Opinion
38604.
DECIDED APRIL 28, 1961.
Foreclosure, etc. Floyd Superior Court. Before Judge Hicks.
F. R. Ingram, E. J. Clower, for plaintiff in error. Rogers, Magruder, Hoyt, Wright Walther, Barry Wright, Jr., contra.
One who is not a party to a written contract whereby title to personal property is retained in the seller as security for the balance of the purchase money, who is not named as payee in the notes made for the deferred payments, and who has no written assignment of the notes or the contract, cannot foreclose close the contract in his own name as holder and owner thereof in the manner mortgages on personal property are foreclosed under Code Ann. §§ 67-701 and 67-1601.
DECIDED APRIL 28, 1961.
The contract upon which the foreclosure proceeding in the instant case is based has thereon a heading as follows:
"The Custer Specialty Company, Inc. Dayton, Ohio, U.S.A. Proposal."
The parts of the contract which we consider material to a clear understanding of this decision are as follows: "Dayton, Ohio, April 30, 1959 . . . Heth Shows (hereinafter called the purchaser) . . . The Custer Specialty Company, Inc., (hereinafter called the company) proposes to furnish to the purchaser . . . One — 32 Passenger Portable Bubble Bounce Ride . . . with gasoline compressor and a single phase tractor motor . . . The property in and the title to the apparatus, machinery and devices above described shall not pass from the company until all payments hereunder (including deferred payments and any notes given on account thereof or any renewals thereof, if any) shall have been fully made in cash . . . It is further agreed that the purchaser shall keep the property fully insured for the benefit of the company, having the policies endorsed `loss if any payable to The Custer Specialty Co., Inc., as its interest may appear.'. . . All previous communications between the parties hereto either verbal or written with reference to the subject matter of this proposal, are hereby abrogated and annulled and this proposal duly accepted and approved constitutes the agreement between the parties hereto and no modification of this agreement shall be binding upon the parties hereto or either of them unless such modification shall be in writing duly accepted by the purchaser and approved by an executive officer of the company The foregoing proposal must be accepted by the purchaser within O days from this date and must be approved by an executive officer of the company in order to make it binding upon the parties." The contract was executed in the following manner:
"Approved at Dayton, Ohio, The Custer Specialty Co., Inc. this 30 day of April, 1959. By L. Luzern Custer. Salesman.
The Custer Specialty Co., Inc. By L. Luzern Custer President.
Witnessed Joseph C. Kuntz Jr.
"Acceptance.
"The foregoing proposal is hereby accepted at the price and upon the terms and conditions named therein.
Dated 3-30-59 Heth Shows By Alfred Kunz Purchaser Witnessed Joseph C. Kuntz Jr."
On the back of this contract the following appears:
"Contract Between The Custer Specialty Company (incorporated) Dayton, Ohio and Heth Shows __________ Apr. 1959"
Heth Shows, by Alfred Kunz, executed a series of notes payable to the Custer Specialty Company for the deferred payments named in the contract, and it is undisputed that no assignment of the notes was made to any person
L. Luzern Custer, acting in his individual capacity (hereinafter after referred to as the plaintiff), brought a proceeding to foreclose the contract in the same manner as mortgages on personal property are foreclosed. Code Ann. § 67-701.
After levy upon the property described in the mortgage execution, the defendant filed a written motion to dismiss the execution and vacate and set aside the foreclosure proceeding upon the grounds: "1. That it appears upon the face of the pleadings and documents attached as exhibits in said foreclosure proceeding that the mortgage which was allegedly foreclosed was in the name of `The Custer Specialty Company, Inc.', as mortgagee, and there appears no transfer or assignment of said mortgage to the plaintiff in fi. fa., sufficient to vest the said plaintiff in fi. fa. with an interest adequate to maintain and prosecute said proceeding. 2. Because said matter is proceeding in the name of an individual, whereas said mortgage, bill of sale to secure debt, and `proposal' and the notes secured thereby are in the name of a corporation. 3. Because the plaintiff in fi. fa. has no title to the instrument which was allegedly foreclosed." The judge of the superior court issued a rule nisi upon the motion requiring the plaintiff in the mortgage execution to show cause why the motion should not be granted. Upon a hearing the trial court overruled the above grounds of the motion. The defendant assigns this ruling as error for review before this court. Thereafter the plaintiff amended his affidavit alleging that the contract was made payable to the aforesaid corporation by a mistake of the scrivener.
