*1 68472. MANN INVESTMENT COMPANY COLUMBIA

NITROGEN CORPORATION. 612) Presiding Judge. Deen, “equipment At issue in this is a case whether certain lease” and accompanying note constitute a conditional sales contract or a “true supports If the lease.” the trial court’s a condi- tional sales further issue of rather true contract than a then there arises the priority competing security between the interests. party sought a action below, One to the to irrigation equipment underlying Chaney-Bush, likewise not a County ap-

action, use on his Coffee farm. Jowers and (Mann) pellant cap- Mann Co. entered into a contract Equipment pay- tioned “Master ment to Mann. given Lease” which set forth conventional upon including terms, that the default would revert According testimony trial, however, to Jowers’ at he was executing understand, “lease,” before the that when final the payment acquire was made he full would title to the a (one having sum nominal mentioned). dollar the amount he as recalled been Georgia exemption Jowers executed a sales tax form list- ing “purchaser,” affirming Mann as “dealer” and himself as and agricultural purposes. the was to be used him for Mann financing naming filed a statement Jowers as the debtor the Coffee County Courthouse. subsequently pay Jowers found himself unable balance ow- ing supply company Reyn- on account with farm one arranged by accepting He olds. with to settle the account payment acquiring pay- small cash ment remaining agreed balance. also to assume the remaining payments undisputed due Mann. It is that this transfer knowledge was made with consent, Mann’s financing reflecting that Mann filed no statement the transfer. turn, When fell into arrears on an account owed appellee (Columbia), Nitrogen pledged Columbia Co. he informing indebtedness, Columbia as for the money the latter that he still owed some on it. Columbia’s agent County noted from the Coffee records that Mann had on file original naming naming statement Jowers none but Reynolds; thereupon financing statement, Columbia filed also County, naming Reynolds. Coffee judgment against Reynolds later, Some time obtained note, on his filed writ of for the asserting action, intervened in the that it owned the collateral and superior had a claim to it Columbia. At trial the court that, alia, as fact inter “lease” found between Jowers and Mann Mann a financing arrangement was in fact a transfer irrigation equipment; knowledge made Mann’s naming Reynolds; financing consent; that Mann filed no an installment delivered to Columbia executed and equipment and security agreement involving note and *2 had filed a statement its and that Columbia proceeds; as a The court then concluded irrigation equipment. the describing sale, lease; the contract was not of law that Jowers-Mann matter refile, failing Jowers-Reynolds sale and by participating the equipment; interest and that perfected security its the Mann lost security interest and was possessed superior the appellee Columbia as appeal assigns On entitled the findings law and of error of the trial court’s conclusions of each shall the enumerations they fact which are based. We address on them, appellant lists an somewhat different from that which order require being appear those which combining consolidating Held: together. treated by sitting a cause of action is tried the court without

1. When that, is if jury, for the court’s there reviewing judgment the criterion support is court’s of competent findings sufficient evidence the fact, appeal. be on Lester findings then those must not disturbed (199 917) Allen, Colodny App. Constr. Co. v. 545 SE2d (1973). issue, here, When the as is the determination whether a “is intended document denominated on its face as lease as (a) case; however, by is to of each inclu be determined the facts the option sion of an does not itself make lease one (b) security, upon compliance intended option terms of the lessee or has the shall become property the owner of become no additional consideration a nominal consideration does make the lease one intended for (37). In security.” (Emphasis supplied.) OCGA 11-1-201 the instant § presented case was original at trial that lessee or purchaser, placed understood him in the terms the contract (b), Scrutiny forth in supra. situation set subsection the record refuted, this never and that evi discloses that evidence was other identify question dence was adduced as a tending to documents C. & S. conditional sales contract rather than a “true lease.” See Leasing Assn., 800, Equip. Savings App. Atlanta Fed. &c. Ga. 243) Peden, (1978); Equip “The Treatment of Mary L. Security ment Leases as & Agreements,” Wm. Rev. say 136. “plain We cannot the trial court error” committed finding “major equipment actually financing that the lease” ar Mann, rangement in favor of and we created a interest therefore affirm its of fact on this issue.

