Cadwallader v. Clifton R. Shaw, Inc.

• Decision Date: 05 June 1928
• Parties: CADWALLADER v. CLIFTON R. SHAW, Inc.
• Court: Maine Supreme Court

142 A. 580

CADWALLADER

v. CLIFTON R. SHAW, Inc.

Supreme Judicial Court of Maine.

June 5, 1928.

Report from Superior Court, Kennebec County.

Action by L. L. Cadwallader against Clifton R. Shaw, Inc. On report from Superior Court, Kennebec County. Judgment for plaintiff.

Argued before WILSON, C. J., and PHLBROOK, DUNN, DEASY, STURGIS, BARNES, BASSETT, and PATTANGALL, JJ.

James L. Boyle, of Waterville, for plaintiff.

F. Harold Dubord, of Waterville, and Roy Sturgis, of Portland, for defendant.

PHILBROOK, J. This is an action of trover. The parties raise no question as to the pleadings and agree that demand was made and refusal had.

The case comes before this court on report based upon an agreed statement of facts, together with the stipulation that if the plaintiff is entitled to judgment the same shall be entered in the sum of $300, otherwise judgment for the defendant, with costs in either instance.

The agreed statement of facts discloses the following: Plaintiff is the common-law assignee of Albert Violette, of Waterville, Me. Defendant is a corporation, dealing in automobiles, with establishments in Portland and Lewiston, in said state. In January, 1926, Violette, a contractor and builder, was in serious financial difficulties and could not complete his contracts. He called a meeting of several of his creditors, and at his request these creditors appointed the plaintiff as the person who should take an assignment of all his goods, property and contracts. On the 23d day of January, 1926, Violette executed this assignment to Cadwallader, and an attached exhibit shows that all real and personal property and rights and credits of Violette were assigned. The assignment was delivered on or about the 1st day of February, 1926, and the assignee then received and took possession of all the property of Violette, including the automobile in question, although the same was not specifically mentioned or described in the assignment. This written transfer of title and interest was recorded in the office of the city clerk in the city of Waterville on February S, 1926, and was recorded in the Kennebec Registry of Deeds February 10, 1926.

In the late spring or early summer of 1926, Violette, while endeavoring to gain a livelihood by the sale of some form of merchandise which required him to go beyond the limits of the city of Waterville, approached Mr. Cadwallader with the request that the latter would grant him the use of the automobile which had been taken over by the assignment. Between the parties it was understood that Violette could have the car for a few days only, but the same must be returned soon as there were several prospective purchasers interested in it. Cadwallader gave Violette the necessary fees to have the car registered in his (Cadwallader's) name, but instead of doing so Violette had the car registered in his own name, used it for a time, and on July 1 went to the defendant company, at its Lewiston branch, advised them that he was from Waterville, Me., was engaged as a travelling salesman, and desired to exchange this car for another one, giving references to reliable persons in Lewiston who were well known as such to the defendant company.

On the strength of these references to people in Lewiston, without making any inquiries in Waterville or in Kennebec county, or examining any public records in Waterville or in Kennebec county, defendant purchased the car from Violette, in exchange gave him another one, and in due course of trade sold to other parties the car thus bought from Violette.

Shortly after that, when Cadwallader endeavored to locate Violette and the automobile in question, he ascertained that the latter had sold the car to the defendant and left for parts unknown.

When the plaintiff made demand upon the defendant for the car he was advised that it had been sold in the regular course of trade; that, relying upon the Lewiston references given by Violette they considered him the rightful owner of the car, and as a consequence could not deliver the car to the plaintiff, and refused to pay the value thereof. After making further demands on the defendant this action was instituted.

At the outset the plaintiff claims that these records made in Waterville and Kennebec county were "notice to the world" of the fact of assignment and the right, title, and interest arising therefrom, and that the defendant was bound by notice given by the record. The defendant claims that it is a bona fide purchaser for value, without notice, and that the record of the assignment in the city clerk's office in Waterville or the Kennebec Registry of Deeds, constituted no notice to it.

