Wheeler v. Kraner

69 P.2d 881, 21 Cal. App. 2d 460, 1937 Cal. App. LEXIS 297
CourtCalifornia Court of Appeal
DecidedJune 21, 1937
DocketCiv. 5715; Civ. 5716
StatusPublished
Cited by3 cases

This text of 69 P.2d 881 (Wheeler v. Kraner) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wheeler v. Kraner, 69 P.2d 881, 21 Cal. App. 2d 460, 1937 Cal. App. LEXIS 297 (Cal. Ct. App. 1937).

Opinion

PLUMMER, J.

—The proceedings in the above-entitled cases involve the constitutionality of section 2980 of the Civil Code, in so far as the same relates to conditional contracts covering the sale of equipment and machinery used or to be used for mining purposes, and arises out of a third party claim to such property taken under an attachment *461 process to satisfy the claims of creditors which were created during the time the property involved was in possession of the debtor-buyer, the conditional sales contract not being recorded. The court held that the claims of the creditors were superior to that of the seller under the conditional contract of sale.

The record shows that on or about the 11th day of July, 1935, certain equipment and machinery were sold under a conditional contract, title to remain in the seller until the purchase price had been fully paid. The machinery and equipment were such as could be used, and which were actually used for mining purposes, even though it is admitted that such equipment and machinery might also be used for other purposes.

Upon this appeal it is insisted on the part of the third party claimant that section 2980, supra, is void as being in contravention of sections 11 and 21 of article I of the state Constitution, in that there is no reasonable basis for classifying equipment and machinery used or to be used for mining purposes, separate and distinct from other chattels, sold on conditional contracts, and that the giving of creditors a right to attach such property, when the conditional contract of sale was unrecorded, constituted the giving of an unlawful preference to creditors dealing with the buyer of mining equipment and machinery under a conditional contract of sale.

Section 2980, supra, was enacted in 1927, and has been amended a number of times. As originally adopted it referred only to conditional contracts of sale covering livestock or poultry. The next amendment made the section cover livestock and animate chattels. In 1933 the legislature amended the section so as to cover equipment and mining machinery used and to be used for mining purposes. Since that date the section has been further amended, but the questions here involved arise under the section as it stood in 1933. The constitutionality of the section as it stood prior to 1933 amendment was involved in the case of Seaboard Dairy Credit Corp. v. Erickson, 41 Fed. (2d) 726. In that case the Circuit Court of Appeals for the Ninth Circuit held that the section was constitutional, but did indicate that the section as it then read was void for uncertainty. The constitutionality of the classification, however, was upheld, and *462 to that extent the decision may be considered as authority for the conclusions hereinafter reached.

Section 2980, supra,, so far as involved herein, provides as follows: Every contract of conditional sale of equipment and machinery used or to be used for mining purposes shall be recorded (within twenty days) in every case, in the county where the property is situate; otherwise, it shall be void as to the interest of the seller against bona fide purchasers and encumbrances and those having no actual knowledge of the contract while said property is in possession of the buyer.

In 1931 the validity of section 2980, supra, was considered by the Supreme Court in the case of Seaboard Acceptance Corp. v. Shay, 214 Cal. 361 [5 Pac. (2d) 882]. In that ease the Supreme Court followed the language used by the Circuit Court of Appeals and held that the section as it then stood was void for uncertainty. The constitutionality of the section was not expressly passed upon, but inferentially it does appear that the Supreme Court was in accord with the views of the Circuit Court of Appeal in upholding the constitutionality of the section as it then read.

In the Shay case the court took occasion to make five recommendations in order to clear up the uncertainty of the section. Those recommendations called for the insertion in the statute of the following provisions:

1. The voiding provision must be limited to the clause reserving title in the seller;
2. There must be inserted a provision that the contract must be recorded within a reasonable time;
3. There must be inserted a provision that only those dealing with the buyer during the period of nonreeordation are protected;
4. There must be inserted a provision that only those acting in good faith are protected;
5. There probably would have to be inserted a provision limiting the application of the statute to those dealing with the buyer and excluding those dealing with the seller.

Following this decision the legislature in 1933, as we have stated, amended the section, and in following the recommendations of the Supreme Court, also inserted the provision making the section applicable to machinery used or to be used for mining purposes.

The constitutionality of the section referred to being, as we think, upheld, the only question remains as to the pro *463 priety and legality of the classification. A survey of the cases reveals that mining has been held a proper subject for classification, and that liens giving to laborers in mines, claims for wages where liens are not given to other laborers, is a proper classification.

In the early case of Quale v. Moon, 48 Cal. 478, the contention was made that the act giving a lien to miners and to laborers working upon miner’s claim, but not giving a lien to engineers upon railroads or laborers in factories, violated the provision of the Constitution relied upon in this case, which reads: “All liens of a general nature shall have a uniform operation.” The court held that the section of the Constitution was not violated. If the classification is reasonable and the authorities are practically unanimous in holding that the classification is a subject entirely within the control of the legislature, it is the duty of the court to uphold the same. That there is a reason for classifying equipment and machinery used for mining purposes is clearly apparent. Such machinery or equipment is either in place or confined in its use to a limited locality, and especially for the development of property which is entirely different in its characterizations from that of any other kind of property. Viewed as real estate, mining property is entirely distinct and separate in its characterizations from any other property classified as real estate. The object, of course, of the legislature was and is to protect persons dealing with operators of mining property when the equipment and machinery used thereon is bought on conditional sales contract.

The questions presented to us upon this appeal have been learnedly considered and set forth in the ease of In re Great Western Petroleum Corp., by the District Court, Southern District of California, 16 Fed. Supp. 247.

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Bluebook (online)
69 P.2d 881, 21 Cal. App. 2d 460, 1937 Cal. App. LEXIS 297, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wheeler-v-kraner-calctapp-1937.