Cairo Banking Co. v. Henderson

137 S.E. 19, 163 Ga. 629, 1927 Ga. LEXIS 36
CourtSupreme Court of Georgia
DecidedFebruary 15, 1927
DocketNo. 5360
StatusPublished
Cited by2 cases

This text of 137 S.E. 19 (Cairo Banking Co. v. Henderson) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cairo Banking Co. v. Henderson, 137 S.E. 19, 163 Ga. 629, 1927 Ga. LEXIS 36 (Ga. 1927).

Opinion

Russell, C. J.

According to the equitable amendment filed by the plaintiff in fi. fa. (present plaintiff in error), in 1913 Elias Henderson owned a tract of land in Mitchell County. But it appears from uncontradicted evidence that his wife, Hester Henderson, had for many years prior to 1913 owned an adjoining tract in her own right, and Elias lived, not on his own place, but “in his wife’s house’’ on her land. It is admitted in plaintiff’s amendment in aid of the levy that through Howard M. Smith & Company of Macon, as brokers, Elias Henderson borrowed $2,500 from one Edward W. Dewey and to secure the loan executed a security deed dated September 14, 1913, conveying to Dewey the tract of land which he owned adjoining his wife’s home place. This deed was duly and timely recorded in book 25, page 598', in the clerk’s office of the superior court of Mitchell County. Thereafter Elias Henderson died, and his son, George Henderson, was appointed administrator of his estate. In the fall of 1919 Jesse Henderson, another son of Elias Henderson, was in jail,and wanted some money. He was the holder of a bond for title executed and delivered to him by his father, the deceased intestate, whereby a deed was to be executed conveying to him, upon the payment of the stated purchase-price, a certain 135-acre parcel which was included in the entire tract to which the father had executed the loan deed to which reference has just been made. J. L. Peebles agreed to advance the needed funds if Jesse could secure the loan by a conveyance of his one-sixth undivided interest in the estate of his father, Elias Henderson, and by a deed to the 135 acres described in his bond for title. When the proposing lender saw the mother and brother of Jesse and proposed'that this conveyance be made, they refused to consent to the plan, even though Jesse might have to stay in jail; and the administrator declined to execute said deed. However, upon being told by counsel for Mr. Peebles, as well as his own counsel, that he could be compelled to make the deed upon payment of the remainder of the purchase-price due by his brother Jesse, the administrator finally consented, and on February 2, 1920, upon the payment and the receipt of the sum of $776, as administrator he executed a deed in conformity with the terms of the bond for title. The record does not show, [631]*631what sum was due as the purchase-price for the 135 acres of laud, hut the small amount paid the administrator on that acreage in that section in February, 1920, raises no presumption that the amount paid him ivas in excess of the unpaid purchase-price owed by Jesse Henderson to the estate of his father, represented by the administrator. Of course the title obtained by the holder of the bond for title was subject to the prior security deed in favor of Dewey, standing unchallenged upon the record, as it is admitted to be a part of the land conveyed to Dewey. It does not appear that any notice was taken of the record of Dewey’s deed, or of the fact that it had not been entered as canceled. So far as the record discloses, it was a recorded lien with title to secure it, covering not only the tract of land conveyed to Jesse Henderson by his father, but also all of the realty of Elias Henderson. It seems 'from the brief of plaintiff in error that Peebles advanced something over $2,000 for Jesse Henderson; but since it is agreed that the administrator was only paid the sum of $776.03, we are not concerned with the disposition of the remainder of the $2,000. The $776.03 was not paid to the administrator by Jesse Henderson, the debtor, or by Mr. Peebles, his creditor, but was paid to the administrator by check of his own attorneys. On May 23, 1923, a transfer of the debt and the original deed of Edward W. Dewey was entered upon the record in the clerk’s office of the superior court of Mitchell County, conveying to Mrs. Hester Henderson all his right, title, and interest in the entire tract of land given as security for the debt, and under a power of sale contained in the deed Mrs. Henderson, as attorney in fact for Elias Henderson, sold the land in accordance with the provisions of the deed. At the sale George Henderson bid in the tract of land for his mother, and a deed was executed conveying the premises to her.

This case was brought about by reason of the fact that the Cairo Banking Company, as transferee of the rights of J. L. Peebles and of a note given by George Henderson individually, which had been sued to judgment, was proceeding.to sell a one-third interest in the real estate conveyed by Elias Henderson to Dewey. Mrs. Henderson interposed a claim against this levy. The case was submitted to the judge without the intervention of a jury, and he found in favor of the claimant and that the property was not subject. A motion for a new trial was overruled, and exception is [632]*632taken to that judgment. The motion is based upon the usual general grounds, and amending grounds which merely set out more fully specific reasons why the verdict and judgment of the court are contrary^ to the evidence and to law. The plaintiff in error insists that the transfer of the security deed of Dewey to Mrs. Henderson is fraudulent and void, and that the administrator was guilty of a fraud in not applying the $776.03 paid by Jesse Henderson on the purchase-price of the 135 acres of land, to ‘the extinction of the debt due to Dewey; and in fact fraud is charged against the administrator as well as the claimant in every possible way. The plaintiff in error relies upon the principle that Peebles, and consequently the Cairo Banking Company, is a bona fide purchaser for value, and as such will be protected against secret equities. • We are of the opinion that this contention is without merit. The' law is very vigilant to protect bona fide purchasers without notice against any undisclosed equity, but notice extends to discovery of anything which reasonable care for one’s self-preservation could discover by the exercise of ordinary diligence. In view of the fact that Jesse Henderson, as a son and privy of Elias Henderson, knew that the land he was transferring to Peebles was subject to the recorded deed in favor of Dewey, and Peebles therefore could get no better title than he had, the claim that Peebles was a bona fide purchaser without notice can not be sustained. Not only Jesse Henderson, but Peebles and his attorney, had constructive notice that the land purchased from Jesse Henderson, as well as his one-sixth interest in his father’s estate which was purchased by Peebles, was subject to the prior deed in favor of Dewey. The fact that they were informed that the deed had been transferred to Merry was sufficient to lead to inquiry as to why the transfer to Merry had not been entered upon the record. It was ample to have put them on such notice as would have led them to require that the Dewey deed be canceled of record before they paid any money to Jesse Henderson for the 135 acres of land or for his one-sixth interest in the estate of Elias Henderson, his father. The argument that it is unreasonable to suppose that Peebles would have advanced $2,000 for Jesse Henderson’s 135 acres of land and his one-sixth interest in the remainder of his father’s plantation is without any force whatever, because the real estate in question might be of such value that Peebles or any [633]*633other purchaser could well have afforded to assume the Dewey loan.

It is further insisted that “when the claimant, Hester Henderson, and the administrator stated that the long-loan paper belonged to Mr. Merry, and referred Mr. Peebles’ attorney to Mr.

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Related

Rossville Federal Savings & Loan Ass'n v. Chase Manhattan Bank
154 S.E.2d 243 (Supreme Court of Georgia, 1967)
Peebles v. Henderson
13 S.E.2d 345 (Supreme Court of Georgia, 1941)

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Bluebook (online)
137 S.E. 19, 163 Ga. 629, 1927 Ga. LEXIS 36, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cairo-banking-co-v-henderson-ga-1927.