Priority of Certain Liens

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  1. Year's support; property taxes; other state taxes; other taxes or judgments. Except as is expressly provided to the contrary elsewhere in this article and in subsection (b) of this Code section, a perfected security interest in collateral takes priority over each and all of the liens, claims, and rights described in Code Section 44-14-320, relating to the establishment of certain liens, as now or hereafter amended; former Code Section 53-7-91 as such existed on December 31, 1997, if applicable; and Code Section 53-7-40, relating to the priority of debts against the estate of a decedent, as now or hereafter amended; provided, nevertheless, that:
    1. Year's support to the family, duly set apart in the collateral prior to the perfection of the subject security interest, takes priority over such security interest;
    2. A lien for property taxes duly assessed upon the subject collateral, either prior or subsequent to the perfection of the subject security interest, takes priority over security interest;
    3. A lien for all state taxes takes priority over such security interest, except where such security interest is perfected by filing a financing statement relative thereto prior to such time as the execution for such state taxes shall be filed in the manner provided by law; provided, nevertheless, that, with respect to priority rights between such tax liens and security interests where under this article the same are perfected other than by filing a financing statement, the same shall be determined as provided by law prior to January 1, 1964; and
    4. A lien for other unpaid taxes or a duly rendered judgment of a court having jurisdiction shall have the same priority with regard to a security interest as it would have if the tax lien or judgment were a conflicting security interest within the meaning of Code Section 11-9-322 or an encumbrance within the meaning of Code Section 11-9-334, which conflicting security interest was perfected by filing or which encumbrance arose at the time the tax lien or judgment was duly recorded in the place designated by statute applicable thereto.
  2. Mechanics' liens on farm machinery. A mechanics' lien on farm machinery or equipment arising on or after July 1, 1985, shall have priority over any perfected security interest in such farm machinery or equipment unless a financing statement has been filed as provided in Code Section 11-9-501 and unless the financing statement describes the particular piece of farm machinery or equipment to which the perfected security interest applies. Such description may include the make, model, and serial number of the piece of farm machinery or equipment. However, such description shall be sufficient whether or not it is specific if it reasonably identifies what is described and a mistake in such description shall not invalidate the description if it provides a key to identifying the farm machinery or equipment.

(Code 1981, §11-9-333, enacted by Ga. L. 2001, p. 362, § 1; Ga. L. 2011, p. 752, § 11/HB 142; Ga. L. 2017, p. 723, § 10/HB 337.)

The 2011 amendment, effective May 13, 2011, part of an Act to revise, modernize, and correct the Code, substituted "hereafter amended; former Code Section 53-7-91 as such existed on December 31, 1997, if applicable; and Code Section 53-7-40," for "hereafter amended, and Code Section 53-7-91 of the 'Pre-1998 Probate Code,' if applicable, or Code Section 53-7-40 of the 'Revised Probate Code of 1998,'" in subsection (a).

The 2017 amendment, effective January 1, 2018, in paragraph (a)(3), deleted "other" preceding "state taxes" near the beginning, and substituted "filed" for "entered on the execution docket in the place and" in the middle.

Editor's notes.

- Ga. L. 2017, p. 723, § 1/HB 337, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'State Tax Execution Modernization Act.'"

Law reviews.

- For article on the 1963 amendment to the Georgia Uniform Commercial Code, see 14 Mercer L. Rev. 378 (1963). For annual survey of state and local tax law, see 35 Mercer L. Rev. 281 (1983). For annual survey of commercial law, see 43 Mercer L. Rev. 119 (1991). For survey article on commercial law, see 44 Mercer L. Rev. 99 (1992). For comment on United States v. Crittenden, 563 F.2d 678 (5th Cir. 1977), see 12 Ga. L. Rev. 692 (1977). For comment on United States v. Crittenden, 600 F.2d 478 (5th Cir. 1979), discussing the priority of a mechanic's lien in Georgia, see 14 Ga. L. Rev. 628 (1980).

JUDICIAL DECISIONS

Editor's notes.

- In the light of the similarity of the provisions, decisions under former Article 9 are included in the annotations for this Code section. For a table of comparable provisions, see the table at the beginning of the Article.

Subordinate security interests.

- 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) (decided under former Code Section11-9-310).

Priority over prior judgment liens.

