Fergus Motor Co. v. Sorenson , 73 Mont. 122 ( 1925 )

The contract before us provides that title to the automobile shall remain in the Fergus Motor Company until the purchase price is paid in full. Such a contract does not evidence a sale, but is merely an executory agreement to sell. (Sec. 7584, Rev. Codes;Malin-Yates Co. v. Justice Court, 51 Mont. 133,149 P. 709.) It is, however, the character of agreement referred to in section 7594 and is designated generally a conditional sale contract.

The automobile was present in Fergus county on the day the contract was signed and delivered, but it was removed immediately to Garfield county, the home of Storm, the conditional vendee, and there it was kept and used.

The contract was filed in Garfield county before the rights of any third party intervened, and the only question for determination is: Was it filed in the proper county? Section 7594, Revised Codes, provides that such a contract shall be filed in the county "wherein the property is situated," otherwise it shall be void as to bona fide purchasers, mortgagees or attaching creditors of such property prior to such filing.

It must be assumed that in enacting the statute the legislature had a purpose in view, and if that purpose can be discovered, a key to the proper interpretation of the Act is provided.

Prior to the enactment of section 7594, a conditional sale contract was not required to be filed, and although not filed and its existence not known to anyone but the vendor and vendee, it protected the interest of the vendor against everyone who dealt with the property. Neither a bona fide purchaser from the vendee in possession, a subsequent mortgagee, nor an attaching creditor of the vendee could obtain any title to or interest in the property covered by the contract, as against the interest of the vendor. (Heinbockle v. Zugbaum, 5 Mont. 344, 51 Am. Rep. 59, 5 P. 897; Silver Bow M. M. Co. v. Lowry,6 Mont. 288, 12 P. 652; Miles v. Edsall, 7 Mont. 185,14 P. 701; Goodkind v. Gilliam, 19 Mont. 385, 48 P. 548;Bennett Bros. v. Fitchett, 24 Mont. 457, 62 P. 780.) Since the vendor was already protected as fully as he could be protected by law, it is manifest that the statute was not enacted for his benefit. On the other hand, those who dealt with the property in the possession of the vendee did so at their peril. The law did not provide any means by which they could know whether the vendee was or was not the owner of the property which he assumed to own, and it was in view of this state of the law that section 7594 was enacted.

It would seem, then, practically demonstrable that the sole purpose was to provide the means — a public record — of imparting notice to every one entitled to notice, viz., those who dealt with the property, in the character of bona fide purchasers, subsequent mortgagees, or attaching creditors. If this were the purpose, then the legislature must have intended that the contract should be filed where the filing would be effective, where it would tend, in some degree, at least, to give the notice it was designed to give.

By the majority opinion the place of filing is determined solely by the place where the property happens to be on the day when the contract is signed and delivered. To illustrate: A., a resident of Lincoln county, and B., a resident of Carter county, meet in Helena. A., who has his automobile with him, contracts to sell it to B., and a conditional sale contract is drawn, signed and delivered. A. returns to his home in Lincoln county, and B. takes the car to his home in Carter county and keeps and uses it there. By the majority opinion that contract would have to be filed in Lewis and Clark county, although the property affected by it was intended to be kept and was kept 400 miles away. In other words, a prospective purchaser, or mortgagee, or a creditor of the person in possession of personal property who desires to deal with such property, must make inquiry of the county clerk of every one of our fifty-six counties before he can be assured that the property is not subject to a conditional sale contract. Such a construction renders section 7594 ridiculous and ought not to be adopted unless the very terms compel it.

Bearing in mind that the statute declares that the contract must be filed in the county "wherein the property is situated," I submit that the language should be given a meaning which will effectuate the purpose for which the statute was enacted. And that purpose would be carried into effect if the contract is filed in the county where the property is kept — where it has its home. That this is the plain meaning of section 7594 is clear to my mind. The word "situated" negatives the idea of mere transitory presence; on the contrary, it connotes permanency to a degree at least. Webster's International Dictionary defines the term as follows: "Situated: Having a site; situation or location; being in a relative position; permanently fixed, placed, located; as a town is situated or situate on a hill or on the seashore."

And this court has heretofore committed itself to this view. Section 2013, Revised Codes, provides: "The property of every firm and corporation must be assessed in the county where the property is situate." In Flowerree Cattle Co. v. Lewis ClarkCounty, 33 Mont. 32, 8 Ann. Cas. 674, 81 P. 398, that section was construed to mean that such property must be assessed in the county which is its home, where it is kept. We said: "If the property be real estate, its actual situs determines the question of its home. If personal property belonging to a merchant, the county where the merchant's business is conducted determines the home of such property; and likewise, if the property be range stock, its home is its accustomed range." The numerous authorities supporting that conclusion will be found cited in the note to 8 Ann. Cas. 677.

A statute of New Hampshire provided that when a mortgagor of chattels resides out of the state, the mortgage should be filed "in the town in which the chattel is situate." In construing that statute the court said: "Of course a short stay of movables during their transit through a place is not within its meaning. But in an ordinary sense movables are situate in a place where they are used day after day, where they are stored, housed or stabled when not in actual use and where the business in which they are employed is done. To the ordinary observation of people for whose protection and information the statute was intended, that is their location." That language is peculiarly applicable here, for there is not a suggestion in the record that the automobile in question was ever in Fergus county except for the one day upon which the contract was signed and delivered.

In my judgment the authorities cited in the majority opinion do not support the conclusion reached, or even tend to that result. Studebaker Bros. Co. v. Mau, on rehearing, 14 Wyo. 68,82 P. 2, did not involve a construction of any statute. The one question for determination was whether an unfiled conditional sale contract, valid in Utah where executed, should be given effect in Wyoming. The inquiry was answered in the affirmative, and the language quoted in the majority opinion is obiterdictum. Decided cases from other jurisdictions, based upon statutes materially different from ours, are of no avail. Neither is it even persuasive to cite Chapter 23, Laws of 1923. That Chapter does nothing more than declare that a conditional vendee who removes personal property subject to a conditional sale contract, from the county where the contract was executed, without the written consent of the vendor, is guilty of a public offense; but it does not refer in the remotest degree to the question before us now. If the vendor's consent is obtained, the property may be removed. If it is not obtained, the property may not be removed lawfully, in which event the contract must be filed in that particular county, not because it is the county where the contract was executed, but because it is the county where the property is situated; that is, where it must be kept.

If it can be argued that by the enactment of Chapter 23, above, the legislature undertook to say what the legislature meant by the terms employed twenty-four years prior thereto, my answer is: "So far as an Act in terms professes to declare the past or present meaning of an existing statute, it is not legislative and not binding on the courts." (2 Lewis' Sutherland on Statutory Construction, sec. 576.)

A reference to our chattel mortgage statute is equally unavailing. It must be conceded that the legislature could have made the same provision for filing a conditional sale contract as it made for a chattel mortgage; but the fact is, it did not do so, and this court is without authority to amend section 7594 so as to make the two statutes harmonize.

By the majority opinion the words "at the time the contract is executed" are inserted in section 7594, notwithstanding the statute forbids it. Section 10519, Revised Codes, declares: "In the construction of a statute or instrument, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted."