O.C.G.A. § 44-14-31 (2019)

Annotations

Law reviews. For note discussing how an open end or

dragnet clause within a deed to secure debt ensnares subsequent purchasers of real property in light of Commercial Bank v. Readd, 240 Ga. 519, 242 S.E.2d 25 (1978), see 30 Mercer L. Rev. 363 (1978).

JUDICIAL DECISIONS ANALYSIS GENERAL CONSIDERATION PARTICULAR INSTRUMENTS DESCRIPTION OF PROPERTY General Consideration Construction of section. - O.C.G.A. § 44-14-31 is to have a reasonable construction, and is to be construed to facilitate and not to hamper and restrict mortgage liens. It requires that the debt or duty of the mortgagor shall be specified; it does not say that such duty shall be specific and precise. It may be indefinite, as to indemnify a surety for whatever the surety may pay in a certain event, or to hold one harmless for whatever may happen under certain circumstances. The paper must point out what the parties intend. Allen v. J.W. Lathrop & Co., 46 Ga. 133, 1872 Ga. LEXIS 22 (1872). Section requires no more than common law. - O.C.G.A. § 44-14-31 is nothing more than what the common law required, and amounts only to saying that the form of the undertaking is immaterial. If the material elements of a mortgage are there - sufficient certainty as to what the parties intend - the paper is good as a mortgage though there be no words of conveyance or any other of the usual forms of a mortgage. Allen v. J.W. Lathrop & Co., 47 Ga. 133, 1872 Ga. LEXIS 313 (1872). No particular form is necessary to constitute a mortgage as long as the

instrument clearly indicates the creation of a lien, and specifies the debt for which it is given, and the property upon which it is to take effect. Ray v. Atkins, 205 Ga. App. 85, 421 S.E.2d 317, 1992 Ga. App. LEXIS 1076 (1992), cert. denied, No. S92C1393, 1992 Ga. LEXIS 924 (Ga. Nov. 5, 1992). Section dispenses with formalities in the execution of mortgages. - Matters of forms are no longer, under O.C.G.A. § 44-14-31 considered of any consequence in determining whether or not a given instrument amounts to a mortgage. Mason v. Parker, 101 Ga. 659, 28 S.E. 985, 1897 Ga. LEXIS 292 (1897); Hopkins v. West Publishing Co., 106 Ga. App. 596, 127 S.E.2d 849, 1962 Ga. App. LEXIS 782 (1962). Intention of parties. - There is no general rule for determining whether a particular transaction is a mortgage or a conditional sale and every case must be decided on its own circumstances. The legal aspect of the contract in this respect depends upon the intention of the parties, to be ascertained by a consideration of the entire instrument and the surrounding circumstances, and not upon the form of the instrument or the name which the parties may have given to it. Valdosta Plywoods, Inc. v. Belote, 75 Ga. App. 616,

General Consideration (Cont’d) 44 S.E.2d 128, 1947 Ga. App. LEXIS 594 (1947). Intent to mortgage. - Any language to show an intent to mortgage (creation of a lien) is sufficient. Daniel v. State, 63 Ga. App. 12, 10 S.E.2d 80, 1940 Ga. App. LEXIS 2 (1940). Mortgage must be in writing. - A mortgage must necessarily be in writing and be duly executed by the party to be bound thereby. Printup v. Barrett, 46 Ga. 407, 1872 Ga. LEXIS 79 (1872); Duke v. Culpepper, 72 Ga. 842, 1884 Ga. LEXIS 330 (1884); Pierce v. Parrish, 111 Ga. 725, 37 S.E. 79, 1900 Ga. LEXIS 702 (1900). Language necessary. - There must be proper words used in order to create a lien; it is not necessary to use “grant,” “bargain,” or other technical words. Any language showing an intent to convey or mortgage is sufficient. Horton v. Murden, 117 Ga. 72, 43 S.E. 786, 1903 Ga. LEXIS 154 (1903). Paper must point out what parties intend. - If this is done, the mortgage is sufficient. Moultrie Banking Co. v. Mobley, 170 Ga. 402, 152 S.E. 903, 1930 Ga. LEXIS 466 (1930). A seal is not necessary to the validity of a mortgage, even upon real estate, under O.C.G.A. § 44-14-31, and a mortgage is valid, as between the parties thereto, without any attesting witness and without being recorded. Hawes v. Glover, 126 Ga. 305, 55 S.E. 62, 1906 Ga. LEXIS 376 (1906). Ambiguity may be determined from the nature of the property conveyed. Valdosta Plywoods, Inc. v. Belote, 75 Ga. App. 616, 44 S.E.2d 128, 1947 Ga. App. LEXIS 594 (1947). Mortgage takes effect upon execution. - A paper containing all the requisites of a mortgage of personal property, is a mortgage from the date of its execution, under O.C.G.A. § 44-14-31, even though it be not attested by an officer. Nichols v. Hampton, 46 Ga. 253, 1872 Ga. LEXIS 46 (1872). Questions of law and fact. - It is only when the terms descriptive of property intended to be conveyed by a written instrument are manifestly too meager, im-

