Piedmont Land & Development Co. v. Carney

192 A.2d 67, 232 Md. 21, 1963 Md. LEXIS 654
CourtCourt of Appeals of Maryland
DecidedJune 17, 1963
Docket[No. 259, September Term, 1962.]
StatusPublished
Cited by4 cases

This text of 192 A.2d 67 (Piedmont Land & Development Co. v. Carney) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Piedmont Land & Development Co. v. Carney, 192 A.2d 67, 232 Md. 21, 1963 Md. LEXIS 654 (Md. 1963).

Opinions

[24]*24Prescott, J.,

delivered the opinion of the Court.

This appeal is from an order directing the sheriff to turn over the proceeds of sale of a 1962 Thunderbird motor car to one of the appellees. The facts are not in dispute. Carney was indebted to Piedmont on a note dated February 5, 1962, and judgment by confession was entered thereon on March 20, 1962. On March 26, 1962, Carney purchased the automobile in question subject to a conditional sales contract which was assigned to Universal C. I. T. Credit Corporation. On April 2, 1962, the Department of Motor Vehicles issued a title certificate on the car, listing thereon a lien in favor of C. I. T. On April 10, 1962, Piedmont obtained and had placed in the hands of the sheriff, a fi.fa. on its judgment, and the sheriff levied on April 12, 1962. The conditional sales contract was recorded on April 18, 1962. C. I. T. intervened on June 27, 1962, and claimed the proceeds of the sheriff’s sale. The trial judge sustained C. I. T.’s claim.

C. I. T. contends that Piedmont had actual notice of the conditional sales contract prior to April 10, 1962, by information obtained through the Department of Motor Vehicles, and is therefore not entitled to any assistance from Article 21, Section 66, quoted below. We find nothing in the record to support the contention. The Department is not a record office hence it does not afford constructive notice. The petition filed by C. I. T. indicates, and the trial court stated in his opinion, that actual notice was not received by Piedmont until after the sheriff’s levy. If C. I. T. relied upon actual notice it should have alleged and proved the same.

The appellant contends that since it acquired a lien prior to the recordation of the conditional sales contract, although subsequent to the delivery of possession of the automobile to the buyer, it should prevail. C. I. T. contends that since Piedmont was an antecedent creditor it is not entitled to preference on a lien acquired subsequent to the transfer of possession subject to the conditional sales contract. The answer depends upon the proper construction of Code (1957), Art. 21, Sec. 66, which reads in part:

[25]*25“Every * * * contract for the sale of goods and chattels * * * wherein the title thereto * * * is reserved until the same be paid in whole or in part, or the transfer of title is made to depend upon any condition therein expressed and possession is to be delivered to the vendee, shall in respect to such reservation and condition, be void as to subsequent purchasers, mortgagees, incumbrancers, landlords with liens, pledges [pledgees], receivers, and creditors who acquired without notice a lien by judicial proceedings on such goods and chattels, * * * until such note, sale or contract be in writing, signed by the vendee and be recorded, as provided in this section * * (Italics added.)

It seems clear that Piedmont falls into the category of a creditor “who acquired without notice a lien by judicial proceedings” on the automobile, and the only controversy is whether the word “subsequent” modifies the word “creditors.” In determining this question, it will be helpful to outline the history of the statute, and to examine the prior decisions of this Court dealing with it and similarly worded statutes.1 Section 66 was first enacted into law in 1916. It provided that conditional sales contracts, wherein possession was to be delivered to the vendee, would be void “as to third persons without notice” until in writing, signed by the vendee and recorded. During the period of time that the above quoted language remained in the statute (1916 to 1949), this Court and the Federal Courts had occasion to deal with and comment thereon. This Court defined the meaning of “third persons without notice.” They were defined as purchasers, lienors and subsequent general creditors of the conditional vendee, i.e., creditors who became such after the delivery of the property and before the recording of the contract. Roberts & Co. v. Robinson, 141 Md. 37, 118 A. 198; Meyer Motor Car Co. v. First Nat. Bank, [26]*26154 Md. 77, 140 A. 34; Gunby v. Motor Truck Corp., 156 Md. 19, 142 A. 596; Enterprise Fuel Co. v. Jones, 99 F. 2d 928; In Re Shipley, 24 F. 2d 991.

In Stieff v. Wilson, 151 Md. 597, 135 A. 407, this Court stated that the Act of 1916 “does not intend any departure from the well-known American theory and purpose of recording claim to title, that is, to protect persons who might subsequently deal with the property and part with value for it without notice of the earlier conveyance.” (Emphasis added.) This statement was quoted with approval in 1954 (after the amendment of 1949, which will be mentioned shortly) in Tatelbaum v. Pantex Mfg. Corp., 204 Md. 360, 104 A. 2d 813.

In Gunby, supra, a case before the amendment of 1949, the precise question presented here was decided to the effect that the Act of 1916 did not apply in favor of creditors whose claims arose out of transactions prior to the date of the delivery of property covered by a conditional sales contract, even though judgment was obtained thereon afterwards. In this case, the Court quoted from the earlier case of Davis v. Harlow, 130 Md. 165, 100 A. 102, as follows: “‘These sections [of the Code relating to the recording of mortgages] have been passed upon in a long line of decisions in this state and we must give them the force and effect they have long been held to be entitled to, that is, that they are for the protection of creditors becoming such after the date of the mortgages, either unrecorded or defectively executed [italics added].’ ” The Court then added: “We see no reason why the sections relating to conditional sales contracts should be differently construed in principle.”

Thus, it is seen that prior to the amendment of 1949 the decisions of the Court of Appeals had made it plain that the purpose of the Act of 1916 was not to protect antecedent creditors of the conditional vendee, but to protect purchasers, subsequent lienors, and subsequent general creditors.

In 1949 and 1951, the Legislature amended Section 66. As pertinent here, the words “third persons without notice” were eliminated, and conditional sales contracts, under certain cir[27]*27cumstances, were rendered void as to “subsequent purchasers, mortgagees, incumbrancers, landlords with liens, pledgees, receivers, and creditors who acquired without notice [the words “without notice” were inserted by the 1951 amendment] a lien by judicial proceedings on such goods and chattels.” 2 It will be noted that we have the adjective “subsequent” followed by seven nouns. Our inquiry, as pointed out above, is whether “subsequent” modifies the word “creditors.” Under all rules of construction, “subsequent” modifies the word “purchasers,” the noun immediately following it. We have held that “subsequent” also modifies the words “mortgagees” and “incumbrancers” (the only others of the seven nouns so far passed upon), and, in so doing, we commented upon the objectives of the statute, after the 1949 amendment.

In Mohr v. Sands, 213 Md. 206, 131 A. 2d 732, Chief Judge Brune, for the Court said:

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Piedmont Land & Development Co. v. Carney
192 A.2d 67 (Court of Appeals of Maryland, 1963)

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Bluebook (online)
192 A.2d 67, 232 Md. 21, 1963 Md. LEXIS 654, Counsel Stack Legal Research, https://law.counselstack.com/opinion/piedmont-land-development-co-v-carney-md-1963.