Opinion
37151.
DECIDED MAY 22, 1958. REHEARING DENIED JUNE 11, 1958.
Lien; venue, record, notice, etc. Columbus Municipal Court. Before Judge Bagley. February 15, 1958.
Theo J. McGee, Max R. McGlamry, for plaintiff in error.
William C. Carter, Wm. A. Leonard, contra.
Where a nonresident purchases personality in a county in Georgia and gives a lien to secure the purchase price, in order to preserve the lien such instrument must be recorded in the county in Georgia where the property was purchased.
DECIDED MAY 22, 1958 — REHEARING DENIED JUNE 11, 1958.
This case involved the transfer of an automobile which was sold on January 2, 1954, to Elton Richardson, a resident of Randolph County, Alabama. The transaction involved a trade-in of a Ford tractor and equipment which was at the time of the trade located on Richardson's farm in Alabama. The property was sold under an instrument captioned "Alabama Conditional Sales Contract." The balance of the purchase price, besides the trade-in, was to be paid by Richardson in monthly instalments. The Associates Discount Corporation purchased the conditional-sale contract and the notes from the seller of the car. The conditional-sale contract on the Plymouth car was recorded in Carroll County, Georgia, on January 6, 1954, and was recorded in Randolph County, Alabama, on January 21, 1954. After the conditional-sale contract was executed and recorded as above shown, on February 2, 1954, Richardson carried the Plymouth car to Atlanta, Fulton County, Georgia, where Motor Sales Company of Columbus (Muscogee County), Georgia purchased it, receiving a bill of sale from Richardson reading in part as follows: "I further warrant and guarantee the title to the same to be free and clear of all liens." The Motor Sales Company, a car dealer, took the car to Columbus, Georgia. We might mention here that the title to the tractor and the tractor equipment passed to Kilgore-Heath Motors immediately upon the closing of the sale of the Plymouth car wherein the tractor and tractor equipment were taken in as part of the purchase price of the Plymouth car. On March 8, 1954, Ernest M. Castleberry, as guardian of the property of his father, W. W. Castleberry, purchased the car from Motor Sales Company.
In November 1954, Associates Discount Corporation notified Motor Sales Company and Ernest M. Castleberry of the conditional-sale contract covering the Plymouth car. On January 17, 1955, a trover action was instituted by Associates Discount Corporation against Ernest M. Castleberry individually, and subsequently a judgment was rendered by the Judge of the Municipal Court of Columbus, Georgia, which read as follows: "The facts, as agreed upon by the parties and as found by the court, are briefly as follows: On January 2, 1954, Elton Richardson executed to Kilgore-Heath Motors, at Carrollton, Carroll County, Georgia, a retention-title contract covering the Plymouth automobile in question. The contract is headed: `Alabama Conditional Sales Contract', and it is recited therein that the residence of Richardson was Randolph County, Alabama, and that he agrees to keep said car in said Randolph County, Alabama, and the evidence shows that Randolph County, Alabama, was his residence at the time. There was also introduced in evidence a `car invoice' covering said automobile which bears the date January 4, 1954, which instrument is not signed by anyone. At the time of the execution of said contract, there was also executed, on January 2, 1954, by said Richardson to said Kilgore-Heath Motors, a recording certificate covering said automobile, which was duly recorded in said Randolph County, Alabama, on January 16, 1954, and also in Carroll County, Georgia, on January 21, 1954. Both the said contract and the recording certificate were signed, sealed and delivered in the presence of H. Don Price, N. P. The evidence shows that the said H. Don Price was a notary public of Carroll County, Georgia. At the time of the execution of said instruments, the automobile was actually located at the place of business of said Kilgore-Heath Motors, in Carrollton, Carroll County, Georgia, and was immediately thereafter taken by said Richardson to his residence in Randolph County, Alabama, and was delivered to him by said vendor in Carroll County, Georgia, on January 2, 1954. Both the contract and recording certificate were transferred and assigned to plaintiff under date of January 2, 1954, the transfer and assignment, without recourse, being signed: `Kilgore-Heath Motors, by J. S. Heath.' The instruments do not indicate whether the said Kilgore-Heath Motors was a corporation or partnership, but the evidence shows that it was a partnership composed of said J. S. Heath and `Mr. Kilgore.' There was no other recording of said recording certificate, other than as above stated. On or about February 2, 1954, said Richardson brought said automobile into Atlanta, Fulton County, Georgia. There is no evidence that there was any change of residence by said Richardson. Under date of February 2, 1954, the Motor Sales Company purchased said automobile from Richardson in Atlanta, Fulton County, Georgia, where the car was located at the time, under full warranty of title and with no knowledge by said Motor Sales Company of said outstanding retention-title contract. Said Motor Sales Company immediately brought said automobile to Columbus, Muscogee County, Georgia, where, on March 8, 1954, it sold said automobile to defendant, another innocent purchaser without any knowledge of said retention-title contract.
