United States National Bank v. Atlas Auto Body, Inc.

335 N.W.2d 288, 214 Neb. 597, 36 U.C.C. Rep. Serv. (West) 1024, 1983 Neb. LEXIS 1149
CourtNebraska Supreme Court
DecidedJune 17, 1983
Docket81-738
StatusPublished
Cited by4 cases

This text of 335 N.W.2d 288 (United States National Bank v. Atlas Auto Body, Inc.) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States National Bank v. Atlas Auto Body, Inc., 335 N.W.2d 288, 214 Neb. 597, 36 U.C.C. Rep. Serv. (West) 1024, 1983 Neb. LEXIS 1149 (Neb. 1983).

Opinions

Krivosha, C.J.

This replevin action was filed in the municipal court of Omaha, Douglas County, Nebraska, by the United States National Bank (U.S. National) to obtain possession of a 1979 Volkswagen automobile. The bank was the holder of a valid purchase money security interest in that vehicle. The municipal court found that Atlas Auto Body, Inc. (Atlas), by reason of an artisan’s possessory lien for labor, materials, and storage, had a superior right to the collateral in question under Neb. U.C.C. § 9-310 (Reissue 1980). On appeal to the District Court the judgment was reversed and the cause remanded to the municipal court with directions to place U.S. National in possession of the collateral and to determine the amount of damages, if any, due and owing the bank for wrongful detention. From that judgment Atlas has appealed to this court. It has assigned two errors. The first assignment claims that the District Court erred in finding that U.S. National has a superior right in the collateral. The second assignment claims that the District Court erred in not permitting Atlas an artisan’s lien for storage charges.

The parties have stipulated as to the facts in this case. On March 10, 1979, Thomas L. Sheppard, do[599]*599ing business as T & A Leasing, purchased a 1979 Volkswagen Dasher from Westroads Volkswagen-Mazda (Westroads). On that day Sheppard executed and delivered a written promissory note to Westroads. Westroads in turn assigned all its right, title, and interest to this note to U.S. National. The Volkswagen Dasher was pledged as security for this note. In return for and in reliance on this pledge and note, U.S. National extended Sheppard a loan of $8,919 at an interest rate of 12 percent per annum. This money was given so as to enable Sheppard to purchase this automobile, thus giving U.S. National a valid purchase money security interest in the Dasher. This security interest is noted on the face of the certificate of title to this automobile and is the first such interest noted thereon. This certificate was in the possession of U.S. National.

Sheppard has defaulted on his note, leaving $2,010 plus interest unpaid. As a result of this default, U.S. National, on December 23, 1980, submitted to the clerk of the Douglas County Motor Vehicle Division an affidavit of repossession and the original certificate of title.

On or about February 20, 1980, Sheppard took the Dasher to Atlas for the purpose of having it repaired. After these repairs were made Atlas attempted to but was unable to contact Sheppard. The fair and reasonable cost of these repairs is $350. At the time Atlas took possession of this Dasher, Atlas did not see its certificate of title, but did see the registration for the vehicle, which carried the name of Thomas L. Sheppard.

Both plaintiff and defendant have attempted to but are unable to find or contact Thomas L. Sheppard. They both also remain unpaid. It is agreed that they both have a superior right to this automobile over Sheppard. This collateral remains in the possession of Atlas.

The only question presented by this appeal is, Does a party having a prior lien on a motor vehicle [600]*600noted on the vehicle’s certificate of title take priority over the subsequent lien of an artisan arising from repairs and services rendered in the artisan’s ordinary course of business? In short, who, as between U.S. National and Atlas, has the superior right to this vehicle?

Atlas argues that under the provisions of § 9-310 it has a superior lien over the lien held by U.S. National. Generally, § 9-310 gives parties in the position that Atlas is in here priority over earlier perfected security interests. “When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise(Emphasis supplied.) The purpose behind this statute is stated in the Comments to this section: “To provide that liens securing claims arising from work intended to enhance or preserve the value of the collateral take priority over an earlier security interest even though perfected.” § 9-310, Comment 1. Clearly, this statute provides that artisans, who in the ordinary course of business enhance the value of an item by services and materials rendered, have an interest in that item, to the extent of the value of those services and materials, which is superior to other interests even if they be prior perfected security interests.

U.S. National, on the other hand, argues that under the provisions of Neb. Rev. Stat. § 60-110 (Reissue 1978) its lien is prior and therefore superior to the lien of Atlas. While this statute was originally enacted before the Uniform Commercial Code, it has since been amended to read in part as follows: “The provisions of article 9, Uniform Commercial Code, shall never be construed to apply to or to permit or require the deposit, filing or other record whatsoever of a security agreement, conveyance intended [601]*601to operate as a mortgage, trust receipt, conditional sales contract, or similar instrument, or any copy of the same covering a motor vehicle. Any mortgage, conveyance intended to operate as a security agreement as provided by article 9, Uniform Commercial Code, trust receipt, conditional sales contract or other similar instrument covering a motor vehicle, if such instrument is accompanied by delivery of such manufacturer’s or importer’s certificate and followed by actual and continued possession of same by the holder of said instrument or, in the case of a certificate of title, if a notation of same has been made by the county clerk on the face thereof, shall be valid as against the creditors of the debtor, whether armed with process or not, and subsequent purchasers, secured parties and other lienholders or claimants but otherwise shall not be valid against them, except that during any period in which a motor vehicle is inventory, as defined in subdivision (4) of section 9-109, Uniform Commercial Code, held for sale by a person or corporation who is licensed as provided in Chapter 60, article 14, and is in the business of selling motor vehicles, the filing provisions of article 9, Uniform Commercial Code, as applied to inventory, shall apply to a security interest in such motor vehicle created by such person or corporation as debtor without the notation of lien on the instrument of title.” (Emphasis supplied.) Further, U.S. National argues that our decision in White Motor Credit Corp. v. Sapp Bros. Truck Plaza, Inc., 197 Neb. 421, 249 N.W.2d 489 (1977), supports its position in this case. In White Motor we found that, under § 60-110, White Motor had a superior interest in these vehicles over that of the artisan, Sapp Brothers. In the White Motor case, however, Sapp Brothers did not have a possessory lien under Neb. Rev. Stat. § 52-201 (Reissue 1978), and therefore § 9-310 did not apply. Further, Sapp Brothers did not contest the trial court’s holding that White Motor was entitled to possession. It therefore is not authority in this case. [602]

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United States National Bank v. Atlas Auto Body, Inc.
335 N.W.2d 288 (Nebraska Supreme Court, 1983)

Cite This Page — Counsel Stack

Bluebook (online)
335 N.W.2d 288, 214 Neb. 597, 36 U.C.C. Rep. Serv. (West) 1024, 1983 Neb. LEXIS 1149, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-national-bank-v-atlas-auto-body-inc-neb-1983.