Gray v. Raper, 42721

• Decision Date: 18 April 1967
• Docket Number: No. 42721,No. 3,42721,3
• Citation: 155 S.E.2d 670,115 Ga.App. 600
• Parties: , 4 UCC Rep.Serv. 351 Glenn GRAY et al. v. Frankie I. RAPER et al
• Court: Georgia Court of Appeals

Page 670

155 S.E.2d 670

115 Ga.App. 600, 4 UCC Rep.Serv. 351

Glenn GRAY et al. v. Frankie I. RAPER et al.

No. 42721.

Court of Appeals of Georgia, Division No. 3.

April 18, 1967.

Syllabus by the Court

On the trial of a money rule it was error to exclude testimony offered by the intervenors who had an unperfected security interest in certain collateral to the effect that the claim of the plaintiff in fi. fa., because of her actual knowledge of such security interest, was nevertheless subordinate to it.

Frankie Ida Raper filed a money rule against the Sheriff of Whitfield County alleging that she had a judgment against one Alvin Raper on which execution had been levied by the sheriff, who had collected $180 which he refused to pay over to her. Glenn and Bessie Gray intervened in the proceedings, alleging that they were the holders of a note and chattel mortgage recorded May 26, 1965, on a Ford automobile belonging to Alvin Raper, upon which Frankie Raper's fi. fa. had been levied; that the $180 held by the sheriff constituted the net proceeds of the sale of this vehicle, and that the intervenors are entitled to the money because the bill of sale to secure debt was recorded prior to the date of the judgment upon which the plaintiff in fi. fa. had the execution levied.

Mitchell ,& Mitchell, Coy H. Temples, Warren N. Coppedge, Jr., Dalton, for appellants.

Pittman & Kinney, John T. Avrett, Dalton, for appellees.

DEEN, Judge.

(a) Under the agreed statement of facts, appellees Gray did not perfect their security interest in the automobile because they did not file a financing statement as required by Code Ann. § 109A-9-302(1)(d) where the subject property is an automobile. They did, however, foreclose the mortgage on September 6, 1966, and place it in the hands of the sheriff for collection, but the plaintiff in fi. fa. had caused her execution to be levied on September 3, based on a May 2nd judgment. Thus, by her prior levy, Mrs. Raper was entitled to the funds unless her judgment was subordinate to the Gray's prior but unperfected security interest in the car. The rule governing priorities here is spelled out in Code Ann. § 109A-9-301, where one who acquires a lien on property by levy (a 'lien creditor' under subsection (3) who becomes such 'without knowledge of the security interest and before it is perfected' (Subsection 1(b)) has priority over another with a prior but unperfected security interest. Given the facts above stated, Mrs. Raper was not entitled to priority over the Grays to the net proceeds in the hands of the sheriff arising from he sale of the automobile if she had acted with knowledge of the existence of the unsatisfied mortgage.

(b) On the trial of the money rule the Grays offered Alvin Raper, plaintiff's former husband and owner of the automobile, as a witness prepared to testify that the plaintiff had actual knowledge of the mortgage...