Mack Trucks, Inc. v. Ryder Truck Rental, Inc.

Citation137 S.E.2d 718,110 Ga.App. 68
Decision Date08 July 1964
Docket Number40608,Nos. 40607,No. 3,s. 40607,3
PartiesMACK TRUCKS, INCORPORATED et al. v. RYDER TRUCK RENTAL, INCORPORATED. RYDER TRUCK RENTAL, INCORPORATED, v. MACK TRUCKS, INCORPORATED, et al
CourtGeorgia Court of Appeals

Syllabus by the Court

1. An unrecorded conditional sale contract, though executed in another State, is to be given the effect of an unrecorded deed of bargain and sale; consequently it is in a preferred position as to a lien arising by operation of law.

2. Where a conditional sale contract executed in another State was duly probated for record in this State and recorded within six months after the chattel described therein was brought into this State it is in a position superior to a judgment obtained in an attachment proceeding against the purchaser and in which the chattel was levied on under the writ of attachment.

3. Where there is in the record a stipulation of counsel as to the existence of a conditional sale contract, the effect of which is for determination as a matter of law, the brief of the evidence is not deficient because the contract was not incorporated therein.

This case was tried before the trial judge on facts stipulated by the parties. Insofar as material to this decision these stipulated facts as shown by the brief of evidence are as follows:

Norman Grumbach, a nonresident of Georgia, purchased a certain truck tractor entering into a conditional sale agreement with Mack Trucks, Inc., which subsequently assigned its interest in the agreement to Mack Financial Corporation. In its original form the agreement, which was executed in Maryland, did not meet prerequisites to recordation under Georgia law. However, this defect was later cured, and the agreement was filed for record on January 23, 1963, in Richmond County, Georgia, where the truck tractor then was located.

Grumbach brought the truck tractor into Georgia on August 12, 1962. Afterwards he became indebted to Ryder Truck Rentals, Inc., which sued out an attachment against him in the Municipal Court of the City of Augusta and levied on the truck tractor. Notwithstanding that Mack Trucks, Inc., and Mack Financial Corporation informed Ryder of the existence of the conditional sale agreement, which at that time had not been recorded in Georgia, Ryder took judgment on its declaration in attachment on November 28, 1962.

On February 11, 1963, the sheriff of the municipal court sold the truck tractor at public sale pursuant to the attachment previously made by Ryder. Ryder purchased the truck tractor at the sale, and continues to retain possession of it.

Afterwards, Mack Trucks, Inc., and Mack Financial Corporation filed an affidavit in the municipal court foreclosing the conditional sale agreement, Grumbach being in default under the agreement, the Ryder interposed its claim affidavit in the foreclosure. The court entered judgment in favor of Ryder. Mack Trucks, Inc., and Mack Financial Corporation filed their motion for a new trial upon the general grounds.

On the ground that no proper brief of evidence had been filed or approved, Ryder made a motion to dismiss the motion for new trial.

The motion to dismiss the motion for new trial and the motion for new trial both were denied. Mack Trucks Inc., and Mack Financial Corporation except to the ruling on their motion for new trial, and Ryder, by cross bill of exceptions, excepts to the ruling on its motion to dismiss the motion for new trial.

Cumming, Nixon, Eve, Waller & Capers, Samuel C. Waller, Augusta, for plaintiffs in error.

Fulcher, Fulcher, Hagler & Harper, J. Walker Harper, Augusta, for defendant in error.

BELL, Presiding Judge.

1. The principle of law governing this case is found in the early case of Burke v. Anderson, 40 Ga. 535, 538(1), and, as well, in Code § 67-1403, as amended by Ga.L.1957, p. 167. Here, as in Burke, there was failure on the part of the attaching creditor (Ryder here) to carry the burden of showing that it was a bona fide purchaser. The evidence reveals no more than that Grumbach was, through some unidentified transaction, indebted to Ryder; that Ryder had found the property in Grumbach's possession, thought it to be owned by him, and levied upon it under a writ of attachment. This was not enough, for as suggested in Burke, Ryder ran into the pre-existing equities of Mack under a conditional sale contract which it held from Grumbach on the truck-tractor. When Ryder secured its judgment in the attachment proceeding it had only a lien created by operation of law which affixed itself only to Grumbach's interest in the truck-tractor. Ryder could reach no more than Grumbach's interest, and could not divest Mack of its equitable interest or title held for security purposes.

Support for this result is to be found in Hubbard v. Andrews & Co., 76 Ga. 177; Peterson v. Kaigler & Walker, 78 Ga. 464, 3 S.E. 655; Steen & Marshall v. Harris, 81 Ga. 681(1), 8 S.E. 206; Phillips & Co. v. Roquemore, 96 Ga. 719, 23 S.E. 855; Davis v. Banks, 142 Ga. 93(2), 82 S.E. 497; Massachusetts Mutual Life Ins. Co. v. Hirsch, 184 Ga. 636, 192 S.E. 435; Mackler v. Lahman, 196 Ga. 535, 27 S.E.2d 35; Parker v. Boyd, 208 Ga. 829, 830(1a), 69 S.E.2d 760; Tremere v. Barfield, 12 Ga.App. 774, 78 S.E. 729; Kaplan v. Collier, 16 Ga.App. 620, 85 S.E. 946; C.I.T. Corp. v. Coleman, 54 Ga.App. 576, 188 S.E. 585; Morris Plan Bank v. Ginn, 56 Ga.App. 681, 193 S.E. 783; Cairo Banking Co. v. Citizens Bank, 63 Ga.App. 690, 11 S.E.2d 806; Manchester Motors v. Farmers &c. Bank, 91 Ga.App. 811, 87 S.E.2d 342; and Central Bank & Trust Co. v. Creede, 103 Ga.App. 203, 118 S.E.2d 844.

