Green v. KING EDWARD EMPLOYEES'FEDERAL CREDIT UNION

• Decision Date: 20 April 1967
• Docket Number: No. 23511.,23511.
• Citation: 373 F.2d 613
• Parties: Doye E. GREEN, Trustee in Bankruptcy for Johnnie Earl Mills, Jr., Bankrupt, Appellant, v. KING EDWARD EMPLOYEES' FEDERAL CREDIT UNION, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

373 F.2d 613 (1967)

Doye E. GREEN, Trustee in Bankruptcy for Johnnie Earl Mills, Jr., Bankrupt, Appellant, v. KING EDWARD EMPLOYEES' FEDERAL CREDIT UNION, Appellee.

No. 23511.

United States Court of Appeals Fifth Circuit.

March 3, 1967.

Rehearing Denied April 20, 1967.

Robert A. Berlin, Macon, Ga., for appellant.

F. Kennedy Hall, Bloch, Hall, Groover & Hawkins, Macon, Ga., for appellee.

Before BROWN, GOLDBERG and AINSWORTH, Circuit Judges.

Rehearing Denied April 20, 1967 en banc.

AINSWORTH, Circuit Judge:

On July 31, 1964, Johnnie Earl Mills, Jr., then a resident of Florida, borrowed a sum of money from the King Edward Employees' Federal Credit Union and gave a 1963 Ford automobile as security. Mills executed a note for $1,983.43 payable to the Credit Union and entered into a conditional sales contract, agreeing that title to the automobile would remain with the Credit Union until the loan was paid. Mills obtained a Florida Motor Vehicle Certificate of Title which showed a first lien in favor of the Credit Union in the sum of $1,983.43. The applicable Florida law was complied with in order to protect and perfect the security interest of the Credit Union against subsequent purchasers and other lienholders.¹

On January 1, 1965, Mills moved to Georgia, taking the automobile with him. No provision in the conditional sales contract prohibited him from removing the car from Florida to another state. On February 24, 1965, Mills obtained a 1965 motor vehicle tag and a Georgia Vehicle Registration Certificate. He did not, however, obtain a Georgia Title Certificate as required by Georgia law.² On March 22, 1965, Mills was adjudicated a bankrupt and the Referee declared title to the automobile to be vested in the Trustee. The Credit Union then filed a reclamation petition against the Trustee for the automobile, which was denied by the Referee. The Referee's decision was reversed by the court below which declared title to be vested in the Credit Union. We affirm.

Trustee contends that his position is one of a creditor without notice of the Credit Union's security interest inasmuch as neither the Credit Union nor the bankrupt complied with certain provisions of the Georgia Motor Vehicle Certificate of Title Act (Chapter 68-4A, Ga. Code Ann.) hereinafter referred to as the "Title Act."

The Title Act provides in pertinent part the following:

"68-421a.

"(a) The security interest in a vehicle of the type for which a certificate of title is required shall be perfected and shall be valid against subsequent creditors of the owner, subsequent transferees and the holders of security interests and liens on the vehicle by compliance with the provisions of this Chapter.

"(b) A security interest is perfected by delivery to the Commissioner of the existing certificate of title, if any, and an application for a certificate of title containing the name and address of the holder of a security interest, the date of his security interest and the required fee. It is perfected as of the time of its creation if the delivery is completed within 10 days thereafter; otherwise, as of the date of the delivery to the Commissioner. When the security interest is perfected as provided in this subsection (b), it shall constitute notice to everybody of the security interest of the holder.

* * * * * *

"(d) If a vehicle is subject to a security interest of lien when brought into this State, the validity of the security interest or lien is determined by the law of the jurisdiction where the vehicle was when the security interest attached subject to the following:

* * * * * *

"(2) If the security interest or lien was perfected under the law of the jurisdiction where the vehicle was when the security interest attached, the following rules apply:

* * * * * *

"(A) If the name of the holder of a security interest or lien is shown on an existing certificate of title issued by that jurisdiction, his security interest or lien continues perfected in this State." (Emphasis supplied.)

While admittedly neither the Credit Union nor the bankrupt complied with section (b) of the Title Act, such compliance was unnecessary to protect the security interest because of the provisions of section (d) (2) (A) which not only recognizes the validity of the security interest in automobiles on which a foreign-perfected lien has attached but allows the security interest to continue perfected in Georgia, notwithstanding the fact that the Act provides an additional method for the perfection of a security interest.

We do not agree with the Trustee that the provisions of section (b) of the Title Act are the exclusive means of holding a perfected security interest in an automobile and that section (d) merely continues perfected a foreign security interest until the new Georgia resident applies for and receives his Georgia license tag. The rationale of this conclusion is that under section 68-406a of the Georgia Code the owner of an automobile must apply for a title certificate when the automobile is registered. This construction of section (d) violates the obvious meaning of the section. It is not our province to impute to the statute an intention to restrict the time within which a security interest...