Smith v. C. I. T. Corporation

Under the provisions of the conditional bill of sale, the title to the automobile was retained in the seller until all of the purchase-money was paid. It was further provided in the bill of sale that in case of default in the payment of any instalment, or the failure of the purchaser to perform any of his obligations under the contract, the seller might, with or without legal process, retake possession of the automobile, and credit the value thereof against the purchase-price, or sell the property at public or private sale and apply the proceeds on the indebtedness. It is admitted by the parties that the money in the hands of the sheriff stands in the place of the automobile, it having been sold under a short-order sale during the pendency of the trover proceeding. With all of the instalments due under the conditional bill of sale, the owner of such paper would have had the right to recover the automobile in a proper legal proceeding, or could have taken possession of it without a legal proceeding under the terms of the contract. I am fully aware of the general rule that a mortgage must be foreclosed before the holder thereof can properly file a claim to money in the hands of an officer in a money-rule proceeding; but I am of the opinion that this rule is not applicable under the facts of the present case, where the title to the property was in the C. I. T. Corporation under the terms of the bill of sale and it had the right under the contract to the automobile. All of the balance of the purchase-money for the automobile under the bill of sale, $470, was due when the C. I. T. Corporation filed the petition in the present case against the sheriff, asking that the proceeds derived from the sale of the automobile be awarded to it. W. O. Smith, the purchaser under the bill of sale, came into court and filed an answer in which he asked that the money be turned over to him. This proceeding was in the nature of a money rule, and equitable principles are applicable to such proceeding. Both parties are claiming the money in the hands of the sheriff, and their respective rights, if any, to this fund can be determined in such proceeding.

In Wright v. Brown, 7 Ga. App. 389 (3) (66 S.E. 1034), it was held: "If the title to the property sold as the property of the defendant in attachment be in a third person by reason of his having reserved it in writing as security for the purchase-money, that third person may waive his right to follow the property and recover it from the purchaser at the sale, and in that event can, on money rule, have the proceeds of the sale applied upon his debt; and this is true notwithstanding he gave public notice on the day of the sale that whoever bought would buy subject to his title." See Thrash v. Harman,21 Ga. App. 98 (94 S.E. 54), holding, as in theWright case, that a money rule is in the nature of an equitable proceeding. In Browder v. Blake, 135 Ga. 71 (68 S.E. 837), a firm bought certain mules, and gave to the vendors a purchase-money note in which it was provided that the title should remain in the latter until payment. This was duly attested and recorded. Later, common-law judgments were obtained against the purchasers, and the executions issued on them were levied on the mules. None of the purchase-money had been paid. The vendors attempted to foreclose their note by affidavit, as in the case of a chattel mortgage or bill of sale given as security for a debt not exceeding $100, and placed in the hands of the sheriff the execution issued upon such foreclosure, in order that they might claim the fund arising from the sale. The mules brought their full value at the sale under the common-law executions. The debtors were insolvent. One of the holders of the note containing the provision for the retention of title was present at the sale, and bid thereat, and bought one or more of the mules. A money rule was brought to distribute the fund arising from the sale. It was held that although the note could not be foreclosed by affidavit, like a chattel mortgage, yet on a rule to distribute money equitable principles are applied, and that under the facts stated there was no error in ordering the proceeds of the sale to be paid to the vendors.

Where it appeared from the evidence in the present case that the balance due on the purchase-price of the automobile under the bill of sale amounted to more than the fund in the hands of the sheriff, which had been derived from the sale of the automobile on the short order, under the facts of this case, with both parties before the court, and equitable principles being applicable thereto, I think the court was authorized to adjudicate that the C. I. T. Corporation was entitled to the fund in the hands of the sheriff, and to so award it.