Mize v. Bank of Whigham

Atkinson, J. 1. This was a statutory proceeding for partition under the Civil Code, § 5358 et seq. The notice filed with the petition called upon the defendants to show cause before the judge at chambers on the 30th day of March, 1911, etc. On that 'day the original answer was filed, and also the plaintiff’s demurrer. The judge thereupon entered an order reciting the facts and setting the case to be heard at the May term of court. The case came on to be heard at that term, and on the 9th day of May, after consideration, the judge stated that he would sustain the demurrer to certain paragraphs of the answer, but did not enter any order to that effect. On the next succeeding day, before such an order was taken, the defendant Mize offered to amend by alleging: “Now at this term of the court comes F. A. Mize, the defendant in the above-stated case, and he amends his answer heretofore filed by adding thereto the following, to wit: The check given to defendant by said Oliver was never paid; and at the time same was given, the said Oliver had no funds to pay the same, and was absolutely and thoroughly insolvent. Defendant shows that shortly after said check was given, the said Oliver was adjudicated a bankrupt, and unless defendant can set aside the deed obtained from him by fraud [503] on the part of Oliver, he is without remedy.” This amendment was disallowed on the ground that it was not accompanied by an affidavit to the effect that at the time of filing the original answer the defendant did not omit the new facts set out in the amendment for the purpose of delay, and that the amendment was not now offered for such purpose. The objections to the allowance of the amendment were not meritorious (Civil Code, § 5363), and the court erred in sustaining it. 2. Save as announced in the third division of the opinion, none of the several grounds of demurrer to the separate paragraphs of the answer would be meritorious, unless the answer as a whole was subject to the ground of general demurrer that it failed to set forth a valid defense. Properly construed the plea set up such matters as would have authorized Mize, in a contest directly with Oliver, to repudiate the sale. The .worthless check which Oliver, the insolvent but sole owner of the Bank of Climax, imposed upon Mize was immediately deposited in that bank, and thereby in effect returned to Oliver. The net result of the transaction, in which credit was not intended to enter, was that Oliver obtained both the deed and check. Under these circumstances he could not in equity hold the deed. Nor did the plaintiff, the Bank of Whigham, stand in any better position. Taking the allegations of the plea as true, which must be done on demurrer, the deed which the Bank of Whigham received from Oliver was merely as security for Oliver’s pre-existing debt, the bank not parting with anything, nor chánging its status in any respect. It did not, therefore, stand in the position of a bona fide purchaser for value, and as such protected from the equities of Mize against Oliver. . Civil Code, § 4307; Mashburn v. Dannenberg, 117 Ga. 567 (5), 568 (44 S. E. 97), and citations; Harris v. Evans, 134 Ga. 161 (67 S. E. 880). A sale of real estate does not stand on the same footing as a sale of negotiable paper, where the rúle is different from that above expressed. Harrell v. National Bank of Commerce, 128 Ga. 504 (57 S. E. 869), and citations. 3. So much of the answer as sought to set up that the Bank of Whigham knew, or ought to have known by the exercise of reasonable prudence, of the alleged fraud on the part of Oliver in procuring the deed from Mize, was insufficient as a charge of' notice, and should be so held, if on another hearing it should become material. Judgment reversed. All the Justices concur.