Opinion
38494.
DECIDED OCTOBER 13, 1960.
Money had and received. Muscogee Superior Court. Before Judge Calhoun. June 21, 1960.
Grover C. Willis, Jr., for plaintiffs in error.
Ernest C. Britton, contra.
Auctioneers who sell, within the State of Georgia, for a disclosed or undisclosed principal, an automobile which was bought originally in Alabama under a conditional-sale contract, to a resident of Georgia, are not liable in tort for money had and received to the holder of the Alabama conditional-sale contract which was not recorded in Georgia within six months from the time the automobile was brought into the State of Georgia, in the absence of actual knowledge of the Alabama contract by the auctioneers.
DECIDED OCTOBER 13, 1960.
J. M. Jackson Buick Company, a partnership, sued John Lewis and Jack Hayes, doing business as the Columbus Auto Auction, for money had and received and alleged in its petition, as amended, the following: "2. Petitioners show that on May 7, 1958, they sold to one Johnny Johnson, of Coffee Springs, Alabama, one 1958 Buick automobile, Model 43, 4-Door Riviera, Motor No. 4E601 5460, on time for $3,534.38, retaining title to same until all payments for same had been made, for which said Johnny Johnson paid $462 in cash and signed a retention-title contract wherein he agreed to pay the balance of $3,072.38 in twelve (12) monthly instalments, beginning June 7, 1958, the first eleven instalments of $100 each and the twelfth for $1,972.38. A copy of said contract is hereto attached marked Exhibit A and made a part hereof. 3. Petitioners show that Johnny Johnson paid the first six (6) monthly instalments due on said automobile, leaving a balance due on the agreed purchase price of $2,472.38, and thereafter he has made no further payments on said automobile. That plaintiff had no knowledge that the said described automobile had been removed from the state of Alabama or the county of the purchaser, Johnny Johnson, until the latter part of January, 1959, when plaintiff learned for the first time that the car had been removed from the state of Alabama into the state of Georgia. 4. Petitioners show that on May 8, 1958, the defendants, acting as auctioneers, sold said automobile at public outcry for cash as the property of Johnson Motor Company, Coffee Springs, Alabama, to Morris Hyles of Columbus, Georgia, and received the sum of $2,600 therefor, a copy of the bill of sale executed by defendants to said Hyles is hereto attached, marked `Exhibit B,' and made a part hereof, and that petitioners had no knowledge of said sale and did not consent thereto. 5. Petitioners show that they had no knowledge that Johnny Johnson had delivered said automobile to defendants until on or about June 15, 1959, when they learned that defendants had sold said automobile to Morris Hyles as above set forth. 6. Petitioners show that defendants wrongfully sold said Buick to said Morris Hyles and wrongfully received the proceeds of said sale and petitioners bring this action against said defendants to recover the proceeds of said sale in the sum of $2,472.38, with interest at 7% per annum from May 8, 1958."
The defendants made an oral motion to dismiss the petition in the nature of a general demurrer. The court overruled the motion and the defendants except.
Code Ann. § 67-108 provides in part: "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. . ." This rule covers conditional sales. Code Ann. § 67-1402. The conditional-sale contract under which the automobile was sold to Johnny Johnson by the plaintiff, a copy of which is attached to the petition, shows that it was not recorded in Georgia within six months of the time it is alleged that Johnson brought the automobile into Georgia and that it was not recorded in Georgia at all. It was sold in Georgia to a resident of Georgia. Under these circumstances the reservation of title by the plaintiff was invalid in Georgia ( Jones v. Andrews, 89 Ga. App. 734, 81 S.E.2d 304) at the time of the sale by the defendants and their principal, and the sale was valid as between the seller and purchaser. Failure to properly record such an instrument renders the reservation of title in the original seller under the conditional-sale contract invalid as to third parties. Home Finance Co. v. United Motor Sales, 93 Ga. App. 690, 691 ( 92 S.E.2d 718); Penland v. Cathey, 110 Ga. 431 ( 35 S.E. 659); Farmers Bank of Doerun v. Avery Co., 145 Ga. 449 ( 89 S.E. 409); Smith Motor Car Co. v. Universal Credit Co., 176 Ga. 565 ( 168 S.E. 18). The burden of the defendants in error's argument is that the failure to record renders the reservation of title in the plaintiff invalid only as to liens subsequently created bona fide against the property by the buyer, and they cite Allen v. Dickey, 54 Ga. App. 451 ( 188 S.E. 273). The ruling in that case did not involve an innocent purchaser and the court did not intend to confine the law to lienholders. Third persons include innocent purchasers as well as lienholders. Smith Motor Car Co. v. Universal Credit Co., supra. The petition does not allege that the Johnson Motor Co. or the auctioneers had actual knowledge of the plaintiff's conditional-sale contract. It therefore follows that the sale in Georgia was legal under the law of this State and that under no theory of wrong-doing shown by the petition could the defendant auctioneers be liable in tort, or in the alternative, for money had and received, since in this case the only basis of an action for money had and received would be a tort and a waiver of the tort in favor of an action for money had and received. The facts in this case are suspicious but legal whether the principal for whom the auctioneers were acting was disclosed or not. It may be observed, however, that after Johnny Johnson bought the automobile he paid six monthly instalments on it after it had been sold in Georgia. The plaintiff contented itself with the receipt of the payments and did not check on who had possession of the automobile or where it was. This observation may serve to prevent such future occurrences.
The court erred in overruling the defendants' motion to dismiss in the nature of a general demurrer.
Judgment reversed. Nichols and Bell, JJ., concur.