"Sometime in November, 1954, the plaintiff notified defendant of its ownership of said retention-title contract, and on January 17, 1955, plaintiff instituted this trover action against the defendant who was in actual possession of said automobile at that time. Said automobile had a fair market value on the date January 17, 1955, of at least $950, and there remains due to plaintiff under said contract the sum of $914.40.
"The language of Code § 67-108 may be confusing to some, on account of its wording. This section, in part, is as follows: `Mortgages on realty shall be recorded in the county where the land lies; on personalty, in the county where the mortgagor resided at the time of its execution, if a resident of this State, and if a nonresident, in the county where the mortgaged property is. If a mortgage shall be executed on personalty not within the limits of this State, and such property shall afterwards be brought within the State, the mortgage shall be recorded according to the above rules within six months after such property is so brought in.'
"The same rules apply to the recording of retention-title or conditional-sales contracts.
"In this case we do not have a situation where the contract is executed by a nonresident on property without the limits of the State and then subsequently brought into this State. The cases are clear as to what the law is in such a case. In such event, the contract must be recorded in the county in this State into which the property is brought to a rest; the contract must be recorded in that county within six months in order to preserve the lien of the contract, in order to put innocent purchasers within this State on notice. See the case of Evans Motors of Ga. Inc. v. Gump Finance Co., 80 Ga. App. 836 ( 57 S.E.2d 506), and cases cited therein.
"In this case we have the situation where a contract is executed in this State by a nonresident and the property being actually located in this State at the time of the execution. In such a case the statute states that the contract must be recorded `in the county where the property is.' The question is what is the interpretation of this language of the statute. It would seem that it means exactly what it states, that the contract shall be recorded in the county in this State where the property was at the time of the execution of the contract; and the contract was recorded in the county where the property was, Carroll County, Georgia.
"The only case that can be found which seems to interpret this statute, under the facts in this case, is the case of Hunt v. Bowen, 75 Ga. 622. It can not be found that this case was ever cited; no other case can be found under the same facts. That case held that where a mortgage on personalty is executed by a nonresident of this State of Georgia, the property being then located in Georgia, the law requires it to be recorded in the county in Georgia where the property is located when the contract is executed, and that when recorded the lien of such contract would be preserved as against innocent purchasers or other lien holders without actual notice anywhere within this State. The statute itself seems to mean actually this. In this case, the contract was so recorded.
"Therefore, I shall be constrained to hold in favor of the plaintiff, and I hereby render the following judgment, the case being submitted to me under agreement of both parties that the court determine all questions of fact and law and enter its judgment without the intervention of a jury; the plaintiff having elected to take a money judgment:
"It is ordered, adjudged and decreed by the court that the plaintiff do have and recover of the defendant Ernest M. Castleberry and of J. Wood Browning, as security, the sum of $914.40 principal and the further sum of $11.70 for costs of court.
"This November 18, 1957."
The defendant Ernest M. Castleberry filed his motion for a new trial on the statutory grounds and later amended by adding six special grounds.
The special grounds read: "1. Because the judgment is contrary to law in that the recording in Carroll County, Georgia, of the conditional-sale contract executed by Elton Richardson to Kilgore-Heath Motors and assigned to plaintiff did not constitute constructive notice to the subsequent bona fide purchasers for value — Motor Sales Company of Columbus, Ernest M. Castleberry, individually or as guardian of his father, W. W. Castleberry — of the fact that title to the automobile had been retained. The title acquired by the subsequent bona fide purchasers was therefore superior to the rights of the plaintiff.
