Commercial Credit Co. v. Schreyer
| Decision Date | 22 May 1929 |
| Docket Number | 21530,21364 |
| Citation | 120 Ohio St. 568,166 N.E. 808 |
| Parties | The Commercial Credit Co. v. Schreyer. |
| Court | Ohio Supreme Court |
Motor vehicles - Bill of sale act - Section 6310-8 et seq., General Code - Penal statutes, and in derogation of common law strictly construed - Contract, conveying motor vehicle without complying with statute, not unlawful - Assignment or transfer, accompanied by delivery of possession, valid between parties - Chattel mortgage executed by mortgagor without bill of sale - Valid between parties, and has priority over subsequent purchasers and mortgagees.
Sections 6310-3 to 6310-14, inclusive, General Code, are penal statutes and those statutes are also in derogation of the common law and should be construed according to their exact and technical meaning, and their application should be limited to cases clearly described within the words used.
Those sections declare it to be unlawful to sell or give away a motor vehicle unless at or before such sale or gift the seller shall execute and deliver a bill of sale therefor, and prescribe other procedure in perfecting transfer of title. They do not declare the contract itself to be unlawful if executed in a manner other than that prescribed.
Any assignment or transfer of a motor vehicle (not violative of the uniform sales laws of this state), which is not executed and delivered in compliance with Sections 6310-3 to 6310-14, General Code, but which is accompanied by delivery of possession, is nevertheless a valid contract between the parties thereto.
A note secured by a chattel mortgage upon a motor vehicle in the possession of the mortgagor at the time of the execution of the mortgage, though the mortgagor had at the time no bill of sale therefor executed in compliance with Sections 6310-3 to 6310-14, General Code, is nevertheless a valid mortgage between the parties, and, if and when said mortgage is filed with the county recorder of the county where the mortgagor resides, it has priority over subsequent purchasers and mortgagees in good faith. (Ohio Farmers' Ins. Co. v. Todino, 111 Ohio St. 274, and Helwig v. Warren State Bank, 115 Ohio St. 152, overruled.)
These two causes are disposed of together because they involve the same legal questions.
Cause No. 21364 originated in the court of common pleas of Delaware county as an action in replevin to recover possession of an automobile. On October 27, 1925, the Central Ohio Peerless Company, a dealer in automobiles, sold an automobile to one Seymour. No bill of sale was delivered concurrently with the sale, but as part payment of the purchase price Seymour gave his note secured by a chattel mortgage upon the automobile. Two days later, on October 29, 1925, the dealer indorsed the note and assigned the mortgage to the Commercial Credit Company. The mortgage was recorded in Franklin county, where the mortgagor Seymour resided, on November 17, 1925. On November 1, 1925, the Central Ohio Peerless Company executed and delivered to Seymour a bill of sale, which, except as to the time of execution and delivery, was in compliance with Sections 6310-4 to 6310-14, inclusive, General Code. The bill of sale was filed in the office of the clerk of courts on May 18, 1926. Prior to June 10, 1926, Seymour delivered possession of the car to the Central Ohio Peerless Company, which company on June 10, 1926, sold the car to Schreyer and executed a bill of sale to him in the usual form, which bill of sale was filed with the clerk of the court of common pleas of Franklin county on June 14, 1926. On the same day, to wit, June 14, 1926, Seymour executed and delivered to the Central Ohio Peerless Company a bill of sale which was on the same day filed with the clerk of courts of Franklin county.
The installment payment upon the note and mortgage, given by Seymour, and later transferred to the Commercial Credit Company, not being paid, the credit company elected to and did declare the entire balance of the note and mortgage due and payable, and on October 28, 1926, demanded of Schreyer possession of the vehicle, and, upon demand being refused, brought this action in replevin. Schreyer did not give a redelivery bond, but, on the other band, defended the action and sought recovery of judgment for the value of the automobile. Upon trial of the action, judgment was rendered in his favor in the sum of $725, the appraised value of the vehicle. The Court of Appeals affirmed the judgment.
Cause No. 21530 originated in the court of common pleas of Fayette county, Ohio, as a suit to replevin an automobile.
