Untitled Texas Attorney General Opinion ( 1967 )

Honorable John T. Cox Opinion No. M-55
County.Attorney
Belton, Texas Re: The method to be used by
the County Clerk to ex-
tend or renew chattel
mortgages-recorded prior
to July 1, 1966, the
effective date of the
Texas Uniform Commercial
Dear Mr. Cox: Code, and related questions.
Your letter requesting an opinion from this office
on the above subject matter is as follows:
"What method must the County Clerk use
to extend or renew,chattel mortgages record-
ed prior to July 1, 1966, the effective date
of the Texas Uniform Commercial Code, and
would such extension or renewal be a prior
lien if some secured party filed a financing
statement after July 1, '1966, and prior to
such extension and renewal?
"Prior to July.1, 1966, Articles 5499
and 5499a, V.A.T.S., provided for aestruc-
tion of chattel mortgages after six years
from maturity of the secured indebtedness
and ten years from the date of filing, re-
spectively, unless the 'creditor filed with
.theCounty Clerk an affidavit stating the
indebtedness had not been paid, Section
10-102(l) of the Uniform Commercial Code
expressly repeals these statutes, but Sec-
tion lo-iO2(2) states transactions entered
into prior to July 1, 1966, remain valid
thereafter and may be 'completed, consummated
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Hon. John T. Cox, Page 2 (M-55)
or enforced' inaccordance with prior law.
Therefore;.the.'question~isif a-chattel mort-
gage'is about to be destroyed pursuant to
Articles 5499 or.~5499a~,whethertheaffidavit
required by those statutes'comes'withinthe
meaning of *completed, consummated or enfor-
ced * or if the creditor must create a new
security interest pursuant to thenUniform
Commercial Code in order to maintain his
lien."
The Texas Uniform Commercial Code became effective
in Texas at midnight June 30, 1966 as set out in Section
lo-101 of the Code.
Section lo-102(l)'of the,Texas Uniform Commercial
Code specifically repeals, among other statutes, Articles
5489-99, Vernon's Civil Statutes, as amended, which were
the chattel mortgage statutes.
Article I, Section 16, of the Constitution of
Texas provides that no retroactive lSW or any law impairing
the obligation of contracts shall be made.
The Legislature showed they did not wish to in-
validate or destroy any existing property rights created
under the above repealed statutes by adopting the savings
clause set out in Section lo-102(2) of the Uniform Commercial
Code which reads as follows:
"Transactions validly entered into before
the effective date specified in Section lo-101
and the riqhts, duties and interests flowinq
from them remain valid thereafter and mav be
terminated, completed, consummated or enforced
as required by any statute or other Law amend-
ed or reoealed by this act as thouqh such re-
*do; amendment had not occurred." (Emphasis
.
A chattel mortgage,validly entered into and pro-
perly recorded prior to July 1, 1966,clearly is a transaction
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Hon. John T. Cox, page 3 (M-55)
entered into prior to July 1, 1966; therefore, all statutes
in effect prior to midnight June 30, 1966, should apply to
saia transaction as well as all rights, duties and interests
flowing from it.
Cur Courts have held that statutes will not be
applied retrospectively unless it appears by fair implication
from the language used that it was the intention of the Legis-
lature to make it applicable to both past and future trans-
actions. State v. Humble Oil 61Refininq Co,, 141 Tex. 40,
169 S.W.2d 707 (1943).
The following quoted statute applied to chattel
mortgages prior to July 1, 1966, in counties in this State
having a population less than six hundred thousand.
Article 5499, Vernon's Civil Statutes, reads as
followsr
"All chattel mortgages filed with the
county clerks of this State in accordance with
law shall be prima facie presumed to have been
paid after the 'expirationof six years from the
.
'date‘of the maturity of the debts au&h mor't-" " '~
gages were intended to secure, unless the owner
or holder of such mortgages, his agent or attor-
ney p shall, within three months next before the
expiration of said time, file an affidavit in
writing with the county clerk stating that such
debt has not been paid, and the amount still
due thereon. If such affidavit is not filed,
the clerk shall, at the expiration of said
time, either deliver such mortgage to the maker
or destroy the same."
Article 5499a, cited by,you, only applies to counties
having a population of six hundred thousand or more. Although
this Article was repealed, and is not applicable to Bell
County, this opinion will necessarily apply also to this Article.
In other states where the question has been raised
on a transaction recorded prior to the effective date of the
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Hon. ,7ohnT. Cox. Page 4 W55)
Uniform Commercial Code which required re-filing to extend
the lien after the effective date of the Uniform Commercial
Code, the majority of the Attorney General's Opinions have
held that re-filing would be under the statutes in effect
prior to the effective date of the Code. Ky. Att. Gen. Op.
No. 60-513, 1960, extension of chattel mortgage lien: Cal.
Att. Gen. Op. No. 64-247, 10-7-64, chattel mortgage: Wyo.
Att. Gen. Op. No. 26, 11-14-62, re-filing trust receipt:
Ark. Att. Gen. Op., 6-20-62, extension of trust receipt: and
Md. Att. Gen. Op., 2-5-64 and 5-14-64 held that party re-filing
conditional sales contract could instruct clerk to file under
laws effective prior,to adoption of Uniform Commercial Code.
29 Tex.B,.J;.345.
Also in other states, in cases deciding which law
to apply where there was a savings clause as to laws repealed
by the Code, the laws in effect prior to the Code were applied
to pre-code transactions. Wilson v. Prudential Ins. Co. of
America, 396 S.W.2d 300 (Ark. 1965): First Nat. Bank of
Marvsville v. Bahan, 198 N.E.Zd 272 (Ohio C.P. 1964); Streeter
v. Middleman, 240 Md. 169, 213 A.2d 471 (1965); Luker v. Kells,
411 P.2d 511 (Gkla. 1966).
InTexas our Courts have held that renewal of a
lien does not affect the lien, nor is it a new transaction.
Willis V. Sanger, 40 S.W. 229 (Tex.Civ.App. 1897, error ref.).
It is therefore our opinion that the re-filing by
affidavit required to extend the chattel mortgage lien under
Article 5499 of Vernon's Civil Statutes after the effective
date of the Uniform Commercial Code would not be a new trans-
action within the meaning of the Uniform Commercial Code, but
is an extension of the transaction entered into by the parties
prior to July 1, 1966. Such filing should be made with the
County Clerk.
In the absence of specific instructions by the
mortgagee, to the Clerk, designating the statute under which
he wishes it to be filed, an instrument in affidavit form
showing itself to be an extension of an agreement entered
into prior to July 1, 1966, should be filed in accordance with
Article 5499, Vernon's Civil Statutes. However,an instrument
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Hon. John T. Cox, page 5 (M-55)
purporting to be a continuation statement should be filed in
accordance with the provisions of the Texas Uniform Commercial
Code.
As to your question on priority of liens, this
office cannot answer that question as submitted by you, as
the Texas Uniform Commercial Code places no duty on the
county clerk to determine this matter.
SUMMARY
Chattel mortgages filed prior to July 1,
1966, should be renewed or extended by filing
affidavit with County Clerk as required by
Article 5499 and recorded under chattel mort-
gage laws in effect prior to July 1, 1966.
ORD C. MARTIN
Prepared by William J. Craig
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
W. V. Geppert, Co-Chairman
W. 0. Shults
Gordon Cass
Ralph Rash
Houghton Brownlee
STAFF LEGAL ASSISTANT
A. J. Carubbi, Jr.
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