Williams v. Oconee County Bank

Atkinson, J. 1. A security deed under the provisions of the Civil Code (1910), §§ 3306, 6037, and 3310, was executed to secure a pre-existing debt owed by the grantor to the grantee and any debt by the grantor to the grantee “which may hereafter arise.” After execution of the security deed, the grantor obtained an additional loan from the grantee. Held: (a) In a contest arising after the additional loan between the security deed and a prior unrecorded deed by the grantor to a third person, the grantee in the security deed occupied the position of a purchaser for value upon a present consideration; and if he was not affected with notice of the prior unrecorded deed, his security deed would be entitled to priority to the extent of the amount of both the antecedent and subsequent debts. (6) The future extension of credit would constitute such “new consideration” as would render the security operative relatively to the pre-existing, as well as the subsequently incurred indebtedness. Branch v. Griffin, 99 N. C. 173 (5 S. E. 393, 398). (c) The case differs from Hubert v. Merchants Bank, 137 Ga. 70 (72 S. E. 505), in which there was “no additional security ” for the security executed for the pre-existing debt, and from the case of Harris v. Evans, 134 Ga. 161 (3) (67 S. E. 880), in which it was held: “One who takes from his debtor a security deed to land, for the purpose of securing a pre-existing debt, without any change in condition or present payment or other new consideration, does not rank as a purchaser within the meaning of the rule of law which protects a bona fide purchaser without notice from an easement upon the land.” 2. The ruling stated in the foregoing division disposes of the assignments of error, in so far as they are insisted upon in the briefs of the attorneys for the plaintiff in error. Judgment affirmed. All the Justices concur. Wolver M. Smith, John J. Strickland, and Rupert A. Brown, for plaintiff. R. M. Nicholson and Erwin, Erwin & Nix, for defendants.