National Shawmut Bank of Boston v. Jones, 5644
| Citation | 236 A.2d 484,108 N.H. 386 |
| Decision Date | 29 December 1967 |
| Docket Number | No. 5644,5644 |
| Parties | , 4 UCC Rep.Serv. 1021 NATIONAL SHAWMUT BANK OF BOSTON v. Victor L. JONES. |
| Court | Supreme Court of New Hampshire |
SYLLABUS BY THE COURT
1. A purchaser in good faith of an automobile, without knowledge that the sale to him was in violation of the security interest of another and bought in the ordinary course from a person in the business of selling automobiles is a "buyer in ordinary course of business" under the Uniform Commercial Code ( RSA 382-A:1 -201 (9)).
2. The provisions of the Uniform Commercial Code ( RSA 382-A:9 -307 (1)) that a buyer of goods in the ordinary course of business "takes free of a security interest created by his seller even though the security interest is perfected," has no application to free the buyer of a security interest in such goods created not by "his seller" but by a previous seller.
3. Under the Uniform Commercial Code (RSA ch. 382-A) a security interest in goods, in the case of a subsequent sale without consent of the secured party, may be impaired only as provided in Article 9 and is unaffected by Article 2-402.
Action of replevin to recover possession of a 1964 Dodge Dart '270' station wagon. Defendant's motion for custody under RSA 536:5 was granted upon his filing a bond in the amount of $2,000.00 to secure payment of any judgment which might be rendered against him. According to an agreed statement of facts, Robert D. Wever of Hampton, New Hampshire, purchased the Dart from Wentworth Motor Company Inc. of Exeter on February 15, 1965 under a conditional sale contract for personal, family or household purposes. He executed a 'Retail Installment Contract' which was assigned by Wentworth to the plaintiff. This contract was filed with the Town Clerk of Hampton pursuant to RSA 382-A:9-401 on February 24, 1965. Sometime thereafter, without the consent of the plaintiff, Wever traded or sold the Dart to Hanson-Rock Inc. of Hampton, an automobile dealer in the business of selling new and used cars to the public. RSA 382-A:1-201(9). Defendant, a resident of Hampton, purchased the Dart from Hanson-Rock on April 8, 1966 for good and sufficient consideration in good faith and without any actual knowledge of any security interest of the plaintiff or anyone else. Neither the defendant nor the Hampton National Bank from which he borrowed the purchase price examined or searched for any filing in the offce of the town clerk. (It was agreed at argument that unless a search was made under the name Wever, the Retail Installment Contract could have been found only by examining all such contracts for the serial number of the vehicle.) An unpaid balance of $1,490.17 is still due under the installment contract.
The following questions were transferred without ruling by Leahy, C.J.:
1. Whether the defendant is liable to the plaintiff in the amount of $1,490.17, the amount outstanding under the Retail Installment Contract executed by Robert Wever in favor of Wentworth Motors, Inc., and subsequently assigned to the plaintiff.
2. Whether under the provisions of the Uniform Commercial Code in New Hampshire (RSA 382-A) a buyer in ordinary course of business takes free of a perfected security interest created by a person other than the seller from whom the buyer purchased the goods.
Perkins, Holland & Donovan and William Beckett, Exeter, for plaintiff.
William W. Treat and Robert G. Tetler, Hampton, for defendant.
Since Wever purchased for personal, family or household purposes, the Dart is classified as consumer goods. RSA 382-A.:9-109. The plaintiff's security interest was perfected by filing the financing statement with the Town Clerk of Hampton where Wever resided, (RSA 382-A:9-401 and continues when the collateral is sold without its consent as was the case here unless Article 9 provides otherwise. RSA 382-A:9-306(2). In the case of buyers of goods, Article 9-307(1) does provide otherwise in certain instances, as follows:
'A buyer in ordinary course of business (subsection (9) of Section 1-201) other than a person buying farm products from a person engaged in farming operations takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.'
Since defendant purchased in good faith without knowledge that the sale to him was in violation of the security interest of another and bought in...
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Gary Aircraft Corp., Matter of
...ordinary course of business takes free of a security interest only if it was created by his seller. See, e.g., National Shawmut Bank v. Jones, 1967, 108 N.H. 386, 236 A.2d 484. General Dynamics, noting that the security interest it asserts was not created by Stewart (Gary's seller) but by A......
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Fin-Ag, Inc. v. Cimpl's, Inc.
...cited decision involving a security interest not `created by his seller.'" Adams, 565 P.2d at 30 (citing National Shawmut Bank of Boston v. Jones, 108 N.H. 386, 236 A.2d 484 (N.H. 1967)). The Oklahoma court explained that the intended application only involves a security interest not create......
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Schultz v. Bank of the West, C.B.C.
...Bros. Implement Co. v. Diepholz, 109 Ill.App.3d 283, 64 Ill.Dec. 768, 440 N.E.2d 320, 324 (1982); National Shawmut Bank of Boston v. Jones, 108 N.H. 386, 236 A.2d 484, 485-86 (1967) (agreeing with official commentary) with C & J Leasing II Ltd. v. Swanson, 439 N.W.2d 210, 213-14 (Iowa 1989)......
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Deutsche Credit Corp. v. Case Power & Equipment Co.
...to All Quip. The leading decision on the "created by his seller" requirement of UCC section 9-307(1) is National Shawmut Bank v. Jones, 108 N.H. 386, 236 A.2d 484 (1967). In that case Wever bought a car from Wentworth Motor Co. and granted it a security interest which Wentworth thereafter p......