The defendant filed written objections to the allowance of the plaintiff's amendment upon substantially the same grounds as the motion to dismiss the execution and the foreclosure proceedings which the trial court overruled, and this ruling is also assigned as error. The defendant filed an affidavit of illegality whereby he reasserted the above contentions and further claimed failure of consideration. Upon trial of the case, the jury rendered a verdict against the defendant.
There are other assignments of error concerning the ruling and charge of the court at the trial, but, as this court's ruling upon the assignments of error relative to the motion to dismiss the execution and foreclosure proceeding and the objections to the allowance of the amendment will dispose of the entire case, we deem it not necessary to rule upon the other assignments of error.
The plaintiff insists that the defendant's motion and objections to the amendment are without merit in that a mistake in a contract consisting of an unintentional act or an omission which is manifestly shown to be a mere clerical error, and which does not change the contract or the relation of the parties, may be corrected at law without the necessity to resort to equity to reform the contract, citing in support of this contention Thompson v. Hall Long, 67 Ga. 627; Tillman v. Webb Co., 17 Ga. App. 620 ( 87 S.E. 904); Gaulding v. Baker, 9 Ga. App. 578 ( 71 S.E. 1018). This is unquestionably a correct principle of law. However, we do not feel that it is applicable to the facts in the instant case, in that, in each of the above cases a mistake was clearly obvious upon the face of the instrument, or was shown to be a typographical error, or was a mistake in the spelling of a name. In the case sub judice the contract appears regular upon its face between the defendant and a corporation. The contract shows the corporation to be one of the parties thereto. Upon review of the contents of the contract, it is to be noted that the plaintiff, L. Luzern Custer, signed the contract as salesman for the corporation, and then approved the contract in his capacity as president of the corporation. There is no written assignment of the contract by the corporation to the plaintiff, and none is claimed by him. The contract is clearly shown to have been executed between the defendant and a corporation. The allowance of the amendment to the affidavit to foreclose the contract opened an avenue for the admission of parol evidence to vary and contradict the terms of a written contract, which is prohibited by law. Code § 20-704. See Carr v. L. N. R. Co., 141 Ga. 219 ( 80 S.E. 716); Boren v. Manhattan Life Ins. Co., 99 Ga. 238 ( 25 S.E. 314).
"Where a promissory note and mortgage upon personal property are combined together in one instrument, the promise being to pay the money to a named payee or bearer, and the mortgage portion of the instrument being in these words: `To further secure the payment of this note I hereby mortgage the following described property,' etc., one who is not the payee named in the paper cannot foreclose the mortgage in his own name as holder and owner thereof without having a written assignment of the same. Code, § 1996; Planters Bank v. Prater, 64 Ga. 609." Nicholson Co. v. Whaley, 90 Ga. 257 (1) ( 16 S.E. 84). See 76 C. J. S. 329, Reformation of Instruments, §§ 4-7; 45 Am. Jur. 602, Reformation of Instruments, § 35.
"As a general rule, an action on a contract must be brought in the name of the party in whom the legal interest in the contract is vested. [citations] Accordingly, an action can not be maintained upon a promissory note payable to the order of a named person, which has not been indorsed or otherwise transferred, except in the name of the person to whom it is payable." Kohn v. Colonial Hill Co., 38 Ga. App. 286 (1) ( 144 S.E. 33).
"An action dependent on the ownership by the plaintiff of a legal title to choses in action can not be sustained by parol evidence tending to show that the plaintiff is the equitable owner of such choses." Florida Coca-Cola Bottling Co. v. Ricker, 136 Ga. 411 (3) ( 71 S.E. 734). See also Allen v. Commercial Credit Co., 155 Ga. 545 ( 117 S.E. 650); Duke v. Culpepper, 72 Ga. 842.
The grounds of the defendant's motion to dismiss the execution and the foreclosure proceeding, and the grounds of his objections to the allowance of the plaintiff's amendment, as above discussed, are valid, and the trial court erred in overruling them. All further proceedings in the case were rendered nugatory.
Judgment reversed. Townsend, P. J., Carlisle and Jordan, JJ., concur.