Charles S. Martin Distributing Co. v. Indon Industries, Inc.

• Decision Date: 12 February 1975
• Docket Number: No. 50010,No. 2,50010,2
• Parties: , 16 UCC Rep.Serv. 1095 CHARLES S. MARTIN DISTRIBUTING COMPANY v. INDON INDUSTRIES, INC
• Court: Georgia Court of Appeals

Page 900

213 S.E.2d 900

134 Ga.App. 179, 16 UCC Rep.Serv. 1095

CHARLES S. MARTIN DISTRIBUTING COMPANY v. INDON INDUSTRIES, INC.

No. 50010.

Court of Appeals of Georgia, Division No. 2.

Feb. 12, 1975.

Rehearing Denied March 6, 1975.

Dunaway, Haas & Broome, Henry R. Stringfellow, Atlanta, for appellant.

Hugh M. Dorsey, III, Atlanta, for appellee.

Syllabus Opinion by the Court

PANNELL, Presiding Judge.

This action was begun in the Civil Court of Fulton County by the plaintiff-appellant as the holder of a security interest retaining title upon goods sold, and which security interest was duly recorded in the State of South Carolina, the complaint seeking to recover the unpaid purchase price ($4,377.72) plus interest thereon of certain goods sold by plaintiff to the debtor as against a transferee of the debtor under a bulk sale, as defined by the laws of South Carolina, and which sale occurred in South Carolina, the goods having been disposed of by the transferee. By amendment, plaintiff alleged the sale and transfer was fraudulent in that no proper notice was given plaintiff of such sale, and alleged further that promises to pay by the transferee were fraudulently made so as to induce plaintiff to refrain from taking any action until the time for bringing actions had expired under the South Carolina statute, which contained a six months limitation, and which defendant claims is controlling. The amendment further sought punitive damages, and substituted a prayer demanding judgment 'in the amount of $4,377.72 compensatory damages, and $20,000 aggravative (sic) damages.' Defendant's motion for summary judgment was granted and plaintiff-creditor appealed. Held:

'. . . Where a statute creates a new right and at the same time prescribes a period within which it may be enforced, its enforcement within that period is a condition precedent to its existence; so much so that if not enforced within that time, it will be completely annihilated, and not merely rendered unenforceable. In such case, if such right is sought to be enforced after it is barred by the law of the state of its creation, in a state whose statute the right would not as yet be barred, the statute of the former state and not of the latter will be operative.' 20 Encyclopedia of Georgia Law, 204, Limitation of Actions, § 32.

It will be seen from a reading of the above that the key to the solution of the problem here is whether the South Carolina bulk sales law creates any causes or rights of action, or whether the statutory limitation of actions merely applies to causes of rights of actions already possessed by the creditor and is one as to the remedy only. If the latter, the South Carolina statute of limitation will not be enforced in this state, but on the contrary, this state's statute of limitation will be enforced; the law of the forum. See in this connection, Fimian v. Atkinson Co., 209 Ga. 113, 70 S.E.2d 762; Gaffe v. Williams, 68 Ga.App. 299, 22 S.E.2d 765; Southern Ry. Co. v. Diseker, 13 Ga.App. 799, 81 S.E. 269; Montague v. Cummings, 119 Ga. 139, 140, 45 S.E. 979; Thomas v. Clarkson, 125 Ga. 72, 54 S.E. 77; Wynn v. Lee, 5 Ga. 217; Selma, Rome and Dalton R. Co. v. Lacey, 49 Ga. 106; O'Shields v. Georgia Pac. R. Co., 83 Ga. 621, 10 S.E. 268; Murray v. Taylor, 130 Ga.App. 129, 202 S.E.2d 512.

Both Georgia and South Carolina have generally adopted the Uniform Commercial Code, and the statute of limitation of South Carolina and that of Georgia are identical in language, with the exception of time limitation, six months in South Carolina and one year in Georgia. See, Code § 109A-6-111; South Carolina Code § 10.6-111. It is apparent that the U.C.C. does not create any causes of action or rights of action. As was said in Matthew Bender's Sales & Bulk Transfers under U.C.C., Vol. 3A, § 15.08, p. 15-44, '(w)here there is no compliance with one or more of the requirements of Article 6, the most important matter with regard to the creditors affected is what their rights will then be. In so many words, the Code is completely silent. In section 6-111, the only reference with regard to creditors is that no action shall be brought nor levy made more than six months after transferee obtains possession of the goods. The use of the words action and levy should be deemed very broad so as to include...