Naomi Anderson was married to James H. Anderson on January 28, 1927, in New York City. As part consideration of the marriage contract James H. Anderson gave Naomi Anderson an automobile. James H. Anderson resided in Fayette county, Ohio, and at the time of making said gift mailed an application from New York to the auto club of Fayette county for a license in the name of his wife. The license was issued February 10, 1927, and at the same time the secretary of the club mailed to Anderson in New York a bill of sale to be executed, and the bill of sale was in fact executed, though imperfectly, and verified, though imperfectly, and delivered to Naomi Anderson in New York state, February 14, 1927. At the time of the delivery of the bill of sale, witnesses had not signed it, and the grantor had not signed the verification. When it was forwarded to the auto club with instruction to file it in the clerk's office, the clerk refused to file it. When Anderson and his wife returned to Fayette county the sheriff levied an execution upon the automobile, as the property of Anderson, to recover upon a judgment theretofore rendered against him in that county. Naomi Anderson thereupon brought an action in replevin. Glen L. Smith, the execution creditor, was substituted for the sheriff, and the cause proceeded. No redelivery bond was given by the defendant Smith. The defects in the bill of sale were not cured until after the levy of execution.
All these matters being developed at the trial, motion was made at the close of all the evidence to direct a verdict in defendant's favor. The motion was granted as to the issue of ownership and possession of the automobile, and the case was submitted to the jury to determine the value of the car. Judgment was thereupon rendered in favor of the defendant in the sum of $975.
In directing a verdict the trial court found that by reason of the bill of sale being defectively executed, and no proper bill of sale having been delivered or filed with the clerk of court prior to execution, the transaction was void, and that no title passed. The Court of Appeals affirmed the judgment. The record has been certified to this court on the ground of public interest.
Mr. W. B. McLeskey, for plaintiff in error in cause No. 21364.
Mr. J. R. Selover and Mr. H. D. House, for defendant in error in cause No. 21364.
Messrs. Rankin & Rankin and Mr. A. C. Patton, for plaintiff in error in cause No. 21530.
Mr. Troy T. Junk, for defendant in error in cause No. 21530.
The judgment in the court of common pleas and the affirmance of the judgment in the Court of Appeals in cause No. 21364 were rendered upon the theory that the failure to execute a bill of sale in favor of Seymour at the time of his purchase, and the consequent failure to file a bill of sale with the clerk of the court within three days thereafter, gave Seymour no title to the automobile, and therefore gave no validity to the chattel mortgage executed by him, and that the Central Ohio Peerless Company was therefore free to give a bill of sale to Schreyer at a later date.
This case turns entirely upon the legislative intent in the enactment of Sections 6310-3 to 6310-14, inclusive, General Code. Those sections were enacted April 29, 1921, (109 Ohio Laws, 330), and the purpose of the act was, as expressed in its title: "To prevent traffic in stolen cars, require registration and bill of sale to be given in event of sale or change in ownership of motor vehicles." Section 6310-4 declares it to be "unlawful to sell, convey, give away, transfer, exchange, receive, purchase or obtain any `motor vehicle' or `used motor vehicle' within this state, except in the manner and subject to the conditions hereinafter provided." Section 6310-5 declares it to be unlawful to sell or give away a motor vehicle unless the vendor or donor shall at or before such sale or gift execute in the presence of two witnesses a bill of sale in duplicate, delivering both copies to the purchaser. That section also provides in detail what the bill of sale shall contain. Section 6310-9 requires such bill of sale to be verified by the seller before a notary public or other officer before the delivery. It further provides that any bill of sale not verified before delivery "shall be null and void and of no effect in law." Section 6310-10 provides for filing a bill of sale with the clerk of courts "within three days immediately thereafter." Section 6310-13 provides: "No person residing in this state shall drive, use or operate, a motor vehicle or `used motor vehicle' upon the public highways thereof, without having a `bill of sale' for the motor vehicle as defined in this act, or without having first filed, with the clerk of courts, of the county in which his residence is established, a sworn statement containing the name," etc., and having obtained from said clerk a certified copy of such statement. Section 6310-14, as amended in 1923, 110 Ohio Laws, 402, provides severe penalties for violation of the provisions of the act, the minimum penalty being a fine of $25, and the maximum $5,000, or imprisonment for not more than five years, or both.
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