Cade v. Jenkins

Lumpkin, Justice. 1. Where a vendor of land takes notes for the purchase money, securing their payment by reservation of title in himself, which notes he afterwards transfers without recourse and without any transfer of the reserved title to a third party, this operates as a payment of the purchase money, the vendee’s equity becomes complete, and the vendor ceases to hold any interest in the land. Tompkins v. Williams, 19 Ga. 569; McGregor v. Matthis, 32 Ga. 417; Neal v. Murphey, 60 Ga. 389; Carhart v. Reviere, 78 Ga. 173. In such event, the debt evidenced by note loses its quality as a purchase money debt; the transferee becomes an ordinary creditor of the vendee, and cannot maintain attachment as for the purchase money. Hunt v. Harbor, 80 Ga. 746. In all the above cases there was no transfer of the realty in the. sale of the notes to the transferee. There being no provision for it, the title kept back by the vendor could not pass to the buyer of the notes, and the vendor having no further claim, either against the realty or against the vendee, the title, at least to the fulness of a perfect equity, would ueeessarily be cast upon the vendee. Thus the security for the debt would become extinguished. It is insisted for the plaintiff" in error that the same principle controls this case. Whether this may have been so before the act of October 22d, 1887, under the particular stipulations in the contracts here sued on, it is not necessary to decide. One of these contracts was signed by the defendant in attachment on October 17th, the other on October 27th, 1887; but they were both transferred and assigned to the 794 plaintiff on March. 7th, 1889. Consequently the act of 1887 applies, and affects the plaintiff’s rights under the transfers. By consulting the act it will be seen that it provides, in substance, that when any judgment has been rendered on a note or. other evidence of debt, given for tire purchase money of personal property, where the title to the same has been retained in the vendor, the holder of said note or other evidence of debt, may make and file and have recorded a bill of sale to the defendant for the property; and if said holder be dead, then his executor or administrator may make and file such bill of sale, whereupon said personal property may be levied on and sold under such judgment as in other eases; provided, said judgment shall be a lieu upon the property, and the proceeds of the sale thei’eof, prior to all other liens and claims, until the said judgment shall be fully paid off* and satisfied. Acts 1887, p. 62. This act is very similar in terms to §3654 of the code, which provides for filing a deed to land held under bond for titles prior to levying on it under judgment for the purchase money. But there is a signifi-* cant difference between the two. The statute touching realty gives the remedy specifically to the obligor in the bond for titles, and does not expressly extend it to any transferee of the purchase money debt. Yet it was held, where the vendor transferred the notes by indorsement for value, thus remaining liable on them, that he could still make the deed to the vendee for the benefit of the transferee, so as to enable the latter to levy on and sell the land under judgment upon the notes. Scroggins v. Hoadley, 56 Ga. 165. But the act touching personalty describes»the person having the remedy as the “holder” of the note. This language plainly indicates an intention to keep the security alive and available for the transferee of the note or other evidence of debt, and to put him in as favorable a position as the vendor, with respect to subjecting the specific property to the claim 795 for its purchase money. An assignment of the notes, since this act, does not extinguish the security, but carries it along, The debt does not lose its character as a purchase money debt, but its peculiar privilege is transmitted together with the instrument evidencing it. The fact that the assignment is made without recourse makes no difference, since the language of the act is broad enough to embrace any holder. All the cases cited above were cases of real property, where title was reserved to secure the purchase money. They fall under $3654 of the code, and obviously are of no authority on the present question. The case of Farrar v. Brackett, 86 Ga. 463, involved personalty, and the principle applicable to the transfer of notes given in purchase of realty was followed. From an examination of the record in that case, it appeal’s that the notes there spoken of were transferred on July 1st, 1886, before the act of 1887 came into operation. Besides, they were ordinary negotiable notes, and the contract between the parties contained no such stipulations as are found in this case; there was no mention of a transfer or of any rights to be enjoyed by the transferee. The contracts now sued on contain evidence that the parties’ intention does not conflict, if indeed it does not exactly coincide, with the effect which should be given the statute. The debtor agrees that the notes may be assigned without notice to him, and that if default is made in payment of the purchase money or of any part thereof, the vendors or their assigns at any time may take possession of the property or of any part thereof, and the power of sale is likewise conferred on the vendors or their assigns. These provisions seem designed to prevent an extinction of the security by the title passing into the vendees on assignment; in other words, the assignees are to have the benefit of the vendors’ reservation of title. Although 'there is imprecise and formal stipulation that title to 796 the property is to pass into the assignees, such a purpose might possibly be inferred from the whole scope of the contract. See Stanford v. Connery, 84 Ga. 731; First Nat. Bank v. Hartman Steel Co., 87 Ga. 435. At any rate the intention is clear enough that the debt Should not lose its status or character as a purchase money debt, even in the hands of the vendors’ assigns. 2. By virtue of the act just discussed, the holder of notes given for the purchase price of personalty occupies the same position in relation to the security afforded by the reservation of title as the vendor himself. It only remains to inquire whether the vendor, and therefore the holder, can use the proceeding by attachment for purchase money, in order to subject the property. Section 3293 of the code says: “Process of attachment may issue in behalf of any creditor whose debt is created by the purchase of property, upon such debt becoming due, when the debtor who created such debt is in possession of the property for the purchase of which the debt was created.” Here is no distinction between absolute sales and conditional sales; and no requirement that title shall be in the debtor, but it suffices if the debtor be in possession. Consequently there is nothing in the statute to forbid the vendor by conditional sale from using its remedy, and no reason appears why he should be excluded. The act of 1887 requires title to be put into the debtor before levy and sale under the judgment, but does not prescribe any special mode of obtaining judgment. It says, “ when any judgment” has been rendered, etc., which is comprehensive enough to include a judgment in attachment. Indeed, the counsel for plaintiff in error admits in his bill of exceptions, that the vendor could maintain attachment, and only insisted that the assignee of the notes could not. By taking the act of 1887 in connection with §3293 of the code, it appears that the assignee 797 of the notes may commence his suit to subject the specific property by'attaching for the purchase money. The attachment issues to secure possession of the property, ancb when it is thus impounded, the suit proceeds as in other cases. Upon obtaining judgment, the plaintiff may make and file and have recorded the bill of sale prescribed in the act, and then the property may be levied on and sold under the judgment. If for any good cause the attachment should be dismissed, the case could nevertheless proceed for a general judgment. Joseph v. Stein, 52 Ga. 332; Camp v. Cahn, 53 Ga. 558; Sutton v. Gunn, 86 Ga. 652. And the plaintiff would doubtless have, under such a judgment, the same right as to filing the bill of sale and selling the property in satisfaction of his demand. There was no error in refusing to dismiss the attachment. Judgment affirmed.