O.C.G.A. § 44-14-32 (2019)

Annotations

Law reviews. For comment on Brown v. Carmichael, 149 Ga. 548, 101 S.E. 124 (1919), and

Wilkes v. Carter, 149 Ga. 240, 99 S.E. 860 (1919), see 10 Ga. B.J. 338 (1948). For article, “The Parol Evidence Rule in Georgia,” see 17 Ga. B.J. 49 (1954). For article surveying recent legislative and judicial developments in Georgia’s real property laws, see 31 Mercer L. Rev. 187 (1979).

JUDICIAL DECISIONS ANALYSIS GENERAL CONSIDERATION PARTICULAR DOCUMENTS General Consideration In general. - O.C.G.A. § 44-14-32 merely prohibits the use of parol evidence for the purpose of reducing a deed, absolute in form and accompanied by the possession of the property conveyed, to a mortgage only. Manget Realty Co. v. Carolina Realty Co., 169 Ga. 495, 150 S.E. 828, 1929 Ga. LEXIS 388 (1929); Hutchinson v. King, 192 Ga. 402, 15 S.E.2d 523, 1941 Ga. LEXIS 487 (1941); Haynes v. Blackwell, 232 Ga. 430, 207 S.E.2d 66, 1974 Ga. LEXIS 975 (1974). Grantee not in possession. - Under O.C.G.A. § 44-14-32, a deed absolute on its face may be shown by parol evidence to have been intended to convey title only for the purpose of securing a debt, where the grantee has not taken possession of the

property. Askew v. Thompson, 129 Ga. 325, 58 S.E. 854, 1907 Ga. LEXIS 373 (1907); Spencer v. Schuman, 132 Ga. 515, 64 S.E. 466, 1909 Ga. LEXIS 347 (1909); Mercer v. Morgan, 136 Ga. 632, 71 S.E. 1075, 1911 Ga. LEXIS 162 (1911); Lowe v. Findley, 141 Ga. 380, 81 S.E. 230, 1914 Ga. LEXIS 212 (1914); Berry v. Williams, 141 Ga. 642, 81 S.E. 881, 1914 Ga. LEXIS 88 (1914); Renitz v. Williamson, 149 Ga. 241, 99 S.E. 869, 1919 Ga. LEXIS 214 (1919); Daniel v. Charping, 151 Ga. 34, 105 S.E. 465, 1921 Ga. LEXIS 138 (1921); Copelin v. Williams, 152 Ga. 692, 111 S.E. 186, 1922 Ga. LEXIS 258 (1922); Paulk v. Dorminey, 154 Ga. 785, 115 S.E. 488, 1923 Ga. LEXIS 392 (1923); Sykes v. Porter, 31 Ga. App. 86, 119 S.E. 455, 1923 Ga. App. LEXIS 736 (1923); Pitts v. Cox, 167 Ga. 228, 145 S.E. 61, 1928 Ga. LEXIS 129

General Consideration (Cont’d) (1928); Hutchinson v. King, 192 Ga. 402, 15 S.E.2d 523, 1941 Ga. LEXIS 487 (1941); Hobbs v. Houston, 195 Ga. 571, 24 S.E.2d 884, 1943 Ga. LEXIS 537 (1943); Haynes v. Blackwell, 232 Ga. 430, 207 S.E.2d 66, 1974 Ga. LEXIS 975 (1974); Haire v. Cook, 237 Ga. 639, 229 S.E.2d 436, 1976 Ga. LEXIS 1338 (1976). Possession in vendor. - Where a paper, on its face, indicated that the possession remained with the vendor, the case does not come within the provisions of O.C.G.A. § 44-14-32, prohibiting parol evidence. Denton Bros. v. Shields, 120 Ga. 1076, 48 S.E. 423, 1904 Ga. LEXIS 802 (1904); Sims v. Sims, 162 Ga. 523, 134 S.E. 308, 1926 Ga. LEXIS 231 (1926). Inapplicable to implied trust. - O.C.G.A. § 44-14-32 is not applicable to a case seeking to set up an implied trust. Jenkins v. Lane, 154 Ga. 454, 115 S.E. 126, 1922 Ga. LEXIS 393 (1922); Stern v. Howell, 160 Ga. 261, 127 S.E. 776, 1925 Ga. LEXIS 132 (1925); Manget Realty Co. v. Carolina Realty Co., 169 Ga. 495, 150 S.E. 828, 1929 Ga. LEXIS 388 (1929). Meaning of “possession.” - Possession of the property means an actual possession, and not that sort of possession which consists in agreeing to hold possession for the grantee in the deed; the formal change of possession is an act indicating on the part of the grantor in the deed, by the deliberate abandonment of grantor’s own possession, that grantor’s agreement is fully expressed in the deed. Spence v. Steadman, 49 Ga. 133, 1873 Ga. LEXIS 321 (1873). The word “possession” as used in O.C.G.A. § 44-14-32 necessarily means possession under a complete and full title. Johnson v. Sherrer, 197 Ga. 392, 29 S.E.2d 581, 1944 Ga. LEXIS 278 (1944). Cardinal rule for testing intent of parties to establish either a mortgage or an absolute deed of conveyance seems to be whether or not the relation of debtor and creditor was intended to exist between the parties - whether the property was taken in satisfaction and discharge of the sum due or advanced - or whether, notwithstanding the words of the conveyance, the relation of debtor and creditor

