OPINION OP THE COURT BY
PETERS, J.
This is a suit in equity to construe a bill of sale from Hilo Motors, Limited, to Hilo Finance & Thrift Company, Limited, dated February 8, 1934, though absolute on its face, to be a chattel mortgage and to foreclose the same. Originally Amos De Costa was the sole respondent. After the suit was filed The von Hamm-Young Company, Limited, as the alleged assignee of De Costa was also made a respondent by amendment.
The amended bill of complaint alleges in substance: On July 1, 1933, De Costa purchased an automobile from Hilo Motors, Limited, under a conditional sales agreement by the terms of which the conditional vendee acquired possession but the legal title of the automobile was retained by the vendor; from the time of its purchase until its subsequent delivery, on October 1, 1935, to the respondent von HammYoung Company, Limited, the automobile had been continuously in the possession of De Costa; on February 8, 1934, Hilo Motors at the request of De Costa executed to the Finance Company a bill of sale of the automobile as collateral security for the loan by the Finance Company to De Costa of $1180.80, sufficient of which per agreement between the Motors Company, the Finance Company and De Costa was immediately paid to the Motors Company in full payment and satisfaction of the balance of the purchase price; the loan was evidenced by a promissory note by De Costa and others as makers to the Finance Company as
payee; a balance of tbe indebtedness from De Costa to the Finance Company was overdue and unpaid for which, prior to suit, demand had been made; after suit brought and on, to wit, October 1, 1935, pursuant to an agreement between them, De Costa delivered the automobile to The von HammYoung Company, and the latter, with full knowledge of all the facts, took “legal title” thereto, De Costa having “divested” himself “of all right, title and interest in and to the said car.” The amended bill of complaint also alleges that De Costa at the time of suit was operating the automobile upon the public highways. From this and the other allegations of the bill it would appear that he originally purchased the car with the intention of driving it upon the public highways and continuously used it for that purpose until he parted with possession in October, 1935. It nowhere appears from the amended complaint however that the respective persons whose title or interest was transferred or the respective transferees upon the transfer of title or interest of the legal owner in the automobile on February 8, 1934, and on October 1, 1935, complied with the requirements of the local motor vehicle law in respect to reregistration upon transfer of title by the legal owner to another.
Respondent De Costa answered. The respondent von Hamm-Young Company, Limited, demurred and the demurrer was sustained and the amended bill dismissed as to demurring respondent. From the decree of dismissal plaintiff prosecuted error.
After argument and submission this court of its own motion raised the question of the applicability of the provisions of the local motor vehicle law to the respective transfers from the Motors Company to the Finance Company of February 8, 1934, and from De Costa to The von HammYoung Company, Limited, of October 1, 1935, and particularly the provisions of section 2671, R. L. 1935, as originally enacted or as amended by section 2 of Act 74 (sr.B-59),
L. 1935, requiring reregistration upon tbe transfer of tbe title or interest of a legal owner in and to a vebicle registered under tbe provisions of tbe motor vebicle law. For if tbe provisions of tbe local motor vebicle law and particularly those of section 2671 as originally enacted or as subsequently amended are mandatory, in tbe absence of allegations in tbe amended bill of complaint showing compliance with tbe statutory procedure required, tbe amended bill of complaint is fatally defective and tbe decree appealed from must be affirmed irrespective of tbe reasons assigned by tbe trial judge for sustaining tbe demurrer.
On February 8, 1934, at tbe time that tbe bill of sale by tbe Motors Company to the Finance Company was executed tbe provisions of tbe local motor vebicle law in respect to tbe registration of motor vehicles and tbe statutory procedure required when tbe title or interest of tbe legal owner therein was transferred were those sections of Act 197, L. 1929, found in tbe Revised Laws of 1935 as sections 2664 to 2676, both inclusive. Paragraph 1 of section 2670 and paragraph 7 of section 2671 were amended by sections 1 and 2 respectively of Act 74, supra, but tbe amendments involve subjects with which we are not concerned. Excerpts of tbe law material to our consideration are quoted in the margin.
Free access — add to your briefcase to read the full text and ask questions with AI
OPINION OP THE COURT BY
PETERS, J.
This is a suit in equity to construe a bill of sale from Hilo Motors, Limited, to Hilo Finance & Thrift Company, Limited, dated February 8, 1934, though absolute on its face, to be a chattel mortgage and to foreclose the same. Originally Amos De Costa was the sole respondent. After the suit was filed The von Hamm-Young Company, Limited, as the alleged assignee of De Costa was also made a respondent by amendment.
