City Wholesale Co. v. Harper, 37787

• Decision Date: 09 September 1959
• Docket Number: No. 2,No. 37787,37787,2
• Citation: 100 Ga.App. 151,110 S.E.2d 561
• Parties: CITY WHOLESALE COMPANY v. E. G. HARPER, Administrator, et al
• Court: Georgia Court of Appeals

Page 561

110 S.E.2d 561

100 Ga.App. 151

CITY WHOLESALE COMPANY v. E. G. HARPER, Administrator, et al.

No. 37787.

Court of Appeals of Georgia, Division No. 2.

Sept. 9, 1959.

Syllabus by the Court.

Where a grantee of a bill of sale to secure debt properly recorded his instrument, and where thereafter the grantor executed another conveyance of the same property to a third party who took the latter instrument within seven years of the former and recorded it, the priorities between the two instruments was fixed at the time the junior grantee recorded the junior conveyance with constructive notice of the outstanding senior conveyance, and the subsequent failure of the senior grantee to file the affidavit to renew the record of his conveyance under the provisions of the Act of 1937 (Ga.L.1937,[100 Ga.App. 152] p. 760) did not affect those respective priorities.

This case was tried by the Judge of the Superior Court of Spalding County upon a stipulation and agreement of the facts, the material portion of which is essentially as follows: On March 12, 1951, H. O. Kelley executed and delivered to C. R. Dorsey a bill of sale to secure debt in the principal amount of $1,200, conveying to the said Dorsey as security for said indebtedness a stock of goods, wares and merchandise in the said Kelley's store, and, also, certain motor vehicles. This bill of sale to secure debt was regularly recorded on March 12, 1951 in the records of the Clerk of the Superior Court of Spalding County, Georgia. On January 28, 1958, Kelley executed and delivered to City Wholesale Company another bill of sale to secure debt in the principal amount of $3,048.61 conveying to City Wholesale Company as security for this indebtedness the same stock of goods, wares and merchandise in his store, and also certain fixtures. This latter bill of sale was regularly recorded on January 29, 1958 in the records of the Clerk of the Superior Court of Spalding County. At the time of his death, Kelley was indebted to Dorsey in the principal amount of $1,200, together with interest amounting to $718, and was indebted to City Wholesale Company in the principal amount of $2,599.61. Since that time, City Wholesale Company has received the sum of $650, the proceeds from the sale of the fixtures included in its bill of sale, but not included in the bill of sale to Dorsey, The balance due City Wholesale Company is $1,949.61. The motor vehicles described in the bill of sale to Dorsey were either worn out or otherwise disposed of by Kelley prior to his death, and the remaining property described in the bill of sale from Kelley to Dorsey is the same property as that described in the bill of sale to secure debt from Kelley to City Wholesale Company, except for the fixtures heretofore referred to. With the agreement and consent of City Wholesale Company and of Howard Dorsey, administrator of the estate of C. R. Dorsey, the said stock of goods, wares and merchandise was sold by E. G. Harper, as administrator of the estate of H. O. Kelley, for the sum of $1,800, and by agreement, said amount is now held by the said Harper subject to determination by the court of the relative priority of the respective bills of sale to secure debt held by City Wholesale Company and by Howard Dorsey, as administrator of the estate of C. R. Dorsey.

It was further stipulated and agreed that on January 28, 1958, City Wholesale Company had no actual notice or knowledge of the bill of sale to secure debt from Kelley to Dorsey or of the indebtedness secured thereby, such notice or knowledge as City Wholesale Company did have, being only the notice afforded as a matter of law by the recording of the said instrument; that no affidavit of extension or renewal of said bill of sale to secure debt has ever been filed in the office of the Clerk of the Superior Court of Spalding County in accordance with the provisions of the Act approved March 31, 1937 (Ga.L.1937, p. 760) as amended by the Act approved March 9, 1945 (Ga.L.1945, p. 389); and, that since January 28, 1958, City Wholesale Company has not loaned to Kelley any additional sums of money, nor has it granted him any extensions or renewals of his indebtedness, nor has it otherwise acted to its detriment with respect to the indebtedness of Kelley. It was further stipulated that Harper, as the administrator of the estate of Kelley was, insofar as the $1,800 realized on the sale of the incumbered property, merely a stakeholder who had no interest in the said $1,800, but stood ready to pay the said amount over to the proper party under direction of the court. The trial judge entered a judgment in favor of Dorsey and against the City Wholesale Company and that judgment is excepted to in this court.

Cumming & Cumming, Griffin, for plaintiff in error.

Beck, Goddard & Smalley, Christopher & Futral, Griffin, for defendant in error.

CARLISLE, Judge.

(After stating the foregoing facts). A decision of the question which was presented to the trial judge under the foregoing stipulations of fact, and which is presented to this court by the exception to his judgment, requires, as was said by the trial judge, an interpretation and construction of the Act of 1937 (Ga.L.1937, p. 760). The pertinent provisions of this Act are sections 1 and 2, which read as follows:

'Section 1. That the notice given to third persons by the filing for record of any mortgage, bill of sale to secure debt, retention of title contract or other security instrument creating a lien on, retaining title to, or conveying an interest in, personal property, shall expire at the end of seven years from the date of the filing thereof for record.

'Section 2. The effect as to third persons of the filing of any such instrument for record, may, in all respects, including the preservation of priority thereof, be extended for successive additional periods, each not exceeding five years from the date of the filing in the office of the clerk of the Superior Court, wherein anyy such instrument is recorded, upon the filing by the owner or holder thereof, of an affidavit...