Johnson v. Poullain

62 Ga. 375

• Court: Supreme Court of Georgia
• Decided: February 15, 1879
• Status: Published

Opinion

Jackson, Justice.

The receiver had no right to invest the homestead fund in property worth more than the fund would buy, and Poullain, cognizant of all the facts, had no right to sell so as to encumber the homestead with a mortgage given by Johnson and wife. His claim is not purchase money in the sense of the constitution. Both parties, however, seem to have acted honestly, but with mistaken-ideas of the law ; and the result is that both have equities which ought to be adjusted; and we think that the case is one peculiarly suited to the interposition and jurisdiction of courts of equity. The mortgage covers all the house and lot except the homestead estate therein ; it does not cover that, because Mr. and Mrs. Johnson had no right to bind that by the mortgage, and it does not appear that they tried to do so. So far as their interest in the house and lot is concerned, that is bound by the mortgage; and as they gave the mortgage, they cannot deny their title, and the foreclosure, if they could, would conclude them. What, then, is their interest-? The answer would seem to be, the house and lot, except the homestead part thereof. What is that part? The whole was estimated at, and bargained for at, and purchased at, the price of twenty-five hundred dollars. Eighteen hundred dollars of homestead money was paid for it; therefore the homestead part is eighteen twenty-fifths thereof. The remaining seven-twenty-fifths is not homestead, and as Johnson and wife have mortgaged it, and the mortgage has been foreclosed against them, and they cannot deny title, that title is in them. So that the mortgage covers seven twenty-fifths of the house and lot. Johnson also owns the reversion in the homestead — eighteen-twenty-fifths of the property — after the termination of the homestead estate by the extinction of the recipients of such an estate; and, therefore, the mortgage covers that, too.

The equities of the respective parties, therefore, would seem to be this : That eighteen-twenty-fifths of the house and lot is not subject to the mortgage so long as the homestead estate remains in existence, so long as the family remains a family, but, that seven-twenty-fifths is subject at once, and the reversion in the eighteen-twenty-fifths will be when it comes into Johnson’s possession, or right of possession, by the termination of the homestead.

The property has depreciated in value. Probably it will not bring $1,800.00. Partition will be necessary— equitable partition especially appropriate ; even more so, if possible, than in the case of Grimes et al. vs. Little et al., reported in 56 Ga., 649, where it was held, in the case of two trust estates having become blended, without fraud in either trustee, that a bill in equity would lie for such partition. In the case at bar, equitable interference is more necessary, because not only partition may have to be made, and the property sold — the homestead fund reinvested somewhere — and Poullain, the vendor and mortgagee, be allowed by decree to hold his judgment of foreclosure open until the termination of the homestead interest, with the right then to make the balance of the money that may be due after seven-twenty-fifths of what the house sells for has been applied to the debt, or the chancellor may allow the fi.fa. to proceed at once to sell the seven-twenty-fifths interest, or so decree at the hearing' — but the equities of the homestead claimants must bo protected.

So regarding the principles which equity will apply to the facts made by this bill substantially, we think that the chancellor erred in not granting the injunction, at least so far as the homestead is concerned, and also the reversion, because that cannot be touched while the family exists.

The execution issued on the judgment of foreclosure should be stayed to that extent until equity can mould the decree in accordance with the principles above declared, and do justice to all parties, so far as justice under the change of values can be meted out. Of course, these views are predicated upon the facts set out in the bill, and those facts are admitted to be true by the demurrer which was filed in resistance of the application for the injunction, and no answer or affidavit varying the case made was offered in evidence before the chancellor. Should they be varied in substance on the trial the equities may be different; probably, however, the truth of the case is before us now, and we have endeavored so to consider and determine the principles controlling it as to make an end of it.

Possibly, other parties ought to be made; if so, the complainant doubtless will be allowed to do so, in behalf of the minors interested — if substantial justice cannot be done according to equity without their being represented other than by their mother ; and perhaps Johnson, also, should be make a party. But all these are premature considerations, which the parties will attend to as they are advised? and as the court shall direct.

It is enough now to rule that the equity in the bill is sufficient to hold it in court for a final decree, and to require an injunction in the meanwhile.

Judgment reversed.