Opinion
44947.
ARGUED JANUARY 5, 1970.
DECIDED FEBRUARY 17, 1970. REHEARING DENIED MARCH 17, 1970.
Priority of lien. Fulton Superior Court. Before Judge Holt.
Powell, Goldstein, Frazer Murphy, Wayne Shortridge, David R. Aufdenspring, for appellant.
Hansell, Post, Brandon Dorsey, W. Rhett Tanner, for appellee.
1, 2. As defendant's debtor failed to sign title-retention agreements, it did not have a perfected purchase money security interest so as to be entitled to a special priority under Code Ann. § 109A-9-312 (4) over the conflicting security interest of plaintiff in the same collateral.
ARGUED JANUARY 5, 1970 — DECIDED FEBRUARY 17, 1970 — REHEARING DENIED MARCH 17, 1970 — CERT. APPLIED FOR.
Plaintiff and defendant are creditors of a defaulting debtor, Summit Productions, Inc. Both assert a right to the proceeds of a sale of certain collateral of Summit Productions. The sale was conducted pursuant to the terms of an agreement between the parties litigant whereby defendant would hold the proceeds of the sale, $4,500, in lieu of and in substitution of the collateral sold, subject to their respective security interests. The plaintiff entered into a security agreement with Summit, dated December 6, 1967, covering the collateral in question. A financing statement was properly filed by plaintiff on December 11, 1967, with the clerk of the superior court. Defendant filed a financing statement covering the same collateral with the clerk on December 15, 1967. The deposition of the general manager of the debtor, Summit, revealed that it purchased equipment from the defendant, which is the collateral in issue. This equipment was delivered to Summit on several different dates. Accompanying the equipment on delivery were twenty-six separate sets of documents prepared in duplicate. The original and carbon copy of each were identical with the exception that the original was entitled "Sales Order" and the carbon copy "Delivery Receipt." These documents on their face, among other things, contained a description of the equipment delivered, the quantity, the price of each item, and terms of net in 30 days. On the reverse is a printed form of a retained title agreement with blank spaces allocated for insertion of the total purchase price, number and amount of monthly instalments, and a space for the buyer's signature. The agreement also contained printed provisions limiting it to "the property listed in the sales order on the reverse side hereof"; for interest; and title to remain in the seller until payment in full. At the time of delivery the general manager or one of his subordinates either placed initials, first name or full signature on the front of each of 25 of the sale orders and delivery receipts. The reverse side of all was completely blank and contained no signature, no sign, and no symbol of the buyer. In one additional instance, the general manager did sign the title-retention contract in blank. The general manager also testified that his initials or signature appearing on the sale order side of 21 of the 25 exhibits meant that "we had received the goods and were responsible for payment." Plaintiff brought this action to recover the $4,500. The trial court granted plaintiff's motion for summary judgment and denied defendant's.
1. As defendant filed its financing statement four days after plaintiff, the issue is whether defendant has a perfected purchase money security interest in the collateral so as to entitle it to a special priority over plaintiff's claim under Code Ann. § 109A-9-312 (4), which provides: "(4) A purchase money security interest in collateral other than inventory has priority over a conflicting security interest in the same collateral if the purchase money security interest is perfected at the time the debtor receives possession of the collateral or within 10 days thereafter." An enforceable title-retention agreement like the ones under consideration would constitute a purchase money security interest within the definition of that term. Code Ann. § 109A-9-107. To perfect this security interest and to be enforceable against the debtor and third parties, there must be a written agreement, signed by the debtor ( Code Ann. § 109A-9-203 (b)) and the filing of a financing statement ( Code Ann. § 109A-9-302 (1)). The record shows that defendant's financing statement was filed either at the time Summit received the equipment or within the ten-day grace period after the debtor received the property, with one exception. The heart of this case lies in the question whether defendant had a signed security agreement with the debtor. Defendant argues that the placing of the initials and/or signatures on the face of the documents sufficed to authenticate the title-retention agreement on the reverse and as a consequence entitle it to priority over the disputed collateral. "Signed" as defined in the Uniform Commercial Code is "any symbol executed or adopted by a party with present intention to authenticate a writing." Code Ann. § 109A-1-201 (39). We do not believe the defendant received a signed security agreement from its debtor with reference to twenty-five of the sales orders where the only signing appears on the face of the instruments. The placing of the initials or signatures on the face shows nothing more than acknowledgment of receipt of the equipment. Furthermore, neither the sale order nor the delivery receipt makes any reference to the reverse side of the documents. Not only are the title-retention contracts devoid of any symbol which can be construed as being signed by the parties, but the defendant and Summit did not complete any one of the vital blank spaces in the printed form, which if completed might have given legal significance to an otherwise blank piece of paper. In short, the parties had no security agreement whatsoever. See Code Ann. §§ 109A-1-201 (3) and 109A-9-105 (h). Defendant is not entitled to the claimed special priority.
2. As regards the one instance where the general manager affixed his signature to the title-retention contract, defendant has admitted that it does not have priority over plaintiff, as to the collateral to which it relates, as its financing statement was filed more than ten days after delivery. The signing of this contract obviously did not operate to authenticate the others, for by its express terms it applies only to the property described on the sale order.
The trial court properly granted plaintiff's motion for summary judgment.
Judgment affirmed. Quillian and Whitman, JJ., concur.