Hawes v. Gloves

55 S.E. 62, 126 Ga. 305

• Court: Supreme Court of Georgia
• Decided: August 17, 1906
• Status: Published

Opinion

Cobb, P. J.

1. Counsel for plaintiff in error do not contend in their brief that the debt claimed by Mrs. Glover against the estate of Mrs. McMichael was barred by the statute of limitations, nor ■does it appear that this contention was made in the trial court. But counsel for defendant in error has discussed the question whether this debt was thus barred, contending that it was not, and has asked and obtained leave to review the decision of this court Tendered in Johnson v. Johnson, 80 Ga. 260, evidently being apprehensive that if that decision should be followed in the present •case, the judgment of this court might be adverse to his client. Even admitting that the note held by Mrs. Glover, which the .mortgage -was given to secure, fell due on December 1, 1895, it was not, relatively to the estate of Mrs. McMichael, barred by ihe statute of limitations. As shown by the evidence, Mrs. McMichael died on April 29, 1897, and there was no administra“tion upon her estate until August 7, 1899. During the period ■of time between these two dates the statute of limitations, relatively to claims against her estate, was suspended. Civil Code, ■§ 3782; Acts 1882-3, p. 104. It was, of course, still further suspended for twelve months after the appointment of the administrator. Civil Code, §§ 3421, 3423; Smith v. Hudspeth, 63 Ga. 212; Pendleton v. Andrews, 70 Ga. 306; Johnson v. Johnson, supra; Adams v. Adams, 113 Ga. 824; Williams v. Lancaster, Ib. 1020; Tarver v. Cowart, 5 Ga. 66. Mrs. Glover took the initial ¡steps toward the enforcement of her mortgage on August 24, 1903, when she, after giving notice of her mortgage upon the land, became a party to the agreement under which the entire interest in the land was sold under the execution in favor of Mrs. Hawes, trustee; and on September 16, 1903, she filed her petition setting up 'her mortgage and claiming thereunder the funds in the hands of the sheriff arising from this sale. Taking either of these dates as •the time when the statute of limitations finally ceased to run in favor of the estate of Mrs. McMichaeh against the claim of Mrs. Glover, it is very clear that such claim was not barred, as the statute had not run against it for the period of six years, which is applicable to promissory notes not under seal. In Johnson v. Johnson, supra, which counsel for defendant in error obtained leave to review, it was held that the statute of limitations was not suspended during the time that the estate of a deceased debtor was unrepresented. That decision simply followed the one rendered in Pendleton v. Andrews, 70 Ga. 306, in which it was held that section 2829 of the Code of 1882 (now section 3781 of the Civil Code) could not "be invoked by a creditor whose debtor dies, in order to prevent the statute of limitations from running;” as “That section provides for the suspension of the statute for five years when the creditor dies, and his estate is unrepresented; but does not suspend the statute in favor of one who holds a claim against” the unrepresented estate of a decedent. The decision in Pendleton v. Andrews was rendered on April 24, 1883, and at the first session of the legislature thereafter the act of September 26, 1883, was passed, which provided that, from and after its passage, “The time between the death of a person and representation taken upon his ■estate, or between the termination of one administration and the •commencement of another, shall not be counted against creditors of his estate, provided such time does not exceed five years.” This ■made the rule which theretofore had been applicable only to creditor estates likewise applicable to debtor estates. That act counsel for defendant in error seems to think was overlooked when the decision in Johnson v. Johnson, supra, was rendered. When that decision was rendered the act of 1883 had not been codified, and in •the opinion in the case, delivered by Chief Justice Bleckley, it is •not referred to. Whether the court had it in view when that case was’decided can not be definitely determined. The cause of action ■with which the court was then dealing lacked but sixteen days of being barred by the statute of limitations when the act of 1883 was passed; and, assuming, as the court did, that the persons sued were rightful' executors, the time between the death of the debtor and representation upon her estate had expired when that statute was enacted. So, if the decision was made in view of the act of 1883, the ruling there made would go no further than holding that that act was not applicable to a case where the time between the death of a debtor and representation taken upon his estate had completely expired before that act was passed. This is not at all in conflict with the ruling which we make in the present case; for here even the debt itself was created long after the act of 1883 was passed, and of course the statute of limitations, relatively to such debt, had not even begun to run until many years after that statute was enacted, so that the period between the death of the debtor and representation upon her estate was clearly covered by the statute in question. There is, therefore, no necessity, in the present case, for overruling the decision in the one which we have been asked to review, in order to reach the ruling which we now make,