The amended bill of complaint alleges in substance: On July 1, 1933, De Costa purchased an automobile from Hilo Motors, Limited, under a conditional sales agreement by the terms of which the conditional vendee acquired possession but the legal title of the automobile was retained by the vendor; from the time of its purchase until its subsequent delivery, on October 1, 1935, to the respondent von HammYoung Company, Limited, the automobile had been continuously in the possession of De Costa; on February 8, 1934, Hilo Motors at the request of De Costa executed to the Finance Company a bill of sale of the automobile as collateral security for the loan by the Finance Company to De Costa of $1180.80, sufficient of which per agreement between the Motors Company, the Finance Company and De Costa was immediately paid to the Motors Company in full payment and satisfaction of the balance of the purchase price; the loan was evidenced by a promissory note by De Costa and others as makers to the Finance Company as
payee; a balance of tbe indebtedness from De Costa to the Finance Company was overdue and unpaid for which, prior to suit, demand had been made; after suit brought and on, to wit, October 1, 1935, pursuant to an agreement between them, De Costa delivered the automobile to The von HammYoung Company, and the latter, with full knowledge of all the facts, took “legal title” thereto, De Costa having “divested” himself “of all right, title and interest in and to the said car.” The amended bill of complaint also alleges that De Costa at the time of suit was operating the automobile upon the public highways. From this and the other allegations of the bill it would appear that he originally purchased the car with the intention of driving it upon the public highways and continuously used it for that purpose until he parted with possession in October, 1935. It nowhere appears from the amended complaint however that the respective persons whose title or interest was transferred or the respective transferees upon the transfer of title or interest of the legal owner in the automobile on February 8, 1934, and on October 1, 1935, complied with the requirements of the local motor vehicle law in respect to reregistration upon transfer of title by the legal owner to another.
Respondent De Costa answered. The respondent von Hamm-Young Company, Limited, demurred and the demurrer was sustained and the amended bill dismissed as to demurring respondent. From the decree of dismissal plaintiff prosecuted error.
After argument and submission this court of its own motion raised the question of the applicability of the provisions of the local motor vehicle law to the respective transfers from the Motors Company to the Finance Company of February 8, 1934, and from De Costa to The von HammYoung Company, Limited, of October 1, 1935, and particularly the provisions of section 2671, R. L. 1935, as originally enacted or as amended by section 2 of Act 74 (sr.B-59),
L. 1935, requiring reregistration upon tbe transfer of tbe title or interest of a legal owner in and to a vebicle registered under tbe provisions of tbe motor vebicle law. For if tbe provisions of tbe local motor vebicle law and particularly those of section 2671 as originally enacted or as subsequently amended are mandatory, in tbe absence of allegations in tbe amended bill of complaint showing compliance with tbe statutory procedure required, tbe amended bill of complaint is fatally defective and tbe decree appealed from must be affirmed irrespective of tbe reasons assigned by tbe trial judge for sustaining tbe demurrer.
On February 8, 1934, at tbe time that tbe bill of sale by tbe Motors Company to the Finance Company was executed tbe provisions of tbe local motor vebicle law in respect to tbe registration of motor vehicles and tbe statutory procedure required when tbe title or interest of tbe legal owner therein was transferred were those sections of Act 197, L. 1929, found in tbe Revised Laws of 1935 as sections 2664 to 2676, both inclusive. Paragraph 1 of section 2670 and paragraph 7 of section 2671 were amended by sections 1 and 2 respectively of Act 74, supra, but tbe amendments involve subjects with which we are not concerned. Excerpts of tbe law material to our consideration are quoted in the margin.
Applying the definition of the term “owner” and of the term “legal owner” defined in section 2664 to the allegations of the complaint it would appear that prior to the transfer of the automobile in question by the bill of sale of February 8,1934, the Motors Company was the “legal owner” and De Costa was the “owner” of said automobile and that upon the execution of the bill of sale of February 8, 1934, while De Costa continued to be the “owner” the Finance Company became the “legal owner” thereof. The definition of the term “legal owner” contained in section 2664 includes a person “who holds * * * a mortgage” on a motor vehicle. And the meaning ascribed to the term “legal owner” in section 2664 being expressly attributable to that term wherever used in the provisions of law requiring reregistration and prescribing the procedure necessary to effect the same, it follows that a mortgagee and his mortgagor, similarly as all other parties to the transfer of the legal title to a motor vehicle, must, upon reregistration of the motor vehicle mortgaged, conform to the requirements prescribed. This being so the provisions of section 2671 apply to the transfer of the motor vehicle in question by the bill of sale of February 8, 1934, if as alleged it was intended as a mortgage of said motor vehicle. On February 8, 1934, under the provisions of sec
tion 2671,
supra,
upon the transfer of the title or interest of the legal owner in or to the motor vehicle theretofore registered according to law the person whose title or interest was to be transferred and the transferee were required to write their signatures with pen and ink upon the certificate of ownership issued for the vehicle together with the address of the transferee in the áppropriate space provided upon the reverse of the certificate and the transferee was required, within ten. days thereafter, to forward both the certificate of ownership so endorsed and the certificate of registration to the treasurer for filing. This, from the absence of allegations in the amended bill to that effect, does not appear to have been done. And similarly we may assume from the absence of allegations to that effect that due to such failure the treasurer has not reregistered the automobile nor has he issued to the owner and the legal owner respectively entitled thereto by reason of such transfer, a new certificate of registration and certificate of OAvnership respectively in the manner and form provided by law for original registration. The statute carries its own penalties for failure to comply with the law. One is that until the treasurer shall have issued the new certificate of registration and certificate of ownership delivery of the motor vehicle shall be deemed not
to have been made and title thereto shall be deemed not to have passed and the intended transfer shall be deemed to be incomplete and not to be valid or effective for any purpose.