perfect, or uncertain to serve as adequate means of identification that the court can, as a matter of law, adjudge the description to be insufficient. “Whether such terms will serve to identify the premises is a question of fact, and not of law.” Balchin v. Jones, 10 Ga. App. 434, 73 S.E. 613, 1912 Ga. App. LEXIS 550 (1912). The question of the sufficiency of description of property in a mortgage is one of law, for the court; that of the identity of the property mortgaged is one of fact, to be decided by the jury. Thomas Ford Tractor, Inc. v. North Ga. Prod. Credit Ass’n, 153 Ga. App. 820, 266 S.E.2d 571, 1980 Ga. App. LEXIS 1994 (1980); Chapman v. Bank of Cumming, 154 Ga. App. 739, 270 S.E.2d 4, 1980 Ga. App. LEXIS 2367 (1980). Whether or not a description in a mortgage, of mares, by name, age, and color was sufficient to put the purchaser on notice, was a question for the jury. Reynolds v. Jones, 7 Ga. App. 123, 66 S.E. 395, 1909 Ga. App. LEXIS 556 (1909). Notes payable in specifics. - It makes no difference, under O.C.G.A. § 44-14-31, that notes, to secure which the mortgage was given, are payable in specifics. The value of the specifics may be recovered. Hatcher v. Chancey, 71 Ga. 689, 1883 Ga. LEXIS 249 (1883). Rule as to deed to secure debt. - While, under the provisions of O.C.G.A. § 44-14-31, one of the requisites to the validity of a mortgage is that the debt which it is given to secure shall be therein specified, a different rule obtains as to a deed given to secure a debt, and it is not necessary that such a conveyance shall specify the amount of the indebtedness that it is given to secure. McClure v. Smith, 115 Ga. 709, 42 S.E. 53, 1902 Ga. LEXIS 542 (1902); Troup Co. v. Speer, 23 Ga. App. 750, 99 S.E. 541, 1919 Ga. App. LEXIS 333 (1919). Particular Instruments In general. - Any instrument creating a lien, specifying the debt to secure which it is given and the property upon which it is to take effect, is to be construed as a mortgage under O.C.G.A. § 44-14-31, notwithstanding that there may be some language in the instrument which would in-