2. Section 5269 of the Civil Code, which is relied upon by plaintiff in error to exclude the testimony of W. J. MeMichael as to the execution of the note and mortgage by Mrs. E. J. MeMichael, is as follows: “Where a person not a party, but a person interested in the result of the suit, is offered as a witness, he shall not be competent to testify, if as a party to the cause he would for any cause be incompetent.” Eelatively to the question of the liability of the witness upon the note, he was competent to testify to its execution by his deceased co-obligor thereon, because at the time he testified he was no longer legally liable upon the note. Although the body of the note concluded with the expression, “Witness my ■ hand and seal,” it was not, as to any of its makers, a sealed instrument, as no seal, or anything intended to take the place of one, appeared thereon after the signature of any one of them. Ridley v. Hightower, 112 Ga. 476, and cases cited; Jackson v. Railroad Company, 125 Ga. 801. It was certainly matured on December 1, 1896. The trial under review occurred in 1905, at the April term of the court. As the note was not under seal, it was clearly barred as to this witness when he testified in the case; for it -is not r-laimp.fi that any suit had ever been brought against him upon it, but the question as to his competency was based solely upon the facts which appeared upon the face of the paper. The mere fact that it was not barred as to the estate of Mrs. MeMichael, his coobligor thereon, did not prevent its being barred as to him. In Shepherd v. Crawford, 71 Ga. 458, it was held: “Where a client brought suit against the representative of his deceased attorney,’ for money collected by such attorney and not accounted for, if the claim against the original debtor was barred by the statute of limir tations, so that no recovery could be had against him in case of failure to recover against the attorney’s estate, he would be a competent, witness to prove that he had paid the amount of the claim to the deceased attorney.” In the opinion Mr. Justice Hall, in discussing the question whether the trial court was right in permitting the original debtor to testify that he had paid the amount of the claim against him to the plaintiffs’ attorney, who was then dead and against whose estate the suit was proceeding, said: “Was the court right in admitting Gilliam’s testimony, over the defendant’s objection? This depends upon the further fact of Gilliam’s liability to the plaintiffs, in the event of their failure to recover against Crawford’s executor? If he would have been liable over to them in that event, when he testified, as Crawford was dead, then, under the decision of this court at the present term, in the case of Daniel vs. Burts, he was incompetent to testify. But it is apparent from the record in this case that the plaintiffs’ right to the claim that had been given Crawford for collection was then barred by the statute of limitations. Even at common law this would render a witness competent, who would, without it, be excluded. 23 Ga. R. 257. In Flournoy & Epping vs. Wooten, administrator, and Wooten, adm’r, vs. Flournoy & Epping, this court, at its present term, held that a witness competent to testify at common law was not rendered incompetent by reason of the exception contained in the evidence act of 1866 (Code, § 3854, par. 1), relative to parties to the suit or contract, etc., where the opposite party was dead.” In the Flournoy & Epping cases, 71 Ga. 168, which are here cited by Mr. Justice Hall, it was held: “The act of 1866 (Code, § 3854) was not intended to exclude any one from testifying who was competent as a witness by the law as it stood at the time of its passage, but did intend to make all persons competent as witnesses except those who fell within the exceptions to the act.” And in the case in 23 Ga. 257 (Leverett v. Stegall), cited by him, it was held: “A witness, whose interest is uncertain, and who is protected against recovery, by the statute of limitations, is a competent witness.” But while¿ as we have seen, the witness in the present case can not be held to have been incompetent by reason of any liability upon bis part upon the contract evidenced by the note, he was nevertheless interested in the result of the suit. He was thus interested, because if the amount of the note should be collected from'the estate of his deceased joint