Summary
In Aetna Auto Finance v. Kirby, 240 Ala. 228, 198 So. 356, a recorded judgment took precedence over an unrecorded conditional sales contract.
Summary of this case from Lloyd's of London v. Fidelity Securities Corp.Opinion
6 Div. 706.
October 17, 1940. Rehearing Denied November 14, 1940.
Appeal from Intermediate Civil Court of Birmingham; W. A. Jenkins, Judge.
Mullins Deramus, of Birmingham, for appellant.
The assignee of a conditional sale contract has the same rights under the contract as the assignor. Assets Realization Corp. v. Ganus, 25 Ala. App. 113, 141 So. 721; Garrison v. Hamlin, 215 Ala. 39, 109 So. 106; Fidelity Dep. Co. v. Richeson, 213 Ala. 461, 105 So. 193. Code, § 6898, is a remedial statute and must be construed according to the intent of the legislature. Lynn v. Broyles Fur. Co., 3 Ala. App. 634, 57 So. 122; Pulaski Mule Co. v. Haley Koonce, 187 Ala. 533, 65 So. 783, Ann.Cas. 1916A, 877. To invoke Code, § 6898, appellee must show his position to be that of the protected class set out by the statute. Gayle Motor Co. v. Gray-Acree Motor, Co., 206 Ala. 586, 90 So. 334; Mathis v. Thurman, 143 Ala. 558, 39 So. 360. The design of the statute as to recording is to see that purchasers and creditors are not deluded or defrauded. Butler v. Jones, 80 Ala. 436, 2 So. 300; La Rue v. Loveman, Joseph Loeb, 220 Ala. 677, 127 So. 243; Wilkinson v. King, 81 Ala. 156, 8 So. 189; Hill v. Rentz, 201 Ala. 527, 78 So. 881; Diamond Rub. Co. v. Fourth Nat. Bank, 171 Ala. 420, 55 So. 100; 55 C.J. 1244, § 1241. Existing creditors are not within the class protected by the recording statute. Birmingham News Co. v. Collier, 212 Ala. 655, 103 So. 839; Elliott v. Palmer, 9 Ala. App. 483, 64 So. 182; Chadwick v. Carson, 78 Ala. 116; Conder v. Holleman, 71 Ga. 93; Finance Corp. v. McGhee, 142 S.C. 380, 140 S.E. 691, 55 A.L.R. 1133; 55 C.J. 1250, 1251, 1953, §§ 1252, 1255; In Re Atlanta News Pub. Co., 160 F. 519; In Re Braselton, 169 F. 960; Union Trust Co. v. Beach Mfg. Co., 225 F. 95.
Hugh Barber, of Birmingham, for appellee.
Reservation of title is more than a lien in the holder, it is the title reserved to the seller, and not to vest in the purchasing party until the purchase price is fully paid. With such a provision the idea of a security for debt is incompatible. Alexander v. Mobile Auto Co., 200 Ala. 586, 76 So. 944; Pierce v. Lyndall, 237 Ala. 432, 187 So. 628; Smith Fay v. Montgomery Ward Co., 209 Ala. 317, 96 So. 231; Emerson Co. v. Arrington, 216 Ala. 21, 112 So. 428; Assets Realization Co. v. Ganus, 25 Ala. App. 113, 141 So. 721; Davis v. Millings, 141 Ala. 378, 37 So. 737; Code 1923, § 6898. A person cannot execute a valid mortgage on property to which he is not then the owner, particularly when the attempted mortgagee is the owner and holder of the legal title. Such attempted mortgage is void. 27 Cyc. 1041; Code, § 9026; Malone Motor Co. v. Green, 213 Ala. 635, 105 So. 897. If a judgment creditor whose debtor was at the time of the rendition of the judgment and prior thereto the vendee of personal property upon a conditional sale contract, failure to record said contract may mislead the judgment creditor to the belief that the property is standing open for seizure under execution upon his judgment. Chadwick v. Carson, 78 Ala. 116; Elliott v. Palmer, 9 Ala. App. 483, 64 So. 182; Decatur Fert. Co. v. Decatur Motors, 24 Ala. App. 32, 129 So. 709; Gen. Motors v. Eaton, 24 Ala. App. 533, 137 So. 780; Code, §§ 6898, 7874, 7485, 7878, 7879; Hall v. Griffin, 119 Ala. 214, 24 So. 27.
The debt due plaintiff from Amos was contracted and suit instituted thereon prior to the purchase of the automobile by Amos from Knapp Motor Company.
The judgment was recovered and the certificate of the clerk issued thereon was registered as provided by the statute, Code 1923, § 7874, subsequent to said purchase, and at the time of such registration the automobile was in the possession of the judgment defendant in the county where the judgment was recorded.
The conditional sale contract, under which Amos purchased, was not recorded as required by § 6898 of the Code, 1923.
The defendant acquired the automobile after the registration of the judgment certificate and sent it out of the state and disposed of it. The plaintiff was without notice or knowledge of the existence of said conditional sale contract.
The contention of appellant, defendant in the trial court, is that the plaintiff — judgment creditor — appellee here, is not within the protection of the recording statute, Code 1923, § 6898, which voids the condition in the sale contract, and makes the sale absolute, unless the contract is recorded, because plaintiff's debt was contracted prior to the time Amos purchased the car. To so interpret the statute the court would have to write an exception, not only into § 6898, but would have to write the same exception into § 7874, excluding judgment creditors whose claim arose prior to the acquisition of the property by the judgment defendant.
Such interpretation would not only do violence to the expressed legislative intent but would be judicial legislation.
The Intermediate Civil Court of Birmingham established by local Act No. 363, p. 219, approved September 7, 1935, is a court of record and its judgments are subject to registration under § 7874 of the Code.
The ruling of the Intermediate Civil Court was in accord with the views above expressed.
Affirmed.
GARDNER, C. J., and THOMAS and KNIGHT, JJ., concur.