Phinizy v. Clark

Bleckley, Justice. 1. A copy of the deed from Henderson to the complainants is in the record. The deed purports on its face to have been made for and in consideration of five hundred and ninety-two dollars and fifty-seven cents in hand paid, and it conveys the premises, absolutely, forever, with full warranty [626] of title. There is no defeasance in or out of the deed ; and the evidence shows that no bond for titles or other stipulation for a re-conveyance was taken by Henderson from the complainants. So far as appears, there was not even a verbal agreement to reconvey. The real object of the conveyance, as appears by the parol testimony, was to secure a debt for borrowed money, which is still unpaid. That this form of security is valid, and when free from fraud or other infirmity, will be upheld, is now as well settled by the authority of this court as any rule of law can be. See Braswell vs. Suber, 61 Ga., 398, and several previous cases. Such security is not a mere lien, but title, subject to be divested by payment of the secured debt. The debtor himself may redeem, or his creditors may redeem, but until redemption, the legal title is out of the debtor and in the creditor. This being so, how is it possible for a judgment rendered against the debtor subsequent to the conveyance, to have a direct legal lien upon the premises which can be enforced before redemption, by levy and sale ? Doubtless, after redemption the lien of such a judgment would relate back so as to bind the land from the date of the judgment; at least, there would seem to be no insuperable difficulty in the way of such a result. But for a court to hold that a mere legal lien could attach and be enforced whilst the whole legal title was outstanding and unredeemed, would be preposterous. That the parties to the deed intended the legal title to pass is manifest from the deed itself, and the parol evidence indicates no intention to the contrary. What it does is to explain the consideration, and show the real object for which the deed was made, and that object, so far as we can perceive from the evidence, was a worthy and upright one; namely, to secure an honest debt. 2. Certainly, the conveyance is open to attack for fraud, and for that purpose parol testimony as well as any other competent evidence is admissible. A fraudulent conveyance cannot stand against creditors, whether made to secure a debt or not. The conveyance must be pure — it must be [627] made bona fide, and with no purpose known to or suspected by the creditor to hamper and entangle the property as against other creditors for the sake of hindering or delaying them. If made partly to secure a debt, and partly to hinder, delay or in any way defraud other creditors, and the creditor taking the deed has knowledge of this latter intention, or grounds for reasonable suspicion, no title will pass as against the other creditors. The morality of this species of conveyance must be as high as that of any other, but need not be higher. A conveyance to secure must be in all respects as clean and clear as a conveyance for permanent ownership. The possible indicia of fraud are so numerous that no court could pretend to anticipate and catalogue them. It is enough that we rule there must be no fraud which would vitiate any conveyance under any section of the Code, or any part of the common law in force here, and that no material badge of fraud must be left unexplained. It should be observed that there is no evidence in the record that Henderson was insolvent. 3. The delay to record the deed has no relevancy, except upon the question of fraud. The consequence of not recording a deed within a year from its date, is not to defeat the conveyance as against subsequent judgment creditors, but as against subsequent vendees from the maker of the deed, if they purchase without notice. And as this conveyance was an absolute deed, and not a mortgage within the sense of the recording statutes, -it could only have been recorded as a deed, and the recording of it as a mortgage was impossible. Gibson vs. Hough, 60 Ga., 588. The presiding judge erred in not granting a new trial. Judgment reversed.