obligor, he, judging from the face of the note, would be liable, upon an implied contract, to her estate, to contribute his proportionate share of the amount which was required to pay the debt. Sherling v. Long, 122 Ga. 797. The fact that his liability upon the note was barred by the statute of limitations would not prevent his being liable upon such implied contract to the estate of his deceased co-obligor, for his proportionate share of the debt; for the cause of action in behalf of such estate against him for contribution would not arise until the payment- by it of the debt evidenced by the note, and then only would the statute begin to run as against such cause of action. Ib. It will be seen, however, that while the witness was thus interested in the result of the suit, his testimony was directly opposed to his interest; for in establishing, by his testimony, the claim of Mrs. Glover against the estate of Mrs. McMichael, he was laying the foundation for a possible future liability upon his part to such estate. When he took the stand as a witness,'he stood protected by the statute of limitations against a suit upon the note by Mrs. Glover, but his testifying to the execution of the note by his joint obligor, Mrs. McMichael, tended to render her estate liable for its payment, and to Tender himself liable over to such estate for contribution, in the ■event it was forced to pay the debt. As we have seen, the section of the Civil Code invoked for the purpose of excluding the testimony of the witness provides that a person who is not a party to the case on trial, but who is interested in the result of the suit, “ shall not be competent to testify, if as a party to the cause he would for any cause be incompetent.” As a party to the cause, the witness would not have been incompetent to testify as he did, for he was testifying against his own interest. Even before the passage of the evidence act of 1866, removing, with, certain exceptions, the incapacity, which existed at common law, of parties and persons interested in the result of the litigation to testify in the case, it was held'that a witness, although interested in the result of the suit, was competent when testifying against his own interest. Molyneaux v. Collier, 13 Ga. 406; Brown v. Burke, 22 Ga. 574. We have already seen that this court has held that the evidence act of 1866 “was not intended to exclude'any one from testifying who was competent as a witness by the law as it stood at the time of its passage.” Since the passage of that act, it was held in Lasseter v. Simpson, 78 Ga. 61, that “The surviving party to a contract, who is not a party to the record, is generally competent to testify against his interest, or where his interest is equally balanced.” In Reed v. Baldwin, 102 Ga. 80, the court held a surviving'party to a contract competent to testify against his own interest, even when he was a party to the record. The headnote in that case is as follows: “Where the executors of the deceased pay^ee of a promissory note bring suit thereon against a husband and wife who signed it as joint makers, and the wife files a plea that the debt was her husband’s and that she is not bound therefor, the husband is a competent witness, under the evidence act (Civil Code, § 5269), in support of the plea of the wife. The testimony thus offered is not in favor of the party testifying.” In the opinion Chief Justice Simmons emphasizes the language of the evidence act which shows that when a suit is instituted or defended by the personal representative of a deceased person, the opposite jDarty is only incompetent “to testify in his own favor against the deceased person as to transactions or communications with such deceased person;” and “that where a suit is instituted or defended by partners, persons jointly liable or interested, the opposite party" is simply rendered incompetent “to testify in his own favor as to transactions or communications solely with the deceased partner, ox person jointly liable or interested.” It is clear,’therefore, that if the witness, W. J. McMichael, had been individually a party to the case, he would not have been incompetent to testify against his own interest. As he would not, as a party to the cause, have been incompetent to thus testify, it necessarily follows that he, as a person not a party, but interested in the result of the suit, was not incompetent to testify against his own interest.

