Court Opinion

ID: 5586272
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:54:26.186028+00
Date Added: 2024-06-11T08:36:15.455801
License: Public Domain

Hines, J.
I can not agree to the rulings made by the court in the latter paragraph of the second division of the opinion. The Flemming Motor Company sold to Jesse A. Drake an automobile under an oral contract of sale, in which title was reserved in the vendor until the purchase-price was paid. The seller instituted, in Early superior court, an action of trover against Chester A. Drake, a resident of Early County, and Jesse A. Drake, a resident of Miller County. The majority of the court hold that the action would not lie against Chester A. Drake, although he'had no title to, interest in, or lien on the automobile, nor had he extended credit on the apparent ownership of the machine to the purchaser; in other words, the majority hold that an oral contract of sale, in which title is reserved, while good between the parties, is invalid against all other parties whatsoever. This involves a proper construction of section 3318 of the Civil Code. This section declares that a “conditional sale, in order for the reservation of title to be valid as against third parties, shall be evidenced in writing, and not otherwise;” that “the written contract of every such conditional sale shall be executed and attested in the same manner as mortgages on personal property;” but that, “as between the parties themselves, the contract as made by them shall be valid and may be enforced, whether evidenced in writing or not.” Do the words “third parties” embrace all the world except the parties themselves? To arrive at the meaning of this term, we must look to *877the object of this statute. Before the passage of the statute now embraced in this section, a parol reservation of title was good not only against the vendee, but against all persons dealing with him. Goodwin v. May, 23 Ga. 205. The manifest purpose of the statute was to protect persons dealing with the vendee in a conditional contract for the sale of personalty. In Merchants & Mechanics Bank v. Cottrell, 96 Ga. 168, 170 (supra), this court said: “The main object of the statute was to prevent frauds and perjury which, in the absence of such a law, might be practiced by debtors and others in collusion with them to defeat creditors seeking to subject to their claims property apparently belonging to the debt- or.” The term “third parties,” as used in this section of the Code, and in accordance with the general law, means creditors having a lien on the property conditionally sold, and not ordinary creditors, and as to the latter the conditional-sale contract was valid though not recorded. In Bacon v. Hanesley, 19 Ga. App. 69 (90 S. E. 1033), it was held that “The phrase ‘third parties/ as used in section 3318 of the Civil Code, means such creditors as have secured a lien upon the property. John Deere Plow Co. v. Anderson, 174 Fed. 815 (98 C. C. A. 923, 23 Am. B. R. 480); Central Trust Co. v. Marietta & North Georgia Ry. Co., 48 Fed. 868 (1 C. C. A. 133).” These words do not include one whose title has been acquired by gift, and who has parted with no valuable consideration. Kaplan v. Collier, 16 Ga. App. 620, 622 (85 S. E. 946). So clearly the term “third parties” embraces only purchasers from the vendee in the conditional bill of sale, creditors who have obtained liens on the property by contract or by operation of law, or who have extended credit to the vendee on the strength of his apparent ownership of the property. It was never intended by this statute to protect persons who had not purchased from the vendee the property to which title was reserved by the seller, who had no interest in such property, who had acquired no lien thereon, and who had extended ho credit to the vendee upon the strength of his apparent ownership of the property. The object of the statute was to prevent fraud, not to protect fraud. A parol reservation of title is admittedly good between the parties. It is equally good between the seller and others, who have no title to, interest in, or lien on the property to which the title is reserved by the seller. It was never intended by this statute to permit a *878person, by merely getting possession of property, and who. had no title to, interest in, or lien on it, to defeat the just rights of a seller merely because the reservation of title was not evidenced in writing. The statute of frauds was never intended to encourage fraud. Robson v. Harwell, 6 Ga. 589; Jenkins v. Lane, 154 Ga. 454 (115 S. E. 126).
So I am unable to agree to the opinion of the majority which holds that a parol reservation of title can not be enforced against a person who has acquired no interest in the property title to which has been reserved by the seller under an oral contract of sale. A written conditional sale of personalty is good against all persons who do not acquire liens against the vendee after the sale is made; and if the sale is recorded as well as written, it is good even against them. Rhode Island Loco. Works v. Empire Lumber Co., 91 Ga. 639 (17 S. E. 1012).