Beebe v. Fouse.

• Decision Date: 22 June 1921
• Docket Number: No. 2495.,2495.
• Citation: 27 N.M. 194,199 P. 364
• Parties: BEEBEv.FOUSE.
• Court: New Mexico Supreme Court

27 N.M. 194

199 P. 364

BEEBE

v.FOUSE.

No. 2495.

Supreme Court of New Mexico.

June 22, 1921.

Syllabus by the Court.

A novation does not take place where the seller under a conditional sale contract consents that the purchaser may transfer the goods covered by the conditional sale contract to a third party, and that such seller will accept payments made on the contract from such transferee, where, under the terms of such subsequent agreement, the original purchaser is not released from liability, and the transferee does not become personally obligated for the payment of the balance of the purchase price.

The statute (chapter 74, Laws 1917), which requires conditional sale contracts to be recorded, does not provide for the recordation of an assignment of such a contract.

A conditional sale contract is not invalidated when not recorded as against a landlord's lien under the statute referred to, which invalidates such a contract when not recorded as to subsequent mortgages in good faith, purchasers for value without notice, and subsequent judgment or attaching creditors without notice and as against subsequent “general creditors” without notice, as a landlord's lien claimant is neither a mortgagee, judgment or attaching creditor, or “general creditor.”

Under a conditional sale contract which gives the seller a right to enter upon the premises and retake possession of the property upon default, the statute of limitations does not begin to run against the right to replevin such property upon default until the seller elects to exercise the right to retake such property.

Under section 4146, Code 1915, which provides that when an instrument in writing is the foundation of the action a copy must be attached to the complaint, no contract or other instrument need or should be filed or annexed which is not the foundation of the action or defense.

Appeal from District Court, Bernalillo County; Hickey, Judge.

Action by L. V. Beebe against Albert Fouse. Judgment for plaintiff, and defendant appeals. Affirmed.

Laws 1917, c. 74, which requires conditional sale contracts to be recorded, does not provide for the recordation of an assignment of such a contract.

H. B. Jamison, of Albuquerque, for appellant.

Simms & Botts, of Albuquerque, for appellee.

ROBERTS, C. J.

Appellee brought this suit against appellant to recover certain articles of personal property which appellee claimed to own, and which were in the possession of appellant. Appellant based his claim to the chattels upon the fact that he had purchased the same at a sale made to satisfy a landlord's lien. The case was tried to the court without a jury, and the court found that the appellee had sold the chattels in question to one Miller some time in the months of January and February, 1917, under a title retention contract; that Miller had made certain payments upon the property; and that he subsequently, with the consent of appellee, transferred the property to one Owens. The property in question was used in a dry-cleaning establishment, and the business was carried on in a building owned by the Kent estate, of which W. P. Metcalf was agent. Owens defaulted in the payment of the rent and left the state. He had not made any payment to appellee on the contract between appellee and Miller after January 2, 1918, and this action was not filed until the 20th day of February, 1919. But no demand was made upon Owens by appellee, and appellee testified that Owens retained possession of the property with his consent thereafter. In other words, he did not elect to forfeit the contract.

The court found that there was no new contract entered into between Owens and appellee when appellee took the goods over from Miller, and that appellee did not release Miller from his obligation, but did agree to accept payments from Owens on the Miller contract. The court found the facts and stated conclusions of law in favor of appellee, and entered judgment accordingly, from which this appeal is prosecuted.

The first point made by appellant is that the agreement between appellee, Miller, and Owens in the summer of 1917, whereby Owens went into sole possession of all the chattels, was invalid as against a landlord's lien unless acknowledged and recorded. This contention is based upon the assumption that there was a novation; otherwise it is without merit.

“A novation, then, as understood in modern law, is a mutual agreement, between all parties concerned, for the discharge of a valid existing obligation by the substitution of a new valid obligation on the part of the debtor or another, or a like agreement for the discharge of a debtor to his creditor by the substitution of a new creditor.” 20 R. C. L. p. 360.

[1] In view of the finding of the court that Miller was not released, there could be no novation. It goes without saying that if there was a conditional sale contract between Owens and appellee such a contract would, under the terms of chapter 74, Laws 1917, be required to be recorded in order to afford protection to the seller against the parties named in the statute. There is a question, which will be discussed later, as to whether a landlord's lien would be within the protection of the statute, but as between Owens and appellee there was clearly no conditional sale, but merely an agreement or understanding between the parties that appellee would and did consent that he would accept the installments due under the Miller contract from Owens. The sale or contract existed between Miller and Owens, not between appellee and Owens. Appellee did not accept Owens as his debtor, and would have had no cause of action against Owens for the debt. We quote the statute:

“Section 1. That section 2 of chapter 71 of the Session Laws of 1915, relating to chattel mortgages, be and the same is hereby amended so as to read as follows:

‘Sec. 2. That hereafter all chattel mortgages, conditional sales, leases, purchase leases, sale leases, or other instruments of writing having the effect of a mortgage or lien upon personal property, or that are intended to hold the title in the former owner, possessor or grantor until the value or purchase price is fully paid, shall be acknowledged by the owner or mortgagor in the same manner as conveyances affecting real estate, and the same shall be filed or recorded as hereinafter required. The failure to so file or record any such instrument in writing shall render the same void as to subsequent mortgages in good faith, purchasers for value without notice and subsequent judgment or attaching creditors without notice; and as against subsequent general creditors without notice such unrecorded instrument shall not be valid until the same shall be duly filed or recorded as hereinafter provided.’ ”

[2] It will be seen that under the terms of this statute it was only the conditional sale contract that had to be acknowledged and recorded. Appellant argues that this construction of the statute and the facts in this case leave the parties dealing with the apparent owner of the chattels, which are in his possession, where he...