Constructive Notice by Record.— We here observe that a debtor may make an assignment of his property for the benefit of his creditors under bankruptcy laws, insolvency laws, common-law authority, or statutory authority. Constructive notice of such assignment depends upon the course pursued in making the same. Prior to 1878, as shown by R. S. 1871, c. 70, we had provisions for a statutory assignment for the benefit of creditors. Constructive notice under that statute was effective by having the assignee, within ten days after the execution of the assignment, file an attested copy of the same, and a certain inventory, in the probate office. When the so-called insolvency law came into being (chap. 74, P. L. 1878), it repealed the statutory assignment law of 1871 (Lewis v. Latner, 72 Me. 487; Pleasant Hill Cemetery v. Davis, 76 Me. 289; Rowell v. Lewis, 95 Me. 83, 49 A. 423). The case at bar does not come under any provision as to constructive notice arising from the National Bankruptcy Act (11 USCA), and the state insolvency law is superseded by the bankruptcy law so far as the person and subject-matter falls within the provisions of the bankrupt act. Littlefield v. Gay, 96 Me. 422, 52 A. 925. The record provided by R. S. c. 114, § 8, has no application to this case. Thomas v. Parsons, 87 Me. 203, 32 A. 876; Richardson Manufacturing Co. v. Brooks, 95 Me. 146, 49 A. 672.

The place of record of mortgages of personal property, and their validity as to third parties arising from such record, are shown by R. S. c. 96, § 1. The object to be obtained by requiring the record of mortgages of personal property is the same as that in providing for the registration of mortgages of real estate. The same general principles are alike applicable in each case. The design is to give notice to the public of all existing incumbrances upon real or personal estate by mortgage. Griffith v. Douglass, 73 Me. 534, 40 Am. Rep. 395. But the instrument executed by the assignor to the assignee in the case at bar is not a chattel mortgage, and as to it, therefore, provisions for the record of chattel mortgages are not applicable.

When an instrument is not entitled by law to be recorded, placing it on record cannot operate as constructive notice. Glenn v. Davis, 35 Md. 208, 6 Am. Rep. 389.

Where parties have desired to give as much publicity as possible to the fact of the transfers of property to themselves, and in seeking to give such publicity may have selected the filing of the instrument of transfer for record in one of the principal offices of the county as a means thereto, they did not thereby create a new law in respect to notice. Parties in interest have a right to rely upon the law of the state as enacted by its Legislature, and are not bound by any constructive notice other than such laws provide. Actual notice must be given in the absence of a statute providing some means for constructive notice. Burck v. Taylor, 152 U. S. 634, 14 S. Ct. 696, 38 L. Ed. 578; Lambert v. Morgan, 110 Md. 1, 72 A. 407, 132 Am. St. Rep. 412, 17 Ann. Cas. 439.

It is therefore plain, since there is no provision requiring or providing for record of this assignment under the common law, or by statute in this state, that the record made in the case at bar has no effect upon the rights, liabilities, or protection of third parties which would arise tinder the provisions for a record of mortgages of personal property. The first claim of the plaintiff that the record made in city clerk's or register of deed's office was "notice to the world" cannot, be sustained.

Since defendant claims that it is a bona fide purchaser of the automobile for value and without notice of defect in title, we deem it proper to discuss the effect of registration of motor vehicles in the office of the secretary of state and whether such record is evidence of ownership or title.

Courts of last resort are not in complete harmony upon this proposition, but their differences in most cases arise from the terms regarding registration used in the statutes of their respective states. In some states, in order to register a car, the applicant must be the actual owner thereof. It is not so in other states. In our state application for registration of a motor vehicle, made to the secretary of state upon blanks prepared by him under statutory authority, do not restrict the application to the owner of the vehicle, and the certificate of registration furnished by him declares that, the motor vehicle thus registered "is owned or controlled by the applicant."

The General Laws of Massachusetts, Ed. 1921, c. 90, § 2, declare that: "Application for the registration of motor vehicles and trailers may be made by the owner thereof."

In Temple v. M. & B. St. Railway Co., 241 Mass. 124, 134 N. E. 641, although recognizing that application for registration of a motor vehicle must be made by the owner thereof, the court interprets the word "owner" as...