O.C.G.A. § 44-14-63 (2019)

Annotations

Cross references. Imposition, rate, collection, and assessment of taxes, § 48-6-60 et seq. Law reviews. For comment on Manchester Motors, Inc. v. Farmers & Merchants Bank, 91 Ga. App. 811, 87 S.E.2d 342 (1955), see 18 Ga. B.J. 82 (1955).

JUDICIAL DECISIONS ANALYSIS GENERAL CONSIDERATION RECORDING EFFECT OF FAILURE TO RECORD

General Consideration O.C.G.A. § 44-14-210 did not repeal O.C.G.A. § 44-14-63, nor did it alter its effect, it not being in conflict therewith. Cooke v. Adams Bros. Co., 148 Ga. 289, 96 S.E. 499, 1918 Ga. LEXIS 307 (1918). Section applies to bills of sale and deeds to secure debts. - O.C.G.A. § 44-14-63 by its express terms applies as well to a bill of sale of personalty to secure debt as to deeds of conveyance of realty to secure debt. Butler v. LaGrange Grocery Co., 29 Ga. App. 612, 116 S.E. 213, 1923 Ga. App. LEXIS 140 (1923). Deed absolute in form. - Although a deed may have been on its face an absolute deed and expressed a valuable consideration, yet if it was given to secure a debt, falls under O.C.G.A. § 44-14-63. Cabot v. Armstrong, 100 Ga. 438, 28 S.E. 123, 1897 Ga. LEXIS 80 (1897). Chattel mortgages. - Under O.C.G.A. § 44-14-63 a chattel mortgage to be valid as against other liens must be recorded. In re Smith, 281 F. 574, 1922 U.S. Dist. LEXIS 1504 (D. Ga. 1922). See also Osborne v. Hill, 91 Ga. 137, 16 S.E. 965, 1892 Ga. LEXIS 535 (1892). Necessity for record. - Prior to the passage of the act from which O.C.G.A. § 44-14-63 was taken, recordation of a chattel mortgage was not required. Tift & Co. v. Dunn, 80 Ga. 14, 5 S.E. 256, 1887 Ga. LEXIS 311 (1887). Effect of § 44-14-101. - A security deed executed under O.C.G.A. §§ 44-1460, 44-14-61, 44-14-63, 44-14-67, and 4414-66, after the passage of O.C.G.A. § 4414-101, to convey cultivated farmland as security for debt, does not ordinarily comprehend crops matured or unmatured on the land. Penn Mut. Life Ins. Co. v. Larsen, 178 Ga. 255, 173 S.E. 125, 1934 Ga. LEXIS 26 (1934). Instrument in form of absolute deed. - Where the instrument is written in the form of an absolute conveyance and does not within itself disclose that title is passed merely as security for a debt, the record of the conveyance puts the world upon notice that no interest or equity in the land remains in the grantor, and one subsequently dealing with the grantor could not be misled or injured by the statement of the consideration as con-