dicate an intention to convey the legal title. Powers & Co. v. Georgia-Florida Grocery Co., 7 Ga. App. 592, 67 S.E. 685, 1910 Ga. App. LEXIS 406 (1910). A deed of bargain and sale, absolute in its terms, and purporting to convey the fee in consideration of $90.00 in hand paid, passes title; and an entry endorsed upon it and signed by the grantee to the effect that the deed is to be returned to the grantor cancelled, on condition that the grantor shall pay to the grantee $90.00 by a specified time, with interest, does not convert the instrument into a mere mortgage. Jay v. Welchel, 78 Ga. 786, 3 S.E. 906, 1887 Ga. LEXIS 78 (1887). Purchase-money notes. - Promissory notes, reciting that they were given for the purchase-money of certain described chattels, but neither reserving title in the property sold nor containing a mortgage to secure the purchase-money, evidence no lien upon such chattels and confer no right upon the holder to have the holder’s debt paid out of funds, in the hands of the sheriff, arising from the sale of such chattels. Bush v. Kimbrell, 25 Ga. App. 424, 103 S.E. 686, 1920 Ga. App. LEXIS 855 (1920). So-called “security deed” from purchaser to vendor and assumption agreement between bank, vendor, and purchaser met the requirements of O.C.G.A. § 44-14-31 as to the contents of a mortgage. Cherokee Ins. Co. v. Gravitt, 187 Ga. App. 179, 369 S.E.2d 779, 1988 Ga. App. LEXIS 674 (1988). Bank was not entitled to lien based on note promising to repay debt in full upon sale of debtor’s house, as this note did not clearly indicate the creation of a lien, and it did not specify the debt for which it was given and the property upon which it was to take effect, as mortgages must do pursuant to O.C.G.A. § 44-14-31. First Nat’l Bank v. Blackburn, 254 Ga. 379, 329 S.E.2d 897, 1985 Ga. LEXIS 701 (1985). Trust indenture. - Language in a trust indenture stating that the debtor “pledged and assigned” the debtor’s interest in real property to a bond trustee as security for payment of bonds was sufficient under Georgia law to create a lien, and the indenture granted the bond

trustee a mortgage under Georgia law even though it was not in recordable form since it specified the debt owed, accurately described the real property, and evidenced a clear intent to create a lien on the real property. Detention Mgmt., LLC v. UMB Bank, NA (In re Mun. Corr., LLC), 501 B.R. 119, 2013 Bankr. LEXIS 4269 (Bankr. N.D. Ga. 2013). Mortgage to secure note and future advances. - A mortgage which recites that it is given to secure the payment of a promissory note for a specified amount and “such future advances in money, stock, merchandise and plantation supplies” as may be made to the mortgagor by the mortgagee during a given year, is valid only as a mortgage to secure the payment of the note, under O.C.G.A. § 4414-31. Any indebtedness above the amount of the note is to be treated as an indebtedness on open account. BentonShingler Co. v. Mills, 13 Ga. App. 632, 79 S.E. 755, 1913 Ga. App. LEXIS 284 (1913). A mortgage to secure a note due, as well as any general or special balance due from the mortgagor up to the value of the property, which was described as being of the value of $5,000, is sufficiently definite to be valid as a mortgage for future advances up to $5,000. In re Corbitt, 248 F. 988, 1918 U.S. Dist. LEXIS 1219 (D. Ga. 1918). Bill of sale. - An instrument denominated a “bill of sale” may really be a mortgage, if it contains a defeasance clause. Daniels v. State, 43 Ga. App. 779, 159 S.E. 903, 1931 Ga. App. LEXIS 553 (1931). Where an instrument was executed by a party in the nature of a bill of sale, but the language used showed the intent of the parties to be the execution of a mortgage, it was held to be a mortgage. Stokes v. Hollis, 43 Ga. 262, 1871 Ga. LEXIS 211 (1871). Conditional lien does not become operative where the contingent balance of indebtedness, for the security of which the lien is given, never comes into existence, according to the plain and unambiguous stipulations set forth in the instrument creating the lien. Dingfelder v. Georgia Peach Growers Exch., 184 Ga. 569, 192 S.E. 188, 1937 Ga. LEXIS 583 (1937).

