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CARROLLTON PRODUCTION CREDIT ASSOCIATION v. ALLEN et al.
35934.
Petition for direction. Before Judge Foster. Haralson Superior Court. August 19, 1955.
GARDNER, P. J.
On a petition of a sheriff for direction in paying out funds which came into his hands from the sale of farm equipment, crops and cattle, where the evidence reveals that the funds (exclusive of costs) were insufficient to pay the indebtedness of creditors who furnished equipment, money, supplies, etc., for making the crop and where one of the creditors who furnished such necessities duly recorded his bills of sale and the other creditors did not, the one securing and duly recording the bills of sale is entitled to the funds in the hands of the sheriff because of priority of lien, as against the creditors not so recording their bills of sale.
This case arose by reason of the Sheriff of Haralson County filing a petition in the superior court asking for direction in the payment of $1,187.30 to certain claimants, namely the Carrollton Production Credit Association, the Commercial & Exchange Bank of Bremen, and H. G. Jones. After due notice the claimants filed their response setting up their instruments under which the claims were alleged to be sustained. It appears that the Carrollton Production Credit Association foreclosed its instruments revealed by the record as follows: One note signed by L. C. Watson payable to the Carrollton Production Credit Association for $770 dated November 16, 1953, secured by bill of sale executed and delivered by L. C. Watson to the Carrollton Production Credit Association dated November 16, 1953, to certain personal property as set out therein, "in accordance with Sections 67-1105 and 1301 Georgia Code, 1933, the repayment of such loan, and of any additional loans that lender may make to borrower (not exceeding an equivalent amount), and all renewals and extensions thereof, and all other indebtedness of borrower to lender, and all interest, costs and attorneys fees, undersigned sells and conveys to lender, its successors and assigns; all crops planted and growing, and that may be planted and grown within twelve months from date on 64 acres of land, more or less, in Bremen District, Haralson County, Georgia, owned by L. C. Watson," together with certain livestock: seven head of cattle, tractor, tools, ripper, harrow, turners, plowstocks, tool bar, planters, all gear and harness, "(for which borrower has executed a note of this date), for planting, cultivating and harvesting the crops hereinafter described." The bill of sale was recorded November 17, 1953. The second note was signed by L. C. Watson payable to the Carrollton Production Credit Association dated February 20, 1954, for $300, for the following purposes: Seed and fertilizer. The third note was a note signed by L. C. Watson payable to Carrollton Production Credit Association, dated June 8, 1954, for $300, "for the following purposes: Fert. for 3 A Beans," for which bill of sale was executed and delivered by L. C. Watson to the Carrollton Production Credit Association dated June 8, 1954, recorded June 15, 1954, in book 75, page 270, in office of Clerk of Haralson Superior Court, and refers to former bill of sale recorded in book 75, page 172, in office of Clerk of Haralson Superior Court, and was therein made a part thereof. There was also a mortgage fi. fa. in favor of the Commercial & Exchange Bank of Bremen filed in the office of the clerk of said court, December 24, 1954, under bill of sale dated April 16, 1954, due November 1, 1954, for $212.80 principal, on five acres of cotton, 18 acres of corn and all other crops to be grown on my place in 1954; also, 2 Jersey cows about 6 and 4 years old weighing about 600 pounds each; also, bill of sale dated May 21, 1954, due November 1, 1954, for $212.80 on five acres in truck crops, nine acres in hay and all other crops to be grown on my place, crop year 1954. The Carrollton Production Credit Association claimed a total of $1,370 principal, $86.92 interest and $145.60 attorneys' fees.
When the property involved was sold it brought sums as follows: 1 black calf, $26.00; 1 brown calf, $31.00; 1 John Deere tractor and harrow and sub-soiler, $700; 1 disc plow, $42.50; plow stock, gears and planter, $8.50; 2 bales cotton, $333.20; corn in field, $46.10; all of the sales totaling $1,187.30. After a hearing the judge of the superior court ordered the sheriff to distribute the funds as follows: "1. To pay all costs in said case in the sum of $ -------- . 2. From the funds derived from the sale of cotton and corn, he is directed to pay the sum of $212.80 to the claimant, Commercial & Exchange Bank. 3. The claimant, Carrollton Production Credit Association, the sum of $770. 4. The balance, if any, should there be a balance received from the sale of live cattle and the crops named and mentioned in the pleadings, be applied on the claim of H. G. Jones." To the order of the court, the plaintiff, the Carrollton Production Credit Association excepts and brings the case here for review.
