National Bondholders Cor. v. Cheeseman , 190 Ga. 166 ( 1940 )

1. Where the petition alleges that described lands were sold on February 5, 1935, under a power contained in a security deed by John E. Lee, it is not subject to demurrer on the ground that it does not allege by whom the sale was made; and if by the plaintiff, it shows no transfer of the security deed or authority of plaintiff to make the sale.

2. The petition being a suit in equity against the maker of a promissory note and one who assumed the payment thereof, for judgment for a stated balance due thereon, alleging that the plaintiff is the owner and holder of the note, an attached copy of which shows that it is indorsed in blank by the payee, the petition is not subject to demurrer on the ground that it fails to allege whether or not the plaintiff is a purchaser for value, before maturity, and in due course.

No. 13185. APRIL 11, 1940. National Bondholders Corporation brought suit against O. R. Muse and Mrs. Trux L. Cheeseman. Paragraph 2 of the petition alleged that defendant Muse executed and delivered six promissory notes in favor of Mortgage Guarantee Company of America, dated December 1, 1930, aggregating $3500 principal, that the notes were numbered 1 through 6, and a copy note No. 6 was attached as exhibit A. Paragraph 3 alleged that defendant Muse executed and delivered his deed in favor of Mortgage Guarantee Company of America to secure the notes mentioned in paragraph 2 of the petition, the deed conveying certain described land in DeKalb County, Georgia. The petition further alleged that after the execution of the notes and security deed above referred to, defendant Muse conveyed by warranty deed the land described in the security deed referred to in paragraph 3 to Mrs. Trux L. Cheeseman, this deed containing a clause providing that as a part of the consideration the purchaser assumed and agreed to pay a first mortgage for $3416.51 with interest, due to Mortgage Guarantee Company of America, and that defendant Cheeseman accepted the deed and entered into possession of the land thereunder. Paragraph 6 of the petition alleged that on February 5, 1935, the property described in paragraph 3 was sold pursuant to the power of attorney and sale contained in the above-mentioned security deed, the notes having matured and the balance due thereon being unpaid. By amendment allowed on March 26, 1938, paragraph 11 was added, in which it was alleged that the property described in paragraph 3 was sold pursuant to the power of attorney and sale contained in the above-mentioned security deed by John E. Lee. It was further alleged that after crediting the net proceeds from the sale there remained due and unpaid the principal sum of $2768.21, and that by reason of the assumption clause in her deed from Muse Mrs. Cheeseman and Muse are in equity indebted to petitioner for this balance due. The petition also alleged that the petitioner is the owner and holder of the note sued on. Mrs. Cheeseman filed her demurrers on a number of grounds, all of which were overruled except paragraphs 4 and 5, which were sustained. Paragraph 4 attacked paragraph 6 of the petition as amended, on the ground that the petition did not state by whom the property was sold, whether by the plaintiff or some one else; and if by the plaintiff, no transfer of the security deed or conveyance of the property was set out or referred to, and no authority was shown for the sale of the property by the plaintiff pursuant to the security deed. Paragraph 5 of the demurrer attacked the petition on the ground that it was not alleged whether or not the note sued on was indorsed to petitioner for value before maturity, or that it was indorsed or transferred to petitioner in due course. Upon hearing the demurrer paragraphs 4 and 5 were sustained with leave to amend within fifteen days, it being provided that unless amended within said period the petition would stand dismissed. The plaintiff excepted to the sustaining of these grounds of the demurrer, and to the dismissal of the action. 1. The demurrer attacks paragraph 6 of the petition, because, as asserted, it fails to show by whom the sale under the power contained in the security deed was made, and whether the sale was by the plaintiff or other parties. Looking to the petition in considering this portion of the demurrer, it appears that as amended it explicitly alleges that the sale was made by John E. Lee. This allegation, in addition to answering the first inquiry as to who made the sale, also answers the further question raised by the demurrer as to whether the sale was by the plaintiff or other parties. Consequently this portion of the demurrer is completely without merit. The remainder of paragraph 4 calls upon the petitioner to set out or refer to a transfer of the security deed or conveyance of the property, and to show authority for sale of the above-described property pursuant to the security deed, provided and only provided such sale was made by plaintiff. Since the sale was not made by the plaintiff, the demurrer calls for no information and requires no amendment. If in stating this ground of the demurrer it was desired by the defendant to obtain information on these questions relative to the party making the sale, whether such party be the plaintiff or some one else, the demurrer should have so stated. Demurrer, being a critic, should itself be free from imperfection. A special demurrer must put its finger upon the exact point of weakness. Southern States Portland Cement Co. v.Helms, 2 Ga. App. 308 (58 S.E. 524); Marietta Realty Development Co. v. Reynolds, 189 Ga. 147 (5 S.E.2d 347). There is no merit in paragraph 4 of the demurrer.

2. Paragraph 5 of the demurrer constitutes no valid attack upon the petition. The petition conforms to all legal requirements with reference to showing the plaintiff's right to sue on the note, when it sets forth copy of the same, showing indorsement in blank by the payee and the amount due thereon, and alleges that plaintiff is the owner and holder thereof. These facts make a prima facie case of "holder in due course." Code, § 14-509. When the Mortgage Guarantee Company of America, the payee, signed its name on the back of the note sued on, that, without more, constituted an indorsement in blank. Code, § 14-402; Heard v. DeLoach, 105 Ga. 500 (30 S.E. 940);Hendrix v. Bauhard, 138 Ga. 473 (75 S.E. 588, 43 L.R.A. (N.S.) 1028, Ann. Cas. 1913d 688). With this the only indorsement in blank appearing on the note, it is payable to "bearer." Code, § 14-209 (5). And it may be negotiated by delivery. § 14-405. Maturity of the note does not affect its negotiability. Bank of Oglethorpe v. Swindle, 155 Ga. 69 (116 S.E. 604, 33 A.L.R. 695). It was error to sustain the demurrer and dismiss the action.

Judgment reversed. All the Justices concur.