Crescent City Aviation v. Beverly Bank of Chicago

219 N.E.2d 446, 139 Ind. App. 669, 1966 Ind. App. LEXIS 513
CourtIndiana Court of Appeals
DecidedSeptember 6, 1966
Docket20,343
StatusPublished
Cited by24 cases

This text of 219 N.E.2d 446 (Crescent City Aviation v. Beverly Bank of Chicago) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crescent City Aviation v. Beverly Bank of Chicago, 219 N.E.2d 446, 139 Ind. App. 669, 1966 Ind. App. LEXIS 513 (Ind. Ct. App. 1966).

Opinion

Wickens, P.J.

— Appellant, Crescent City Aviation, Inc. of Evansville, was in the business of buying, selling and repairing aircraft. Appellee, Beverly Bank (of Chicago) specialized in buying aircraft financing paper. Crescent City sold a certain airplane to one Vinco Corporation under a retail installment contract whereby title was retained by the seller until the full purchase price was paid. Crescent City immediately thereafter sold the installment sale contract including the title to the plane to Beverly Bank.

Within three months after the sale to Vinco, Crescent City at the request of Vinco removed one of the two engines from the plane and installed a new remanufactured engine. On subsequent dates Crescent City also, at the request of Vinco performed services and furnished material and personnel in connection with the maintenance and operation of the plane.

Crescent City’s account for these matters was unpaid and it filed a notice of mechanic’s lien with the recorder of Vander-burgh County, Indiana. Vinco Corporation subsequently defaulted on the conditional sale contract owing at default $49,037.52. The installment sale contract signed by Crescent City as seller and by Vinco as purchaser and showing the assignment to Beverly Bank was promptly filed for record by the latter with the Federal Aviation Agency under a Federal statute hereafter referred to. No documents relating to the lien were recorded with the Federal Aviation Agency.

*671 Appellant, Crescent City, brought suit to foreclose its claimed mechanic’s lien and appellee, Beverly Bank, counter-claimed to replevy the plane which was being held by appellant.

The matter was tried without a jury and the trial court entered special findings of fact and conclusions of law holding that Beverly Bank was entitled to immediate replevin of the plane and that appellant had no valid lien against Beverly Bank’s interest in the plane. As against Vinco the court awarded appellant judgment in full and to that extent the judgment is final.

Appellant raises questions about its lack of knowledge as to the true ownership of the plane, about the urgent need for the new engine and the work which was performed, and about a cognovit feature of appellee’s retail installment contract. In addition appellant asserts that by reason of its continued possession of the plane it has a common law lien.

All of these questions were settled adverse to appellant by the trial court’s findings and conclusions. One of the conclusions of law was to the effect that Beverly Bank had not consented expressly or impliedly in the work being done on the plane, having no knowledge of such work. The conclusions further stated that the only way an aircraft may be transferred and by which liens upon aircraft may be duly recorded was the means provided by Congress of the United States which jurisdiction is now under the Federal Aviation Act.

Thus the paramount question here is whether a mechanic’s lien is valid against the interests in aircraft of a conditional vendor where he has recorded his title documents with the Administrator of the Federal Aviation Act and the party claiming the lien has not so recorded his notice thereof.

In 1958 Congress of the United States enacted the Federal Aviation Act providing among other things for the recording *672 of instruments affecting the title to aircraft. 49 U. S. C. A., §§ 1401-1405.

The 1958 provision repealed and superseded but was almost identical to provisions of the Civil Aeronautics Act of 1938 relating to such recording. 49 U. S. C. A., §§ 401-403.

It is provided in the Federal Aviation Act that the Administrator of the Federal Aviation Agency shall establish and maintain a system for the recording of all conveyances which affect the title to, or any interest in civil aircraft of the United States. 49 U. S. C. A., § 1403.

“Conveyance” as the word is used above is defined in 49 U. S. C. A., § 1301 (17) as an “. . . instrument affecting title to, or interest in, property.”

It is made plain in this Act that Congress ordained that no instrument affecting title to aircraft would be valid against innocent third persons “until such conveyance or other instrument is filed for recordation in the office of the Administrator. . . .” 49 U. S. C. A., § 1403 (c).