2. Having found without merit those enumerations of error which challenge propriety of the court’s regard- and conclusions ing the nature of the “equipment lease,” that, by we must conclude consenting sale of the from Jowers to a reflecting transfer, statement Mann lost its perfected security interest. Because Columbia’s properly filed, timely it therefore has the status of senior in question, and Columbia is possession. law entitled to

Had the in question document been determined the trial court to be a contract, lease rather than a sales requirements for filing under the Uniform Commercial Code applicable. See, would not be e.g., Sanders v. (5th Commercial Credit Corp., 398 F2d 988 Cir. 1968). Since the trial court rightly held the document to be a sales contract which would security interest, however, create a provi (2) sions of OCGA 11-9-306 clearly govern the original § transaction sequelae: “Except where this provides, article otherwise a se curity interest continues in collateral notwithstanding sale . . . thereof unless the disposition was authorized by the secured party . . .” (Emphasis supplied.) In the instant case it is undisputed that acquiesced in the transfer of the irrigation equipment *3 Jowers to and that Mann filed no financing statement thereafter. Under the section, then, cited Code per lost its security interest, fected properly belongs to Co lumbia. Judgment Banke, J.,P. Carley, Pope JJ., and Beasley, affirmed.

concur. J., McMurray, J., C. Birdsong, Sognier P. Benham, JJ., dissent. 26,

Decided November

Rehearing denied December Mills, Jr.,

Ben B. appellant. for

Roy Tritt, D. Charles Stebbins, III, C. appellee.

McMurray, Chief Judge, dissenting. Jowers, farmer, a sought to irrigation certain ment. He was advised the seller that he equipment, could lease the is, he “didn’t have go to money.” borrow the He leased it through Mann Company, a partnership. He executed a equipment master lease which terms, set forth the warranties, various identification of personal property and taxes, the return of the equipment, including other covenants as to the lessee’s obligation to pay period rent for a years. of seven All the terms of the lease were set forth therein including an description amendment and a of the requirement equipment subsequently of insurance. Jowers leased, as the well required pay under the monies himself to found unable supply company to a farm owed an account lease and addition Whereupon, by Reynolds. and Mann Invest- Company reference to into entered

ment assignment equipment consent to the lease as to written master stating specifically that the lessor lease but the above to (Jowers) any liability obligation under lessee did not release the not then the lease whether or accrued. owed to Colum- fell into on an account turn arrears (Columbia) security agreement Nitrogen Company and executed a

bia with informing respect Columbia, to Co- money Company with ref- he lumbia that still owed equipment equity irrigation interest in but had an same. erence to the duly in a shown as a debtor J. W. Jowers also was recorded with reference to showing as the secured Mann Investment irrigation equipment which was filed before the security agreement. Columbia subsequently judgment against obtained against Reynolds brought action obtain

and possession writ of permitted partnership, The of same and be foreclose. and claimed the Mann Investment filed an intervention lease as the owner of same under master Company. and Mann Investment Mann Invest- and between Jowers ment allowed to intervene. proceeded reference

The case to trial of the issues with to the petition possession. In its of fact the court deter- writ of the contract Jowers and Mann Investment mined while purports arrange- true it is to be a lease fact a in the ment and Mann Investment but title assigned ownership irri-

transferred to Jowers. Jowers then his gation equipment Reynolds exchange forgiveness debt and assumption payments to of the balance of the Jowers to Mann Invest- Company, thereby transferring possession *4 Reynolds knowledge with the and consent of Mann Investment Com- pany. part found, fact, The of its of court also as a security Reynolds delivered to Columbia an installment note and security granted in in which he interest proceeds executed a therefrom that he financ- duly ing law, In statement which was of recorded. conclusions court In- determined that transaction Jowers Mann vestment was a sale a lease and not and Mann Investment only security irrigation equip- interest in the retained participated then in a ment. It sale from Jowers to failing perfect a security interest in the then in it perfection lost the of the interest it had previously Therefore, irrigation equipment. had Columbia Nitrogen Company had the valid first security interest the irrigation equipment trial court it a writ pos- session. The appeals. intervenor majority

