Trust Co. of New Jersey v. Atlanta Aluminum Co.

255 S.E.2d 82, 149 Ga. App. 605, 1979 Ga. App. LEXIS 1954
CourtCourt of Appeals of Georgia
DecidedApril 13, 1979
Docket57319
StatusPublished
Cited by3 cases

This text of 255 S.E.2d 82 (Trust Co. of New Jersey v. Atlanta Aluminum Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trust Co. of New Jersey v. Atlanta Aluminum Co., 255 S.E.2d 82, 149 Ga. App. 605, 1979 Ga. App. LEXIS 1954 (Ga. Ct. App. 1979).

Opinion

Birdsong, Judge.

Materialman’s lien. The facts of this case show the following evolvement. In January, 1973, at least twelve individuals (defendants in fi. fa.) purchased real estate for development. The owners contracted with a general contractor for improvements. The appellee, Atlanta Aluminum Co. (plaintiff in fi. fa.) contracted with the general contractor to furnish aluminum products for the improvement of the owners’ (defendants in fi. fa.) property. In February, 1973, Atlanta Aluminum filed a lien against the property for the material and work furnished and to be furnished. Four days after the lien was filed, the owners pledged the property by security deed. After the work was completed, Atlanta Aluminum demanded payment from the general contractor, but without success. Atlanta Aluminum then filed suit in November, 1973, against the contractor and the owners and sought enforcement of its lien against the property. The general contractor filed for bankruptcy and is not a [606]*606factor in this litigation. The owners answered denying indebtedness and filed a counterclaim alleging improper performance by Atlanta Aluminum. Sometime in 1974, the holder of the security deed foreclosed and took legal title to the property. Between the time of the foreclosure and January, 1976, the property changed hands three times. The suit filed by Atlanta Aluminum was quiescent until January 22, 1976. The twelve owners had filed motions denying personal responsibility and moved for dismissal as against them personally. The trial court apparently took these motions under advisement pending trial. On January 22, 1976, approximately half of the original owners and defendants in the original suit entered into a consent judgment granting a lien on the property in the amount of the outstanding indebtedness owed to Atlanta Aluminum. On January 26, appellant’s (Trust Co. of New Jersey) predecessor in title conveyed the property to appellant. On March 5,1976, the remainder of the original owners entered into the consent decree granting the lien against the property. On March 25, 1976, fi. fas. based upon the consent decrees were entered on the execution docket. Nothing further transpired until March 15,1978, when Atlanta Aluminum served notice of foreclosure and sale upon the original defendants as well as Trust Co. On March 31, the sheriff levied on the property. On May 1, 1978, Trust Co. posted bond and on July 17, 1978, filed an intervention. The trial court, with the consent of parties (i.e., Trust Co. and Atlanta Aluminum), conducted a hearing without the intervention of a jury and based upon a stipulation of facts basically establishing the above elucidated occurrences. On August 29, 1978, the trial court found against Trust Co. on all the issues presented. This appeal followed with Trust Co. enumerating as error the same four basic issues asserted before the trial as tainting the original issuance of the fi. fas. Held:

1. Though appellant Trust Co. has enumerated four alleged errors, as we view the questions presented, the third enumeration requires first consideration. In that enumeration, Trust Co. in effect argues that the original owners were without authority or power to enter into a consent judgment with Atlanta Aluminum as to the [607]*607property against which the lien had been placed because they (the original owners) had no interest in the property and had had no interest therein since 1974 when their security deed was foreclosed. This argument further contends that at the time of the consent judgment of March 5, 1976, not only were the original owners strangers to the property, but the true owner, Trust Co., who was then known to be the owner, was never informed of the consent judgment against its property and did not participate or consent to that judgment. Thus, the argument contends that a lien was consented to by strangers against its property without notice or hearing, a violation of statute and due process.

At first blush, this argument appears to have great merit. However, when one considers the facts in perspective, the argument loses much of its force. At the time the initial suit was filed against the original owners, Atlanta Aluminum was seeking a personal judgment against the contractor and against the twelve owners as well as a special lien against the owners’ property. At the time, it is not disputed that the trial court had jurisdiction over the persons of the defendants as well as over the res, the property. Atlanta Aluminum complied in all particulars with the lien laws; thus had the property not been conveyed, there can be no doubt that a judgment granting a special lien against the property would have been proper, whether following a jury trial or as the result of a consent judgment.

The issues pending before the court in the original suit involved the value of the work performed, the liability of the contractor, the personal liability of the owners, the quality of the work performed by the aluminum company, and the validity of the lien filed by Atlanta Aluminum. Even though the property was conveyed by foreclosure, thus divesting the original owners of legal title to the property, there remained before the court the questions of personal liability, the counterclaim for quality of work performed, and the issue of the special lien. We will consider the effect of the consent judgment as to the resolution of the other issues in the succeeding divisions of this opinion. Now we are concerned with the power of the ex-owners to consent to a [608]*608special lien against property they no longer owned and the power of a court to grant such a lien.

We note that the lien against the property has been a matter of record since February, 1973, almost three years before Trust Co. became the title owner of the property. The object of the recording statutes is to give constructive notice to all the world as to the rights of the parties thereto. Moreover, actual notice to third parties, where it can be shown, is as effective as recordation. Bank of Ringgold v. West Publishing Co., 61 Ga. App. 426, 428 (6 SE2d 598). Thus, we conclude that the appellant Trust Co. did not accept conveyance of the property in ignorance of Atlanta Aluminum’s recorded lien against the property. See Bryant v. Ellenburg, 106 Ga. App. 510, 512 (127 SE2d 468). It follows that when Trust Co. purchased the property with actual or constructive notice of Atlanta Aluminum’s lien, Trust Co. took the property subject to the lien. There can be no question that the lien was properly recorded against the original owners, the only parties against whom a lien could have been filed at the time of filing. The court had jurisdiction over the res, the property, and over the persons of the original owners. The parties before the court agreed to dispose of the case by way of a consent judgment, a perfectly valid and lawful disposition. First Nat. Bank &c. Co. v. Roberts, 187 Ga. 472 (1) (1 SE2d 12). The lien having been properly recorded against the original owners, and the foreclosure action having been properly brought against them, it was not necessary for the subsequent purchaser on notice of the lien to become a party to the action. Oglethorpe Savings &c. Co. v. Morgan, 149 Ga. 787, 795 (102 SE 528). If Trust Co. had believed that there was fraud in the agreement for a consent judgment or that the materialman’s in rem rights were not enforceable against the property because no such work had been accomplished, then it could have proceeded in equity to set aside the consent judgment. No such allegations have been made nor such evidence presented.

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Cite This Page — Counsel Stack

Bluebook (online)
255 S.E.2d 82, 149 Ga. App. 605, 1979 Ga. App. LEXIS 1954, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trust-co-of-new-jersey-v-atlanta-aluminum-co-gactapp-1979.