Cumming v. McDade

Lamar, J. (after stating the facts.) The holder of collateral has ••an interest in the property pledged as security, which he is authorized to transfer; such sale, assignment, or transfer, of course, being .subject to the right of redemption in the original debtor. If the -collateral consists of negotiable instruments, a subpurchaser without notice may acquire an absolute title; and if the debtor is injured thereby, he may recover from the original pledgee any special damages sustained by reason of the transfer. Where the security consists of non-negotiable instruments, or personal property, the special assignee or subpledgee, of course, acquires no greater interest than that held by the person under whom he claims. The original debtor, by paying or tendering the amount due, is entitled to the possession -of his property. Talty v. Freedman’s Savings Co., 93 U. S. 321; Coleb. Coll. Sec. (2d ed.) §§ 79-82. .Where land has been conveyed by security deed, the creditor may transfer the whole or any part of the debt and with it the real estate [615] as security. Hunt v. New England, Mortgage Co., 92 Ga. 720; Moss v. Stokely, 107 Ga. 233-4; Civil Code, §§ 3684, 5432. Consequently M. F. McDade had the right to purchase the notes due Mrs. Cumming, and she had the corresponding light to convey the whole or a part of her interest in the property on his paying or acquiring the whole or part of the debt. He took the land subject to Amanda McDade’s right of redemption. The fact that other records in the clerk’s office made him the apparent owner of the land did not deprive the lender of the power to sell him the debt and security. And there being no suggestion that she knew of any fraudulent intent, she is not responsible for his subsequent conduct in selling to Rozier the fee in property, to which she had only conveyed him a qualified interest to the extent of $350. If the owner sells land, and gives a bond to make title on the payment of the purchase-money, and then conveys to a third person, he has put it out of his power to comply with his contract, and thereby committed a breach of h'is bond. Gibson v. Carreker, 91 Ga. 617. But this case relied on by the defendant in error has no application to this, where land was conveyed as security and where, as has been shown, Mrs. Cumming had the right as creditor to sell. The exercise of the right, of course, could not be a breach, nor did the conveyance to M. F. McDade deprive the estate of Amanda McDade of any interest it held in the land, or of the privilege of redeeming and obtaining a reconveyance on full payment of the debt. The bond for titles does not stipulate for warranty or quitclaim, but provides that the lender “will reconvey the said premises upon a full compliance with the conditions set out in the promissory note.” The original debt was $1,150. When she demanded the deed, the administratrix of Amanda McDade only tendered $890. It is not claimed that she has. paid the other $350 .to Mrs. Cumming, to M. F. McDade, or to Rozier. If the $890.98 satisfies the only interest which Mrs. Cumming retained in the property as security, then she has complied with the condition of the bond by making a reconveyance of the kind provided for in the Civil Code, § 2774. If the administratrix of Amanda McDade takes the benefit of the payment of the $350 by M. F. McDade, she must likewise approve of the quitclaini- deed made to him at .the time by Mrs. Cumming in consideration thereof; for she can not ratify in part and repudiate in part. Civil Code, § 3021. If [616] «he does not recognize the validity of that payment or the right to transfer the security to M. F. McDade, then the original 11,150 has not been fully paid, and the plaintiff is not entitled to a reconveyance according to the terms of the bond. If she tenders to Rozier or M. F. McDade the $350 and they refuse to make her a quitclaim deed, or to enter the satisfaction, she may be entitled to-have the cloud on her title removed, and the deed marked satisfied. But she is now asking for a reconveyance before she has paid the $1,150 to any one If Mrs. Cumming failed to have the satisfaction on the deed from Amanda to M. F. McDade entered of record, she incurred the risk of having her security deed defeated by a sale to an innocent purchaser from M. F. McDade, the apparent holder of a sirperior title. But she was under no legal obligation to have the satisfaction recorded, especially .when Amanda-McDade herself had neglected for several years to have it so entered. The bond signed, “Carolyn P. Cuinming, admx. Estate E. C. Palmer," was her individual undertaking; and it is therefore unnecessary to consider the effect of her discharge as administratrix by the court of ordinary. Judgment reversed. By five Justices.