Equitable Mortgage Co. v. Braswell

Atkinson, Justice. The facts are stated in the official report. The question is, whether the court abused its discretion in granting an injunction under the facts disclosed by the record. 1. If the testimony of the plaintiff be believed, and we must presume, in favor of the judgment granting the injunction, that the court gave to it full faith and credit, the transaction out of which the alleged security deed arose was usurious; and this being true, the deed, in so far as it is relied upon as passing title to the lender, as between the [145] lender and the borrower or the administrator upon the estate of the latter, is void; nor can it be upheld as an equitable mortgage. It being void as title, no title would ever pass; and it has been ruled that unless title passes by the ■deed, an equitable mortgage is not created by a conveyance of land. Section 2057 of the code denounces as void all titles to property made as a part of a usurious transaction; hence we conclude that where a promissory note is given for a loan infected with usury, and this is sought to> be secured by a conveyance of land, such a conveyance, whatever form it may take, is void, and being void as title, it is likewise void and incapable of enforcement as an equitable mortgage. See McLaren v. Clark, 80 Ga. 423; Ryan v. American Freehold Land Mortgage Co. et al., 96 Ga. 322. 2. If the deed under which title is claimed adversely to the administrator of the borrower was executed in pursuance of and as a part of a usurious transaction, the title still remains in the borrower, and hence the land sought to be conveyed was subject to administration as a part of his estate. If, being administered, it was sold as a part of the r estate of the borrower, the validity of the purchaser’s title would necessarily depend upon whether the deed previously executed by the borrower was a valid conveyance. ‘The administrator in the course of administration could lawfully ignore such an outstanding conveyance and treat the property as still that of his intestate, and in order to make the sale, it was not essential that he should redeem the outstanding title which was usurious; and while it is quite probable that he would not be entitled to relief to the extent ■of having a void usurious deed delivered up for cancellation, yet inasmuch as the courts will not lend their aid to an assertion of titles based upon a usurious transaction, there is no reason why an injunction might not issue to enjoin his use of such a conveyance, either as evidence of title to Tecover the land itself, or as an equitable mortgage. The ■conveyance in question is in the form of what purports to [146] be a conveyance of land. It does not therefore fall within that class of cases in which usury, if any there be in tire ■transaction, may be purged. It must stand either as a conveyance .or not at all, and, being void as, a conveyance of land, there is no reason why the court should not have granted the injunction restraining the creditor from prosecuting his claim in an independent suit. 3-4. In the present case the administrator of the borrower, being harassed with conflicting claims of the creditors of the estate of his intestate, filed a petition to. marshal its assets, alleging the existence of the conveyance hereinbefore referred to1, as one reason why in the administration of the estate such doubts arose as to the amounts allowable to the conflicting creditors as to make 'it proper for a court of equity to seize upon the assets of the estate and marshal them for the benefit of all concerned. There was likewise a claim upon the part of the widow of the intestate as for a year’s support; a claim of a physician as for the expenses of the last illness. It was alleged that the sole property of the estate consisted of the lands covered by the conveyance in this case; that it was otherwise,insolvent; and that for his own protection the administrator was entitled to direction from the court as to the manner in which he. should dispose, cf the property of the estate in the settlement of these various conflicting claims. The court granted the injunction restraining the prosecution of any suit upon the said conveyance, other than as a party to this proceeding. Upon the question of usury in the transaction the evidence was conflicting; and the circuit judge, therefore, committed no error in granting a temporary injunction, preserving the status until the case comes on for final determination. Judgment affirmed.