tained therein. McClure v. Smith, 115 Ga. 709, 42 S.E. 53, 1902 Ga. LEXIS 542 (1902); McIntire v. Garmany, 8 Ga. App. 802, 70 S.E. 198, 1911 Ga. App. LEXIS 153 (1911); Bank of Chatsworth v. Patterson, 148 Ga. 367, 96 S.E. 996, 1918 Ga. LEXIS 342 (1918). A parol agreement extending the security to an additional indebtedness is not to be taken as varying the written terms of the instrument, and is good, since where the form is that of an ordinary warranty deed, the mere naming of a consideration is not to be taken as stating any amount of security or limiting it to any particular sum. Hester v. Gairdner, 128 Ga. 531, 58 S.E. 165, 1907 Ga. LEXIS 160 (1907); Wiggs v. Hendricks, 147 Ga. 444, 94 S.E. 556, 1917 Ga. LEXIS 255 (1917); Troup Co. v. Speer, 23 Ga. App. 750, 99 S.E. 541, 1919 Ga. App. LEXIS 333 (1919). Instrument specifying amount of loan. - Where an instrument made in the form of a security deed by its own language specifies and thus limits a debt in a named amount as being the one which it is actually intended to secure, the record of the instrument will not suffice to give to the grantee thereunder any priority over third persons who may have subsequently and in good faith acquired a lien upon the same property, except as to the amount of the particular indebtedness thus specified. American Nat’l Bank v. Brooks, 143 Ga. 320, 85 S.E. 117, 1915 Ga. LEXIS 416 (1915); Skinner v. Elliott, 17 Ga. App. 511, 87 S.E. 759, 1916 Ga. App. LEXIS 737 (1916); Bank of Cedartown v. Holloway-Smith Co., 146 Ga. 700, 92 S.E. 213, 1917 Ga. LEXIS 451 (1917); A. Leffler Co. v. Lane, 146 Ga. 741, 92 S.E. 214, 1917 Ga. LEXIS 477 (1917). As between the parties themselves the rule would be different, and although a deed may be given as security for a named indebtedness in a specified amount, it is competent for the parties to extend the security by agreement so that as between them it shall cover an additional indebtedness. Wylly v. Screven, 98 Ga. 213, 25 S.E. 435, 1896 Ga. LEXIS 10 (1896); Hester v. Gairdner, 128 Ga. 531, 58 S.E. 165, 1907 Ga. LEXIS 160 (1907); Troup Co. v. Speer, 23 Ga. App. 750, 99 S.E. 541, 1919 Ga. App. LEXIS 333 (1919).

Whether a conditional sale contract is properly attested is immaterial between the original parties or between the maker and a transferee. Carter v. Commercial Credit Co., 58 Ga. App. 470, 198 S.E. 792, 1938 Ga. App. LEXIS 12 (1938). Recording The purpose of the recording statute is to protect against the negligent. - O.C.G.A. § 44-14-63 made it the plain duty of a grantee to record the deed, thereby giving constructive notice to everyone of its existence and of the grantee’s rights thereunder; and since it is thus made the duty of such grantee to supply notice, everyone is justified in relying upon an examination of the record and believing that a purchase of land will convey all title which the record fails to disclose is in another. As a means of implementing this protection that section provides that the negligent failure to record renders the unrecorded deed ineffectual as against bona fide purchasers for value and without notice. Archer v. Kelley, 194 Ga. 117, 21 S.E.2d 51, 1942 Ga. LEXIS 536 (1942). O.C.G.A. § 44-14-63 was modified by O.C.G.A. § 44-2-2, subsequently enacted. Cross v. Citizens’ Bank & Trust Co., 160 Ga. 647, 128 S.E. 898, 1925 Ga. LEXIS 222 (1925). The word “shall” here used is merely directory as to the place where such instruments may be recorded, if at all. City Whsle. Co. v. Harper, 100 Ga. App. 151, 110 S.E.2d 561, 1959 Ga. App. LEXIS 555 (1959). A “bill of sale” as contemplated by O.C.G.A. § 44-14-63 is a “deed” to personalty, and is included in the meaning of the word “deeds” as employed in O.C.G.A. § 44-2-2; and consequently under that law bills of sale to secure debt are required to be recorded. Merchants’ & Mechanics’ Bank v. Beard, 162 Ga. 446, 134 S.E. 107, 1926 Ga. LEXIS 215 (1926). The effect of recordation of conveyances to secure debt is by the law relating thereto made the same as the effect of the recordation of deeds of bargain and sale. City Whsle. Co. v. Harper, 100 Ga. App.

