John Hancock Mutual Life Insurance v. Ross

Russell, C. J. An equitable petition was filed in the superior court of Barrow County against the administrators of G. W. Smith, deceased, praying that they be removed, and that receivers be appointed to supersede them. The administrators were removed, and the defendant in error became sole receiver. The present plaintiff in error, the John Hancock Mutual Life Insurance Company, was not a party to the original petition. Later the insurance company and other parties were brought into court by ancillary equitable. petition by way of amendment. The plaintiff in error, with other named parties, filed both general and special demurrers, which were overruled. The insurance company alone excepted. In the bill of exceptions error is assigned upon the judgment overruling its general and special demurrers, as well as the judgment requiring the plaintiff in error to intervene in the receivership proceedings. In the view which we take of this case it is not necessary to [655] decide whether the court erred in requiring the plaintiff in error to intervene. It appears in the record, without dispute, that G. "W. Smith and J. H. Hill bought a tract of land in Macon County, Georgia, containing over .2000 acres, from L. B. Hamilton, upon which there was paid to Hamilton a large portion of the purchase-price. At the time of this purchase by Smith and Hill the land was encumbered by a loan deed originally securing a loan of $20,-000 advanced by the John Hancock Mutual Life Insurance Company to Hamilton. Smith and Hill assumed the payment of this liability. An extension of time of payment was granted by the lender, with the proviso that the latter might proceed, in case of default, independently of either Hamilton, the original borrower, or Smith and Hill, at its option. Prior to the filing of the ancillary petition, the plaintiff in error had sued L. B. Hamilton (the maker of the security deed which was outstanding at the time of the purchase by Smith and Hill) in the city court of Montezuma, and had obtained a judgment for $17,000, with a special lien upon the 2024 acres of land above referred to. The petition asked that the plaintiff in error be enjoined from proceeding to levy or sell this tract of land, because it could be sold to better advantage by the receiver, so as to thus preserve the equity which had originally been the property of Smith and Hill, and which equity had later become the undivided property of the estate of G. W. Smith, deceased. It appears from the evidence that the estate of G. W. Smith, deceased, is insolvent, but that the tract of land has been worth as much as $100,000; that G. W, Smith paid many thousand dollars upon the purchase-price, and that his equity over and above the debt of $17,000 should be preserved for the benefit of other creditors. In this summary we are conceding, as argued in behalf of the defendant in error, that whatever interest John H. Hill may have had in the equity has been properly transferred to the estate of G. W. Smith, deceased, and is therefore within the control of the receiver. So the question presented for determination is whether one who holds title to a tract of land to secure a pre-existing debt and who has reduced that debt to judgment can be delayed or prevented from collecting his debt, in the absence of any showing that the judgment was obtained by deception or fraud or is for any reason defective, merely because it may be to the advantage of another who derives his rights from the judgment [656] debtor 'with knowledge of the outstanding lien and subject thereto. It may be granted that in many instances substantial benefits might be preserved by delay. However, we have been cited to no • authority which would seem to authorize that the processes of the law shall be stopped by the hand of equity under the circumstances of the present case. In our opinion there is no equity in the petition so far as the same relates to the plaintiff in error, and the general demurrer should have been sustained. Judgment reversed. All the Justices concur.