TITLE 40 MOTOR VEHICLES AND TRAFFIC

Section 3. Certificates of Title, Security Interests, and Liens, 40-3-1 through 40-3-95.

ARTICLE 1 GENERAL PROVISIONS

40-3-2. Definitions.

As used in this chapter, the term:

"Boat trailer" means any vehicle without motive power designed for carrying boats, either partially or wholly on its own structure, which is being drawn by a self-propelled vehicle and operated over the public roads of this state.
"Commissioner" means the state revenue commissioner.
"Dealer" means a "dealer" as defined in Code Section 40-1-1 to whom current dealer registration plates have been issued by the commissioner.
(3.1) "Department" means the Department of Revenue.
"Homemade trailer" means a vehicle without motive power, designed for carrying persons or property either partially or wholly on its own structure and for being drawn by a self-propelled vehicle other than a self-propelled vehicle running exclusively on tracks, which trailer has been manufactured and constructed from component parts for personal use and not for the purpose of commercial resale.
"Identifying number" means the numbers and letters, if any, on a vehicle designated by the commissioner for the purpose of identifying the vehicle.
"Lien" means any lien created by operation of law and not by contract or agreement with respect to a vehicle and includes all liens mentioned in Code Section 44-14-320, other than that in paragraph (5) thereof, and all liens for taxes due the United States of America, constructive notice of which is given by filing notice thereof in the office designated by state law.
"Lienholder" means a person holding a lien created by operation of law on a motor vehicle.
To "mail" means to deposit in the United States mail properly addressed and with postage paid.
"Major component part" means any one of the following subassemblies of a motor vehicle:
1. Front clip assembly (fenders, hood, and bumper);
2. Rear clip assembly (quarter panels, floor panel assembly, and roof assembly, excluding a soft top);
3. Engine and transmission;
4. Frame; or
5. Complete side (fenders, door, and quarter panel).
(9.1) "Natural person" means an individual human being and does not include any firm, partnership, association, corporation, or trust.
"Rebuilt motor vehicle" means any motor vehicle which has been damaged and subsequently restored to an operable condition by the replacement of two or more major component parts.
"Salvage motor vehicle" means any motor vehicle:
1. Which has been damaged to the extent that its restoration to an operable condition would require the replacement of two or more major component parts;
2. For which an insurance company has paid a total loss claim and the vehicle has not been repaired, regardless of the extent of damage to such vehicle or the number of major component parts required to repair such vehicle, but shall not mean or include any stolen motor vehicle which has been recovered with the public manufacturer's vehicle identification number plate intact and the vehicle:
  1. Is undamaged;
  2. Has only cosmetic damage; or
  3. Has been damaged but only to the extent that its restoration to an operable condition will not require the replacement of two or more major component parts;
3. Which is an imported motor vehicle which has been damaged in shipment and disclaimed by the manufacturer as a result of the damage, has never been the subject of a retail sale to a consumer, and has never been issued a certificate of title.
  The term salvage motor vehicle shall not include any motor vehicle for which a total loss claim has been paid which vehicle has sustained only cosmetic damage from causes other than fire or flood.
"Security agreement" means a written agreement which reserves or creates a security interest.
"Security interest" means an interest in a vehicle reserved or created by agreement which secures the payment or performance of an obligation, such as a conditional sales contract, chattel mortgage, bill of sale to secure debt, deed of trust, and the like. This term includes the interest of a lessor under a lease intended as security.
"Security interest holder" means the holder of an interest in a vehicle reserved or created by agreement and which secures payment or performance of an obligation.

(Ga. L. 1961, p. 68, § 2; Ga. L. 1962, p. 79, § 1; Ga. L. 1964, p. 178, § 1; Ga. L. 1980, p. 518, § 1; Ga. L. 1981, p. 644, § 1; Ga. L. 1982, p. 3, § 40; Ga. L. 1982, p. 152, §§ 1, 2; Ga. L. 1984, p. 781, §§ 1, 2; Ga. L. 1989, p. 1186, § 6; Ga. L. 1990, p. 1657, § 4; Ga. L. 1990, p. 2048, § 3; Ga. L. 1993, p. 1260, § 4; Ga. L. 2000, p. 951, § 4-1; Ga. L. 2001, p. 1173, § 1-5; Ga. L. 2004, p. 452, § 1; Ga. L. 2005, p. 334, § 15-1/HB 501; Ga. L. 2007, p. 635, § 1/HB 183.)

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 2007, a comma was deleted following "Code Section 40-1-1" in paragraph (3).

Law reviews.

- For note on 1990 amendment of this Code section, see 7 Georgia. St. U.L. Rev. 329 (1990).

JUDICIAL DECISIONS

"Lien" excludes security interests.

- "Lien," as used in Ga. L. 1964, p. 178, § 1 (see now O.C.G.A. § 40-3-2) , means a lien created by operation of law and not by contract, thus excluding security interests. Atlanta Truck Serv., Inc. v. Associates Com. Corp., 146 Ga. App. 170, 246 S.E.2d 2 (1978).

Creation of security interest by leasing.

