Pitts v. Maier

Lumpkin, P. J. This was an action upon a promissory note the payment of which had béen secured by an instrument which the,, plaintiff contended was a deed passing title to land, but which the defendant insisted was a mere mortgage. The case as presented here involves hut two questions: (1) what was the real nature of that instrument? and (2) was the note sued on infected with usury ? 1. The document which the plaintiff claimed was a deed passing title was in all respects in the form of a deed, and should unquestionably be regarded as an instrument passing title unless the following clause therein gives to it the character of a mortgage: “ Re-conveyance of said property to be made upon fulfillment of all the conditions of this instrument.” It will thus be seen that the paper is one of substantially the same kind as that which this court had under consideration in the case of Pirkle v. Equitable Mortgage Co., 99 Ga. 524. The instrument now before us embraces a stipulation the plain intent and meaning of which is that the maker shall have a reconveyance of the land upon payment of the secured debt. The instrument under consideration in the Pirkle case contained a stipulation that, upon payment of the debt thereby secured, “then this deed shall be cancelled and surrendered in accordance with the act of the General Assembly of Georgia approved November 12th, 1889.” A°stipulation for an actual reconveyance upon payment of the secured debt is, for all practical purposes and in essence, the same as a stipulation for surrender and cancellation which shall under a statute operate as a reconveyance. The end to be accomplished is, in each instance, precisely the same, the only difference being as [285] to the method to he employed for accomplishing the desired result, vk.: that the title which has passed from the debtor to the creditor shall go back to the former. Were we, therefore, to adhere to the ruling made in the Pirlcle case, we would be constrained to hold that the paper on which we are now called upon to pass was a mere mortgage. The decision therein is, however, under review, and we are fully satisfied of its unsoundness. Indeed, we were much disposed to take this view soon after it was rendered. See the comment made thereon by Mr. Justice Cobb -in the ease of Williamson v. Insurance Co., 100 Ga. 794. In passing the act of November 12, 1889 (Acts of 1889, p. 118), the General Assembly was expressly undertaking to deal with instruments which actually passed title to property for the purpose of securing the payment of debts. The subject-matter of the legislation was deeds, not mortgages; and' the only object of the statute was to substitute for a formal reconveyance of title a mere surrender and cancellation of the instrument executed by the debtor, the cancellation to be entered of record by the clerk of the superior court “ in the same manner that cancellations of mortgages are now entered.” See Civil Code, §2774,-which sets forth the provisions of this aci. The legislative purpose was not to provide for the cancellation of liens, but for the reconveyance of title. We therefore made a grave mistake in holding that a stipulation in a security deed for the cancellation and surrender thereof in accordance with the statute just mentioned was the equivalent of such a defeasance clause as is usually inserted in a mortgage, and that, as a consequence, a deed manifestly designed to pass title became a mere mortgage. This is our first opportunity to correct this mistake, and we do so by overruling the decision in the Pirhle case to the extent here indicated. The decision rendered in the case of Frost v. Allen, 57 Ga. 326, is likewise under review; and in so far as it conflicts with what is now laid down, it also is overruled. 2. An examination of the brief of evidence makes it clear that the note sued upon was not, for any reason set forth in the defendant’s answer, open to attack for usury. The lender actually parted with $700, the principal sum named in the note. Out of this sum the borrower paid fifty dollars, forty of which went to his agent for services in procuring the loan, while the remaining ten dollars were expended in procuring an attorney to investigate and [286] make an abstract of the title to the property offered as security. The lender did not, directly or indirectly, receive any portion of this fifty dollars, and had no concern in the disposition made thereof. This being so, the plea of usury was not made out, and the trial judge properly directed a verdict in favor of the plaintiff below. In the brief of counsel for the plaintiff in error it is contended that the note was infected with usury because all of the money was not loaned out at once, but that some of it was held back by the lender. We have been unable to find in the record the slightest indication that any such point was made in or passed upon by the trial court. Judgment affirmed. All the Justices concurring, except Lewis, J, absent.