The here has considered the parol various heard before the trial court and has determined that the written in- styled strument master lease was not fact a lease but was actually a conditional sales contract which created a in- terest in favor of Mann therefore, Investment the find- ings of fact of the trial court were correct. It then determined that consented to the sale of the Reynolds, thus styled instrument an agreement or consent the lessor assigning the lease to was a consent to the sale of equipment by Reynolds. Jowers to Subsequently in a financing statement reflecting this trans- fer Mann perfected lost its interest the irrigation equipment, hence the trial court did not err in finding properly, belongs to Columbia Nitrogen Company, substance, finding the various enumerations of error of the inter- venor to be without merit. To all of I cannot agree. all,

First of the trial court has taken two written instruments with reference to the here, transaction the same being the master lease and the assignment clearly both showing Jowers as the lessee and Mann Investment Company lessor, as the and has rewritten them so as to determine same not a lease ment but as a conditional sales In addition, contract. the other instru- ment, which was a consent to the assignment of the lease to was determined to be a sale from Jowers in which it had participated and lost perfection of its security previ- it ously had in the irrigation equipment. The contracts here are not am- biguous, and the trial court erred affirming the rewriting of same parol based on testimony which inis conflict with the written instru- ments. This cannot be done unless the terms are ambiguous. See Stonecypher v. Ga. Power Co., (1), 183 Ga. 498 13); SE Smith v. Standard Co., Oil (1) (180 691).

Jowers testified that he leased the from Mann Invest- ment Company but that he believed that after years seven “the equipment would be mine if I made payments.” This, all the course, is not in the agreement. Under the lease at all times the equipment was that of the lessor and same was not a lease agreement. In addition, Reynolds being testified as to given pos- session of equipment by Jowers in which he forgave a certain indebt- edness owed by Jowers himto and then after he was default he

82 that Investment to Mann

returned the 13- OCGA See equipment. §§ Company Investment Mann 38- (formerly Code 20-704) 24-6-1 § Ann. (formerly Code § (271 SE2d Kalb, 246 Ga. Bank v. Commercial 501); Gwinnett 444). (271 SE2d Henry, 246 Ga. Trust Co. v. 216); Bank & Cobb trial finding of the support simply does not The evidence Invest- and Mann Jowers the lease transaction court Further, was unneces- it a lease. and not Company was a sale ment consented to Company Investment sary at the time that fil- security interest its perfect file and of the lease to assignment when irrigation financing statement ing another Reynolds. Accordingly, was transferred the lease Corporation Nitrogen in determining trial court erred supe- in the security interest priority a first had a writ granting it erred Company. Hence Investment rior to Mann Investment the intervenor possession against Corporation. Nitrogen favor of Columbia of all of consideration after argument, the sake of

Conceding for testimony, parol and the evidence, styled a instrument to Jowers a sale of this was could sell Jowers loan and that thereafter lease was a mere that the evi- (which agree I under no circumstances lost Mann Investment agree I proved), dence cannot security agreement perfected in not security interest is no waiver of simply There purchaser Reynolds. prospective of Mann part interest on the merely assigned Jowers who against released its claims never Production Compare Dixie Reynolds. interest he had to whatever 277). There is sim- Kent, App. Credit Assn. record that Mann whatsoever this ply no evidence Reynolds so as to look from Jowers to Company consented to the sale state- file second require it to alone and to (2) security interest continues that a provides ment. OCGA 11-9-306 § was author- disposition notwithstanding sale “unless otherwise, and in the ized the secured Code sec- Nothing any proceeds.” continues identifiable also perfect again requires Mann Investment tion interest as to the I reasons, am authorized respectfully I dissent.

For the above Ben- Judge Judge Sognier, Presiding Judge Birdsong, state that join ham this dissent.