151, 110 S.E.2d 561, 1959 Ga. App. LEXIS 555 (1959). Laws relating to mortgage registration govern. - The registration and record of conditional bills of sale shall be governed in all respects by the laws relating to the registration of mortgages on personal property, except that they must be recorded within 30 days from their date, and in this respect they differ from mortgages, deeds and bills of sale to secure debt since these latter instruments date only from the time they are filed for record as to innocent purchasers without notice thereof. Scoggins v. General Fin. & Thrift Corp., 80 Ga. App. 847, 57 S.E.2d 686, 1950 Ga. App. LEXIS 796 (1950). Recording not necessary to convey title. - It is not essential under O.C.G.A. § 44-14-63, in order to convey title to land to secure a debt as between the maker and the grantee, that the deed should be recorded. As between the maker of the security deed and the grantee, the latter would get a good title. Cooper v. Bacon, 143 Ga. 64, 84 S.E. 123, 1915 Ga. LEXIS 289 (1915). Serves as constructive notice. - Under O.C.G.A. §§ 44-2-1 and 44-14-63, when bills of sale to secure debt have been recorded in the county of residence of the maker thereof, such registration serves as constructive notice from the date the same are filed for record. General Fin. & Thrift Corp. v. Bank of Wrightsville, 92 Ga. App. 808, 90 S.E.2d 93, 1955 Ga. App. LEXIS 717 (1955). The record of a security deed is constructive notice to subsequent grantees. Constructive notice is notice to the world. Cummings v. Johnson, 218 Ga. 559, 129 S.E.2d 762, 1963 Ga. LEXIS 261 (1963). Record from time of filing. - In a contest between a bill of sale to secure a debt and a lien of a subsequently recorded general execution, the record of the bill of sale dates back from the time of its filing for record in the office of the clerk of the superior court. Merchants’ & Mechanics’ Bank v. Beard, 162 Ga. 446, 134 S.E. 107, 1926 Ga. LEXIS 215 (1926). Fractions of a day. - Where a priority as between a bill of sale to secure a debt

Recording (Cont’d) and the lien of a subsequently recorded general execution depends upon whether the bill of sale was recorded first or the general execution was entered upon the execution docket first, such recording and such entry upon the execution docket having occurred on the same day, in determining such priority fractions of a day are to be considered. Merchants’ & Mechanics’ Bank v. Beard, 162 Ga. 446, 134 S.E. 107, 1926 Ga. LEXIS 215 (1926). Where recorded. - A retention-oftitle contract attested by a person described as a commercial notary public of one county, although the caption of the instrument indicates that it was executed in a town in another county is presumably officially executed in the first county. It nevertheless is legally executed to record in county indicated in the caption, the residence of the maker. Smith v. Simmons, 35 Ga. App. 427, 133 S.E. 312, 1926 Ga. App. LEXIS 419 (1926). Place of recording as effecting priority. - Where evidence in trover action establishes that, at the time of execution of bills of sale in question, maker was resident of one county but had domicile in another, in view of fact that O.C.G.A. § 44-14-63 provides for such recording, in the county where the maker resided at the time of the execution of such instruments, and the law draws a clear distinction between residence and domicile, defendant who was holder of junior bill of sale recorded in county where maker was resident had title to property superior to that of plaintiff who was holder of senior bill of sale recorded in county where maker had domicile. Commercial Bank v. Pharr, 75 Ga. App. 364, 43 S.E.2d 439, 1947 Ga. App. LEXIS 544 (1947). Recording in wrong place equivalent to no record. - The recording of bills of sale in a court other than in the residence of the maker at the time of its execution is equivalent to no record. It will remain valid against persons executing it, but will be postponed to all liens, created or obtained or purchased, made prior to legal record thereof. Commercial Bank v. Pharr, 75 Ga. App. 364, 43 S.E.2d 439, 1947 Ga. App. LEXIS 544 (1947).

Chapter 7 trustee was allowed under 11 U.S.C. § 544 and O.C.G.A. § 44-14-63(a) to avoid a security deed which debtors gave to a bank before the debtors declared Chapter 7 bankruptcy because the bank filed the deed in the wrong county. There was no merit to the bank’s claim that the trustee had inquiry notice of the bank’s security interest because the debtors used the proceeds of a loan the debtors obtained from the bank to pay a debt to another bank and the other filed documents to cancel its loan that were defective under O.C.G.A. § 44-14-67(c); in addition, the doctrine of equitable subordination did not prevent the trustee from avoiding the bank’s secured interest. Rogers v. M&I Bank FSB (In re Morgan), 449 B.R. 821, 2010 Bankr. LEXIS 6263 (Bankr. N.D. Ga. 2010). Where a conditional bill of sale or retention title contract is executed in another state on property afterward brought into this state, and such instrument is not recorded in the county of the buyer’s residence within the time allowed by the statute, bona fide valid liens subsequently created against the property by the buyer would be superior to the rights of such seller, there being no question of actual knowledge of the rights of the seller under the conditional sale contract, or any fraud. Allen v. Dickey, 54 Ga. App. 451, 188 S.E. 273, 1936 Ga. App. LEXIS 662 (1936). Recorded deed not showing maturity. - A duly filed and recorded deed, which plainly shows that it was given to secure a debt, but does not show when the same matures, is notice to one dealing with the grantor therein of all the rights which the grantee has under the contract performance of which is thereby secured. Mattlage v. Mulherin’s Sons & Co., 106 Ga. 834, 32 S.E. 940, 1899 Ga. LEXIS 763 (1899). Where subsequent purchaser or creditor has notice of sale. - A sale of personal property to secure a debt, where the property remains in the possession of the vendor, is inoperative and void as against third persons, unless it is reduced to writing, in which event it will be good as to third persons when recorded under O.C.G.A. § 44-14-63, or, when not re-

