Dampier v. Citizens & Southern National Bank

Clark, Judge. By reason of the Citizens & Southern National Bank proceeding in a single foreclosure under Code Ann. § 67-701 on two defaulted conditional sales contracts and stating the gross amount of the debts as a lump sum without segregation as to principal and interest owing separately on each document, this appeal presents two questions. The first is the legality of using a single foreclosure where multiple security instruments exist between the same parties. If ruled permissible, we must then decide if the foreclosure affidavit must specify what portion thereof is principal and what portion represents interest as to each contract. 1. We hold a single foreclosure proceeding under Code § 67-701 between the same creditor and the identical defaulting debtor on multiple security instruments is valid. This is true even though as here the conditional sale contracts involve different motor vehicles and were made on different dates. We do not agree with appellant’s contention that such ruling "would defeat the basic fundamentals of fairness and justice.” In fact we submit that the words of Chief Justice James Jackson in Chamberlin & Co. v. Beck, Gregg & Co., 68 Ga. 346, 349, in upholding a single mortgage foreclosure where there was one mortgage on the same goods but two creditors with differing debts are appropriate: "It does not hurt defendants to make one foreclosure; it saves costs and helps them.” If the debtor wishes to release one of the secured items from the proceeding he has the right to tender into court the amount owed on that particular contract as the instant appellant did in Dampier v. Universal C. I. T. Credit Corp., 116 Ga. App. 303 (157 SE2d 159). As shown by the report in that case there was a single foreclosure of three conditional sales contracts which was upheld. 2. Appellant, debtor-defendant below, contends there is a fatal defect in the foreclosure by reason of the failure to plead separately the 'amount of principal and interest owing upon each of the contracts, citing Harris v. Usry, 77 Ga. 426, as supporting such assertion. This court has always honored the principle that the earliest full bench Supreme Court opinion constitutes a controlling precedent. Haggard v. Shaw, 100 Ga. App. 813 (112 SE2d 286); State v. Jones, 125 Ga. App. 361 (187 SE2d 902). That early case does not control here for a number of reasons which [241] we will list seriatim. Firstly, there is a basic difference in the facts. This 1886 decision relied upon the wording of the execution which directed the levying officer to make the sum stated "and all accruing interest at the rate of-Laconically, the court said its reason for requiring separation of interest and principal to be that "otherwise the judgment of foreclosure would draw interest on interest, and thus compound the interest.” It cited Code § 3570 of our 1882 Code which is identical in language with § 110-304 of our present 1933 Code forbidding a judgment to carry interest upon interest. Tins verboten reads "but no part of such judgment shall bear interest except the principal which may be due on the original debt.” In the case sub judice the affidavit recited there "is now outstanding and due the Citizens & Southern National Bank upon conditional sales contracts the sum of $3,606.37.” The process directed the sheriff to "cause to be paid the sum of $3,606.37 and-dollars for costs.” Thus, it will be observed the instant case did not seek "accruing interest.” That is to say, there is here no claim for interest on interest. Secondly, plaintiff bank has by its conduct committed itself to a maximum recovery of the amount claimed and thereby cannot recover interest thereon. In a personalty'foreclosure action defendant’s counter .-affidavit converts the proceeding to mesne process. Hart v. Hatcher & Brannon, 71 Ga. 717. With such conversion into a proceeding for trial plaintiff bank could have amended its claim at that point and segregated the amounts claimed as principal and as interest. Instead of doing so it elected to stand by the amount stated in its original affidavit and accompanying process and moved for dismissal of the counter-affidavit for failure to state any claim upon which relief could be granted. Thus, it elected to waive interest on its judgment. Our view is buttressed by the limitation of liability of the forthcoming bond established by Code § 39-304 which provides the measure of damages on replevin bonds covering personalty. Although that section provides for recovery of "the value of the property at the time of its delivery under the bond, with interest thereon” the concluding sentence reads: "The amount of damages shall in no case exceed the amount due on the execution levied.” See also Hobbs v. Tindol, 32 Ga. App. 609 (2) (124 SE 112). Thirdly, the manner in which our Supreme Court treated Harris v. Usry, 77 Ga. 426, supra, in two subsequent unanimous [242] full-bench cases under the title of Bank of Tupelo v. Collier shows their interpretation of Harris v. Usry does not constitute an affirmance of the phrase "fatally defective” as used in the headnote of the 1886 decision. In the first of these two cases reported in 191 Ga. 852, 859 (14 SE2d 59) a judgment for the Bank of Tupelo was affirmed providing "the plaintiff in fi. fa. will make and file a renunciation of all interest on the judgment and have the execution amended accordingly.” The second case is in 192 Ga. 409 (15 SE2d 499) where our Supreme Court ruled the inclusion of principal and interest in a gross amount which would have permitted interest to have been charged upon interest was "a mere irregularity” and therefore amendable even after the term of court had passed. See also Bentley v. Phillips, 171 Ga. 866 (5) (156 SE 898) where a verdict aggregating principal and interest followed by a judgment thereon was ruled defective but amendable and Newby v. Maxwell, 121 Ga. App. 18 (1) (172 SE2d 458) where our court held a judgment not to be invalid by reason of compounding interest in violation of Code § 110-304 because the trial judge amended the judgment to separate the principal and interest. Argued January 5, 1973 Decided May 11, 1973 Rehearing denied June 20, 1973 Elsie H. Griner, for appellant. Tillman, Brice, McTier & Coleman, George T. Talley, for appellee. We also observe that in the second Bank of Tupelo case the Supreme Court expressly differentiated Harris v. Usry, saying, "In Harris v. Usry, 77 Ga. 426, where a judgment and fi. fa., allowing the recovery of interest on interest in a chattel-mortgage foreclosure were held illegal, there appears to have been no motion to amend either by making a proper segregation of principal and interest or by eliminating the illegal future interest. ” (Emphasis supplied.) Bank of Tupelo v. Collier, 192 Ga. 409, supra, p. 413. As there is no claim to nor right of interest upon interest in the case at bar, the trial court’s judgment is affirmed. Judgment affirmed. Bell, C. J., Hall, P. J., Pannell and Quillian, JJ, concur. Been, Evans and Stolz, JJ., dissent. Eberhardt, P. J., disqualified.