It is further contended, however, that the witness was incompetent under the act of December 21, 1897 (Acts 1897, p. 53). That act provides, “That when suit is instituted against joint defendants, one of whom is the representative of an insane or deceased person, the sane or living party defendant shall not be permitted to testify as to any transaction or communication with the insane or deceased party, when, his evidence would tend to relieve or modify the liability of the party offered as a witness and tend to make the estate of the insane or deceased party primarily liable for the debt or default.” We are unable to see how the witness was incompetent under the provisions of this act. The case in which he testified was not a suit against joint defendants, nor was he a party defendant thereto. The act of 1897 simply extended the exceptions, contained in the act of 1889 and subsequent acts, to the general rule of competency of witnesses provided by the evidence act of 1866; and as was said by Mr. Justice Candler in Hendrick v. Daniel, 119 Ga. 360, “This court is thoroughly committed to the proposition that the act of 1889 and the subsequent acts amendatory thereof, the provisions of which are embodied in the Civil Code, § 5269, are to be literally construed, and nothing will be added to or taken from them by judicial construction.” Besides, even if, under the act of 1897, the witness would otherwise be incompetent, we have seen that the bar of the statute of limitations as to him would remove his disqualification and render him competent.

2. The objection to the testimony of the witness, that he signed the name of his wife, Mrs. E. J. McMichael, to the note and mortgage, by her request, under her direction and in her presence, upon the ground that authority to execute the mortgage could not be conferred by parol, but would have to be executed with all the formalities required in the execution of the mortgage itself, was properly overruled by the court. In Reinhart v. Miller, 22 Ga. 402, it was held: “When a party present, and an instrument is presented for his signature, directs another to sign it, no written authority is necessary, and if the instrument is signed and the parties immediately recognize it by acting upon it, no proof of the presence of the party when the instrument is signed need be made.” In Brown v. Colquitt, 73 Ga. 59, 62, it was said: “A deed may be signed, sealed, and delivered by a person under instructions by parol, if the grantor be present at the time, and it will be good to pass title, because the law considers, under such circumstances, the act of the agent to be the act of the principal; it is done at his instance and under his directions, it is his act.” In Wyatt v. Walton Guano Co., 114 Ga. 375, it was held: “Where a husband, in the presence of his wife and with her express consent, signs her 'name to a promissory note which she knows is to be delivered to the payee in settlement of -an existing indebtedness for which she :is individually liable, and such note is delivered in the cancellation •of the indebtedness, the mere fact that she remarked to her husband, at the time of authorizing him to sign the paper: ?You may .sign my name to it, but I will have nothing to do with it/ the .same not being heard or communicated to the payee, does not relieve her from liability on the note.” Counsel for the plaintiff in error invoke and rely upon the statute of frauds, and contend that ■the execution of the mortgage on realty in this State must comply with its provisions "as contained in section 2693, par. 4,” of the ■Civil Code, which requires that "any contract for the sale of lands, •or any interest in or concerning them,” shall "be in writing, signed by the party to be charged therewith, or some person by him lawfully authorized.” *ft is utterly immaterial here whether this provision of the statute embraces a mortgage upon real estate or not; for it is obvious that when it is held that a contract is, in. contemplation of law, signed by a party when his name is signed thereto by another, in his presence and by his direction, there is no room for the contention that such a mortgage, so signed, is invalid un•der the statute of frauds. Counsel admit that this court “has decided the point as regards a deed or marriage agreement, in the case of Reinhart v. Miller, 22 Ga. 402;” but they insist that "The •deed there, however, was nothing more than a bill of sale to personalty, the subject-matter being slaves;” and that "All said in the decision further than was necessary to pass upon the question .as one respecting a bill of sale to personalty was obiter.” We do not agree with counsel in the construction which they place upon the instrument dealt with in that case, nor in the criticism which ‘they make upon the opinion of the court therein. The instrument ■which was there under consideration was undoubtedly "an agreement made in consideration of marriage,” which the law required then, and requires now, to be in writing. Cobb’s Dig. 1127; Bradley v. Saddler, 54 Ga. 681; Civil Code, § 2693 (4).

3. A mortgage is good as between the parties without any attesting witness. Marable v. Mayer, 78 Ga. 60. So is a deed. Johnson v. Jones, 87 Ga. 85; Howard v. Russell, 104 Ga. 230. And a mortgage, not attested as the law requires, is good as against third persons who take with actual notice of its 'existence. Gardner v. Moore, 51 Ga. 269. The requirements of the code as to the at-testation of mortgages have reference to the registry laws, and' must be complied with in order to entitle the instrument to record.. A seal is not necessary in order to render a mortgage valid. Civil Code,"§ 2724. As said by McCay, J., in Nichols v. Hampton, 46 Ga. 256, “our code requires no specified form to constitute a mortgage. It’ conveys no title, and is not required to be under seal. It' is sufficient if it specifies the property, states the debt and shows that the parties intend to create a lien.” A mortgage is perfectly valid as between the parties thereto, though never recorded. Hardaway v. Semmes, 24 Ga. 305; Gardner v. Moore, 51 Ga. 268; Myers v. Picquet, 61 Ga. 260; Civil Code, § 2727. If it is not recorded,, or, as in this case, is illegally recorded) the only effect is to postpone-it to purchases made, or liens procured by contract, without notice-of its existence, or to liens obtained by operation of law. It follows that the mortgage, upon proof of its execution, was admissible-in evidence.