corded, as to subsequent purchasers or creditors who have actual notice of such sale. Henry Vogt Mach. Co. v. Bailey, 2 Ga. App. 204, 58 S.E. 314, 1907 Ga. App. LEXIS 322 (1907). Preference arose when security executing not recorded. - Elements of a preference under 11 U.S.C. § 547(b) were met since the mortgagee’s claim based on the mortgagee’s security deed arose when the security deed was executed, under O.C.G.A. § 44-14-63, but the transfer occurred when the security deed was recorded, and thus was made on behalf of antecedent debt. Ogier v. Mortg. Elec. Registration Sys. (In re Tanoh), No. 0879087 - MHM, No. 09-6017, 2011 Bankr. LEXIS 3760 (Bankr. N.D. Ga. Sept. 26, 2011). Effect of Failure to Record A bill of sale is valid between the parties though not recorded. Arnoldsville Trading Co. v. Jones, 62 Ga. App. 677, 9 S.E.2d 693, 1940 Ga. App. LEXIS 401 (1940). O.C.G.A. § 44-14-63 so changes the prior law with reference to bills of sale and deeds to secure debts as to render such instruments, even though unrecorded, superior in rank to subsequent liens created by law; however, these statutes do not expressly or impliedly change the prior law with regard to contracts of conditional sale. Evans Motors of Ga., Inc. v. Hearn, 53 Ga. App. 703, 186 S.E. 751, 1936 Ga. App. LEXIS 375 (1936); Massachusetts Mut. Life Ins. Co. v. Hirsch, 184 Ga. 636, 192 S.E. 435, 1937 Ga. LEXIS 607 (1937); Mackler v. Lahman, 196 Ga. 535, 27 S.E.2d 35, 1943 Ga. LEXIS 386 (1943); Refrigeration-Appliances, Inc. v. Atlanta Provision Co., 90 Ga. App. 821, 84 S.E.2d 602, 1954 Ga. App. LEXIS 821 (1954); Manchester Motors, Inc. v. F & M Bank, 91 Ga. App. 811, 87 S.E.2d 342, 1955 Ga. App. LEXIS 870 (1955) (for comment, see 18 Ga. B.J. 82 (1955)). An unrecorded bill of sale to secure debt is uniformly superior to any lien arising by operation of law, as is the case with any mechanic’s lien. Manchester Motors, Inc. v. F & M Bank, 91 Ga. App. 811, 87 S.E.2d 342, 1955 Ga. App. LEXIS 870 (1955) (for comment, see 18 Ga. B.J. 82 (1955)).