was still to exist, to wit: the right of the one to demand, and the obligation of the other to pay. Haire v. Cook, 237 Ga. 639, 229 S.E.2d 436, 1976 Ga. LEXIS 1338 (1976). The inquiry in every case must be whether the contract in the specific case is a security for the repayment of money or a conditional sale. If the writings which were signed by both parties correctly set forth the agreement between them, then these writings evidence a sale and conveyance of the land, with an option to the vendor to repurchase it within a designated period. Manget Realty Co. v. Carolina Realty Co., 169 Ga. 495, 150 S.E. 828, 1929 Ga. LEXIS 388 (1929). No conclusive test can be suggested to determine whether transactions are mortgages or conditional sales, because the question arises under such varieties of circumstances that slight differences in these would make it inapplicable. Manget Realty Co. v. Carolina Realty Co., 169 Ga. 495, 150 S.E. 828, 1929 Ga. LEXIS 388 (1929). Construction of unambiguous contracts. - While the issue as to what was the true intent of the parties in the execution of a written instrument is frequently for the determination of a jury, who, upon consideration of all the facts and circumstances, are to determine whether a certain writing evidences an absolute conveyance or a mere security for the payment of a loan, nevertheless, the construction of unambiguous contracts in writing is for the court, and in the state of the pleadings in this case the contracts attached as a part of the petition were so plain and unambiguous as not to require the intervention of a jury. Durden-Powers Co. v. O’Brien, 165 Ga. 728, 142 S.E. 90, 1928 Ga. LEXIS 57 (1928). Cancellation of security deed. - A grantor in a deed absolute in form but made to secure a debt, who remains in possession of the land conveyed, may, upon the payment of the debt, have the deed canceled as a cloud on grantor’s title. Blankenship v. Cochran, 151 Ga. 581, 107 S.E. 770, 1921 Ga. LEXIS 335 (1921); Hobbs v. Houston, 195 Ga. 571, 24 S.E.2d 884, 1943 Ga. LEXIS 537 (1943). Presumption of absolute conveyance. - The presumption, of course, is that an instrument is what it purports on

its face to be, an absolute conveyance; and the burden is on the grantor to show otherwise. Hobbs v. Houston, 195 Ga. 571, 24 S.E.2d 884, 1943 Ga. LEXIS 537 (1943). Resolution in doubtful cases. - In doubtful cases the court leans to the conclusion that the transaction is in reality a mortgage and not a sale. Manget Realty Co. v. Carolina Realty Co., 169 Ga. 495, 150 S.E. 828, 1929 Ga. LEXIS 388 (1929). Assignee of grantee. - There is nothing in O.C.G.A. § 44-14-32 which will prevent an assignee of the grantee who in an absolute deed conveyed to his wife the land thereby conveyed from treating it as a deed to secure debt, and, upon payment of the money thereby secured, reconveying the land to the grantor. Pitts v. Cox, 167 Ga. 228, 145 S.E. 61, 1928 Ga. LEXIS 129 (1928). Evasion of usury laws. - Whether a transaction was a bona fide sale with a right in the vendor to repurchase, or whether it was a ruse devised to evade the usury laws and to take security for the loan of money, can be shown by parol evidence. Jackson v. Commercial Credit Corp., 90 Ga. App. 352, 83 S.E.2d 76, 1954 Ga. App. LEXIS 711 (1954). Motion to dismiss. - A petition to have a warranty deed declared a security deed in which it is not alleged that the petitioner could not read, or that any fraud was practiced which excused petitioner from reading the instrument which petitioner signed, is subject to a motion to dismiss. Burns v. Washington, 149 Ga. 42, 99 S.E. 115, 1919 Ga. LEXIS 109 (1919). No showing of fraud. - Where it was not alleged in the petition that the plaintiff could not read, and no fraud was shown to have been practiced which excused plaintiff from reading the instrument which plaintiff signed, that instrument being a deed of conveyance absolute upon its face, and accompanied with possession of the property, such deed could not be shown by parol evidence to be merely a security deed; nor was the plaintiff entitled to have the deed in question treated as a mortgage or security deed, so as to recover a judgment for the sums which plaintiff seeks to recover in this case. Wynn v. First Nat’l Bank, 176 Ga.