Particular Instruments (Cont’d) Assignment of a bond for title as security for a debt, which clearly expresses its purpose and specifies the debt and the property, is in legal effect a mortgage, and, to be effective against subsequent liens, must be recorded. Fuller v. Atlanta Nat’l Bank, 254 F. 278, 1918 U.S. App. LEXIS 1300 (3d Cir. 1918), cert. denied, 249 U.S. 599, 39 S. Ct. 257, 63 L. Ed. 796, 1919 U.S. LEXIS 2253 (1919). A retention title contract signed by the purchaser in the trade name by the purchaser in the purchaser’s individual name is entitled to record where it otherwise meets the requirements of O.C.G.A. § 44-14-31, and after being duly recorded constitutes constructive notice of the right and interest of the vendor therein as against the purchase of the property at a judicial sale on execution issued against the purchaser in an individual capacity. NCR Co. v. Sikes, 94 Ga. App. 391, 94 S.E.2d 782, 1956 Ga. App. LEXIS 553 (1956). After-acquired property. - Subject only to the statutory exceptions, it has long been the general rule in this state that any mortgage on after-acquired personal property is invalid; this general rule, with only the statutory exceptions, is applicable even though it is sought by an express provision of the instrument to include after-acquired property. Dupriest v. Bennett Bros., 61 Ga. App. 704, 7 S.E.2d 293, 1940 Ga. App. LEXIS 228 (1940). Instrument indicating that title should pass. - An instrument, after reciting that the makers were indebted to F. in an amount named, for which a note had been given, conveyed to F. certain personalty, specifying that it was intended that the title should pass. It provided further, that if the note was not paid when due, F. should take possession of said property, and after advertising, sell it, and apply the proceeds to the debt; that if the note was met as maturity, F. should reconvey by quit-claim deed. The instrument was a mortgage, under O.C.G.A. § 44-1431, and might be foreclosed as such. Frost v. Allen, 57 Ga. 326, 1876 Ga. LEXIS 109 (1876).

The term “pledge,” used in an instrument whereby a sawmill and accessories are conveyed to a creditor to secure a debt, is ambiguous and subject to explanation since the pledge of such property to secure a debt is most unusual and practically unheard of; therefore, the testimony of the creditor to the effect that the intention was to create a mortgage is relevant and material and should not be excluded. Valdosta Plywoods, Inc. v. Belote, 75 Ga. App. 616, 44 S.E.2d 128, 1947 Ga. App. LEXIS 594 (1947). Livestock. - A writing which purports to create a mortgage lien upon property described as “seven head of mules and horses” is void under O.C.G.A. § 44-14-31 as against one claiming the proceeds of a sale thereof under a subsequently acquired lien by attachment. Reynolds v. Tifton Guano Co., 20 Ga. App. 49, 92 S.E. 389, 1917 Ga. App. LEXIS 707 (1917). Second agreement written on mortgage. - See Howard v. Rumble, 4 Ga. App. 327, 61 S.E. 297, 1908 Ga. App. LEXIS 284 (1908). Description of Property The words “to specify” means “to point out, to particularize, to designate by words one thing or another.” Morris & Eckels Co. v. Fulton Nat’l Bank, 208 Ga. 222, 65 S.E.2d 815, 1951 Ga. LEXIS 321 (1951). Meaning of “bounded.” - In a mortgage description of land, the words, “bounded - by F. M. S.” will be construed as meaning “bounded by lands of F. M. S.” Smith v. Downing Co., 21 Ga. App. 741, 95 S.E. 19, 1918 Ga. App. LEXIS 505 (1918). Exactness not required. - No formal or exact description of the debt is essential, provided there is a debt between the parties capable of being enforced against the mortgagor or the property mortgaged. Literal exactness is not required. Moultrie Banking Co. v. Mobley, 170 Ga. 402, 152 S.E. 903, 1930 Ga. LEXIS 466 (1930). General descriptions, such as “all the estate, both real and personal, of the grantor,” “all my land in a certain town, county, and State,” and “all my land, wherever situated,” have been held good and sufficient under O.C.G.A. § 44-14-31.