Under the Supremacy Clause of the Constitution of the United States, Art. 6, cl. 2, where the Congress, in a proper sphere of law, enacts legislation, the Federal law becomes superior to that of the state. Free v. Bland (1962), 369 U. S. 663, 8 L. Ed. 2d 180, 183, 82 S. Ct. 1089.

In the province of aviation, by the enactment of the Federal Aviation Act, Congress has provided the only way aircraft may be transferred and the only way in which liens upon aircraft may be duly recorded. It has been held by the Texas Courts, among the decisions of various states on this subject, that a Texas constitutional lien is void as to third parties without actual notice unless duly recorded under the Federal Act. In re Veterans’ Air Express Co., 76 F. Supp. 684, 686 (D. N. J. 1948); Continental Radio Co. Inc. v. Continental Bank & Trust Co., 369 S. W. 2d 359, 362 (Tex. Civ. App. 1963).

*673 Indiana through its General Assembly recognized that aircraft registration is a question for Federal legislation and that the field has been preempted by Congress. An Indiana aircraft registration and certificate of title act, Acts 1955, ch. 164, §§1-6 (§§14-1001 et seq., Burns’ 1964 Replacement) was completely repealed by Acts 1965, ch. 77, § 1.

The said Federal Aviation Act contains two provisions of particular interest.

“Nothing contained in this chapter shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies. 49 U. S. C. A., § 1506;

and

“. . . The validity of any instrument the recording of which is provided for by section 1403 of this title shall be governed by the laws of the State ... in which such instrument is delivered. . . .” 49 U. S. C. A., § 1406 (Supp. V. 1964) , 1

Reading together the provisions of the Federal Aviation Act we are of the opinion that any lien affecting aircraft will not be effective against the property of third persons without knowledge unless and until the lien is recorded with the Administrator of the Federal Aviation Agency. The validity of the lien or of any conveyance within the purview of the FAA is a question to be determined by applying the law of the jurisdiction where the instrument is delivered. But there is no question of validity or for construction of the instrument that can be determined until the lien is filed under the Federal Act.

*674 We find this interpretation quite consistent with the wording of Section 1506, supra,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Triad Intl v. So Air Transp
Sixth Circuit, 2007
SO. HORIZONS AVIATION v. Farmers & Merchants Bank of Lakeland
497 S.E.2d 637 (Court of Appeals of Georgia, 1998)
In Re Gull Air, Inc.
73 B.R. 820 (D. Massachusetts, 1987)
Catlin Aviation Co. v. Equilease Corp.
626 P.2d 857 (Supreme Court of Oklahoma, 1981)
In Re Holiday Airlines Corporation
620 F.2d 731 (Ninth Circuit, 1980)
Danning v. Pacific Propeller, Inc.
620 F.2d 731 (Ninth Circuit, 1980)
Bitzer Croft Motors, Inc. v. Pioneer Bank & Trust Co.
401 N.E.2d 1340 (Appellate Court of Illinois, 1980)
Brokaw v. Brokaw
398 N.E.2d 1385 (Indiana Court of Appeals, 1980)
Emmco Insurance Co. v. Indiana Farmers Mut. Ins. Co.
283 N.E.2d 404 (Indiana Court of Appeals, 1972)
Pavach v. State
271 N.E.2d 896 (Indiana Court of Appeals, 1971)
Dowell v. Beech Acceptance Corp., Inc.
476 P.2d 401 (California Supreme Court, 1970)
Aocker v. Buell
261 N.E.2d 894 (Indiana Court of Appeals, 1970)
Indianapolis Power & Light Co. v. Southeastern Supply Co.
257 N.E.2d 722 (Indiana Court of Appeals, 1970)
Southern Jersey Airways v. Nat. Bk. of Secaucus
261 A.2d 399 (New Jersey Superior Court App Division, 1970)

Cite This Page — Counsel Stack

Bluebook (online)
219 N.E.2d 446, 139 Ind. App. 669, 1966 Ind. App. LEXIS 513, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crescent-city-aviation-v-beverly-bank-of-chicago-indctapp-1966.