138 Ga. 258 | Ga. | 1912
An attachment issued in favor of George W. Yoyles against W. S. Pickett, and was levied, on November 10,
The controlling question in the case is whether a conditional bill of sale, attested by a stockholder of the claimant corporation, who is a notary public, and recorded within the statutory period, shall prevail over the lien of a subsequent attachment on the property. The statute provides that when personal property is sold and delivered with the condition affixed to the sale that the title shall remain in the vendor until the purchase-price shall have been paid, such conditional sale, in order for the reservation of title to be valid as against third persons, shall be evidenced in writing. The statute further provides that conditional sales shall be recorded within thirty days from their date, and in other respects shall be governed by the laws relating to the registration of mortgages. Civil Code, §§ 3318, 3319. In order for a mortgage to be entitled to registry it must be executed in the presence of and attested by, or proved before, a notary public or justice of any court of this State or a clerk of the superior court (and, in case of real property, by one other witness). Civil Code, § 3258. A mortgage recorded without due attestation or probate shall not be held notice to subsequent bona fide purchasers or younger liens. Civil Code, § 3262. The contention is that the conditional bill of sale was illegally attested, in that the notary public was pecuniarily interested in the transaction, and therefore its record was not constructive notice of its existence to the holder of the younger attachment lien.
The rule is universal that an officer can not take an acknowledgment of his own deed. And, “because of the probative force
It is maintained in a large majority of the decided cases, on this_ point, that a stockholder of a corporation beneficially interested in an instrument is disqualified from taking an acknowledgment thereof. 1 Devlin on Real Estate, § 477b. See note to the case of Ardmore National Bank v. Briggs Machinery Co., 16 Am. & Eng. Ann. Cases, 133 (20 Okla. 427, 94 Pac. 533, 23 L. R. A. (N. S.) 1074, 129 Am. St. R. 747), where a large number of cases are collected and examined; Betts-Evans Trading Co. v. Bass, 2 Ga. App. 718 (59 S. E. 8). While it is conceded, under the doctrine of corporate entity, that a stockholder has no independent ownership in the corporate property, nevertheless, if the corporate property is enhanced in value, he gets the benefit of the enhancement in the increased value of his shares; and while this benefit may be small, the amount of beneficial interest can not be made the criterion of disqualification on the ground of interest. His shares of stock entitle - him to such aliquot part of the corporate property as his number of shares bears to the entire capital of the corporation. His holding of stock may be so large that almost any transaction of the corporation may affect the value of his shares. Indeed a corporation may have only one stockholder (Exchange Bank v. Macon Co., 97 Ga. 1, 25 S. E. 326, 33 L. R. A. 800), and in such a case there would be no difference, even in degree, between the pecuniary interest of the stockholder and of the corpora
All the authorities agree that if an instrument discloses on its face that it is not entitled to record, the actual record of it is ineffectual to charge the public with constructive notice. Herndon v. Kimball, 7 Ga. 432 (50 Am. D. 406); MacKenzie v. Jackson, 82 Ga. 80 (8 S. E. 77); 1 Cyc. 529. There is a difference of opinion in the American courts as to the effect of a record of an instrument defectively acknowledged, where the defect does not appear on the face of the record. Some courts hold- that a defectively acknowledged instrument is not entitled to record, whether the defect is apparent on the face of the instrument or not, and therefore the actual record of such an instrument does not import constructive notice. Smith v. Clark, 100 Ia. 605 (69 N. W. 1011); Kothe v. Krag-Reynolds Co., 20 Ind. App. 293 (50 N. E. 594). Others hold that where an instrument bearing a certificate of acknowledgment or proof which is regular on its face is presented to the recording officer, it becomes his duty to record it, and its record operates as constructive notice to third persons, notwithstanding there may be a hidden defect in the acknowledgment. National Bank of Fredericksburg v. Conway, 17 Fed. Cases, No. 10,037; Ardmore National Bank v. Briggs &c. Co., supra; Stevens v. Hampton, 46 Mo. 404; Morrow v. Cole, 58 N. J. Eq. 203 (42 Atl. 673). This court has never considered and adjudged the effect of the record of a defectively acknowledged instrument, where the defect was hidden, and the acknowledgment was regular on the face of the instrument, as between third parties in the determination of their respective rights. Nor do the facts require such adjudication in the instant case. But this court has decided, in at least three cases, that in a contest between a party to a defectively acknowledged instrument and an innocent third party, where the defect was hidden, such innocent third party may go dehors the record and show by extrinsic proof that the instrument was defectively acknowledged, and that as between them the record is not notice of the
The case in hand comes within the principle of these cases. The circumstances attending the execution of the conditional bill of sale authorize the inference that the managing officials of the corporation knew, at the time of its execution, that the attesting witness was a stockholder of the corporation. Of course • he was bound to know the law, that a stockholder, who is a notary, can not take the acknowledgment of an instrument to which the corporation is a party. Therefore knowledge to the corporation is imputable that the conditional bill of sale was not entitled to go to record, and its procuring the record of an instrument not entitled to record, and known to be such at the time, can not serve to defeat
■ The claimant further contends, that, aside from the defective attestation of its conditional bill of sale, it is entitled to prevail over the attaching creditor, because the latter’s lien was based on an indebtedness incurred previously to the execution of its conditional bill of sale. We do not think so. The statute provides that a mortgage or conditional sale recorded without due attestation or probate shall not be held notice to subsequent bona fide purchasers or younger liens. Civil Code, § 3262. This statute makes it the duty of a mortgagee ip see that his mortgage is duly attested for record; and if he fails in this regard, then his mortgage is postponed to younger liens. The question is not an open one; for it has been distinctly decided that “a judgment junior in date to a mortgage illegally recorded for want of probate, but founded on a debt antecedent to the date of the mortgage, has priority of lien to the mortgage.” Andrews v. Mathews, 59 Ga. 466; Richards v. Myers, 63 Ga. 762; New England &c. Co. v. Ober, 84 Ga. 294; Cottrell v. Merchants & Mechanics Bank, 89 Ga. 508 (15 S. E. 944). As the same rules govern the priority of conditional bills of sale, as affected by registry, which govern the registry of mortgages, it follows that if the conditional bill of sale be illegally recorded, the property therein described is subject to a younger attachment lien founded on an antecedent debt.
Judgment affirmed.