It is to be recognized that there are many cases in which contrary holdings, rulings, statements and intimations are to be found, but there is an explanation, as to all of them, why a different ruling must be made here.

For example, it is pointed out in Burke v. Anderson, 40 Ga. 535, supra, decided in 1869, that § 1947 of the Code of 1861 required that mortgages be recorded within a prescribed time and in a particular manner, failing which the lien of the mortgage must yield to liens created by operation of law, bona fide purchasers and junior mortgages if they were properly recorded. Thus the court was bound by the statutory provision to find that contrary to the general principle announced in the first division of the opinion, and which we utilize here, if the mortgage had not been properly recorded a junior judgment would have preference.

Other cases, relying upon the statutory provision requiring recording of chattel mortgages and holding that absent the proper recordation a junior lien created by operation of law would prevail are: Shepherd v. Burkhalter, 13 Ga. 443 (1853); Smith v. Jordan, 25 Ga. 687 (1852); Andrews v. Mathews, 59 Ga. 466 (1887); Richards & Bros. v. Meyers, 63 Ga. 762 (1879); Hubbard v. Andrews & Co., 76 Ga. 177 (1885); Benson v. Green, 80 Ga. 230, 4 S.E. 851 (1887); New England Mortgage Sec. Co. v. Ober & Sons Co., 84 Ga. 294, 10 S.E. 625 (1889); Cambridge Tile Co. v. Scaife, 137 Ga. 281(2), 73 S.E. 492 (1911); Reynolds v. Tifton Guano Co., 20 Ga.App. 49, 92 S.E. 389 (1917); Rowe v. Hancock, 29 Ga.App. 261, 114 S.E. 911 (1922); Hosch v. Smith, 31 Ga.App. 91, 119 S.E. 667 (1923); and Bank of America, etc. Assn. v. Reserve Life Ins. Co., 90 Ga.App. 332(8), 83 S.E.2d 66 (1954). All of these cases, save the last, were decided prior to the Act of 1931 (Ga.L.1931, p. 153), now found in Code § 67-109, 1 providing that 'The effect of failure to record a mortgage shall be the same as is the effect of failure to record a deed of bargain and sale.' The effect of failure to record a deed of bargain and sale, provided in Code § 29-401, 2 is that it 'loses its priority over a subsequent recorded deed from the same vendor, taken without notice of the existence of the first.' It does not lose priority to a junior judgment or other lien created by operation of law, for the holder of such a lien is not a bona fide purchaser. Lowe v. Allen, 68 Ga. 225. The principle of Code § 67-109 3 was not taken into account in Bank of America, which, of course, must yield to the Code.

As to conditional sale contracts this court held that the Act of 1931, not expressly having mentioned them therein, had no application. It applied only to mortgages and bills of sale to secure debt. Evans Motors of Ga. v. Hearn, 53 Ga.App. 703, 186 S.E. 751. Consequently, there are many cases holding that an unrecorded conditional sales or retention of title contract is inferior to a junior judgment or lien created by operation of law. Cohen & Co. v. Candler, 79 Ga. 427, 7 S.E. 160 (1887); Gartrell v. Clay, 81 Ga. 327, 7 S.E. 161 (1887); Green v. Franklin, 86 Ga. 360, 12 S.E. 585 (1890); Rhode Island Locomotive Works v. Empire Lumber Co., 91 Ga. 639, 17 S.E. 1012 (1893); Derrick v. Pierce, 94 Ga. 466, 19 S.E. 246 (1893); Harp v. Patapsco Guano Co., 99 Ga. 752, 27 S.E. 181 (1896); Southern Iron & Equipment Co. v. Voyles, 138 Ga. 258, 264, 75 S.E. 248, 41 L.R.A.,N.S., (1912); North v. Goebel, 138 Ga. 739, 76 S.E. 46 (1912); Pickard & Hogg v. Garrett, 141 Ga. 831(3), 82 S.E. 251 (1914); Farmers Bank of Doerun v. Avery & Co., 145 Ga. 449, 89 S.E. 409 (1916); Smith Motor Car Co. v. Universal Credit Co., 176 Ga. 565, 168 S.E. 18 (1953); Reisman v. Wester, 10 Ga.App. 96, 72 S.E. 942 (1911); Shaw v. Renfroe, 11 Ga.App. 807, 808, 76 S.E. 363 (1912); Phillips & Crew Co. v. Drake, 13 Ga.App. 764, 79 S.E. 952 (1913); Bradley & Co. v. cochran, 27 Ga.App. 463, 108 S.E. 624 (1921); Butler v. LaGrange Gro. Co., 29 Ga.App. 612, 116 S.E. 213 (1923); Jones Motor Co. v. Finch Motor Co., 34 Ga.App. 399, 129 S.E. 915 (1925); Saunders v. Citizens First Nat. Bank, 38 Ga.App. 141, 142 S.E. 744 (1928); Evans Motors Of Ga. v. Hearn, 53 Ga.App. 703, 186 S.E. 751 (1936); Rhodes v. Jones, 55 Ga.App. 803, 191 S.E. 503 (1937); Bank of Ringgold v. West Pub. Co., 61 Ga.App. 426, 6 S.E.2d 598 (1939); Buchanan v....

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