O.C.G.A. § 11-9-317 (2019)

Annotations

Editor’s notes. Ga. L. 2010, p. 481, § 3-1/HB 451, not codified by the General Assembly, provides that: “This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the

document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act.” This Act became effective May 27, 2010. Ga. L. 2010, p. 481, § 3-2/HB 451, not codified by the General Assembly, provides that: “A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, com-

pleted, consummated, or enforced under that statute or other rule.” This Act became effective May 27, 2010. JUDICIAL DECISIONS Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Article 9 are included in the annotations for this Code section. Effect of perfection. - Following perfection of security interest, other creditors enjoy no priority over such security interest. General Lithographing Co. v. Sight & Sound Projectors, Inc., 128 Ga. App. 304, 196 S.E.2d 479, 1973 Ga. App. LEXIS 1466 (1973) (decided under former Code 1933, § 109A-9-301). Knowledge of security interest. - Where security interest in an automobile was not properly recorded and was documented only in divorce decree’s incorporated agreement, the secured party failed to carry the burden of proving that buyer had actual knowledge of the secured party’s interest, even assuming the buyer had knowledge of the divorce. Freeman v. Bentley, 205 Ga. App. 409, 422 S.E.2d 435, 1992 Ga. App. LEXIS 1202 (1992) (decided under former Code Section 11-9-301). As a cotton gin bought a farmer’s cotton crop with actual knowledge, as defined by O.C.G.A. § 11-1-201(25), (27), of a bank’s security interest therein, but still withheld some of the proceeds of the sale, under O.C.G.A. § 11-9-315(a)(1), the gin was liable to the bank for conversion and was not entitled to summary judgment. Bank of Dawson v. Worth Gin Co., 295 Ga. App. 256, 671 S.E.2d 279, 2008 Ga. App. LEXIS 1350 (2008). Effect of filing. - Filing of financing statement can perfect only those interests acquired through security agreements. Tri-County Livestock Auction Co. v. Bank of Madison, 228 Ga. 325, 185 S.E.2d 393, 1971 Ga. LEXIS 560 (1971) (decided under former Code 1933, § 109A-9-301). Surety, under master surety agreement in which bankrupt had signed as principal, could not assert priority over trustee with respect to equipment of bankrupt on basis of equitable lien upon retained contract funds following surety’s completion of construction contract; without such eq-

uitable lien, surety, without perfected security interest, stood as general unsecured creditor which must defer to trustee. In re Merts Equip. Co., 438 F. Supp. 295, 1977 U.S. Dist. LEXIS 13631 (M.D. Ga. 1977) (decided under former Code 1933, § 109A-9-301). Unperfected security interest is subordinate to rights of lien creditors who acquire liens without knowledge of prior security interest and before its perfection; this operates in favor of creditor who has acquired lien on property involved by attachment, levy or the like. Mack Trucks, Inc. v. Ryder Truck Rental, Inc., 110 Ga. App. 68, 137 S.E.2d 718, 1964 Ga. App. LEXIS 547 (1964) (decided under former Code Section 11-9-301). Deemed unperfected security interests. - Although a bank’s security interests in equipment were properly perfected and remained so throughout a buyer’s acquisition of the equipment from the debtor, those security interests were deemed never to have been perfected as against a purchaser for value when the bank failed to file timely continuation statements, under O.C.G.A. § 11-9515(b), and the buyer took free of the security interests under O.C.G.A. § 11-9317(b) because the buyer did not have actual knowledge of the security interests. Four County Bank v. Tidewater Equip. Co., 331 Ga. App. 753, 771 S.E.2d 437, 2015 Ga. App. LEXIS 229 (2015). Judgment on note. - Judgment on debt for unpaid balance on note does not in itself operate to perfect security interest in collateral listed on note, and payee’s rights are subordinate to those of lien creditor who has no knowledge of security interest. Fas-Pac, Inc. v. Fillingame, 123 Ga. App. 203, 180 S.E.2d 243, 1971 Ga. App. LEXIS 1160 (1971) (decided under former Code 1933, § 109A-9-301). Judgment liens are subordinate. - The legislature intended to make judgment liens subordinate to purchase money security interests perfected within the

grace period contained in former subsection (2) of this section. Crossroads Bank v. Corim, Inc., 262 Ga. 364, 418 S.E.2d 601, 1992 Ga. LEXIS 586 (1992) (decided under former Code Section 11-9-301). Purchase money security interests. - A purchase money security interest has priority over a prior judgment lien only to the extent permitted by former subsection (2) of this section, which established a 15-day grace period for filing the purchase money security interest. Crossroads Bank v. Corim, Inc., 262 Ga. 364, 418 S.E.2d 601, 1992 Ga. LEXIS 586 (1992) (decided under former Code Section 11-9-301). Unperfected and untimely-perfected

purchase money security interests are subordinate to a judgment lien. Crossroads Bank v. Corim, Inc., 262 Ga. 364, 418 S.E.2d 601, 1992 Ga. LEXIS 586 (1992) (decided under former Code Section 11-9-301). Applying Canadian law. - to the facts of the case, a remote purchaser could not prevail over a creditor who had perfected its purchase money security interest in a truck within the time specified by Canadian law. Paccar Fin. Servs., Ltd. v. Johnson, 195 Ga. App. 412, 393 S.E.2d 685, 1990 Ga. App. LEXIS 525 (1990) (decided under former Code Section 11-9301).

RESEARCH REFERENCES U.L.A. Uniform Commercial Code (U.L.A.) § 9317.