As we see the issue, the only question for us to determine is whether or not the Carrollton Production Credit Association, under the record, is entitled to all the funds in the hands of the sheriff (less court costs). It is our opinion that this question is to be resolved around the fact produced from the evidence to the effect that the Carrollton Production Credit Association has a prior claim by virtue of having filed its bills of sale prior to any others. The Commercial & Exchange Bank held an unrecorded bill of sale on the cotton and corn crop and on 2 Jersey cows. H. G. Jones, another creditor, had filed a claim on the corn and cotton crops. The controversy as between the creditors here concerns the law regarding advancements for the purpose of making crops for the year 1954. We have found no decision concerning this statute where one creditor obligates himself to furnish equipment and money and takes as security there for a bill of sale for such equipment and money furnished, and properly records the same, which would permit another creditor subsequently to such recording of the bill of sale by the first creditor to obtain a legal claim for money furnished to the same farmer to make a crop on the same premises during the same year. It is true that it is contended here by the Commercial & Exchange Bank of Bremen that the bills of sale of the Carrollton Production Credit Association covering the $770 hereinabove set out, included a prior existing debt and, therefore, rendered the lien of the Carrollton Production Credit Association inoperative. There is some evidence that L. C. Watson owed a certain amount on some insurance and a balance on the tractor at the time the note of the Carrollton Production Credit Association was executed. We see no reason why a creditor to whom a farmer is indebted may not take a note and a bill of sale which includes a then existing debt. No doubt it is quite often true that a party to whom a farmer owes an existing debt may be the one most likely to be willing to continue to assist the farmer in making a crop and taking security therefor by way of a bill of sale and including in the bill of sale the pre-existing debt. In the bill of sale executed by Watson to the Carrollton Production Credit Association, it apparently included an obligation on the part of the Carrollton Production Credit Association to furnish material and supplies and the advancement of additional sums of money for the purpose of making the crop and the bill of sale to protect the Carrollton Production Credit Association from loss for the amount in the first note and not for the advancement and indebtedness which the Carrollton Production Credit Association might extend to Watson. We will have something more to say later concerning this, supported by authority. Presently we will only state that there are creditors, one claiming the entire amount of the money in the hands of the sheriff realized from the proceeds of the sale, one by its duly recorded bills of sale and the others by having furnished money to the same party for the purpose of making a crop on the same premises, under Code 67-1105 and 67-1301. It is contended here that the Carrollton Production Credit Association is not entitled to all the funds in the hands of the sheriff because of the indefiniteness of the bills of sale. We have considered the record carefully and we do not agree with this contention. In this connection, we call attention to Scoggins v. General Finance & Thrift Corp., 80 Ga. App. 847 (1 a) (57 S. E. 2d 686), wherein this court held: "Under Code 67-1403, when conditional bills of sale have been recorded in the county of the residence of the conditional vendee within thirty days from the date of their execution, such registration serves as constructive notice to the world of the existence of such instruments from the date of their execution." See McIntyre v. Burns, 81 Ga. App. 239 (58 S. E. 2d 442).
A bill of sale to personalty to secure debt stands on the same footing as a deed to realty to secure debt. See Code 29-401. The failure to record deeds and bills of sale is to the same effect as to recording of deeds and bargains of sale. See Code 67-2003 and 67-2501. We call attention to Luther Williams Bank & Trust Co. v. Sherwood, 53 Ga. App. 666 (1) (187 S. E. 193) which states: "in order for a creditor to levy an execution upon property covered by a valid bill of sale made to secure a debt, the creditor must first redeem the property by paying off in full the security debt; and a levy made without a compliance with such condition precedent is void." See also Hill v. Marshall, 18 Ga. App. 652 (90 S. E. 175); Bull v. Johnson, 63 Ga. App. 750 (2) (12 S. E. 2d 96); Keel v. Attaway, 65 Ga. App. 172 (15 S. E. 2d 562); Felder v. Middleton Hardware Co., 66 Ga. App. 572 (18 S. E. 2d 574). In Hicks v. Morris, 183 Ga. 116 (1) (187 S. E. 639) the Supreme Court said: "A deed of conveyance made under the provisions of Chapter 67-13 of the Code, relating to conveyances to secure debt, passes title to the property so conveyed until the debt is fully paid. 67-1301." See Decatur Lumber & Supply Co. v. Baker, 210 Ga. 184 (78 S. E. 2d 417), wherein it is said: " 'A debt of $1,000 . . . or any other present or future indebtedness or liability of mine to second party,' is unambiguous and is sufficiently broad by its terms to secure an indebtedness on open account existing at the time of the execution of the deed. A subsequent grantee of the grantor in the deed to secure debt was not entitled to have it canceled of record on the payment of $1,000, under the facts of this case . . .
"The prior indebtedness of the grantor in the deed to secure debt was secured by the deed, and the fact that the deed recited that it was given to secure a debt of $1,000, evidenced by a described note, 'or any other present or future indebtedness or liability,' of the grantor to the grantee, did not make it ambiguous. Moultrie Banking Co. v. Mobley, 170 Ga. 402 (152 S. E. 903); Dudley v. Reconstruction Finance Corp., 188 Ga. 91 (2 S. E. 2d 907); Rose City Foods v. Bank of Thomas County, 207 Ga. 477 (62 S. E. 2d 145), and cases cited."
The question concerning the clause "to secure present, past or future indebtedness" has been gone into fully by the Supreme Court in Hurst v. Flynn-Harris-Bullard Co., 166 Ga. 480 (143 S. E. 503). This principle has been followed continuously. See Zachry v. Industrial Loan &c. Co., 182 Ga. 738 (186 S. E. 832); Manchester Motor Company v. Farmers & Merchants Bank, 91 Ga. App. 811 (87 S. E. 2d 342), and Fourth National Bank of Columbus v. Howell, 92 Ga. App. 868 (90 S. E. 2d 78). The cases cited by counsel for the defendants are not applicable, under their respective facts.
The court erred in failing to award the funds in the hands of the sheriff to the Carrollton Production Credit Association, the plaintiff here, since the funds in the hands of the sheriff, (exclusive of court costs) were not sufficient to pay the indebtedness of Watson to Carrollton Production Credit Association.
Judgment reversed. Townsend and Carlisle, JJ., concur.
Claude V. Driver, Murphy & Murphy, L. P. Allen, contra.
Shirley C. Boykin, Boykin & Boykin, E. B. Jones, Jr., for plaintiff in error.
DECIDED DECEMBER 5, 1955 -- REHEARING DENIED DECEMBER 16, 1955.
Saturday May 23 02:50 EDT


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