4. The Civil Code, § 2488, provides, that “while the wife may contract, she can not bind her separate estate by any contract of suretyship, nor by any assumption of the debts of her husband, and any sale of her separate estate, made to a creditor of her husband,, in extinguishment of his debts, shall be absolutely void.” In construing this section, it has been repeatedly held that any contract of suretyship entered into by a married woman, whether in behalf of her husband or any other person, is void, and at her instance-will be so declared. But the question whether a creditor of hers can. raise the question of the validity of such a contract entered into by her, when, because of her insolvency and the existence of some lien or conveyance which she has executed in connection with the contract, it tends to prevent the collection of his debt against her, has1, never, so far as we have been able to discover, been before this, court. In Palmer v. Smith, 88 Ga. 84; it was held: “A conveyance of land executed by a married woman in payment of her husband’s debt, though declared by the statute absolutely void, is only so as against her and upon her election to treat it as void, coverture being a personal privilege which is not available in behalf of a. stranger to her title.” In the opinion Mr. Justice Simmons said: “Where a married woman having a separate estate conveys her property to a third person in payment of her husband’s debts, and afterwards seeks to recover the property or cancel the deed, the deed will be declared void, on her motion, as against all persons who had notice that it was made for such purpose. But where she has conveyed her separate estate, in payment of her husband’s debts, to one party, and another party is in possession of the property who is not in privity with her in blood or estate,, and is sued therefor by the vendee of the wife, the defendant can not set up in his defense that the deed is void because made in payment of the husband’s debts. This plea of the wife is a personal privilege, confined to her or her privies; and if she or they do not set it up, no stranger has the right to do so.” This decision, or principle, would seem to be directly in point here, notwithstanding the fact that there it was not shown that the defendant, who sought to invalidate the married woman’s deed, was a creditor of hers. The decision, in principle, seems to be directly in point, because it is based upon the principle that the plea of coverture is not available except to the wife herself and her privies in blood or estate, and we fail to see how a mere creditor can be a privy in estate to his debtor. We say this in full view of the decisions of this court, rendered in cases involving the right of a creditor of an insolvent debtor to raise the question of usury relatively to transactions between such debtor and another creditor; and we frankly admit the force of the argument of counsel for plaintiff in error, based on the strong analogy in principle between some of those cases and the present one. The theory, or principle, that there exists a legal privity between a creditor and his debtor, of which one creditor of an insolvent debtor can avail himself for the purpose of raising the question of usury as to the claim of another creditor against such debtor, was first announced by this court in Pope v. Solomon, 36 Ga. 541, the decision in which, though sometimes criticised, has been followed in a number of subsequent cases wherein the question of usury was involved. It is to be noted, however, that it was not held in that case that a creditor is a privy in estate to his debtor. The holding there was simply that there was a sufficient “legal privity” between a creditor and his debtor to authorize one creditor of an insolvent debtor, for his own protection, to raise the question of usury as to transactions between such debtor and another creditor holding a claim against him, which claim, under the circumstances of the particular case, had priority relatively to the funds in controversy of the common debtor, in order to reduce such prior claim by the amount of usury which the debtor had paid thereon. The term “privy in estate” was not once used by the court in dealing with the case. Of that case McCay, J., in delivering the opinion of the court in Gatewood v. City Bank, 49 Ga. 45, 50, said, that “the circumstances were peculiar. There was a privity between all the parties. The debtor had sold his goods, and the purchaser had agreed to pay the purchase-money to the creditors of the seller. Solomon was mentioned by name, the others generally. As the ■case was before the court, Pope, one of the creditors, had garnisheed the purchaser, and he, Pope, knowing the terms on which the purchaser had bought, filed a bill to attack Solomons debt on account of usury. Here was a fund belonging to an absconded debtor, in hand, none of the debts were in judgment, the fund had been, as the record was before the court, appropriated by the debtor to the creditors. And this court, on the idea, we suppose, that under the circumstances of the case the principles of a trust •or the usages of a bankrupt court were applicable, sustained the bill. The privity then existing, by reason of the written orders of the debtor, make that case stand on special circumstances. Otherwise it would be contrary to the uniform current of decisions, and a dangerous innovation on established principles.” Notwithstanding this sharp criticism, the ruling in Pope v. Solomon has not been confined to the peculiar facts of that case, but has been followed in subsequent cases, wherein the facts were dissimilar, but which involved the right of one creditor of an insolvent debtor to raise the question of usury relatively to transactions between such debtor and another creditor. So that, as shown by Presiding •Justice Lumpkin in the opinion in Stone v. Georgia Loan & Trust Co., 107 Ga. 524, the principle announced in that case, as applied to usury cases, may be now considered as firmly established in this State. Indeed, as he points out in that opinion, our Civil Code now applies that principle to the subject of usury in the following language: “The plea of usury is personal; but a creditor has no right to collect usurious interest from an insolvent debtor to the prejudice of other creditors.” But the application of this principle has not been extended beyond the usury cases, and we deem it unwise that it should be. Those eases must stand in a .class apart to themselves. The plea of coverture being a personal privilege, we are clearly of opinion that no one should have the right to question the validity of a mortgage executed by a married woman, as security for the debt of another, whether such debt be the debt of her husband or of some one else, except the woman herself or1 her privies in blood or estate. We are equally clear that a mere creditor of hers is not her privy in estate.

