City of Hamlin v. Motor Inv. Co.

I disagree with the majority ruling that Presley (assignor of Motor Investment Company) acquired no valid lien as against City of Hamlin, his prior mortgage being dated November 4, 1940, evidenced by notation thereof on the Hedrick manufacturer's certificate and instrument of mortgage filed in the Dallas County chattel mortgage records. The sale to appellant City was subsequent thereto, or March 14, 1941.

In truth, this case is ruled by Motor Inv. Co. v. Knox City, Tex.Sup.,174 S.W.2d 482, 486, as Presley had fully complied with Sec. 41 by noting on the manufacturer's certificate the fact of his mortgage, and same was incident to and simultaneous with the sale of the truck by Elkins Motor Company to Hedrick, being to the extent of $750 a cash advancement by Presley on the purchase price. Here, in the subsequent negotiations between Hedrick and City of Hamlin, the latter could easily have protected iself by demanding profert of manufacturer's certificate, whereby the prior mortgage would have been disclosed. Although our Supreme Court, in Motor Inv. Co. v. Knox City, supra, holds that, while transfer of manufacturer's certificate is not essential to the validity of a first sale, yet a purchaser is charged with notice of any lien that may be already noted thereon. On all fours with the instant facts, Judge Alexander there states: "It is true that Section 41 provides that no lien shall be valid on any motor vehicle unless there is noted on the manufacturer's certificate certain evidence of the existence of such a lien, and, by implication at least, such statute charges purchaserswith notice of such a lien if it is so noted on the certificate. For thisreason it is necessary for purchasers, in order to protect themselvesagainst any outstanding liens shown on the certificate, to obtain suchcertificate before buying the vehicle; * * *." (Italics mine)

The majority further holds that the Presley-Hedrick loan was violative of Art. 4000 (passed in 1879). This old statute (4000) was superseded, in so far as motor vehicles were concerned, by Art. 5497a (Acts 1933), which in turn has been repealed perforce of Art. 1436 — 1, Vernon's Ann.P.C., Certificate of Title Act; Commercial Credit Co., Inc. v. American Mfg. Co. et al., Tex. Civ. App. 155 S.W.2d 834, writ refused.

Likewise, the Motor Company lien has here been declared unenforceable because (Sec. 41) not arising out of or incident to a first sale, and (Sec. 45) Hedrick was not an "owner," as defined by the Act. The Legislature expressly provides for a liberal construction of Art. 1436 — 1 and its many sections, either singly or collectively (Sec. 1), and the final section declares: "* * * the fact that an early adoption of this Act will operate to materially safeguard dealing in motor vehicles and using the same as security * * *" creates an emergency. Section 66. The Act, in its broad scope and detail, manifests a legislative purpose to cover the entire field of legislation relative to motor vehicles; and, aside from the fact that the lien in question arose out of and was incident to the Elkins Motor Company-Hedrick sale (being cash advanced to Hedrick in the transaction), I believe the Act authorizes the unrestricted use of motor vehicles as security by either manufacturer, distributor, dealer, or subsequent owner, assuming, of course, an appropriate compliance with the statute.

The judgment under review is correct and should be affirmed.