The money arising from the sale of mortgaged property sold under the regulations prescribed in this part shall be paid to the person foreclosing the mortgage unless claimed by some other lien which by law has priority of payment over the mortgage; and, when there is any surplus after paying off the mortgage and other liens, the surplus shall be paid to the mortgagor or his agent.
(Laws 1799, Cobb's 1851 Digest, p. 571; Code 1863, § 3873; Code 1868, § 3893; Code 1873, § 3969; Code 1882, § 3969; Civil Code 1895, § 2751; Civil Code 1910, § 3284; Code 1933, § 67-501.)
Law reviews.- For survey article on real property law, see 60 Mercer L. Rev. 345 (2008).
JUDICIAL DECISIONS
Oldest lien has priority.
- The mortgagee, having the oldest lien, was equitably entitled to have the proceeds in the hands of the sheriff applied thereto. Winter v. Garrard, 7 Ga. 183 (1849). See also Thomson v. McCordel, 27 Ga. 273 (1859).
Payment of surplus.
- Grantee of deeds to secure debt had to pay to grantors the surplus from a foreclosure sale of two properties to the grantee's agent and a subsequent transfer of the properties to third parties for profit. Tower Fin. Servs., Inc. v. Smith, 204 Ga. App. 910, 423 S.E.2d 257, cert. denied, 204 Ga. App. 922, 423 S.E.2d 257 (1992).
Second mortgage referring to older mortgage.
- A first mortgage was entitled to priority over a second which recited that there was an older mortgage on the same property, in a distribution of the proceeds of the mortgaged property, raised at a sale made by a receiver. Kiser & Co. v. Carrollton Dry Goods Co., 96 Ga. 760, 22 S.E. 303 (1895).
Two mortgages executed on the same day are of equal date, and if both are recorded in time, are entitled to share pro rata in a fund not sufficient to satisfy them both. The law will not note fractions of a day except to prevent injustice, and in cases specially provided for by law. Russell v. C.D. Carr & Co., 38 Ga. 459 (1868).
Where facts apparent on the faces of mortgages executed on same day show that it was the intention of the parties to give the preference to one over the others, that lien so preferred will be enforced. Coleman & Co. v. Carhart, 74 Ga. 392 (1884).
When there is a fund in court on which a judgment creditor can lay hands without trouble, expense or delay, a court of equity will not, at the instance of other creditors, holding junior mortgage liens on the fund, force the judgment creditor to proceed with a judgment against property in the hands of third persons, where the judgment creditor must encounter expense and delay in collecting the debt. Behn & Foster v. William H. Young & Co., 21 Ga. 207 (1857).
Judgment obtained between mortgage and novation.
- On a rule for distribution of money in the sheriff's hands, judgments junior to mortgages to a party will prevail over a mortgage fi. fa. junior to the judgments and founded on a mortgage to that party, alleged to have been given in renewal of the former mortgages, but shown by the record to be a novation. Williams & Co. v. Donalson, 84 Ga. 593, 10 S.E. 1015 (1890).
Judgment younger than mortgage but older than general judgment on same.
- The owner of a mortgage on realty did not foreclose the mortgage, but obtained a general judgment on the debt secured by it, and the property embraced in the mortgage was sold by the sheriff. Another creditor, who had a judgment younger than the mortgage but older than the general judgment brought a rule against the sheriff for distribution of the funds realized from the sale of the property and the fund was properly awarded to the older of the two judgments. Thomasville Live Stock Co. v. Burney, 19 Ga. App. 703, 91 S.E. 1062 (1917).
Creditor holding bonds as collateral.
- At a time subsequent to the deposit of bonds with a creditor as collateral, the creditor became the purchaser of the bonds under circumstances which rendered void the transaction culminating in a sale of the bonds to the creditor. If the sale was void, the holder of the bonds claiming to be the purchaser was relegated to the position of holder of the bonds as collateral security, and as such was the proper beneficiary in the proceedings to foreclose the trust deed to secure the payment of the bonds. Valdosta M. & W.R.R. v. Valdosta Bank & Trust Co., 144 Ga. 761, 87 S.E. 1083 (1916).
Damages for wrongful foreclosure.
- Measure of damages for wrongful foreclosure was the fair market value of the property foreclosed rather than the full bid price at a foreclosure sale to an agent of the grantee, in light of the grantee's subsequent sale of the property to a good faith purchaser which prevented the grantors from redeeming their equity. Tower Fin. Servs., Inc. v. Smith, 204 Ga. App. 910, 423 S.E.2d 257, cert. denied, 204 Ga. App. 922, 423 S.E.2d 257 (1992).
In a suit brought by a purchaser seeking damages for wrongful foreclosure of certain real property after two foreclosure sales, the trial court erred in granting the second foreclosing bank attorney fees under O.C.G.A. § 9-15-14, based on frivolous litigation since the second bank had knowledge of the purchaser's acquisition of the property via the first foreclosure, therefore, the purchaser's suit did not lack substantial justification as to the second bank and the second bank's failure to provide proper notice of the sale to the purchaser. Roylston v. Bank of Am., N.A., 290 Ga. App. 556, 660 S.E.2d 412 (2008).
Cited in Tefft v. Sternberg, 40 F. 2, 5 L.R.A. 221 (S.D. Ga. 1887); Mixon v. Stanley, 100 Ga. 372, 28 S.E. 440 (1897); Caldwell v. Loeb, 742 F. Supp. 650 (N.D. Ga. 1990).