Clarke Bros. v. McNatt

• Decision Date: 13 May 1909
• Citation: 64 S.E. 795,132 Ga. 610
• Parties: CLARKE BROS. v. McNATT.
• Court: Georgia Supreme Court

64 S.E. 795

132 Ga. 610

CLARKE BROS. v. McNATT.

Supreme Court of Georgia

May 13, 1909

Syllabus by the Court.

Where a vendor of personal property delivers possession of it to the vendee, but receives from the latter a promise to pay a stipulated amount therefor and an agreement that the title shall remain in the vendor until payment has been made, it is not generally necessary to the validity of such a contract as against the vendee or one purchasing under him, that it should be signed by the vendor.

(a) Where a contract on its face provides or shows that the parties intended for both to sign before it takes effect, it is not complete until both do so.

[Ed Note.-For other cases, see Sales, Cent. Dig. § 1350; Dec Dig. § 462; ^[*] Contracts, Cent. Dig. § 177; Dec. Dig. § 35. ^[*]]

Where a contract of sale of personal property, with the title retained in the vendor till payment of the purchase price, provided that the vendee might sell such property to a purchaser or purchasers, who should make the check or checks payable to the vendor, and that the latter should apply one-half to his vendee to pay for the expense of preparing and marketing the product, and such contract was recorded, if a purchaser from a vendee was affected with notice of such terms, as against him they could not be varied by the subsequent parol agreement between the original vendor and vendee under which one-half of the amounts received from sales of the lumber was not applied to the purchase price, but to another indebtedness of the vendee to a firm of which the vendor was a member for supplies furnished to the vendee.

[Ed. Note.-For other cases, see Sales, Cent. Dig. § 1371; Dec. Dig. § 472. ^[*] ]

A contract of sale in regard to timber which is attached to the soil, but which is presently to be severed therefrom and converted into personalty before the title is to pass to the purchaser, is an executory sale of personalty, and not of an interest in land.

[Ed. Note.-For other cases, see Logs and Logging, Cent. Dig. §§ 6, 7; Dec. Dig. § 3. ^[*]]

If a vendor of personal property retains title under a written and recorded contract until payment of the purchase money, but it is also provided in such contract that the vendee may sell the property, consisting of lumber to be cut and carried to market, the vendor cannot impose on a bona fide purchaser or purchasers from his vendee, without notice of such limitations, other than the mere recording of the contract, the duty of seeing that he receives the proceeds of the sale or sales; nor, as against such a bona fide purchaser without notice, can he accomplish such result by stating in the contract that the sales shall be made to a purchaser who will make the checks payable to him.

[Ed. Note.-For other cases, see Sales, Cent. Dig. § 1384; Dec. Dig. § 473. (FN*) ]

Error from Superior Court, McIntosh County; P. E. Seabrook, Judge.

Bail trover by James McNatt against Clarke Bros. Judgment for plaintiff, and defendants bring error. Reversed.

A contract of sale of standing timber, to be severed and converted into personalty before title is to pass, is an executory sale of personal property, and not of an interest in land.

James McNatt brought an action of bail trover against Clarke Bros., seeking to recover two rafts of timber. The defendants denied the plaintiff's title to the property, and contended that it belonged to them. McNatt was the owner of certain timbered lands. T. P. McBride and W. D. Petersen executed and delivered to him the following written contract, which was recorded:

"State of Georgia, Montgomery County. This indenture and contract of lease, made and entered into this the 22d day of January, 1903, between James McNatt, of the first part, and T. P. McBride and W. D. Petersen, of the second part, all the parties of the county and state aforesaid, witnesseth: That for and in consideration of the sum of two thousand and thirty-six and 42/100 dollars, to be paid as hereinafter provided, as the purchase price of all the sawmill timber on the following tract of land [describing it]. The aforesaid condition [consideration?] of two thousand and thirty-six dollars and 42/100 is to bear interest at the rate of 8 per cent. per annum for the above date, and is to be paid as follows: The said parties of the second part hereby agree, in order to pay the aforesaid sum of two thousand and thirty-six and 42/100 dollars and all interest that may accrue thereon at the said rate of 8% per annum, to cut, haul, and saw square all the sawmill timber on the land aforesaid, and when the same is ready for the Darien market then the same is to be sold to a buyer who will make the check payable to the said James McNatt, who hereby agrees to return to the said party of the second part one-half of the proceeds of said check, in order that the said parties may defray the expenses incurred by reason of preparing the said timber for market. It is further agreed by the parties to this contract that the said James McNatt reserves the title to the aforesaid sawmill timber and control and sale thereof until the purchase price aforesaid is paid. In order to further secure the aforesaid sum of two thousand and thirty-six and 42/100 dollars we hereby mortgage and create a lien on the following personal property to wit: [Describing it.] It is further agreed that the above sum of two thousand and thirty-six and 42/100 dollars, to become due and collectible in six months from the above date; and should we fail to pay the aforesaid sum of two thousand and thirty-six and 42/100 dollars, we hereby constitute the said James McNatt our lawful authorized agent to sell said mules heretofore described and to execute titles thereto in our names after having advertised the same for ten days at the courthouse in Montgomery county, Ga., said county, and appropriate the proceeds to the payment of the aforesaid sum and all interest and costs that may accrue thereto. And we hereby waive and renounce for ourselves and families all the rights to the homestead or exemption laws which we may have under or by virtue of the Constitution or laws of the state of Georgia or of the United States, as against this note or any renewal thereof. In witness whereof we have hereunto set our hands and seals the day and year first above written. T. P. McBride. [L. S.] W. D. Petersen. [L. S.]

"Signed, sealed, and delivered in presence of W. L. Wilson, Com. N. P., M. Co., Ga.

"Recorded January 28, 1903. D. B. Graham, Clerk."

On this were entered four credits, of $90.82, $462.97, $440.64, and $366.67, respectively. McBride and Petersen cut timber from the property and caused it to be sold. Some of the drafts or checks given in payment were made payable to McNatt, and some to the order of McBride and Petersen. In order to carry on the business, McBride and Petersen purchased supplies from merchants, a large part of them from E. T. McBride & Co., which firm was composed of E. T. McBride and the plaintiff, McNatt. The plaintiff testified that that firm would not furnish McBride and Petersen with supplies until he agreed that the indebtedness due them should first be paid from the proceeds of the timber as cut and sold, and then the balance should be paid to him on account of the purchase price; he saying: "If anybody loses, let it be me." He admitted that $2,037.42 had been by consent delivered to E. T. McBride & Co., and said that, after settling the account of that firm, he received certain payments for which he gave credit on the contract with McBride and Petersen. He testified that these applications of payments were made by agreement between himself, E. T. McBride & Co., and McBride and Petersen. He indorsed drafts which were payable to him. Finally Clarke Bros. bought the timber now in controversy from McBride and Petersen, and gave drafts which were not payable to McNatt. These drafts did not come into the hands of the plaintiff, and he sought to recover the timber. There was also testimony tending to show notice to Clarke Bros. of a claim to the property by the plaintiff. On behalf of the defendants there was testimony that the consideration for the entire timber had been paid to McNatt, and that nothing was due him on account of it when the sale was made to Clarke Bros. There was also evidence conflicting in some respects with that of the plaintiff as to any agreed application of the proceeds of timber first to the account of E. T. McBride & Co. There was much other evidence which it is unnecessary to set out. The jury found for the plaintiff. The defendants moved for a new trial, which was refused, and they excepted.

W. L. Clay, for plaintiffs in error.

E. J. Giles, Chas. M. Tyson, and Hines & Jordan, for defendant in error.

LUMPKIN J.

1. Objection was made to the admission of the contract in evidence, on the ground that it was not signed by McNatt. Section 2776 of the Civil Code of 1895, on the subject of conditional sales, declares that "every such conditional sale, in order for the reservation of title to be valid as against third parties, shall be evidenced in writing, and not otherwise. And the written contract of every such conditional sale shall be executed and attested in the same manner as mortgages on personal property." It is not required that the vendor as well as the vendee shall sign the written instrument. Smith v. De Vaughn, 82 Ga. 574, 9 S.E 425. If the personal property is delivered into the possession of the vendee, the object is to provide a method of putting third parties on notice that the apparent title thus evidenced by possession is not in fact such, but that the title rests in the vendor until the condition of the sale shall be fulfilled. As against creditors or persons claiming under the vendee it does not...