218, 167 S.E. 513, 1933 Ga. LEXIS 49 (1933). Particular Documents Deed to secure debts. - Where a deed absolute on its face is made to secure a debt, the legal title will vest in the grantee and the equitable title, or right to have the property reconveyed on payment of the debt, will remain in the grantor. Hester v. Gairdner, 128 Ga. 531, 58 S.E. 165, 1907 Ga. LEXIS 160 (1907); Waller v. Dunn, 151 Ga. 181, 106 S.E. 93, 1921 Ga. LEXIS 197 (1921); Copelin v. Williams, 152 Ga. 692, 111 S.E. 186, 1922 Ga. LEXIS 258 (1922); Paulk v. Dorminey, 154 Ga. 785, 115 S.E. 488, 1923 Ga. LEXIS 392 (1923). Quitclaim deed. - Where tenants in common of a tract of land conveyed the same by quitclaim deed to a third person, but remained in possession of the land, and the grantee in such security deed was never in possession thereof, the rule of O.C.G.A. § 44-14-32 applies, and it can be shown by parol evidence, by the heir of one of the tenants in common, that the deed was made only to secure a debt for money borrowed. Southern Ry. v. Williams, 160 Ga. 541, 128 S.E. 681, 1925 Ga. LEXIS 204 (1925). Deed in trust for benefit of grantor. - A deed absolute in form may be shown by parol evidence to have been made in trust for the benefit of the grantor, where the maker remains in possession of the land. Chandler v. Georgia Chem. Works, 182 Ga. 419, 185 S.E. 787, 1936 Ga. LEXIS 376 (1936). Bond for title. - Under O.C.G.A. § 44-14-32 a transfer of a bond for title to land, absolute in form, may be shown to have been made for the purpose of securing a loan, where the transferor retains the possession of the land. Renitz v. Williamson, 149 Ga. 241, 99 S.E. 869, 1919 Ga. LEXIS 214 (1919). Bill of sale to secure debt. - A writing in the form of an absolute bill of sale, but in fact intended only as security for a debt, conveys title, but is treated as an equitable mortgage, under O.C.G.A. § 4414-32. Denton Bros. v. Shields, 120 Ga. 1076, 48 S.E. 423, 1904 Ga. LEXIS 802 (1904); Farmer v. State, 18 Ga. App. 307,

Particular Documents (Cont’d) 89 S.E. 382, 1916 Ga. App. LEXIS 316 (1916). See also, Ellison & Chew v. Wilson, 7 Ga. App. 214, 66 S.E. 631, 1909 Ga. App. LEXIS 598 (1909). A sale on agreement to repurchase is nearly allied to a mortgage. In cases of sales and agreements to repurchase, the papers are open to contradiction by parol. Manget Realty Co. v. Carolina Realty Co., 169 Ga. 495, 150 S.E. 828, 1929 Ga. LEXIS 388 (1929). Parol agreement to reconvey. - When a party contracts on the purchase of a property in payment of a debt, to reconvey on the payment of the amount at which the party was taken in a settlement, and agrees to reduce it to writing, but does not, and refuses to comply, it is not a case in which parol evidence cannot be admitted. Henderson v. Touchstone, 22 Ga. 1, 1857 Ga. LEXIS 99 (1857).

Use of parol evidence to proof deed. - A deed absolute in form may be shown to have been made to secure a debt where the maker remains in possession of the land conveyed. But where there is no fraud in the procurement of the deed, and the possession is surrendered to the grantee contemporaneously with the execution of the deed, it is not competent to show by parol that the deed absolute in form was in fact a deed to secure a debt. Wilkes v. Carter, 149 Ga. 240, 99 S.E. 860, 1919 Ga. LEXIS 213 (1919). A deed absolute on its face, and accompanied with possession of the property, shall not be proved (at the instance of the parties), by parol evidence, to be a mortgage only, unless fraud in its procurement is the issue to be tried. Brown v. Carmichael, 149 Ga. 548, 101 S.E. 124, 1919 Ga. LEXIS 317 (1919).

RESEARCH REFERENCES Am. Jur. 2d. 55 Am. Jur. 2d, Mortgages, § 109 et seq. C.J.S. 59 C.J.S., Mortgages, §§ 44, 50 et seq. ALR. Lapse of time as affecting rights and remedies of parties to absolute deed intended as mortgage, 28 A.L.R. 554. Deed placed in escrow to be delivered to grantee upon failure to pay debt due him as a mortgage, 65 A.L.R. 120. Change of deed intended as mortgage by subsequent agreement into an absolute deed, 65 A.L.R. 771. Deed absolute on its face, with contemporaneous agreement or portion for repurchase by grantor, as a mortgage vel non, 79 A.L.R. 937; 155 A.L.R. 1104.

Value of property as factor in determining whether deed intended as mortgage, 90 A.L.R. 953; 89 A.L.R.2d 1040. Admissibility of parol evidence to show whether particular word or phrase was intended to connote a chattel mortgage or conditional sale, 101 A.L.R. 625. Parol evidence in relation to assumption of mortgage debt by grantee of mortgaged property, 143 A.L.R. 548. Remedy of mortgagee in forged or unauthorized mortgage where proceeds are used to discharge valid lien, 151 A.L.R. 407. Bill of sale, absolute on its face, as a chattel mortgage, 33 A.L.R.2d 364.