44 S.E.2d 128 | Ga. Ct. App. | 1947
1. The motion to dismiss is not meritorious.
2. The term "pledge," used in an instrument whereby a sawmill and accessories are conveyed to a creditor to secure a debt, is ambiguous and subject to explanation. The testimony of the creditor to the effect that the intention was to create a mortgage was relevant and material and should not have been excluded. Under the facts, as shown above, and the fact that the property was not delivered to the creditor, the finding that the instrument was a mortgage was demanded, and the court erred in not awarding all of the funds in the sheriff's hands, exclusive of costs, to the creditor under the instrument indicated.
The facts with reference to this alleged mortgage foreclosure are as follows: C. M. McLain executed and delivered to Valdosta Plywoods Inc. a bill of sale to the property involved. Valdosta Plywoods Inc. executed the following instrument: "We the undersigned hereby sell, transfer and convey to L. R. DeLoach, all items described on bill of sale executed by C. M. McLain to Valdosta Plywoods Inc., as of this date, copy of which is attached hereto. We the sellers hereby acknowledge receipt of a 6% interest-bearing notice in the amount of $2300, executed by L. R. DeLoach as of this date, in consideration for transfer of title to the items referred to above, subject to compliance with the terms of the above described 1st-mortgage note. All items described by this bill of sale are tendered by the buyer as collateral and security on the note. Additional collateral and security tendered by the buyer on same note is described as follows: One 1942 Mercury Motor No. 99A50-5278. Valdosta Plywoods Inc., Seller, by D. E. Nichols, Pres. Freda M. Schurr, Notary Public, Georgia State at Large, My Commission *617 expires Dec. 29, 1946. Copy of this bill of sale is hereby Signed by purchaser and attached to above-described note, as witness of collateral and security to apply on same. Buyer, L. R. DeLoach. Freda M. Schurr Notary Public, Georgia State at Large, My Commission expires Dec. 29, 1946 (N. P. Seal) Recorded Sept. 24, 1946, Book 110, page 161, Louise Dickinson, Dept. Clerk." On April 24, 1946, L. R. DeLoach executed a promissory note for $2300 to Valdosta Plywoods Inc., and on April 30, 1946, a note for $665. On the back of the $665 note is the following: "Security: First Mortgage on one U 40 Power Unit, Allis-Chalmers No. 35538U with 12x12 pulley. L. R. DeLoach." On May 9, 1946, DeLoach executed a note to Valdosta Plywoods Inc. for $275. On May 30, 1946, DeLoach executed a note to Valdosta Plywoods Inc. for $3815. After the signature of the witness to the note the following appears: "This note supersedes and includes attached notes totaling $3240." (The notes set forth above.) On the back of the $3815 note is the following: "As security for this note the following equipment is pledged: (Description of property sold by the sheriff) L. R. DeLoach."
On the hearing of the money rule before the judge, it was stipulated by counsel as follows: "1. That Valdosta Plywoods Inc. did not surrender and did keep and retain all of the notes given to it by L. R. DeLoach, which notes are mentioned in the pleadings. 2. That D. E. Nichols, President of Valdosta Plywoods Inc. handled the transactions on behalf of Valdosta Plywoods Inc. with L. R. DeLoach. 3. That D. E. Nichols would testify as follows: (a) That the purpose and intent of the entry on the face of the note given by L. R. DeLoach to Valdosta Plywoods Inc., dated May 30, 1946, as follows: "This note supersedes and includes attached notes totaling $3240.00,' was to evidence that the amount of the note included other notes referred to and was not intended to evidence that such other notes had been paid or delivered up. (b) It is further agreed that the said D. E. Nichols would testify that the purport and intention of the entry on the back of the note above referred to as follows, `As security for this note the following equipment is pledged,' was to evidence that the property mentioned was given as security for the payment of the note and that the transaction constituted a mortgage. The said D. E. Nichols would also testify that he does not know the import in legal contemplation *618 of the term `pledged,' and that it was used in connection aforesaid to evidence that the property mentioned was mortgaged a security for the payment of the debt. 4. It is agreed that L. R. DeLoach did not make delivery of the property of Valdosta Plywoods Inc. at or subsequent to the time the said note was given.'
