Court Opinion

ID: 9673789
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:18:33.465963+00
Date Added: 2024-06-11T18:14:02.719488
License: Public Domain

DISSENT
DAVIS, Justice.
I dissent. The house trailer was sold by “M.” System, Inc., to Stevens Trailer Sales, Inc., hereinafter referred to as Stevens, on November 16, 1961, and apparently was delivered to 2114 Piedmont Road, Atlanta, Georgia. The house trailer was then sold on January 23, 1961, by Stevens to Kenneth E. Smith. Smith executed a Chattel Mortgage in favor of Pioneer Finance Company on January 26, 1962. Pioneer Finance Company paid Stevens. The appellee is not men*926tioned in this transaction. Appellant purchased the trailer house on July 26, 1962, from Kenneth E. Smith. The appellee was not mentioned in this transaction.
The Contract of Sale provides, in part, as follows:
“3. Buyer shall not remove said property from the place of business herein-below described without the written consent of the Seller or assigns, nor use the same for any unlawful purpose, nor sell, encumber nor permit any liens to be incurred against the same, except as hereinafter provided: Buyer may display said property at its place of business herein-below described for resale for cash only, provided that when a sale is made, all of the proceeds of said sale whether in cash or in kind, which shall not be less than the deferred balance above indicated, shall be received by the Buyer in trust for the Seller or assigns and shall be immediately transferred by the Buyer to Seller or assigns. Said proceeds in form as received by Buyer on resale shall be the property of the Seller and shall not be used by the Buyer for any purpose. At any time Seller or assigns may examine the personal property herein sold, together with the books and records of the Buyer with reference to the above obligation.
“ * * . *
“8. This contract, the note given in connection therewith, and the formalities of execution thereof including witnessing and acknowledgment shall be a contract of and construed pursuant to the laws of the state where the property shall be located, which shall be only the place of business of the dealer (Buyer) hereinbe-low set forth.”
The contract provided that Stevens could sell the trailer house and the money would become the property of M. System, Inc., or its assigns. The place of business of Stevens was 2114 Piedmont Road, Atlanta, Georgia.
Appellant filed a motion that the trial court take judicial notice of the laws of the State of Georgia. The motion was granted.
On the date of the Bill of Sale and Conditional Sales Contract and Note, November 16, 1961, Georgia did not have in effect a Certificate of Title Act. Art. 68-4A, Code of Georgia, took effect July 1, 1962. Statutory and case law applies to the transactions between Stevens and appellee’s predecessor. Under the Georgia law, such contracts must be duly recorded. The Bill of Sale and Conditional Sales Contract was nowhere recorded, and the Conditional Sales Contract provided for the resale of the house trailer. There is no allegation or proof that the contract was recorded in Georgia, or anywhere else. There was a conversion of the house trailer when it was sold by Stevens to Smith, and there was a further conversion when it was sold by Smith to appellant. More than two years time elapsed after the sale of the house trailer to Smith and by Smith to appellant, and the only recourse that the appellee has is a suit for damages against Stevens. I think the law of Georgia is applicable. Peoples Loan & Finance Corporation of Rome v. McBurnette (1959), 100 Ga.App. 4, 110 S.E.2d 32; 47 Am.J. 57 § 863; Jewelers Investment Company, Inc. v. Elliott Addressing Machine Co. (1957), 95 Ga.App. 152, 97 S.E.2d 548; Mize v. Paschal (1949), 206 Ga. 189, 56 S.E.2d 266; Lewis v. Jackson (1960), 102 Ga.App. 573, 117 S.E.2d 209.
There was no pleading nor proof of fraud. I think that Art. 5526, V.A.C.S. is applicable. The sale of personal property to Smith and appellant was without notice of any lien whatever. They were innocent purchasers for value. There was no effort on their part to try to sell the same, and nobody was negligent except the appellee and its predecessors in title, because they had a Note that was payable 30 days after the date of sale. The appellee’s Note was for the sum of $4,131.00, and was due 30 days after November 16,1961. They did not take any action until more than two years after the property was sold. I think the following *927cases are applicable: Luter v. Hutchinson (1902), 30 Tex.Civ.App. 511, 70 S.W. 1013, N.W.H.; Port Arthur Rice Milling Co. v. Beaumont Rice Mills (1912), 105 Tex. 514, 143 S.W. 926; Clevenger v. Galloway & Garrison (Tex.Civ.App.1907, W.R.), 104 S.W. 914; Ellis v. Heidrick (Tex.Civ.App.1914, W.R. W.M.), 154 S.W.2d 293; Meyer Bros. Drug Company v. Fry (1898), Tex.Civ.App., 48 S.W. 752, N.W.H.
Smith, without any notice of the lien whatever, purchased the trailer house for a cash selling price of $6,191.34. He paid $953.34 in cash, and a trade-in allowance of $585.00. He executed a chattel mortgage to be paid off in 84 monthly installments of $87.23 each, or a total of $7,326.32. Smith sold his equity to appellant for $100.00 and the assumption of the balance due on the note. If appellant is required to pay the $4,131.00 that is claimed by the appellee, plus the $7,326.32 that is due to Pioneer Finance Company, that would be degrading. The blame for the situation that exists here is due to the action of Stevens and the negligence on the part of the appellee and its predecessor in title.
As I study the provisions of the contract it seems to me that the lien claimed by ap-pellee was released when the property was sold by Stevens to Smith. The money that was paid to Stevens, along with the trade, by Smith and Pioneer Finance Company became the property of the appellee and its predecessor in title. The sale was made according to the contract and the money was paid to Stevens, “IN TRUST”. If appellee and its predecessors in title had been diligent they could have collected from Stevens. I am a strong believer in the principle of: “That which is morally is, and of right ought to be, the law.” If these principles are applied to the contract, and the action of the parties, the appellant is an innocent purchaser as far as the appellee and its predecessors in title are concerned.
I would sustain the appellant’s point of error and would reverse and render the judgment in favor of the appellant.