An unrecorded bill of sale to secure debt has the same effect as a deed of bargain and sale, and, therefore, although unrecorded, is superior in rank to subsequent liens created by law. Associates Disct. Corp. v. Willard, 99 Ga. App. 116, 108 S.E.2d 110, 1959 Ga. App. LEXIS 795 (1959). Effect of failure provided in § 442-1. - The last sentence of O.C.G.A. § 4414-63 states that the effect of failure to record deeds to secure debt and bills of sale shall be the same as shall be the effect of failure to record a deed of bargain and sale. The effect of this latter failure is provided in O.C.G.A. § 44-2-1. Commercial Bank v. Pharr, 75 Ga. App. 364, 43 S.E.2d 439, 1947 Ga. App. LEXIS 544 (1947). The penalty of failure to record has reference only to the rights of a subsequent vendee, taking a deed from the same vendor without notice of the existence of the prior unrecorded deed. Caldwell v. Northwest Atlanta Bank, 194 Ga. 370, 21 S.E.2d 619, 1942 Ga. LEXIS 571 (1942). An unrecorded deed of bargain and sale is postponed only to later bona fide purchasers for value without notice. Ivey v. Transouth Fin. Corp., 566 F.2d 1023, 1978 U.S. App. LEXIS 12842 (5th Cir. 1978). An unperfected security interest is subordinate to the rights of lien creditors who acquire their liens without knowledge of the prior security interest and before it is perfected, and this operates in favor of a creditor who has acquired a lien on the 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). The effect of failure to record a deed of bargain and sale is that it loses its priority over a subsequent recorded deed from the same vendor, taken without notice of the existence of the first. It does not lose priority to a junior judgment or other lien created by operation of law, for the holder of such a lien is not a bona fide purchaser. Mack Trucks, Inc. v. Ryder Truck Rental, Inc., 110 Ga. App. 68, 137 S.E.2d 718, 1964 Ga. App. LEXIS 547 (1964).

Effect of Failure to Record (Cont’d) Prior to the passage of O.C.G.A. § 44-14-63, a security deed executed in good faith, though unrecorded, was superior to a subsequently acquired lien against the grantor. Phinizy v. Clark, 62 Ga. 623, 1879 Ga. LEXIS 590 (1879); Sosnowski v. Rape, 69 Ga. 548, 1882 Ga. LEXIS 260 (1882); McClure v. Smith, 115 Ga. 709, 42 S.E. 53, 1902 Ga. LEXIS 542 (1902); McIntire v. Garmany, 8 Ga. App. 802, 70 S.E. 198, 1911 Ga. App. LEXIS 153 (1911). A judgment against a grantor, obtained after the execution by the grantor of a security deed, but prior to its being filed for record in the county where the land lies under O.C.G.A. § 4414-63, is superior to such deed. Cabot v. Armstrong, 100 Ga. 438, 28 S.E. 123, 1897 Ga. LEXIS 80 (1897); Cambridge Tile Co. v. Scaife & Sons Co., 137 Ga. 281, 73 S.E. 492, 1911 Ga. LEXIS 382 (1911); Coley v. Altamaha Fertilizer Co., 147 Ga. 150, 93 S.E. 90, 1917 Ga. LEXIS 94 (1917); Cooke v. Adams Bros. Co., 148 Ga. 289, 96 S.E. 499, 1918 Ga. LEXIS 307 (1918); Merchants’ & Mechanics’ Bank v. Beard, 162 Ga. 446, 134 S.E. 107, 1926 Ga. LEXIS 215 (1926). Priority of lien of judgment duly recorded over earlier security deed recorded afterward. Saunders v. Citizens First Nat’l Bank, 165 Ga. 558, 142 S.E. 127, 1927 Ga. LEXIS 424 (1927). Priority despite deed not being recorded in proceeding under Uniform Fraudulent Transfers Act. - Judgment voiding a transfer of property as fraudulent under the Uniform Fraudulent Transfers Act (UFTA) (now Uniform Voidable Transactions Act), O.C.G.A. § 182-70 et seq., was reversed because, despite not being recorded, the 2002 security deed executed in favor of a former sister-in-law, pledging the property as collateral for a promissory note, gave the former sisterin-law, as one of the defendant’s creditors, priority over the plaintiff’s judgment, such that the property could not be characterized as the defendant’s asset under the UFTA. Wallin v. Wallin, 341 Ga. App. 440, 800 S.E.2d 617, 2017 Ga. App. LEXIS 218 (2017).