- Mere holding of title as a lessor of a leased motor vehicle does not give rise to a security interest therein, unless the interest arose under a lease intended as security. First Nat'l Bank v. Strother Ford, Inc., 188 Ga. App. 749, 374 S.E.2d 203 (1988).

"Security interest holder" not purchaser or vendee.

- "Security interest holder" is not a purchaser or vendee of, or a successor in title to, the motor vehicle in question; rather, even though in physical possession of the vehicle's certificate of title, the possessor is only the holder of a legally recognized interest therein. Wooten v. G.M.H. Auto Sales, Inc., 187 Ga. App. 331, 370 S.E.2d 165 (1988).

Effect of foreclosure on mechanic's lien.

- Automobile lessor does not, merely by initiating a foreclosure action in regard to a vehicle, thereby acquire any status as a secured party for purposes of obtaining a priority over the holder of a prior validly perfected mechanic's lien. First Nat'l Bank v. Strother Ford, Inc., 188 Ga. App. 749, 374 S.E.2d 203 (1988).

Liability for incomplete compliance with recording and insurance provisions.

- When a seller delivered possession of the automobile to the buyer and the transaction was complete as between them, even though compliance had not yet been made with the applicable recording and insurance provisions, the buyer was the "owner" of the automobile, and the buyer alone, and not the seller or the seller's insurer, was liable to a third party for injuries sustained in an accident while the buyer was driving the automobile. American Mut. Fire Ins. Co. v. Cotton States Mut. Ins. Co., 149 Ga. App. 280, 253 S.E.2d 825 (1979).

Potential owners.

- Under Ga. L. 1961, p. 68, (see now O.C.G.A. Ch. 3, T. 40), the owner of an automobile must necessarily be a natural person, firm, copartnership, association, or corporation. A person doing business in a trade name could be none of these except a natural person. Samples v. Georgia Mut. Ins. Co., 110 Ga. App. 297, 138 S.E.2d 463 (1964).

Bulldozer.

- Caterpillar 977L Traxcavator does not fall under definition of "motor vehicle" found either in O.C.G.A. § 10-1-31(a)(4) or general definition of "motor vehicle" under O.C.G.A. § 40-1-1(33) but does fit the definition of "special mobile equipment" under O.C.G.A. § 40-1-1(59). Battle v. Yancey Bros. Co., 157 Ga. App. 277, 277 S.E.2d 280 (1981).

"Rebuilt motor vehicle" construed.

- Motor vehicle which was a welded-together composite of parts of two cars was a "rebuilt motor vehicle" rather than a "salvage motor vehicle." Bill Davidson Buick, Inc. v. Sims, 187 Ga. App. 81, 369 S.E.2d 285 (1988).

Security agreement not required.

- To the extent that a debtor argued that a creditor's security interest had to be in writing, the need for a writing, as contemplated by O.C.G.A. § 40-3-2, was obviated because the debtor admitted on the stand that a vehicle constituted the collateral for the loans the creditor made to the debtor. Allen v. Santana, 303 Ga. App. 844, 695 S.E.2d 314 (2010).

Cited in Wooden v. Michigan Nat'l Bank, 117 Ga. App. 852, 162 S.E.2d 222 (1968); Citizens & S. Nat'l Bank v. Georgia Steel, Inc., 25 Bankr. 796 (Bankr. M.D. Ga. 1982).

OPINIONS OF THE ATTORNEY GENERAL

No particular form of "security instrument" is prescribed by Ga. L. 1961, p. 68 (see now O.C.G.A. Ch. 3, T. 40), and any written agreement that secures the payment or performance of an obligation should suffice as a "security instrument." 1962 Op. Att'y Gen. p. 308.

Caterpillar tractor, hyster, and bulldozer.

- Caterpillar tractor, hyster, and bulldozer used in snaking logs from swamps are "special mobile equipment." 1965-66 Op. Att'y Gen. No. 66-109.

Security interest must be perfected.

- Security interest must first be perfected in accordance with the Uniform Commercial Code (see now O.C.G.A. T. 11), and then in accordance with Ga. L. 1961, p. 68 (see now O.C.G.A. Ch. 3, T. 40), for "special mobile equipment." 1965-66 Op. Att'y Gen. No. 66-109.

Mobile home considered "vehicle."

- Mobile home is included under the definition of the term "vehicle" as a mobile home is a device by which a person or property may be transported or drawn upon a highway. 1962 Op. Att'y Gen. p. 303.

RESEARCH REFERENCES

Am. Jur. 2d.

- 7A Am. Jur. 2d, Automobiles and Highway Traffic, §§ 38, 47, 50. 51 Am. Jur. 2d, Liens, §§ 1, 3.

C.J.S.

- 60 C.J.S., Motor Vehicles, §§ 96 et seq., 193.

U.L.A.

- Uniform Motor Vehicle Certificate of Title and Anti-Theft Act (U.L.A.) § 1.

ALR.

- Who is "owner" within statute making owner responsible for injury or death inflicted by operator of automobile, 74 A.L.R.3d 739.

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