Ruff v. Lee

Gunter, Justice,

concurring specially. I concur in the judgment rendered by the court today. However, I desire to state the reasons for my concurrence.

The appellant here was a debtor-grantor in a deed to secure debt. In Georgia a deed to secure debt conveys absolute title to the realty to the grantee, "with the right reserved by the grantor to have said property .reconveyed to him upon the payment of the debt or debts intended to be secured agreeably to the terms of the contract. ” Code § 67-1301.

The security deed in this case contained a power of sale in favor of the grantee which provided a procedure by which the reserved right in the grantor to reconveyance could be cut off. In short, upon default on the part of debtor-grantor, the grantee was authorized to exercise the power of sale by advertisement of same by publication *430once a week for four weeks prior to the sale to be conducted in the same manner as sheriffs sales are conducted in this state.

The grantee exercised the power of sale in accordance with its terms as contained in the security deed, and by doing so he cut off the debtor-grantor’s reserved right to reconveyance.

The debtor-grantor’s contention here is that this prescribed method of foreclosure of this reserved right or equity does not comport with procedural due process in that it does not give adequate notice and a hearing to the debtor-grantor before this reserved right or equity is terminated.

Another Georgia statute (Code Ann. § 67-1506) provides that no sale of real estate under powers contained in deeds shall be valid unless the sale shall be advertised and conducted at the same time and place and in the usual manner of sheriffs sales in the county in which the real estate being sold is located.

It is this latter statute that the debtor-grantor attacks as being unconstitutional in that it does not require adequate notice and a hearing prior to the exercise of the power of sale; and that this statute therefore permits foreclosure in violation of minimum procedural due process requirements.

The gist of the appellant’s arguments seems to be that since this statute permits foreclosure in this manner without minimum procedural due process requirements, and since foreclosure in this case was pursuant to contractual provisions which were in turn based on this statute, then procedural due process has not been accorded to the appellant.

This issue was presented to the trial judge by the appellant’s motion for summary judgment which was denied. However, a certificate for immediate review of this ruling was granted.

I agree that the trial court’s judgment was correct.

*431The essence of appellant’s argument is that Code Ann. § 67-1506 is unconstitutional on its face in that it does not require adequate notice and a hearing before sale. I do not agree with this argument. It is clear to me that this statute standing alone does not permit a foreclosure. The statute itself is predicated on a contract between the parties containing a power of sale from the grantor to the grantee. Unless such a contract is in existence there can be no foreclosure under the statute. And if such a contract containing the power of sale is in existence between the parties, then the statute merely says that a foreclosure or sale under the power will only be valid if the sale is conducted in the manner prescribed by the statute. The statute, therefore, in and of itself does not allow foreclosure or the divestment of a property right.

There must be a contract between the parties containing a power of sale before the statute even comes into the legal picture. And it is clear to me that a party can by contract waive his due process rights to notice and a hearing. See D. H. Overmyer Co. v. Frick Co., 405 U. S. 174 (92 SC 775, 31 LE2d 124) (1972).

In the instant case the debtor-grantor signed and delivered to the grantee a deed conveying absolute title to the grantee. The debtor-grantor retained the right to reconveyance of the realty upon the payment of the specified debt. The deed contained a provision whereby the reserved right to reconveyance could be divested by following a specified procedure. The specified procedure for divestment did not include actual notice and a hearing to and for the debtor-grantor as legal requirements prior to divestment. This, in my opinion, amounted to a positive contractual waiver of procedural due process requirements of notice and a hearing. The provisions in the contract of the instant case are, to my mind, analogous to the provisions in the contract in Overmyer where the Supreme Court of the United States held that the due process requirements for notice and a *432hearing were waived.

But the appellant argues that the contract in Overmyer was plainly not a contract of adhesion, and that a Georgia deed to secure debt, on a printed form, containing a power of sale is plainly a contract of adhesion and should therefore be held to be constitutionally unenforceable pursuant to the statute, Code Ann. § 67-1506.

A Georgia deed to secure debt containing a power of sale is not on its face an unenforceable contract of adhesion. Clearly, if a lawyer, knowledgeable in Georgia real estate law, were to excute and deliver such a deed, it would not be held to be an unenforceable contract of adhesion. Whether such a deed is an unenforceable contract of adhesion may be a question of fact depending upon the circumstances, but such a deed is not an unenforceable contract of adhesion as a matter of law.

I conclude that the Georgia statute here attacked, Code Ann. § 67-1506, is not unconstitutional on its face; and the contract providing for divestment contained in the deed is not, per se, violative of procedural due process.

I distinguish the present case from Sniadach v. Family Finance Corp., 395 U. S. 337 (89 SC 1820, 23 LE2d 349) (1969) and Fuentes v. Shevin, 407 U. S. 67 (92 SC 1983, 32 LE2d 556) (1972) in that here there was a prima facie written contractual waiver of procedural due process rights. Here the debtor-grantor by contract specified the procedure, which was not summary, by which divestment of a reserved right could take place. Such an agreement is not constitutionally infirm per se; and if such an agreement was voluntarily, intelligently, and knowingly made, which may be a question of fact in some circumstances, then such an agreement for divestment is constitutionally enforceable.

For the reasons stated, I concur in the judgment of affirmance.