Williamson v. Orient Insurance

Cobb, Justice. Mrs. Williamson brought suit against the Orient Insurance Company upon a policy of fire insurance. The policy contained a stipulation, that it should be void “if the interest of the insured be other than unconditional and sole ownership.” The .defendant pleaded, that prior to the issuance of the policy the plaintiff had conveyed the property in fee simple, and that at the date of the policy she was not the owner, and that this fact was unkmnvn to it at the time the policy was written, or it would never have been delivered. Erom the evidence it appeared that the policy was issued on November 2, 1893, and that the conveyance by the plaintiff was dated August 1, 1892. The instrument contained a recital that it was intended to operate as provided in sections 1969 et seq. of the Code of 1882, in regard to sales of property to secure debts, and to pass title to the property described, In case of default in payment of interest or principal of the debt, or of insurance, premiums, or taxes, the grantee was authorized to sell the property at public sale, and make to the purchaser “good and sufficient titles in fee simple to the same, thereby divesting out of the said Janie R. Williamson all right and equity that she may have in and to the said property, and vesting the same in the purchaser or purchasers aforesaid,” the proceeds of such sale to be applied first to the payment of the debt and interest and expenses of sale, the remainder, if any, to be paid to the grantor. It appeared that there was no bond to reconvey the property on payment of the debt. The debt was paid on November 13, 1894, and the paper was entered “satisfied” on the record on December 18, 1894. The court directed a verdict for the defendant, and this is assigned as error. 1. That a deed executed under the provisions of sections - 1969 et seq. of the Code of 1882 (Civil Code, §2771) passes title, of course cannot be questioned, as the statute so declares. That a fee simple deed in ordinary form given [793] to secure a debt, even where a bond to reconvey is given ■concurrently with the execution of the deed, will also pass title, 'is equally clear. Oellrich v. Ga. Railroad Co., 73 Ga. 389, and cases cited. That an ordinary fee simple deed made to secure a debt, and which contains nothing which •could be construed into a clause of defeasance, passes title to 'the grantee, is well settled. Lackey v. Bostwick, 54 Ga. 45; Phinizy v. Clark, 62 Ga. 623; Carter v. Gunn, 64 Ga. 651; Groves v. Williams, 69 Ga. 614. A failure to •comply strictly with the provisions of section 1969 et seq. •of the Code of 1882 does not necessarily make a conveyance given to secure a debt a mortgage. Prior to the act of 1894 (Civil Code, §5432), it was held by this court that one •effect of such failure was to defeat the right of the creditor to pursue the special remedy given in the Code of 1882 for the collection of his debí; that is, obtaining judgment, filing ;a deed of reconveyance, and causing the land to be* levied •on and sold as the property of the debtor. Griggs v. Strippling, 59 Ga. 500; Braswell v. Suber, 61 Ga. 398; Henry v. McAllister, 93 Ga. 667-672. The instrument under consideration in this case contained nothing which could be construed into a clause of defeasance. Construing it as a whole and giving effect to all of its stipulations, the conclusion is inevitably reached that it was the intention of the grantor to pass the title to the grantee for the purpose of securing the payment of the debt. This intention will not be defeated, although the deed contain a recital, which is not true, that it was executed under the provisions of section 1969 et seq. of the Code of 1882. The creditor, by a failure to comply strictly with the terms of this law, is simply deprived of that which he would be only entitled to when the statute is strictly followed; but he has not lost the title to the property which it was the intention of his debtor that he should have. He has all the ordinary remedies that a title can give [794] him, and also such as could be properly derived from the-act of 1894, above cited. 2. In the case of Pirkle v. Equitable Mortgage Company, 99 Ga. 524, the eoratroMing question was whether the instrument in controversy was a deed or a mortgage,, and the effect of a failure to give a bond for titles when a deed was taken to secure a debt was not involved in that, case. The principle in that case, that the distinction between a deed to secure a debt and a mortgage grows out of the-absence or presence, as the case may be, of a clause of defeasance, is sound and cannot be questioned. Whether or not the clause which was held in that case to be a clause of’ defeasance was properly so held is not involved in this case; nor was the controlling question in the present case, as-to the effect of a failure to give a bond for titles when a deed made to secure a debt purport! to have been executed under-section 1969 of the Code of 1882, involved in that case. In so far, therefore, as any language was used in thePirJtle .case which, purports or undertakes -to -deal with such, question, it is obiter and not binding as authority. 3. There was no error in directing a verdict for the defendant. The deed of the plaintiff which was outstanding-at the date of the policy passed the title to the creditor; and the interest of the insured, therefore, not being an “unconditional and sole ownership,” the policy by its terms was. void. Orient Ins. Co. v. Williamson, 98 Ga. 464; Phœnix Ins. Co. v. Asberry, 95 Ga. 792. Judgment affirmed. All the Justioes ooneurring.