"2. Said judgment is contrary to law in that the conditional-sale contract was not recorded in a Georgia county where the record thereof would constitute constructive notice to subsequent bona fide purchasers and particularly was not recorded in Fulton County, Georgia, or Muscogee County, Georgia, within six months from February 2, 1954, on which date the automobile was brought into the State of Georgia from Randolph County, Alabama, by Elton Richardson, a nonresident of Georgia, and sold to Motor Sales Company of Columbus, a bona fide purchaser for value without any actual notice of the retention of title by plaintiff. The vehicle was promptly brought to Muscogee County, Georgia, where it has been located ever since. On March 8, 1954, Ernest M. Castleberry, as guardian of W. W. Castleberry, purchased the automobile from Motor Sales Company of Columbus in good faith for value and without actual notice of plaintiff's retained title. The recording of the contract in Carroll County, Georgia, on January 16, 1954, at which time the automobile had come to rest outside the State of Georgia, was insufficient in law to give constructive notice to the subsequent bona fide purchasers for value, and the title so acquired by them was and is superior to any right or title of plaintiff. . .
"3. Said judgment is contrary to law and the uncontradicted evidence including the stipulations of fact because the recording of the conditional-sale contract in Carroll County, Georgia, did not operate as constructive notice that plaintiff had retained title against the subsequent bona fide purchasers, no constructive notice having been imparted by the record in Carroll County, Georgia, in that:
"(a) Elton Richardson was a nonresident of Georgia and in negotiating for the purchase of the automobile in Carroll County, Georgia, he and the seller both contemplated the immediate transfer and removal of the property to Randolph County, Alabama, and said property was pursuant to the negotiations immediately removed to Randolph County, Alabama. . .
"(b) By the express terms of the conditional-sale contract the parties agreed that the situs of the property would be Randolph County, Alabama, the residence of the purchaser, and the property was, pursuant to the terms of the agreement, taken to Alabama on the same day that the contract was signed by the purchaser. . .
"(c) By the terms of the conditional-sale contract the parties agreed that the automobile would not remain in Carroll County, Georgia, its temporary location, but would immediately be taken to Randolph County, Alabama, and there kept; and in compliance with the agreement, the automobile was on the same day the contract was signed taken to Randolph County, Alabama, the residence of the purchaser. . .
"(d) The automobile was not in Carroll County, Georgia, on January 16, 1954, the date on which the conditional-sale contract was recorded in that county but was in the State of Alabama, and the recording on such date in Carroll County, Georgia, was not in conformity with Georgia Code § 67-108 which provides that when a mortgage is executed by a nonresident upon personal property in the State of Georgia, the instrument shall be recorded in the county where the property is. . .
"(e) The recording statutes of Georgia and particularly Code § 67-108 can only operate with respect to property located within the State of Georgia and having come to rest within the State of Georgia at the time of the recording of the instrument affecting the title to such property.
"4. Because the judgment is contrary to law and to the uncontradicted evidence in that defendant as guardian of the property of his father and Motor Sales Company of Columbus as bona fide purchasers of the automobile acquired a title superior to that of plaintiff and were not chargeable with constructive notice of plaintiff's retained title by the recording of the contract in Carroll County, Georgia, for the following reasons:
"(a) Movant avers and contends that the purchase of the automobile by Elton Richardson from Kilgore-Heath Motors under the conditional-sale contract was not actually consummated and concluded in the State of Georgia but was consummated and concluded in the State of Alabama. By the terms of the contract the purchaser agreed to deliver to the seller as a `trade-in' a certain tractor of the value of $1,322.25 which was at the residence of Elton Richardson in Alabama at the time and on the date that the contract was signed in Georgia and the said tractor was not delivered to the seller until a subsequent date when an agent of the seller of the automobile went to Alabama and there received delivery of the tractor. At the time the Plymouth automobile was in the State of Alabama. . .
"(b) Movant avers and contends that the purchase of the Plymouth automobile by Elton Richardson was not actually consummated and concluded while the vehicle was in the State of Georgia but was consummated and concluded after the automobile had been taken from Carroll County, Georgia, its temporary location, to Randolph County, Alabama. Under date of January 4, 1954, two days after the date of the conditional-sale contract, Kilgore-Heath Motors, the seller of the automobile, prepared and delivered to the purchaser Elton Richardson an invoice setting forth the terms of sale of the automobile and showing receipt of the tractor delivered as a part of the purchase price. Movant avers and contends that by the uncontradicted evidence of plaintiff's witnesses, the sale of the Plymouth automobile was not completed until and at the time of the execution and delivery of this invoice which the witnesses described as a `bill of sale'. On January 4, 1954, when this document was prepared, the Plymouth automobile was in the State of Alabama. . .