The court in its judgment found that there was no ambiguity in the language of the instrument of May 30, 1946, or in the indorsement thereon; that this instrument superseded (did away with, supplanted, made inefficacious, obliterated, displaced, set aside and made void) all of the prior notes and mortgages; that the language of the indorsement is not ambiguous and that the words constituted a pledge and not a mortgage; that new advances were included in the $3815 note; that the pledge failed because of nondelivery of the property; that the evidence offered on behalf of Valdosta Plywoods Inc. (in the form of a written stipulation between counsel for the interested parties) is excluded and the objection thereto is sustained; that the claims of the other two creditors be paid and the balance be paid to DeLoach.
Valdosta Plywoods Inc. filed its bill of exceptions, reciting the foregoing facts and assigning error as follows: "Whereupon, to the action of the court in excluding the evidence offered in behalf of the plaintiff, to the effect `that the purpose and intent of the entry on the face of the note given by L. R. DeLoach to Valdosta Plywoods Inc., dated May 30, 1946, as follows, "this note supersedes and includes attached notes totaling $3240.00," was to evidence that the amount of the note included other notes referred to and was not intended to evidence that such other notes referred to had been paid or delivered up,' and in holding, under the evidence that Valdosta Plywoods Inc. `holds only an unsecured note for $3815.00,' and in ordering payment of the claim of Economy Oil Company and A. J. Strickland, executor, in preference to that of Valdosta Plywoods Inc., then and there excepted and here and now excepts and assigns said several rulings as error upon the ground that the same were error and are contrary to law, in that said evidence should have been considered and the claims of the plaintiff should have been sustained and ordered paid in preference to the claims of Economy Oil Company and A. J. Strickland, executor." *619 1. The motion to dismiss the writ of error is on the ground that there is no valid assignment of error. While the assignments may not be as technically accurate as they might have been, the final judgment is excepted to and likewise the exclusion of the evidence offered. The order excluding the evidence shows the grounds of exclusion and the exception under such circumstances is sufficient to apprise this court of the contention made.
2. The court erred in excluding the evidence and in ordering the claims of the other two creditors paid in preference to the claim of the plaintiff in error. "No particular form is necessary to constitute a mortgage. It must clearly indicate the creation of a lien, specify the debt to secure which it is given, and the property upon which it is to take effect." Code, § 67-102;Horton v. Murden,
In various transactions between the plaintiff in error and DeLoach various terms were used to show the nature of the security given. In one instrument it was stated, "All items described by this bill of sale are tendered by the buyer as collateral and security on the note." The court properly held that those terms created a mortgage, and we can see no distinction between that provision and the one in the last instrument, the one with which we are dealing. To tender collateral and security implies a pledge about as much as the word "pledge" itself. So, under the facts and circumstances of the case we hold that the court erred in excluding the evidence indicated and in finding against the plaintiff in error. These circumstances, to sum up, are, the nature of the property and the consequent ambiguity of the term "pledge;" the non-delivery of the property to the payee of the note; and the stipulated testimony of Nichols as to the meaning of "pledge."
This ruling does not conflict with the general principle that in cases of doubt the transaction must be construed to be a pledge. For this principle to apply, all the elements of a pledge must be present, including delivery of the property, an element which is not present in this case. Failure to record the instrument and prejudice to third parties are not involved in this case. Neither is the prejudice of third parties involved because of the ambiguous term "pledge." The transaction as it was intended between the immediate parties is controlling. Code, §§ 67-109, 67-1305; Mackler v. Lahman,
The court erred in not finding that Valdosta Plywoods Inc. had a prior claim and was entitled to the funds in question.
Judgment reversed. Sutton, C. J., and Parker, J., concur.