Unrecorded bill of sale of crops to secure the debt was superior in rank to the subsequent judgment lien created by law. Cairo Banking Co. v. Citizens Bank, 63 Ga. App. 690, 11 S.E.2d 806, 1940 Ga. App. LEXIS 530 (1940). Security deed superior to debt outstanding evidenced by unrecorded deed. Mortgage Guarantee Co. of Am. v. Atlanta Com. Bank, 166 Ga. 412, 143 S.E. 562, 1928 Ga. LEXIS 317 (1928). The record of an agreement extending lien of recorded security deed to an additional debt, is not necessary to prevent a judgment for an unsecured from obtaining priority. McClure v. Smith, 115 Ga. 709, 42 S.E. 53, 1902 Ga. LEXIS 542 (1902). Landlord’s lien for rent and tenant’s unrecorded bill of sale. - A landlord’s general lien for rent, arising upon the issuance and levy of a distress warrant, is superior to a tenant’s unrecorded bill of sale of personalty to secure a debt, though the latter was executed and delivered prior to the date of the levy of the distress warrant upon the property covered by the bill of sale. Butler v. LaGrange Grocery Co., 29 Ga. App. 612, 116 S.E. 213, 1923 Ga. App. LEXIS 140 (1923). Distress warrant levied on prior to recording of security deed had priority over deed. Virginia-Carolina Chem. Co. v. Rylee, 139 Ga. 669, 78 S.E. 27, 1913 Ga. LEXIS 563 (1913). A recorded quitclaim deed, when taken in good faith for a valuable consideration, without notice, will prevail over a prior unrecorded deed. This rule is not altered by the fact that the quitclaim deed conveys only the grantor’s rights, title, and interest in and to the land, instead of conveying the land itself. Archer v. Kelley, 194 Ga. 117, 21 S.E.2d 51, 1942 Ga. LEXIS 536 (1942). Where at the time that a security deed was executed and recorded a bond for title was not recorded, and the obligee on the bond for title was not in possession of the property, and where the grantee in the security deed had no actual notice of the outstanding bond for title, the rights conveyed by the security deed were superior to those held by the obligee in the bond for title. Kelley v. Spivey, 182

Ga. 507, 185 S.E. 783, 1936 Ga. LEXIS 474 (1936). Foreclosure provisions unenforceable. - The trial court did not err in finding that the foreclosure provisions of the deed to secure debt could not be enforced because the deed had never been delivered and recorded. Jones v. Phillips, 227 Ga. App. 94, 488 S.E.2d 692, 1997 Ga. App. LEXIS 842 (1997). Recording of security deed not necessary to effect a transfer between debtors and lender. - Because the security deed between the debtors and the lender was effective as between those parties at execution, it was not relevant that the security deed was recorded within 90 days prior to the debtors filing a petition in bankruptcy; under the doctrine of equitable subrogation, the security deed was not avoidable as a preferential transfer. Gordon v. NovaStar Mortg., Inc. (In re Hedrick), No. 04-92733-JEM, No. 04-

6420, 2005 Bankr. LEXIS 1923 (Bankr. N.D. Ga. Aug. 31, 2005), aff’d, No. 05-cv2689-TCB, 2007 U.S. Dist. LEXIS 69426 (N.D. Ga. Feb. 23, 2007), aff’d, 524 F.3d 1175, 2008 U.S. App. LEXIS 8006 (11th Cir. 2008). No judgment lien shown. - Trial court erred by granting summary judgment to a judgment lienholder because the lienholder did not establish as a matter of law that the lienholder had any legal or equitable interest in the property at any time after a quitclaim deed was executed; because the record did not establish that the lienholder had any ownership interest in the property upon which the right to seize assets could attach, the trial court erred in finding that the lienholder held a judgment lien against the property. Wells Fargo Bank, N.A. v. Twenty Six Properties, LLC, 325 Ga. App. 662, 754 S.E.2d 630, 2014 Ga. App. LEXIS 46 (2014).

RESEARCH REFERENCES Am. Jur. 2d. 66 Am. Jur. 2d, Records and Recording Laws, §§ 59, 153 et seq. C.J.S. 26A C.J.S., Deeds, § 155 et seq. 59 C.J.S., Mortgages, § 192 et seq. ALR. Reinstatement and restoration of mort-

gages released or discharged without authorization, as against subsequent purchasers, lienholders, judgment creditors, and the like, without notice, 35 A.L.R.2d 948.