Untitled Texas Attorney General Opinion ( 1947 )

; ‘.
,-
R-571
OFFICE OF
THE ATT~ORNEY GENERAL
AUST~, TEXAS
I
. PRICE DANIEL
ATTORNEYGENERAL June 30, 1947
Honorable D. C e Greer Opinion X0. V-288
State Highway Engineer
Texas Hi hway Department Re: The effect to be ac-
Austfn 22 p Texas corded the exls’tenc6-
of a lien recorded 6n
a previous certificate
of title when issuing
8 new certificate of
title to a purchase*
at a sheriff’s sale.
Dear Sir:
Your request for our opinion is on the following
question:
..“When title has been issued on a motor
vehicle and when such title records a lien,
should this Department obtain a release of
that lien in the event the motor vehicle Is
sold at a sheriff’s sale?”
In connection with this question, you state that
you have heretofore asked the question bf this Depart-
ment: “What evidence was needed to Issue title to
the purchaser of a motor vehicle which was sold at
sheriff ss sale?” That question applied to: (1) motor
vehicles on which no title had been issued; (2) motor
vehicles on which title had been issued and no lien
recorded and; (3) motor vehicles on which title had
been issued and a lien recorded. In response to that
question, Opinion IVo. 0-3842 was rendered. You were
advised to Issue a certificate of title to a purchaser
of the automobile at a sheriff’s sale made pursuant to
a court order. This answer was made on the assumption
that a lien against a motor vehicle had been foreclosed
by judicial process and that the rights of all the par-
ties had been fully adjudicated by the coui%. You ad-
vise that pursuant to said opinion your policy has been
to issue a clear title to a purchaser of a motor vehl-
cla at a sheriff’s sale regardless of whether there was
or was.,not a lien recorded on the previous title.
Hon. D. C. Greer, Page 2 v-288
Opinion O-3842 assumed that any lien against
the motor vehicle had been foreclosed by,judlcial RI;-
cess. The conclusion in the former opinion that,
Is the duty of your Department to issue a certificate
of title to the purchaser at a sheriffIs sale made pur-
suant to the court’s order,” Is correct. But. where the
motor vehicle baa been seized under exeoutlon, not to
foreclose a lien against the automobile but to satisfy
a judgment debt of the mortgagor to a third party, a
different situation arises. Your question Involves the
effect of a prior lien recorded upon a certificate of
title when your Department Is reque,sted to Issue a new
cer’lflcate of title, on a motolr vehicle sold at a sher-
lff~*s sale where the prior lien remains outstanding on
the record.
It may be stated as a general rule that prior lien
holders have the right OS protection against subsequent.
judgment or execution liens. In 18 Texas Jurisprudence,
page 766, paragraph 193, we find:
“Where the property of the defendant ia
execution has been mortgaged, its sale under
execution conveys only the Interest of the
mortgagor, subject to the rights of the mort-
gageen
Rule 643 of Vernon’s Texas Rules of Civil Procedure,
replaces, but does not change, Art. 3797, V.C.S,, and
reads as Sollowe:
“Goods and chattels pledged, assigned or
mortgaged as security for an9 debt or contract,
may be levied upon and sold on execution against
the person making the pledge, assQ&nent or
mortgage subject thereto; and the yurchaselr
shall be entitled to the possession when It Is
held by the pledgee, assignee or mortgagee, on
complying with the conditions of the pledge,
assignment or mortgage.” .,
Section 35 of Article 1436-l V.P.C., provides in
part:
“Whenever the ownership of a motor vehicle
registered or licensed within this E&ate IS
transferred by operation of law, as upon l * l
judicial sale or any other Involuntary dlvesture
of ownership, the Department shall Issue a new
certificate of title upon beiag provided with
Hon. D. C. Greer, Page 3 V-288
certified.cop9 of * * t order, or bill of
'stilefrom the oSflcer *king the judicial
stile.l **.*“’
Section 42 OS the same Article provides:
'No lien on any motor vehicle shall be
valid as against third parties without actual
knowledgb thereof or enforceableagainst the
motor vehlole of any such third parties as
tbe,lssuanceof e certificateof tltle'therq-
~. .
of;un1esa an application for a ndw title Is
niadeas prescribed In this Act and all first
and stibordlnateliens-notedby the Department
thereon."
Thus, under the rule that a prior lien holder
Is entitled to protectl6n as agalnst,the purchaser of
the automobllb under a tiherlff'asale, we conclude tbat
~lt.l6'~th&duty~'of
your Department ln Issuing a new cer-
tificate of title on a motor vbhlcle sold at a sheriff's
sale to satisfy a judgment debt owing,to a third part9
to r&cord-thdreon'theprior recorded lien or liens. You
are not charged with the duty of obtaining'arelease of
any li&; .yourdutJr~in~l,ssulng,anew certificateof
tltle'ls,torecord thereon the prior existing liens ln
order to protect the rights of the lien holders.
SUMMARY .
Where a'purchaser of a motor vehicle sold
,at a sherlffts sale to satisfy CLjudgment debt
owing to,a third pert9 makes sppllcstlon for a
certlflcate.oftitle, It Is the duty of the
~TexasHighway Department to Issue a new certifi-
cate of title and recordson the new certificate
all prior liens recorded on a previous certlfl-
cate of title. Article 1436-1, Sections 35 and
42, V. P. C.; Rule 643,: Vernon's Texab Rules of
Civil Procedure.
Very trulj yours,
APPROVED: ~ATTORNEYGENERAL OF TEXAS
ATTORNEY
GER'ERAL
Charles E. Crenshaw
CEC:rt:e~t Assistant