Commercial Credit Co. v. American Mfg. Co.

155 S.W.2d 834
CourtCourt of Appeals of Texas
DecidedOctober 10, 1941
DocketNo. 14277
StatusPublished
Cited by47 cases

This text of 155 S.W.2d 834 (Commercial Credit Co. v. American Mfg. Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commercial Credit Co. v. American Mfg. Co., 155 S.W.2d 834 (Tex. Ct. App. 1941).

Opinion

SPEER, Justice.

Commercial Credit Company, a corporation, to which we shall refer as appellant, instituted this suit against American Manufacturing Company, a corporation, referred to as appellee, Forest Green and Joseph A. Farry, to recover the value of an automobile, alleged to be $800.

No process was served on Farry and he was dismissed from the suit. The case was tried to the court and judgment was entered against appellant (Commercial Credit Co.) and in favor of appellee (American Manufacturing Co.) and Green for recovery of their costs. From that judgment appellant has perfected this appeal.

[836]*836From the pleading's and stipulated facts, a statement of the points presented for reversal may be summarized as follows:

On October 2d, 1939, Farry purchased a new Dodge automobile from Alexander Motor Co., and executed his note for $984,. as a part of the purchase money; at the same time he executed a chattel mortgage lien on the car to secure the payment of the note in instalments of $41 per month. Appellant did not file its mortgage in the county clerk’s office in any county in the State. On the same day, Alexander Motor Co. sold and transferred the note and lien to appellant. On that day Far-ry made application to the Department of Public Safety for a certificate of title; the application was accompanied by Farry’s sworn statement to the effect that he was the owner and that the car was encumbered by appellant’s lien. The application complied in 'every respect with the requirements of House Bill 407, 46th Legislature, Vernon’s Ann.P.C. art. 1436 — -1, effective October 1, 1939. In due time the Department issued to Farry the title certificate showing appellant’s lien, and furnished the necessary highway license plates. Farry made two monthly instalment payments and quit. At some time between October 2, 1939, and November 7th, following, without the knowledge or consent of appellant, Farry went to Michigan and in that State, on the last mentioned date, made application to the proper authorities for a certificate of ownership and title to the car, and procured the certificate, upon which the encumbrance of appellant did not appear. The certificate from Michigan, issued by the Secretary of State, recites, among other things, that it was issued upon the sworn application of Joseph A. Farry, disclosing that he was the owner of the car and that his ownership thereto was subject to the liens and encumbrances shown therein and no others. In the face of the certificate, in space for description of liens and encumbrances, the word “None” appears.

On November 28, 1939, Farry, having previously procured the certificate of ownership from the State of Michigan which showed no liens or encumbrances on the car, and having had attached to the car the highway numbers issued by that State, sold and transferred the motor vehicle to Forest Green for a consideration of $750 in cash. Farry executed to Green a bill of sale for the car and made application to the Texas Department of Public Safety for a certificate of title. The application was made upon Farry’s oath that he was the owner of the car and that no liens or encumbrances were against it; the certificate of ownership was issued and showed no liens on the car; the certificate was delivered to Green and he procured Texas Highway license numbers and put them on the car. On January 20, 1940, Green, a dealer in second hand cars, exhibited his certificate of title, which showed no liens thereon, to appellee (American Manufacturing Co.) and sold to it the car bearing the Texas Highway numbers, for a cash consideration of $800, and transferred the certificate of ownership and the title to the purchaser. Neither appellee nor Green had any actual knowledge of the existence of appellant’s debt. and lien and had no constructive knowledge thereof, except such as would be imputed to them by the recitations contained in the certificate of ownership issued to Farry under his application of October 2, 1939. Neither appellant nor Green had any actual knowledge of the existence of the first certificate of ownership to Farry. Appellant had no actual knowledge of any of the transactions of Farry in procuring the Michigan certificate of ownership, nor of the subsequent application by him to the Department of Public Safety for the second certificate of ownership and title, nor of the sale by Farry to Green, nor of the sale and transfer from Green to appellant.

The trial court filed complete findings of fact and conclusions of law. He found the facts to be substantially in the language of the stipulations of the parties and concluded as a matter of law that by the passage of House Bill 407 (Art. 1436 — l, Vernon’s Ann.P.C.) the Legislature did not intend to repeal existing chattel mortgage registration statutes contained in Art. 5490 et seq., Vernon’s Ann.Civ.St., but that they are and were at the times involved, in full force and effect. That it was necessary, under the provisions of those statutes, for the mortgagee (appellant) to properly register its mortgage in the office of the County Clerk before it would be effective as against the appellees, who were admittedly innocent purchasers. Court further stated that if mistaken in the conclusion first announced, that the Department of Safety had issued two certificates of ownership to the same person on the same car, the first one showing the debt and lien of appellant and the second [837]*837showed neither. That the defendant Green purchased the car in good faith for a valuable consideration and took a transfer thereof in conformity to the applicable statutes. That Green relied upon the Michigan certificate of ownership and that he was not negligent in doing so, and that he followed the provisions of House Bill 407 in procuring a new certificate of title, and therefore he should be protected against the lien of appellant. The court further concluded that since defendant American Manufacturing Co. purchased from Green and relied upon Green’s' title, as disclosed by his certificate of ownership issued by the Department of Public Safety, which did not show appellant’s lien, as required by the new Act, it would not be charged with notice of the existence of the encumbrance. Upon these conclusions, judgment was entered as above indicated.

As we view the record before us, the controlling question for our determination is: “Did House Bill No. 407 of the 46th Legislature, now Article 1436 — 1 of Texas Penal Code, known as the Certificate of Title Act, effective October 1, 1939, repeal and supersede those parts of Articles 5490, 5497 and 5497a R.C.S., insofar as those Articles affect the registration of chattel mortgage liens on motor vehicles?” We have concluded that the question should be answered in the affirmative, and shall presently attempt to demonstrate why we have so decided.

The point is one upon which our appellate courts have not spoken, insofar as we are able to ascertain. We must therefore find the answer by the application of our settled rules of statutory construction. One of the earliest tests in such matters seems to be that we must “ ‘try out the right to intendment’ of the law, and, when found, to observe and follow it though there may be a conflict between its intent and words.” Russell v. Farquhar, 55 Tex. 355; Mclnery v. City of Galveston, 58 Tex. 334; Edwards v. Morton, 92 Tex. 152, 46 S.W. 792. The rule thus expressed is still the law in this State. Board of Insurance Commissioners v. Sproles Motor Freight Lines, Tex.Civ.App., 94 S.W.2d 769, writ refused.

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155 S.W.2d 834, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commercial-credit-co-v-american-mfg-co-texapp-1941.