Where, as here, the motor vehicle law requires reregistration of a registered vehicle upon a transfer of the title or interest of a legal owner in and to the same and prescribes the procedure to be followed to effect such reregistration and also provides that until such reregistration shall have been completed delivery of the vehicle subject to the transfer shall be deemed not to have been made and title thereto shall be deemed not to have passed and the intended transfer shall be deemed to be incomplete for any purpose, one seeking to foreclose a chattel mortgage upon a registered motor vehicle by bill in equity must by appropriate averments show that at the time the motor vehicle was transferred to him by the legal owner by way of mortgage the requirements of the motor vehicle law in respect to reregistration upon transfer were complied with. The provisions of law requiring reregistration and prescribing the procedure to effect the same are mandatory.
(State ex rel Connecticut Fire Ins. Co.
v.
Cox,
306 Mo. 537, 268 S. W. 87;
General Motors Acceptance Corporation
v.
Dallas,
198 Cal.
365, 245 Pac. 184.) Before jurisdiction in equity could be successfully invoked in tbe present case it was necessary that it affirmatively appear by appropriate allegations not only that the bill of sale of February 8,1934, though absolute in form, was intended as a mortgage but that a valid and subsisting lien was created thereby of which the complainant was entitled to foreclosure. The transfer of February 8,1934, is alleged in the complaint thus: “The Vendor * * * executed to the Complainant a bill of sale by the terms of which, for a nominal consideration, the Vendor sold and transferred to the Complainant the said car and all equipment and conveyed the same guaranteed free and clear of liens and encumbrances of all kinds whatsoever,” and “that by * * * agreement * * * between the parties * * * Complainant should hold the legal title of the said car as security for the payment of the said promissory note * * *” and that “the said bill of sale is absolute in form although intended only by the way of chattel mortgage.” These allegations are insufficient to show compliance with the provisions of the statute requiring reregistration. For all that appears from the amended bill of complaint the lien in
tended to be created is, under tbe provisions of tbe statute, incomplete and invalid and ineffective for any purpose. In tbe absence of allegations showing a valid and subsisting lien equity is without jurisdiction of tbe subject matter of the action.
Holding, as we do, that tbe amended bill of complaint did not allege facts sufficient to show that tbe bill of sale of February 8, 1934, created a valid and subsisting lien of which tbe complainant was entitled to foreclosure, we deem it unnecessary to determine whether tbe allegations of the amended complaint in respect to tbe transfer from De Costa to The von Hamm-Young Company, Limited, of October 1, 1935, were similarly insufficient.
Plaintiff in error importunes an expression of opinion by this court upon what it considers to be the vital question involved, viz., whether, under the allegations of the amended bill of complaint, complainant is entitled in its prayer for equitable relief to ask for a deficiency judgment against the respondents jointly. This court can hardly consider what ancillary relief may be accorded a complainant in equity, where the existence of a cause of action entitling him to any relief remains in doubt. Until it appears by appropriate pleadings that complainant has a cause of
action within the jurisdiction of the circuit judge at chambers in equity the discussion of the relief to which it may be ultimately entitled against a party or the parties to the proceeding would be premature. For the present the relief to which the complainant would be ultimately entitléd against the demurring respondent in the event that the transfer of February 8,1934, created a valid and subsisting lien is at best a moot question.
O. 8. Oarlsmith (Oarlsmith
cG
Oarlsmith
on the briefs) for plaintiff in error.
Irwin & Harlocker
filed briefs for defendants in error but did not argue.
The decree appealed from is affirmed and the cause remanded with instructions that upon application therefor the complainant be granted leave to further amend its amended bill of complaint.