they were getting it free from the outstanding encumbrance. This makes an investigation necessary. Because ff there be equity in this case, it consists in the foregoing view of it. We will state briefly what we understand to be the true principles that should control and regulate this matter. The whole of the property included in the Trust Deed, is to be regarded as subject to the amount of money due upon the bond debts. If the property sold brought what it was fairly worth, then it should not be disturbed, until the rest of the property embraced in the Trust Deed be sold. Then should there still be a deficiency, the property first sold must make it up. For it was bought subject to this lien. And when the balance is sold under the deed, it will be sold free from any lien, and the purchaser will take an absolute title. If the property sold would at its fair worth — to be ascertained at the time of sale — in addition to what has already been paid [442] for it, extinguish the bond debts, then it should bear the whole burthen of discharging that indebtedness. If however at its fair worth, it would fall short of satisfying the outstanding encumbrance, then the property unsold should contribute its pro-rata proportion of said lien. And for the purpose of carrying out these views, and having the equities of the parties fully determined under the present proceeding, the cestui que trust of the bond debt should be made a party to the bill. It should be further amended by distinctly alleging what was the value of the property purchased by complainants, as well as that which remained in the possession of the debtor, to be ascertained at the time of the Sheriff’s sale. Judgment affirmed.