"5. Because the judgment is contrary to law in that the court erroneously construed and applied Code § 67-108. Said Code section has no application to a conditional-sale contract executed in this State by a nonresident while in this State where the parties contract and expressly agree that the property shall immediately be taken into another State and there come to rest. The recording statutes of Georgia and particularly Code § 67-108 can operate only upon property having a situs and location within the State of Georgia and which has come to rest within the State of Georgia at the time of the recording of the instrument. The uncontradicted evidence of the plaintiff shows that the property was only temporarily in Carroll County, Georgia, and did not come to rest until it was taken to the residence of Elton Richardson in the State of Alabama. Thereafter he brought the property to Fulton County, Georgia, where it was sold to Motor Sales Company of Columbus, the predecessor in title of defendant. The recording of the contract in Carroll County, Georgia, the temporary location of the automobile, from which county the property had been removed by agreement of the parties did not operate as constructive notice to the subsequent bona fide purchasers. . .
"6. Because the court erred in rendering an in personam money judgment against Ernest M. Castleberry individually. The judgment is contrary to the uncontradicted evidence including the stipulations of fact and without evidence to support it and is contrary to law in that Ernest M. Castleberry held title and possession of the automobile as guardian of his father. He did not hold said property in his individual capacity. . ."
The court denied the motion for new trial and it is on this judgment that the case is here for review.
So far as we have been able to determine, the question now before us has never been dealt with except in the case of Hunt v. Bowen, 75 Ga. 662, wherein what is now Code § 67-108 was cited, and in Evans Motors of Ga. v. Gump Finance Corp., 80 Ga. App. 836 ( 57 S.E.2d 506) wherein Code § 67-108 was cited and quoted. The facts in Evans Motors of Ga. v. Gump Finance Corp., supra, are not in any wise similar to the facts in the instant case. The transaction in which the plaintiff's car in the instant case was sold was handled in direct compliance with the provisions of Code § 67-108 as interpreted in Hunt v. Bowen, supra. To hold otherwise, would be to hold that, when a nonresident comes into Georgia and buys a car (or other personal property), such car would have to be registered in every county in Georgia and in every county of the State of the residence of the nonresident purchaser. Code § 67-108 reads: "Mortgages on realty shall be recorded in the county where the land lies; on personalty, in the county where the mortgagor resided at the time of its execution, if a resident of this State, and if a nonresident, in the county where the mortgaged property is. If a mortgage shall be executed on personalty not within the limits of this State, and such property shall afterwards be brought within the State, the mortgage shall be recorded according to the above rules within six months after such property is so brought in. All chattel mortgages of stocks of goods, wares, and merchandise, or other personal property, shall be recorded, in case the same is upon property or goods located in some other county than that of the mortgagor's residence, in the county where said personal property is located at the time of the execution of said mortgage, in addition to the record of said mortgage in the county of the mortgagor's residence. Where a mortgage either upon realty or personalty is executed to secure the payment of money or other thing of value, and the same is not recorded as provided by law, but such mortgage is renewed or re-executed, in every case of renewal or re-execution of a mortgage which has not been recorded, such mortgage shall operate as a lien upon the property of the mortgagor only as against the mortgagor himself and those having actual notice of such mortgage, except from the date of the record of such mortgage." That Code section was intended to protect the citizens of Georgia in just such instances as are involved in this case. It would have been quite easy for the purchaser of the car in Atlanta to make some sort of investigation as to whether or not there were any liens against the car. There were many methods by which the purchaser (or anyone else) could have secured information in order to be protected.
Under similar statutes and statements of facts, it has been held in other jurisdictions that the location of the property at the time of execution of the instrument controls, although the nonresident purchaser and the seller intend that it is to be immediately removed from the State. See National Fire Insurance Co. v. Collinsworth, 288 Ky. 398 ( 156 S.W.2d 157).
The general grounds and special grounds are not meritorious.
Judgment affirmed. Townsend and Carlisle, JJ., concur.