Bennett v. Green, 156 Ga. 572, 156 Ga. 573, 119 S.E. 620, 1923 Ga. LEXIS 275 (1923). Where property not distinguishable. - If the description is altogether general, such that the mortgaged property cannot be separated from the general mass of similar articles, the requirement of the law is not met. Morris & Eckels Co. v. Fulton Nat’l Bank, 208 Ga. 222, 65 S.E.2d 815, 1951 Ga. LEXIS 321 (1951). Description must give record notice. - In a case where one claims the proceeds of a sale of mortgaged property, under a subsequently acquired lien, the sufficiency of the mortgage description is not governed by the rule which would obtain between the parties to the writing, but such a degree of definiteness is required as would be sufficient to impart record notice to third parties. Reynolds v. Tifton Guano Co., 20 Ga. App. 49, 92 S.E. 389, 1917 Ga. App. LEXIS 707 (1917). Description not imparting notice. - The words of description in a mortgage may be sufficient to create a lien, and yet be insufficient of themselves to impart notice of the lien which they create. Nussbaum v. Waterman & Co., 9 Ga. App. 56, 70 S.E. 259, 1911 Ga. App. LEXIS 416 (1911); Reynolds v. Tifton Guano Co., 20 Ga. App. 49, 92 S.E. 389, 1917 Ga. App. LEXIS 707 (1917). Description which is partially untrue does not render the mortgage void, if the part which is correct does not apply generally to other like property and reasonably identifies the property in controversy; but where the part of the description that is true is not so distinctive as reasonably to identify the property mortgaged, a purchaser may be justified in assuming that the property is not covered by the mortgage. Pinson-Brunson Motor Co. v. Bank of Danielsville, 40 Ga. App. 793, 151 S.E. 549, 1930 Ga. App. LEXIS 701 (1930). Parol evidence to aid description. - In providing that a mortgage or a conditional bill of sale shall specify the property on which it is to take effect under O.C.G.A. § 44-14-31, the law does not require such a description as will serve to identify the property without aid of parol evidence. A.S. Thomas Furn. Co. v. T. & C.

Furn. Co., 120 Ga. 879, 48 S.E. 333, 1904 Ga. LEXIS 734 (1904); Hester v. Gairdner, 128 Ga. 531, 58 S.E. 165, 1907 Ga. LEXIS 160 (1907); Georgia Novelty Mach. Co. v. Mount, 96 Ga. App. 704, 101 S.E.2d 104, 1957 Ga. App. LEXIS 667 (1957). Description of chattels. - Chattel mortgages were insufficient to impart notice to third parties, where the description of the chattels was too general to specify the exact chattels and no information was given as to their location. Morris & Eckels Co. v. Fulton Nat’l Bank, 208 Ga. 222, 65 S.E.2d 815, 1951 Ga. LEXIS 321 (1951). Boundaries of land. - A mortgage which described the land as having a frontage of a certain number of feet and extending back a stated distance, and which set out the boundaries on each side, and further described the property as being the same which was conveyed to the mortgagor by a deed of certain date and recorded on a specified date, fully identified the land. In re Corbitt, 248 F. 988, 1918 U.S. Dist. LEXIS 1219 (D. Ga. 1918). Tract capable of being located. - As to the matter of descriptive averments of the land intended to be mortgaged, if the descriptive recitals are so definite as to render the tract capable of being located, the averments are sufficient. Daniel v. State, 63 Ga. App. 12, 10 S.E.2d 80, 1940 Ga. App. LEXIS 2 (1940). Securing promissory notes. - Where a chattel mortgage is executed which describes the debt intended to be secured as the “aforesaid promissory notes,” and it appears that two papers in the form of promissory notes, the one duly executed and attached to and preceding the mortgage, and the other written on the same paper with and immediately preceding the mortgage but unsigned by the maker, such mortgage sufficiently describes the debt intended to be secured to create a lien for the sum of the notes in favor of the mortgagee upon the mortgaged property. Mason v. Parker, 101 Ga. 659, 28 S.E. 985, 1897 Ga. LEXIS 292 (1897). Securing advances. - A mortgage upon real estate given to secure “advances” to be made by the mortgagee to the mortgagor, for the purpose of carrying on the farm of the mortgagor, is not in-

