Court Opinion

ID: 3403020
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:15:24.432757+00
Date Added: 2024-06-11T13:35:29.760296
License: Public Domain

An unforeclosed retention-of-title contract can not at law be the basis for a claim to money which is in court for distribution.
                          DECIDED MARCH 11, 1941.
C. I. T. Corporation sued out a money rule, in the name of W. L. Andrews Motor Company for its use, against the sheriff of Floyd County. The substance of the petition as amended was as follows: The C. I. T. Corporation instituted a trover suit against W. O. Smith, to recover a certain automobile, based on a retention-of-title contract signed by Smith, payable to W. L. Andrews Motor Company and duly assigned to C. I. T. Corporation. Smith defended the suit on the grounds that he had not defaulted in the payment of any installment, and that the suit was premature. Pending the trial the automobile was sold under a "short order." Smith prevailed in the trover suit. There was still due and unpaid on the purchase contract more than the amount realized from the sale of the automobile. Smith had no *Page 482 
interest in the money in the sheriff's hands, and the plaintiff was entitled to it. W. L. Andrews Motor Company had reacquired the contract by a repurchase agreement before the filing of the rule. The prayer was that the sheriff be required to pay over to the C. I. T. Corporation the money arising from the sale of the automobile. The sheriff and Smith acknowledged service of the petition and rule nisi. Smith filed an answer and demurrer. The evidence showed, that the W. L. Andrews Motor Company had repurchased the contract; that it had been delivered to it, and that it had no further claim on Smith; that there were no executions in the hands of the sheriff which it was contended were liens on this money in his hands; that Smith prevailed in the trover suit in which the sole issue was whether that suit was prematurely sued out. The judge passed an order requiring the sheriff to pay over the proceeds of the sale of the automobile to the C. I. T. Corporation, and Smith excepted.
1. It would seem that when the C. I. T. Corporation unqualifiedly and without reservation, in the absence of fraud or mistake, resold the contract to the W. L. Andrews Motor Company, it had no further interest in the contract. Whether the purchase of the car at a short-order sale is such a repossession of the car as to require the motor company to repurchase the contract under its repurchase agreement with C. I. T. Corporation will not now be passed on, as the terms of the repurchase agreement do not appear.
2. The petition did not allege insolvency of Smith, or any other fact which would give equity jurisdiction of the subject-matter. The petition was merely an effort to foreclose as a mortgage a retention-of-title contract under the proceedings of a money rule against the sheriff. There was no foreclosure of the contract at law, and no execution was placed in the sheriff's hands. An unforeclosed retention-of-title contract, to all intents and purposes, so far as foreclosure and enforcement against the property or maker are concerned, is the same as an unforeclosed mortgage: and it has repeatedly been held that an unforeclosed mortgage can not, in a court of law, claim money which is in court for distribution. Thornton v. Wilson,55 Ga. 607; Baker v. Gladden. 72 Ga. 469; *Page 483 Ennis v. Harralson, 101 Ga. 282 (2) (28 S.E. 839);National Bank of Athens v. Exchange Bank, 110 Ga. 692 (36 S.E. 265); DeVaughn v. Byrom, 110 Ga. 904 (36 S.E. 267). The fact that equitable principles apply in money-rule proceedings does not mean that in a court of law one may "hurdle" a jurisdictional requirement. A court of law cannot have jurisdiction to decide the equities between liens until it first has the liens themselves, in the forms of executions, in the sheriff's hands. In this case the attempt is made to circumvent that requirement. Only a court of equity can do that, and there must exist some extraordinary reason for it. All of the Supreme Court cases cited by the defendant in error were cases in equity. If there is anything contrary to the above decisions in Wright v. Brown,7 Ga. App. 389 (66 S.E. 1034). and Thrash v. Harman,21 Ga. App. 98 (94 S.E. 54), they must yield to the controlling authority. Under the above rulings it was error to order the sheriff to pay the money in his hands to the C. I. T. Corporation.
Judgment reversed. Stephens, P. J., concurs specially.Sutton, J., dissents.