The Four County Bank v. Tidewater Equipment Co.
Georgia Court of Appeals
771 S.E.2d 437 (2015)
The Four County Bank (plaintiff) financed two pieces of heavy forestry equipment purchased by Shepherd Brothers Timber Company, LLC, a Tigercat cutter and a skidder. The bank filed purchase-money financing statements for both pieces of equipment that perfected its security interests. While the financing statements remained effective, Shepherd Brothers traded in the cutter and skidder to Tidewater Equipment Company (defendant) toward new equipment. Neither piece of equipment required a motor-vehicle title. Tidewater did not run a lien search and resold the equipment to someone else without giving any of the sales proceeds to the bank. The bank filed second financing statements more than five years after the initial filings, meaning they had already lapsed. After Shepherd filed for bankruptcy, the bank sued Tidewater in trover and conversion to recover the equipment or its value. The trial court granted summary judgment for Tidewater, reasoning that the bank did not file continuation statements on time to perfect its security interests, and that Tidewater did not actually know about the bank’s security interests when it accepted and sold the trade-ins. The bank appealed.
Rule of Law
Holding and Reasoning (Branch, J.)
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