Description of Property (Cont’d) valid for want of a sufficient description of the debt intended to be secured. Allen v. J.W. Lathrop & Co., 46 Ga. 133, 1872 Ga. LEXIS 22 (1872). Misdescription of bond. - Under O.C.G.A. § 44-14-31, where a mortgage is given to indemnify one who becomes a surety upon a bond in which the mortgagor is principal, a misdescription of the particular bond may be corrected by parol testimony so as to identify the bond described in the mortgage with the one upon which the mortgagee became surety. And the mere misdescription of the bond will not have the effect to render the mortgage invalid as a lien upon the property described, either as to the mortgagor personally or the mortgagor’s vendees. Emerson v. Knight, 130 Ga. 100, 60 S.E. 255, 1908 Ga. LEXIS 237 (1908). Bill of sale. - As is the case with a mortgage, an instrument creating a lien by bill of sale to secure a debt must specify the debt sought to be secured. Dingfelder v. Georgia Peach Growers Exch., 184 Ga. 569, 192 S.E. 188, 1937 Ga. LEXIS 583 (1937). Stock of goods in store. - Considering the caption and body together, the mortgage in this case covers goods in the brick store of the mortgagor in a certain place on the street named, and between two other stores named. It included all the merchandise in that store and to be in it to supply the place of old goods sold; and the description was sufficient. Welsh v. Lewis

& Son, 71 Ga. 387, 1883 Ga. LEXIS 191 (1883). The following description: “Our entire stock of dry goods, boots, shoes, hats, clothing, and notions, and such other goods as are usually kept in a first-class country store,” (without any location of the goods, or without any other language of identification), is not a sufficient description under O.C.G.A. § 44-14-31. Jaffrey v. Brown, 29 F. 476, 1886 U.S. App. LEXIS 2488 (C.C.D. Ga. 1886). Mares. - A paper, providing for a lien on a “bay mare,” and showing that the mare was purchased by the mortgagor from the mortgagee, is a sufficient description of the property mortgaged under O.C.G.A. § 44-14-31. Nichols v. Hampton, 46 Ga. 253, 1872 Ga. LEXIS 46 (1872). Describing cotton. - See Stephens v. Tucker, 55 Ga. 543, 1875 Ga. LEXIS 460 (1875). Descriptions found insufficient. - A description of land in a mortgage in these terms: “Two hundred and sixty-one acres of land off of lots numbers five, twenty-seven and twenty-eight, in the ninth district of Randolph County,” is fatally defective for want of sufficiently definite description, under O.C.G.A. § 44-1431. Atkins v. Paul, 67 Ga. 97, 1881 Ga. LEXIS 139 (1881). A mortgage on “twelve acres of cotton,” without any further description, does not sufficiently specify the property upon which it is to take effect under O.C.G.A. § 44-14-31. Hampton v. State, 124 Ga. 3, 52 S.E. 19, 1905 Ga. LEXIS 624 (1905).

RESEARCH REFERENCES Am. Jur. 2d. 55 Am. Jur. 2d, Mortgages, § 12. C.J.S. 59 C.J.S., Mortgages, § 93. ALR. Trust receipt, or instrument purporting to be such, as a chattel mortgage within filing statutes, 25 A.L.R. 332; 49 A.L.R. 309; 87 A.L.R. 316; 101 A.L.R. 463; 168 A.L.R. 359. Liability of mortgagee under mortgage clause for insurance premiums, 56 A.L.R. 679; 83 A.L.R. 105.

Requisites and sufficiency of description of property in conditional sales contract, 65 A.L.R. 714. Sufficiency of description of property in mortgage on animals, 124 A.L.R. 944. Validity, construction, and application of insecurity clause in chattel mortgage, 125 A.L.R. 313. Inconsistency between description of land in instruments conveying same or affecting title thereto and description in another instrument referred to therein, 134 A.L.R. 1041.

Deed or mortgage as affected by uncertainty of description of excepted area, 162 A.L.R. 288. Sufficiency of description of property, as against third persons, in chattel mortgage on farm equipment, machinery, implements, and the like, 32 A.L.R.2d 929. Uncertainty as to terms of mortgage or of accompanying note or bond contem-

plated by real-estate sales contract as affecting right to specific performance, 60 A.L.R.2d 251. Validity and effect of “wraparound” mortgages whereby purchaser incorporates into agreed payments to grantor latter’s obligation on initial mortgage, 36 A.L.R.4th 144.