5. Section 2727 of the Civil Code, which provides that an unrecorded mortgage is “postponed to all other liens created or obtained . . prior to the actual record of the mortgage,” refers to liens created or obtained during the lifetime of the mortgagor. Standing alone, this section would seem to give a general judgment obtained against the estate of a decedent priority over a mortgage executed before the judgment but not recorded. But the statute of distribution provides that “Judgments, mortgages, and other liens created during the lifetime of the deceased, [are] to be paid according to the priority of their lien,” and gives them the sixth place in the order of distribution of insolvent estates. Civil Code,, §3424(6). This clearly excludes the idea that a judgment obtained after the death of the judgment debtor is to have any priority of lien, as a judgment, upon the assets of Iris estate. It also clearly includes the idea that a mortgage, whether recorded or not, is entitled after the death of the mortgagor to whatever priority of lien it had when he died. So the provisions of these two sections of the Civil Code are to be construed together and in harmony with each other. Subsequent paragraphs of section 3424 give the order of priority of debts ranking below liens created in the lifetime of' the deceased, placing “All liquidated demands,” including promissory notes, etc., in the eighth class. In construing this distribution statute, it has been repeatedly held that, in the distribution of an insolvent estate of a decedent, a judgment obtained against the administrator thereof ranks no higher than the claim upon which it. is based. Consequently a mere general judgment against the estate of a decedent can neither take precedence over, nor stand upon an equal footing with, an unrecorded mortgage executed by him. Counsel for plaintiff in error contend “that the word ‘mortgages’1 in the sixth paragraph of section 3424 means a mortgage executed and recorded in accordance with law, such a mortgage only as. yould be good against a subsequent judgment if the intestate had remained in life, because a mortgage unattested and unrecorded according to the provisions of section 2727 is not such a lien as. could claim the fund in a contest with third .persons who are judgment creditors.” The sixth paragraph of section 3424 includes all mortgages “created during the lifetime of the deceased,” and provides that they shall be paid according to the priority of their liens. It makes no exception as to unrecorded mortgages, but applies to all mortgages alike, whether recorded or not. They all take éífect according to the priorities of their liens; and an unrecorded mortgage takes effect according to the priority of its lien, which is the priority of the lien appertainng to an unrecorded mortgage; and this, in .the distribution of the insolvent estate of a decedent, is superior to that of a general judgment obtained after his death, because such judgment, in such distribution, ranks no higher than the claim upon which it is founded.

It follows that the court did not err in directing the verdict in favor of the mortgagee.

Judgment affirmed,

All the Justices concur, except Fish, C. J absent.