Opinion
32845.
DECIDED FEBRUARY 9, 1950.
Trover; from Fulton Civil Court — Judge Robert S. Carpenter. November 4, 1949.
Woodruff, Swift Dorsey, for plaintiff in error.
Kobak, Levy Buffington, contra.
When property is purchased under a conditional-sales contract in another State by a nonresident of this State, and the property is afterwards brought within this State, the conditional vendor, in order to preserve his rights as against innocent purchasers for value and without notice, must, within six months after the property is brought in, record the conditional-sales contract in the county where the property is located at the time the instrument is filed for record. The recording of the instrument in a county where the property is not located, although it may have been there during some previous part of the six-month period allowed by statute, is insufficient to serve as constructive notice to the world of the rights of the parties under Code § 67-108, which provides for the registration of such instruments.
DECIDED FEBRUARY 9, 1950.
The defendant in error, Gump Finance Corporation, hereinafter called the plaintiff, brought a trover action in the Civil Court of Fulton County against the plaintiff in error, Evans Motors of Georgia Incorporated, hereinafter called the defendant.
The petition alleged in substance: that on July 5, 1948, Auto Market Incorporated of Bristol, Tennessee, sold to one Thomas C. Jones, of Bristol, Virginia, a certain described automobile; that besides making a down payment the said Jones agreed to pay a balance of $2064 in 24 monthly instalments of $86 each, said sale being evidenced by a conditional-sales contract; that plaintiff for a valuable consideration purchased said conditional-sales contract from Auto Market Incorporated on the date the same was executed; that said Jones made two payments on said contract about the dates they were due, which left an unpaid balance of $1806; that thereafter, without the knowledge of the plaintiff, Jones removed the automobile to the State of Georgia and on or about July 28, 1948, sold it to the defendant; that the plaintiff did not learn of these facts until the early part of January, 1949; that on January 7, 1949, it had the said contract filed and recorded in the office of the Clerk of the Superior Court of Fulton County; that on January 4, 1949, it demanded the return of the property from the defendant or its value, alleged to be $1806; that the defendant thereupon advised plaintiff that it had disposed of said automobile and refused to pay its value.
The defendant interposed demurrers on the ground that the petition as a whole fails to set forth a cause of action, and on the further ground that the petition fails to allege that Fulton County, where the conditional-sales contract was recorded, was the county of residence of the conditional-sales vendee, and, therefore, such recording of the contract did not constitute notice to the defendant of the existence of the contract. Thereupon the plaintiff amended its original petition by alleging in substance that said automobile was sold by Jones, the conditional vendee, on or about July 28, 1948, to the defendant in Fulton County, Georgia, and delivered by said conditional vendee to the defendant at the latter's place of business then located in Fulton County. The defendant then filed renewed demurrers on the ground that the petition as amended fails to set forth a cause of action and on the further ground that the petition as amended fails to show that the automobile was in Fulton County at the time the conditional-sales contract was filed for record in said county, and, therefore, such record of said contract did not constitute notice to the defendant, who was a bona fide purchaser of the property for value without notice of the conditional-sales contract.
The trial judge overruled the renewed demurrers to the petition as amended, and the defendant filed exceptions pendente lite to this judgment. On the trial of the case before the judge, without the intervention of a jury, the plaintiff introduced the contract duly assigned to it and showing the date and record thereof as alleged; also the notes, totaling the principal sum of $1806. The evidence also showed without dispute that the conditional vendee, who was a nonresident of this State, brought the automobile to Atlanta and sold the same to the defendant, who, on July 29, 1948 transferred it to one Lane Dolvin, and that Dolvin, on August 2, 1948, sold the same to one Virgil Hoagland, Box 182, Chamblee, Georgia, for $2195.
The judge entered a judgment for the plaintiff in the sum of $1806. The defendant filed a motion for a new trial on the general grounds, which was overruled. On the judgments of the trial court, overruling the demurrers of the defendant and overruling its motion for a new trial, error is assigned.
The question presented involves a construction of Code § 67-108, which provides in part as follows: "Mortgages . . on personalty [shall be recorded] in the county where the mortgagor resided at the time of its execution, if a resident of this State, and if a nonresident, in the county where the mortgaged property is. If a mortgage shall be executed on personalty not within the limits of this State, and such property shall afterwards be brought within the State, the mortgage shall be recorded according to the above rules within six months after such property is so brought in." (Italics ours.) This section applies to the case at bar by reason of Code § 67-1403 which provides that the registration and record of conditional bills of sale shall be governed in all respects by the laws relating to the registration of mortgages on personal property.
The conditional vendee, Jones, was a nonresident of Georgia, and he had brought the property into this State at least by July 29, 1948, which allowed the plaintiff until January 29, 1949, to make a proper record of the mortgage in this State. The defendant had sold the car on July 29, to one Lane Dolvin and on August 2 it was sold by him to a resident of Chamblee, Georgia, which is in DeKalb County, as shown by the evidence. It was recorded in Fulton County, the county of residence of the defendant, on January 7, 1949, which date is within the six-month period allowed by statute. However, the car was on that date, and had been for some months prior thereto, in DeKalb County and not in Fulton County.
In Hampton v. Universal Credit Co., 59 Ga. App. 570 ( 1 S.E.2d, 753) the court held, in weighing the relative rights of the conditional vendor and an attachment creditor of the conditional vendee, that the vendor's rights were protected by his act in recording the instrument in the county of this State into which the property was casually brought, and where it was located at the time of recording. Presumably the car was merely in transit at the time it was halted by the attachment proceedings, but it was within the limits of the county at the time the instrument was filed.
The purpose of the statute codified as Code § 67-108 and other recording statutes, is the constructive notice which is given to all the world as to the rights of the parties thereto. Bank of Ringgold v. West Publishing Co., 61 Ga. App. 426 ( 6 S.E.2d, 598. If the words used therein, to the effect that the instrument shall be recorded in the county where the property is, be construed to mean any county where the property was, or through which it passed, during the six-month period allowed to the holder thereof, then it is obvious that the notice given by such recording would be equivalent to no notice at all, and that any county between Fulton and the Tennessee State line would have been equally available to the conditional vendor as a county of record. It is true that Fulton County is also the county of residence of two persons or corporations who bought the car during the six-month period, but they did not own it, and it was not within the county, at the time the conditional-sales contract was recorded. Even the most liberal construction of the statute could not justify the place of record on the ground that it was the residence of a former owner. It must therefore be decided that the plain intendment of the statute must be observed, and the record filed in the county in which the property is located on that date, if an action is commenced against it in transitu, or in the county of its situs if it has come to rest in any permanent location, but that the filing of the instrument for record merely in a county in which it had been located at some former time within the six-month period would be insufficient to give constructive notice to anyone, and is also insufficient to conform to the terms of the statute.
This defect was pointed out by special demurrer attacking paragraph 6 of the petition, which alleges that on or about July 28, 1948, Jones sold the automobile to the defendant and that "shortly thereafter" the defendant disposed of said car, on the ground that the petition fails to show that the automobile was in Fulton County at the time the contract was filed for record, which date is set forth elsewhere in the petition as January 7, 1949. The trial court erred in overruling this demurrer, and in not thereafter sustaining the general demurrer to the petition. This error rendered all further proceedings nugatory. Judgment reversed. MacIntyre, P. J., and Gardner, J., concur.