General Lithographing Co. v. Sight & Sound Projectors, Inc., s. 47620 and 47621

• Decision Date: 01 February 1973
• Docket Number: No. 2,Nos. 47620 and 47621,s. 47620 and 47621,2
• Citation: 128 Ga.App. 304,196 S.E.2d 479
• Parties: , 12 UCC Rep.Serv. 200 GENERAL LITHOGRAPHING COMPANY et al. v. SIGHT & SOUND PROJECTORS, INC., et al. FIRST NATIONAL HELLER FACTORS, INC. v. SIGHT & SOUND PROJECTORS, INC., et al
• Court: Georgia Court of Appeals

Page 479

196 S.E.2d 479

128 Ga.App. 304, 12 UCC Rep.Serv. 200

GENERAL LITHOGRAPHING COMPANY et al. v. SIGHT & SOUND PROJECTORS, INC., et al.

FIRST NATIONAL HELLER FACTORS, INC. v. SIGHT & SOUND PROJECTORS, INC., et al.

Nos. 47620 and 47621.

Court of Appeals of Georgia, Division No. 2.

Feb. 1, 1973.

Rehearing Denied Feb. 28, 1973.

Poole, Pearce, Cooper & Smith, Robert R. Smith, Atlanta, Ernest J. Nelson, Jr., Decatur, for General Lithographing Co.

Hansell, Post, Brandon & Dorsey, Terrence Lee Croft, Atlanta, for First National Heller Factors, Inc.

Cotton, Katz & White, J. Timothy White, Sewell K. Loggins, Max B. Hardy, Jr., Atlanta, for Sight & Sound Projectors, Inc. and others.

Syllabus Opinion by the Court

PANNELL, Judge.

These cases present an appeal and cross-appeal involving the order of priorities to a chose in action among an unperfected security interest, a garnishing creditor, a lien creditor, a perfected security interest, and other intervening judgment creditors.

1. The trial court did not err in holding that the security interest of First National Heller Factors, Inc. (cross-appellant) was perfected after the garnishment of appellee Sight & Sound Projectors, Inc., but prior to any garnishment or claim by any other creditor or defendant. Distribution of money received by garnishment must be made according to priorities established by law. Code § 46-502. A judgment does not create a lien on a chose in action. The lien on a chose in action is created by the service of a summons of garnishment, and the lien dates from the date of the service of the summons, and not from the date of the judgment. Armour Packing Co. v. Wynn, 119 Ga. 683, 46 S.E. 865; McWilliams v. Hemingway, 80 Ga.App. 843, 57 S.E.2d 623. Summons of garnishment was served by appellee, Sight & Sound Projectors, Inc., on July 1, 1972. To perfect the assignment of accounts receivable, a financing statement must be filed in the County of debtor's residence, where he is a resident individual. Ga. UCC Section 9-401(1)(b) (Code Ann. § 109A-9-401(1) (b)). The debtor in this case was a resident individual with offices in DeKalb County but residing in Fulton County. A financing statement was filed in Fulton County on August 27, 1972. An unperfected security interest is subordinate to the rights of a person who becomes a lien creditor without knowledge of the security interests and before it is perfected. Ga. UCC Section 9-301(1)(b) (Code Ann. § 109A-9-301(1)(b)). McInvale v. Tifton Air Service, 119 Ga.App. 821, 168 S.E.2d 898. Following perfection of the security interest, other creditors enjoy no priority over the security interest. Therefore, the court did not err in ordering first priority to Sight & Sound Projectors, Inc., the garnishing creditor, in the amount of $3,887.58 (the total claimed as due) or in ordering that the lien of First National Heller Factors, Inc. (when the security interest was perfected) was superior to the claim of all other creditors who intervened in the proceeding. The court's order to pay the amount stated to Sight & Sound Projectors, Inc., and the balance of the funds (less than the amount claimed) to First National Heller Factors, Inc., with provision for costs to the garnishee and the moving creditor was not error. Although the debtor himself might be estopped from claiming such amount by the terms of his security agreement, plaintiff appellee by garnishment had priority over an unperfected security interest.

2. The trial court did not err in finding, in support of the...