General Motors Acceptance Corp. v. Bettes

57 S.W.2d 263
CourtCourt of Appeals of Texas
DecidedJanuary 25, 1933
DocketNo. 7788.
StatusPublished
Cited by7 cases

This text of 57 S.W.2d 263 (General Motors Acceptance Corp. v. Bettes) 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
General Motors Acceptance Corp. v. Bettes, 57 S.W.2d 263 (Tex. Ct. App. 1933).

Opinion

BAUGH, Justice.

Appeal is from a statutory trial of the right of personal property, consisting of three Pontiac automobiles. Appellees seized them under a distress warrant, asserting a landlord’s lien on them for past-due rents owing to ap-pellee Ruth R. Bettes, by L. C. McKean on the building in which the cars were placed and offered for sale. ’ After they had been so seized, appellant filed claimant’s oath and bond, retained possession of the cars theretofore obtained, and subsequently sold same. In a trial to the court, judgment was rendered in favor of appellees against appellant for $1,625, the amount of the rents due appellees by McKean, on the ground that appellees liad a prior landlord’s lien on said cars to secure the rent account.

*264 Appellant’s first assignment is tliat the court erred in holding that it had failed 'to establish its claim of ownership of the cars. The transactions through which it claimed title to the cars were as follows: On May 27, 1931, McKean doing business at Brownwood, Tex., as the McKean Motor Company, ordered the cars from the Oakland Motor Company factory branch at Dallas. Their purchase was financed by appellant as follows: The cars were shipped from the factory to Brownwood, under a bill of sale to the General Motors Acceptance Corporation and bill of lading with draft attached sent to a Brown-wood bank. When the cars arrived, McKean paid draft for $278 and executed his note for $2,375, dated June 22, 1931, due four months after date, and payable to appellant at Dallas, Tex. This note represented the purchase price of the four cars shipped, three of which are here in controversy. McKean at the same time executed and delivered to appellant what is designated a “trust receipt,” under which the cars were delivered into McKean’s possession, unloaded, and placed by him in the rented building on June 24, where they were offered for sale.

On July 14,1931, appellant, under the terms of the “trust receipt,” which was not placed of record in Brown county, and of which ap-pellees had no notice, took possession of said cars and removed them to Coleman county, where appellees had them seized on the following day under the distress warrant.

Clearly title passed under, the bill of sale from the manufacturers into the'General Motors Acceptance Corporation. Industrial Acceptance Corp. v. Corey (Tex. Com. App.) 29 S.W.(2d) 978. But appellant delivered the cars to McKean, who placed them in appel-lees’ building and offered them for sale to the public, and McKean executed and delivered to it his promissory negotiable note for the purchase price, together with the “trust -receipt.”

Appellant contends that the “trust receipt” evidenced merely a consignment or bailment for sale, that appellant retained ownership of the cars while located in appellees’ building, and consequently that no lien for rents could attach. Appellees contend that such trust receipt evidenced such a reservation of title as is required by articles 5489 and 5490, R. S.-1925, to be recorded as a chattel mortgage in order to be valid against creditors; and, ■ not having been registered, same was void as against Ruth R. Bettes, a creditor within the purview of the statute, who acquired a landlord’s lien on the cars to secure past-due rents.

We have concluded that appellees are correct. While the trust receipt acknowledged that appellant was the owner of the cars and bound McKean to hold them for purposes of storage under further instructions of appellant, and not to sell or incumber same until after payment by McKean to appellant “of amounts shown on dealer’s record of purchase and release, etc.,” it also bound him to “pay and discharge all taxes, encumbrances and claims relative thereto.” McKean was a dealer in automobiles, selling both new and secondhand cars to the public. The cars were in his possession clearly for purposes of sale to the public, and were offered for that purpose. Appellant had nothing of record to indicate otherwise than that McKean was the owner of same with full power to sell same to the public. Under such circumstances, had he sold one of said cars to a purchaser in good faith for value without notice of appellant’s claim, such purchaser would undoubtedly have obtained a good title thereto. Industrial Acceptance Corp. v. Corey, supra. Under such circumstances, and the provisions of the trust receipt, which clearly contemplated a sale of the cars by McKean to the public, and the execution and delivery by McKean to appellant of his negotiable promissory note, binding him without qualification to pay to appellant the full purchase price of the cars delivered to him for purposes of sale, we think the trust receipt must be construed as a mere reservation of title to secure the payment of. the note, and clearly within the purview of; articles 5489 and 5499 of the statute. Notj being recorded it was void as to creditors of McKean without notice thereof. Carrollton-Acceptance Co. v. Wharton (Tex. Civ. App.) 22 S.W.(2d) 985; Commercial Credit Co. v. Motor Co. (Tex. Com. App.) 23 S.W.(2d) 702; General Motors Acceptance Corp. v. Boddeker (Tex. Civ. App.) 274 S. W. 1016; Texas Bank & Trust Co. v. Teich (Tex. Civ. App.) 283 S. W. 552; Scruggs v. Crockett Automobile Co. (Tex. Civ. App.) 41 S.W.(2d) 509.

Considered in its general aspects, in the light of the circumstances and of the written instruments executed, we think it is obvious that appellant was merely financing the dealer in his purchase of new cars, that such cars were to be sold by him to the public and the appellant to be repaid by the dealer, out of the proceeds of such sales, the funds advanced by it to him, in carrying on. his business. The dealer was consequently clothed with the indicia of ownership, if not with actual title to the cars, and the purposes and import of the note and trust receipt executed by him were merely to evidence and secure the appellant in the sums advanced by it to him to enable him to carry on his business of selling automobiles.

While one of appellant’s witnesses tes-tilled that it was the custom of appellant, followed in the instant case, to surrender to the dealer the note executed by him, when appellant repossessed the cars, there is nothing either in the trust receipt or in the note itself obligating it to do so. The note was an unconditional negotiable promise to pay the purchase price of the cars. Any collateral *265 agreement or custom of appellant seeking to vary its express written terms was therefore not admissible. Robertson v. City Nat. Bank, 120 Tex. 226, 36 S.W.(2d) 481; Daggett v. Corn (Tex. Civ. App.) 64 S.W.(2d) 1098.

It is well settled that the owner of a rented building is a creditor of bis tenant for rents due to him within the purview of the statute, and under article 6238 entitled to a preference lien on the property of the tenant in the building to secure rents due, superior to an elder unrecorded mortgage on the same property. Berkey & Gay Fur. Co. v. Sherman Hotel Co., 81 Tex. 136, 16 S. W. 807; Low v. Troy Laundry Machinery Co. (Tex. Civ. App.> 160 S. W. 136; Cave v. Talley (Tex. Civ. App.) 298 S. W. 912; Carrollton Acceptance Co. v. Wharton, supra.

Appellant’s second assignment and remaining contention is as follows: “The trial court erred in decreeing the automobiles in. controversy were subject to a landlord's lien securing appellees in the payment of rents due them by L. C.

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57 S.W.2d 263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/general-motors-acceptance-corp-v-bettes-texapp-1933.