- A purchase money security interest has priority over a prior judgment lien only to the extent permitted by subsection (2) of former § 11-9-301, 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) (decided under former Code Section11-9-310).

A bank's security interest in the inventory of a carpet manufacturer took priority over a mechanic's lien. Nationsbank v. Hardwick Carpets Int'l, Inc., 233 Ga. App. 894, 506 S.E.2d 174 (1998) (decided under former Code Section11-9-310).

Identification of collateral.

- All that former subsection (2) required is a reasonable identification, and even a mistaken description will suffice so long as a key to identification is provided. Goodwin v. South Atl. Prod. Credit Ass'n, 201 Ga. App. 35, 410 S.E.2d 159 (1991) (decided under former Code Section11-9-310).

Financing statement which identified the collateral as "all farm machinery and equipment, tractors, tilling and harvesting tools of every kind and description owned by debtors" satisfied the requirements of former subsection (2). Goodwin v. South Atl. Prod. Credit Ass'n, 201 Ga. App. 35, 410 S.E.2d 159 (1991) (decided under former Code Section11-9-310).

Bailee's lien inferior to recorded security interest.

- Bailee's lien was inferior to a cooperative banks' duly recorded security interest. Farm Credit of Northwest Fla., ACA v. Easom Peanut Co., 312 Ga. App. 374, 718 S.E.2d 590 (2011), cert. denied, No. S12C0444, 2012 Ga. LEXIS 315 (Ga. 2012).

Priority of year's support award.

- In the absence of evidence that defendants had a perfected security interest in corporate stock prior to the death of the owner, where the stock had been set aside as year's support for the owner's wife by order of the probate court, defendants' interest in the stock was extinguished at the time the year's support award was made. Auto Alignment Servs., Inc. v. Bray, 214 Ga. App. 53, 446 S.E.2d 753 (1994).

Cited in Mack Trucks, Inc. v. Ryder Truck Rental, Inc., 110 Ga. App. 68, 137 S.E.2d 718 (1964); Troy Lumber Co. v. Williams, 124 Ga. App. 636, 185 S.E.2d 580 (1971); Park Ave. Bank v. Bassford, 232 Ga. 216, 205 S.E.2d 861 (1974); Amoco Oil Co. v. G. Sims & Assocs., 162 Ga. App. 307, 291 S.E.2d 128 (1982); Davidson v. Smith Can. Peat, Inc., 163 Ga. App. 367, 294 S.E.2d 582 (1982); Newton Ford Tractor Co. v. JI Case Credit Corp., 163 Ga. App. 497, 294 S.E.2d 723 (1982); GECC v. Capital Ford Truck Sales, Inc., 164 Ga. App. 468, 298 S.E.2d 159 (1982); Tuggle v. IRS, 22 Bankr. 439 (Bankr. N.D. Ga. 1982); Sterling Nat'l Bank & Trust Co. v. Southwire Co., 713 F.2d 684 (11th Cir. 1983); State v. Mozley, 171 Ga. App. 1, 318 S.E.2d 647 (1984); First Bulloch Bank & Trust Co. v. Inca Materials, Inc., 880 F.2d 1307 (11th Cir. 1989).

OPINIONS OF THE ATTORNEY GENERAL

Ad valorem tax lien on mobile home follows it into hands of bona fide purchaser.

- Ad valorem tax lien attaches to property, a mobile home being no exception; the lien follows property even into hands of bona fide purchaser for value and attempted transfer of mobile home to evade tax would be void. 1970 Op. Att'y Gen. No. U70-208.

RESEARCH REFERENCES

Am. Jur. 2d.

- 68A Am. Jur. 2d, Secured Transactions, §§ 138, 139, 167, 168, 811-816, 869-894, 931-941.

C.J.S.

- 8 C.J.S., Bailments, §§ 80-85. 56 C.J.S., Mechanics' Liens, § 220. 72 C.J.S., Pledges, § 23.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 9-333.

ALR.

- Priority as between federal tax lien and mortgage to secure future advances or expenditures by mortgagee, 90 A.L.R.2d 1179.

Secured transactions: priorities as between previously perfected security interest and repairman's lien on motor vehicle under Uniform Commercial Code, 69 A.L.R.3d 1162.

Secured transactions: Priority as between statutory landlord's lien and security interest perfected in accordance with Uniform Commercial Code, 99 A.L.R.3d 1006.


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