Mutual Loan & Banking Co. v. Haas

Simmons, Chief Justice. 1. It was contended on the part of the judgment creditor that, the mortgagee not having the legal title and being merely an agent of the mortgagor in the sale of the land, a purchaser at the sal© would 'take the land subject to' the lien of judgments against the mortgagor existing at the time of the sale, just as he would if -the land were sold hy the mortgagor herself. We do not concur in this view. The mortgagee, in the exercise of the power of sale, was something m'ore than a mere agent of the mortgagor. The mortgage, it is trae, did not convey title, and therefore the mortgagee did not acquire such an interest in the mortgaged property as would prevent a revocation of the power -of sale by the death of the mortgagor (Wilkins v. McGehee, 86 Ga. 766), but he did acquire-such a vested right in the [115] power as could not be divested in the lifetime of the mortgagor, either by any act of revocation on her part, or by the rendition of a judgment against her in favor of a subsequent creditor. Calloway v. Bank, 54 Ga. 441; Ray v. Hemphill, 97 Ga. 564; and see Wilkins v. McGehee, supra. In the pres■ent case there was no stipulation that the power should he innVo cable, such as was contained in the mortgage dealt ■with in the- case of Hemphill v. Ray, supra; but w© do not think such a stipulation is essential in order to give the power that effect; and in this view we are supported'by the authorities cited in th'e Opinion of the court in that case. 'See opinion of Marshall, C. J., in Hunt v. Rousmanier, 8 Wheaton, 174; 1 American Leading Cases, Hare & Wallace, *578; 2 Story on Agency (8 ed.), §477. Under these authorities a power of sale which is -a part of a security is from its own nature and character, in contemplation of law, irrevocable, even though it be not mad© so in terms. In Calloway v. Bank, supra, a power of sale in a mortgage which contained no such stipulation was held irrevocable; and although in Wilkins v. McGehee, supra, the reasoning of McCay, J"., in so far as he treated the power .as coupled with an- interest in the land itself, was disapproved, and it was held that such a power would not survive the death of the mortgagor, we nevertheless said that under the facts of the case 'the decision was right, the mortgagor being in life at 'the time of the exercise of the power. In the Galloioay ease, as in the present case, the rights of a creditor holding a judgment junior to the mortgage were involved. A creditor of a mortgagor who obtains his judgment subsequently 'to. the execution of a mortgage which has been ■duly registered takes it subject to the rights, of the mortgagee; and the p'ower of sale being a part of 'the security, ■he takes it subject to th'e exercise of that -power. His judgment attaches merely to the equity of redemption. (Tarver v. Ellison, 57 Ga. 54.) He stands in the shoes of the mort [116] gagor, -and cannot defeat 'the exercise of 'the power any more' ■than the mortgagor himself could. “TO permit the mortgagor to prevent the exercise of this.” power by subsequent grants, or to allow his creditors to-defeat [it] by subsequent judgments, would be, in substance, a reservation of the power, and would render the security worthless, so far as its value depended on the power.” Thompson, J\, in Bancroft v. Ashburs't, 2 Grant’s.-Cases (Pa.), 520. If a subsequent creditor could effect a. revocation of 'the power by obtaining a judgment against the mortgagor, the mortgagor himself could at any time-before the exercise of the power effect a revocation by contracting indebtedness to others, and permitting or procuring • judgments to be taken against him; so that 'at- last the right’, of the mortgagee to avail himself of the power which he-had contracted for as a part of his security, would be dependent on the will of the mortgagor. In Jones on Mortgages, it is'said that the purchaser at a sale under a power of sale in a mortgage “'takes tire mortgagor’s title divested of all incumbrances made since the-creation of the power,” an'd 'that “a sale regularly exercised/ under a power is equivalent to strict foreclosure by a court, of equity properly pursued, or to a foreclosure and sale under a decree in equity, and cannot be defeated to the prejudice of one purchasing in good faith. Yol. 2, §1897. See' also Id. §1654. The same author further says: “Although in several States a mortgage is by statute or judicial' interpretation declared to be a mere security for the payment of a debt, and not a conveyance of the legal 'title, yet-' 'this view of the nature of the security does not in any way interfere with or impair the doctrine of powers to sell.”' (§1767.) 2. It is well settled that a mortgagee may purchase the mortgaged property at a sale by him under a power of sale-in the mortgage, if by the terms of ’the mortgage he is expressly authorized to dto sov See 2 Jones on Mortgages^ [117] •§1883. Even where no such authority is expressly given, the sale, if made fairly and without fraud, would not be void, but merely voidable. Palmer v. Young, 96 Ga. 246. Judgment affirmed. All the Justices concurring.