Exchange National Bank v. Pearsons-Taft Co. , 159 Ga. 168 ( 1924 )

Beck, P. J.

(After stating the foregoing facts.) The defendants in error insist, that Edwin Dorminy having made a mortgage to the Citizens Bank of Oeilla, the paper which was afterwards transferred to the plaintiff in error, Exchange National Bank of Fitzgerald, he had no title to the lands described in the mortgage upon which the instrument purports to create a lien; that the title to the lands was in the Land Company, under their first deed, and an equity was in the same company under their second deed to secure debt; that it was a matter of legal impossibility for Edwin Dorminy to create a mortgage lien on something that he did not have, and the only thing that he had at the time of making the mortgage was a mere equity of redemption, and he could not create a lien on this by an instrument in the form of a mortgage which purported to create a lien on the land itself. It is conceded that a mortgage lien could have been -created upon the equity of redemption, but it is insisted that he did not do this; that the mortgage did not purport to be given on the equity but on the entire interest or title in the property.

The court does not concur in this. While the mortgage referred to did not- recite that it was upon the equity, we think the effect of it was to cover whatever interest the mortgagor had in the land. The transfer to the plaintiff in error of the notes secured by the mortgage conveyed to the transferee the benefit of the security. Civil Code, § 4276. In the case of Citizens Bank of Moultrie v. Taylor, 155 Ga. 416 (117 S. E. 247), referring to lands which had been conveyed by a security deed to a named creditor, this court said: “A subsequent incumbrance of the same property by the grantor, whether by security deed or mortgage executed by the grantor named in the prior security deed while he retains liw equitable estate in the land, will operate upon that equitable estate.” The writer of the opinion cited there, among other cases, the case of Wood v. Dozier, 142 Ga. 538 (83 S. E. 133). But the defendant in error here relies upon the case of Wood v. Dozier; and while the plaintiff in error, with whose contention we agree, asks that this last case be reviewed and overruled, we do not think it necessary to review it. It is not in conflict with the decision we reach in favor of the party asking the review. That ease differs in its facts from the case at bar. In that case the grantee in the security deed executed a bond for reconveyance to the grantor, his heirs, assigns, etc., upon the payment of the debt, and that bond for re-conveyance had been transferred to a third party. Besides, the claim of the widow for a year’s support on the funds in controversy might have been a material fact for consideration upon the question of award of the funds. In the present case there was no bond for reconveyance. See also, in this connection, the case of Cook v. Georgia Fertilizer & Oil Co., 154 Ga. 41 (113 S. E. 145). We are of the opinion that the Exchange National Bank of Fitzgerald, the holder of the notes secured by the mortgage, had a prior lien upon the funds.

It is further insisted, however, in this case that the mortgage, prior in date as it is to the security deed to the First National Bank oí Odlla, was not entitled to recordation, because Dan Dorminy was a joint maker with Edwin Dorminy o£ the note which is secured by the mortgage. ' We think, however, that he was competent as a non-official witness. The mortgage, it is true, secures a note° of which Dan Dorminy was a joint maker with Edwin Dorminy, but he had no interest in the land that was mortgaged and did not sign the mortgage. Edwin Dorminy owned the land which was mortgaged and was the sole maker of the mortgage: It is true that Dan Dorminy may have had an interest in having the note secured by a lien on Edwin Dorminy’s property, but we do not think that this interest disqualified him to act as a non-official witness. Under certain outside authorities he might be disqualified on the ground of interest. From the case of Peagler v. Davis, 143 Ga. 11 (84 S. E. 59, Ann. Cas. 1917A, 232), it appears that a mortgage was executed by one Everett to the Cairo Banking Company, and was attested by two witnesses, one of whom was a notary public. .The non-official witness was a stockholder of the mortgagee corporation; and it was insisted that he was incompetent on that account to be an attesting witness. After referring to the case of Southern Iron & Equipment Co. v. Voyles, 138 Ga. 258 (75 S. E. 248, 41 L. R. A. (N. S.) 375, Ann. Cas. 1913D, 369), wherein it' was held that a stockholder of a corporation bears such financial relation to it as to disqualify him from attesting as a notary a deed to which the corporation was a party, Presiding Justice Evans, who wrote the opinion in the Peagler case, said: “It does not follow, however, that a stockholder, though incompetent to take an acknowledgment of the corporation’s deed, is likewise incompetent as an attesting witness. There is no reason to extend the public policy which forbids the former so as to include the latter. An unofficial attesting witness'does not act under oath of office, and is not selected because of that impartiality of conduct to be presumed of a sworn official. Besides, the statute declares -that a 'mortgage must be executed in the presence of, and attested by or proved before, a notary public or justice of any court in this 'State, or a clerk of the superior court.’ Civil Code (1910), § 3257. An individual who is not a party to a mortgage may attest it as a witness. Under the doctrine of corporate entity, the corporation’s mortgage is not the mortgage of the stockholder; and it has been held that notwithstanding an acknowledgment of a deed before a notary, who was at the time a stockholder of the grantor corporation, is not good as an acknowledgment, nevertheless such certification may be allowed to stand for the notary’s attestation as a non-official witness. Spink v. Guarantee Bank & Trust Co., 181 Ala. 272 (61 So. 302). We hold that one, though incompetent to take an acknowledgment of a mortgage as a notary because he is a stockholder of the mortgagee corporation, is not incompetent as a non-official witness to the signature of the mortgagor'. See Maddox v. Wood, 151 Ala. 157 (43 So. 968); 1 C. J. 807.”

We do not think that the fact that the First National Bank oE Ocilla obtained'a judgment on its claim prior to the date of the judgment in favor of the Exchange National Bank of Fitzgerald and that the former bank garnished the Land Company, as recited in the statement of facts, would have any material effect upon the priority of the liens of the contesting parties.

Judgment reversed.

All the Justices concur.