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Woodson vs. Veal et al.

Supreme Court of Georgia1878-01
60 Ga. 562

Summary

Holding. The court affirmed the judgment for the plaintiffs in ejectment, holding that bankruptcy does not arrest an ejectment action against the bankrupt, and that an absolute deed intended to convey legal title as security for a debt operates according to the parties' expressed intent to pass title.

A bankruptcy proceeding does not shield a defendant from an ejectment action seeking to recover real property. The bankruptcy does not delay or stop such an action; rather, it may provide additional reason to move the case forward expeditiously, since a bankrupt defendant is less able to pay rent or maintain the property. The defendant must either vacate the property or proceed to trial where the plaintiff's ownership rights will be determined.

The court addressed whether a deed absolute (rather than a mortgage) successfully conveyed legal title to secure a debt. The court held that when parties intend to pass title through an absolute deed rather than use a mortgage instrument, courts should honor that intention. The specific language and provisions in the deed—including the grantees' express right of entry and the grantor's obligation to pay costs of any necessary suit—demonstrated the parties' deliberate intent to transfer title. While the debtor may have an equitable remedy to compel a sale if the property's value exceeds the debt, that remedy does not override the deed's operation as a conveyance of legal title.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Effect of bankruptcy on pending ejectment actions
  • Whether an absolute deed conveys legal title versus creating only a mortgage
  • Enforceability of parties' contractual intent regarding conveyances of land
  • Equitable remedies available when property value exceeds secured debt

Procedural posture

This is an appeal from a judgment in an ejectment action brought by plaintiffs to recover possession of real property from the defendant.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Bleckley, Judge.

Bankruptcy adds no strength to the bankrupt’s title to realty or personalty. A pending action of ejectment against him is not to be arrested or delayed by the adjudication. Such an action treats him as a wrong-doer, a trespasser — as having the possession of property which does not belong to him, and as refusing to yield it to the true owner. "Why should he be allowed to withhold it because he is a bankrupt ? If any difference, the bankruptcy is a reason why the action should progress the. more expeditiously, as he is the less able to pay rent while his occupation continues. If he is a bankrupt, let bin) get out, and make room for a more solvent tenant, or else come to trial and have the plaintiff’s right to enter determined. 57 Ga., 281, 601.

The deed on which the plaintiffs in ejectment rested their recovery, was intended to pass the legal title; and the intention ought to prevail. Such is the general rule in the construction of all contracts. Code, §2755. There can be no good reason why the rule should not apply to a conveyance of land. Where the parties do not intend a title, but only a legal mortgage, why should they adopt an absolute deed instead of a mortgage ? It is precisely that they do intend, and deliberately intend, title to pass, that they eschew the mortgage, and make use of a deed absolute. Let them have their way. It is legal for them to have it; and when they have followed their own free election, they should meet with no disappointment. To constrain parties to abide by their own stipulations is a part of that same justice which protects them against being bound by stipulations into which they have not entered. The courts will not, and cannot, absolve men from their engagements, any more than impose upon them engagements to which they have not assented. Contract, with few exceptions, is free. Each man may make his own terms. One of the legal methods of securing a debt, is by passing title to the creditor. If that is the method chosen, there is no legal reason why both parties should not abide by the choice. While the debt remains unpaid, it is the right, both legal and moral, of the creditor to have the security to which his contract entitles him — not some other security, but that identi cal security. It ought to be the debtor’s pleasure not to withdraw or impair it. Why should not both debtor and creditor comply with the contract into which they have voluntarily entered ? There is no sounder law than that which recognizes the inviolability of contracts. The path of a legal tribunal is never more clear than when the question presented is, whether the intention of parties as embodied in their lawful agreements shall prevail or not prevail. In the deed before us, the special matters of detail as to the rights of the parties, and the mode of realizing them, tend to show, even more completely than the general form of the instrument, that the real intention was to pass title. It is expressly stipulated that there may be an entry by the grantees (the plaintiffs), and the grantor (the defendant) is made chargeable with the expense of any suit necessary for that purpose.

It is true there is a power of sale, and it may be that the exercise of that power would be beneficial to the grantor. But if so, and if he has an equitable right to compel its exercise, he may yet have that relief. Indeed, by making the requisite proof as to the property having a present marketable value in excess of the debt, he might have obtained a decree of sale on an equitable plea to the present action ; especially, if owing to his poverty, he is unable to redeem. The real end to be accomplished is that which the parties had in contemplation — the payment of the debt, and the surrender of the overplus, if any, to the debtor. That is honest; and in that the transaction should work out, if practicable.

Cited in the argument: Code, §§1954, 3809 ; 10 Ga., 65 ; 9 Ib., 157; 2 Story’s Eq., §1016, and note; Id., §1008 et seq.’, 55 Ga., 650 ; 54 Ib., 45 ; Crabb Real Prop., §2202 ; 57 Ga., 601; 43 Ib., 230; Code, §2283 ; Id., §2698; 16 Ga., 615; 32 Ib., 589 ; 38 IIb., 263 ; Code, §2757.

Judgment affirmed.