Colonial Finance Co. v. Anthony , 79 Ga. App. 763 ( 1949 )

1. Where a chattel mortgage is executed in another State on property afterwards brought into this State, it must be recorded in the county where it is located within six months after being brought into this State. Code, § 67-108.

(a) The effect of failure to record a mortgage within six months after the property is brought into this State as to bona fide purchasers for value and without notice, is to divest the lien of such mortgage. Allen v. Dickey, 54 Ga. App. 451 (188 S.E. 273).

(b) The purpose of recording statutes generally is to protect innocent purchasers without notice from claims and liens which it might be impossible to discover in the course of prudent investigation, and to provide for stable regulations under which the title to personal property may be legally transferred. See 45 Am. Jur. 435.

2. While even a bona fide purchaser without notice may acquire no rights as the result of purchase from one who has no title or right to sell, nevertheless, in the absence of fraud or estoppel, a bill of sale to personal property, properly executed and recorded, is prima facie evidence of title, and the burden is upon the plaintiff in fi. fa. to show that it is invalid.

(a) The rule of evidence, that title in a certain person, once proved, is presumed to continue until the contrary appears, is a rebuttable presumption which, without more, will not prevail over direct and uncontradicted evidence, in the form of a properly executed bill of sale, that another was a purchaser for value.

DECIDED JULY 14, 1949. REHEARING DENIED JULY 28, 1949. The plaintiff in error, Colonial Finance Company, herein referred to as the plaintiff, filed, in the Superior Court of Muscogee County, on January 8, 1949, an affidavit to foreclose a mortgage on a certain Buick automobile, naming as defendants in said foreclosure proceedings Henry Moore, described as a non-resident of the State of Georgia, and the defendant in error, Anthony Motor Company, herein referred to as the claimant.

The claimant thereafter filed, what purported to be an affidavit of illegality, but this pleading was treated by consent as a claim. The affidavit to foreclose has attached to it a copy of the mortgage dated September 19, 1946, from Henry Moore to Colonial Finance Company, conveying the described automobile, then located in Columbus, Ohio. The affidavit to foreclose alleges that the property is now in Muscogee County, Georgia.

The claim recites that levy has been illegally made upon the deponent's property, in that the claimant purchased the property from one Roy Turner, that no such mortgage as is here sought to be foreclosed was recorded in Muscogee County within six months after the property was brought into the State, and that the claimant was without notice of any claim against his title for a period of over one and one-half years.

The case was submitted to the trial judge upon an agreed statement of facts, which recited that Henry R. Moore, a resident of Ohio, owned the automobile in fee simple and mortgaged it to the plaintiff on September 19, 1946; that the loan was never repaid and is now in default; that the plaintiff never authorized anyone to bring it into the State of Georgia; and that the mortgage was recorded in Muscogee County on January 4, 1949. It was further agreed that the claimant purchased the property from one Roy Turner on July 19, 1947, in Muscogee County, Georgia, and now holds a properly recorded retention-of-title contract thereto; and that its loan has never been repaid, and is now in default. The claimant introduced in evidence the original bill of sale from Roy Turner and its conditional-sales contract.

The trial court entered judgment in favor of the claimant, and thereafter the plaintiff filed a motion for a new trial based only on the general grounds. The exception here is to the judgment overruling this motion. 1. The agreed statement of facts in this case shows that the automobile which the plaintiff seeks to recover was located in Muscogee County, Georgia, for over one and one-half years before the plaintiff took any action to record his mortgage thereon. In view of Code § 67-108, which requires that, when property purchased elsewhere is subsequently brought into this State, any mortgage or lien thereon must be recorded in the county where the property is located within six months after it is brought into this State, the holder of such a mortgage or lien cannot, after that period of time, come in and claim the property as against innocent third parties. See Allen v. Dickey, 54 Ga. App. 453 (supra);North v. Goebel, 138 Ga. 739 (76 S.E. 46). If this were not so, there would be no purpose in the statute, nor any security afforded to purchasers of personal property. Most of our States now have recording statutes designed to protect their citizens against unknown claims and liens which it would be impossible for them to discover. Unless some such protection were afforded, in the present state of mobility of such articles as motor vehicles, it would be a practical impossibility to carry on the transfer and sale of goods with any degree of security. Therefore, in the absence of other circumstance, such as fraud or estoppel, the mortgagor who wishes to protect his lien must follow the procedure outlined. It is true, in some cases, he may have difficulty in following the property within the time allowed by law, but it is both easier and more equitable for him to do this, after voluntarily parting with its possession, than for a buyer of personal property to be required to locate liens and claims the only record of which exists in some unknown State.

2. The plaintiff contends that, even though it did not record the mortgage within the statutory period, the title to the automobile in question should be decreed in it, due to the fact that, title thereto having once been shown in the defendant Moore, it is presumed to continue in him. As to the claimant, the plaintiff insists that he is not entitled to the automobile because he has not proved possession in himself, and for the further reason that his claim of title rests on a bill of sale from a third party, whom the plaintiff denominates as a stranger to the title.

We cannot subscribe to this view. The bill of sale from Roy Turner to the claimant is in proper form. The claimant testified that he purchased the automobile on July 10, 1947. This is perfectly consistent with the plaintiff's evidence, which showed that Moore owned the car on September 19, 1946, and is sufficient to overcome the presumption that the title remained in Moore at the time of the levy. This case is easily distinguished from Hydraulic Cement Block Co. v. Christensen, 38 Utah 525 (114 P. 524), cited by the plaintiff on this point. In that case direct evidence was offered to prove that the bill of sale under which the claimant held had been given him by one not having title to the property. Here no such state of facts is apparent, and none will be presumed. The other cases cited by the plaintiff on this point have to do with the law of real property, and are not applicable here for that reason.

It may be noted further that the presumption relied on by the plaintiff that title, having once been shown to be in the defendant Moore, will be presumed to continue in him, may be offset by the fact that the property was in Georgia at the time of the levy. The defendant Moore is a non-resident of Georgia. He was a resident of the State of Ohio in 1946, and it may be presumed that he was still a resident of Ohio at the time of the levy. SeeClark v. Baker, 186 Ga. 65, 74 (196 S.E. 750). The property, however, was then in Muscogee County, Georgia, the residence of the claimant, and the plaintiff offers no explanation of its presence there which in any way conflicts with the testimony of the claimant as to his ownership. To prove title to personal property, it is not necessary to show a chain of title uninterrupted to its source.

It follows, therefore, that the judgment of the trial court overruling the motion for a new trial is without error.

Judgment affirmed. MacIntyre, P. J., and Gardner, J., concur.