Com. v. Two Ford Trucks

• Decision Date: 21 January 1958
• Parties: , 1 UCC Rep.Serv. 356 COMMONWEALTH of Pennsylvania v. TWO FORD TRUCKS and Thomas McDivatt. Appeal of UNIVERSAL C. I. T. CREDIT CORPORATION.
• Court: Pennsylvania Superior Court

Page 847

137 A.2d 847

185 Pa.Super. 292, 1 UCC Rep.Serv. 356

COMMONWEALTH of Pennsylvania v. TWO FORD TRUCKS and Thomas McDivatt.

Appeal of UNIVERSAL C. I. T. CREDIT CORPORATION.

Superior Court of Pennsylvania.

Jan. 21, 1958.

Lawrence R. Nelson, W. Louis Schlesinger, Erie, Clair V. Duff, Duff & Doyle, Pittsburgh, for appellant.

Roger M. Brown, Corry, Herbert J. Johnson, Jr., Erie, for appellees.

Before RHODES, P. J., and HIRT, GUNTHER, WRIGHT, WOODSIDE, ERVIN and WATKINS, JJ.

ERVIN, Judge.

On November 23, 1954 and July 6, 1955, Harris Ford, Inc., (as bailment-lessor) entered into two separate written bailment lease agreements for two Ford trucks with Thomas McDivitt ¹ (as bailment-lessee). On November 30, 1954 and July 9, 1955, respectively, Harris assigned said bailment leases to appellant, Universal C. I. T. Credit Corporation (hereinafter referred to as U. C. I. T.), for value. On September 16, 1955, McDivitt was operating these trucks while they were overloaded near the City of Corry, Erie County, Pennsylvania, as a result of which he was arrested and was given a hearing before an alderman. McDivitt was convicted and fined $1,020 under the terms of the Motor Vehicle Code, as amended by the Act of June 30, 1955, P.L. 225, § 5, 75 P.S. § 453. McDivitt failed to pay the fine and the alderman notified the sheriff of Erie County, who seized the trucks and caused them to be impounded at the M. V. Irwin Moving and Storage Company in Erie, Pennsylvania. At the time of the illegal use, of which U. C. I. T. had no knowledge, McDivitt was in default in payment of rentals due under the leases. On September 13, 1955, McDivitt was in the office of U. C. I. T. and said he would pay the past due instalments on September 19, 1955. He was told that if he did not pay on September 19, U. C. I. T. would repossess the trucks. On September 17, 1955, McDivitt told U. C. I. T. Manager James E. Weaver that the trucks had been seized by the sheriff. This was the first time that U. C. I. T. had knowledge of the violation of September 16, 1955. At all times the certificates of title issued for said trucks by the Bureau of Motor Vehicles of the Commonwealth of Pennsylvania named Thomas McDivitt as the owner. The only encumbrances noted on the certificates of title were in favor of U. C. I. T. in the total amounts of the bailment-lease rentals. On November 18, 1955, the sheriff informed U. C. I. T. that the trucks were to be sold on November 28, 1955. U. C. I. T. filed a petition in the court below praying for an order to stop the sale and for delivery of the trucks to U. C. I. T. In its petition U. C. I. T. averred:

'3. That your petitioners hold legal title to the aforementioned trucks, there being due and owing to your petitioners the amount of $3,413.18 on truck bearing serial number F60Z5B10249, said balance due resulting from a bailment lease contract dated the 23rd of November, 1954, under which contract your petitioners obtained legal title, and, there also being due and owing to your petitioners the amount of $2,901.47 on truck bearing serial number F60Z5B16361, said balance due resulting from a bailment lease contract dated the 6th of July, 1955, under which contract your petitioners obtained legal title.

'4. That Thomas McDivatt, lessee of said trucks is not the lawful owner thereof but that your petitioners are now the lawful owners, said Thomas McDivatt having failed to comply with the terms of said bailment lease contract.'

In the prayer of the petition U. C. I. T. requested that the trucks be delivered to it 'in accordance with the provisions contained in P.L. 263 of July 3, 1941 (75 P.S. Sec. 1291.5(6)) which same is controlling.' On December 2, 1955, the court below entered an order directing that the trucks be returned to U. C. I. T. On December 3, 1955, the court below entered a new order vacating the previous order and scheduling a second hearing. At the second hearing held on December 6, 1955, the sheriff, on behalf of M. V. Irwin Moving & Storage Company, claimed storage charges of $20 per day, or a total sum of $2,940 for both vehicles. On December 9, 1955, Parlette & Davis filed a petition to intervene in which they alleged that they were the owners of four tires on one of the trucks under a lease agreement; that the lessee was in default and that the rental balance due them was $292.93. No encumbrance in favor of Parlette & Davis was recorded on the certificate of title for either truck. On January 30, 1956, the court below ordered the sale of the trucks and the substitution of the fund derived therefrom in lieu of the trucks. On October 18, 1956, the court below filed its opinion and distributed the fund of $2,725 obtained from the sale of both trucks. That order directed payment of $292.93 to Parlette & Davis and payment of the balance of the fund, $2,432.07, to the sheriff for his costs, the storage company for storage charges and the City of Corry for its fines and alderman's costs, the payees to pro rate these fines and the various costs. That order made no mention of appellant's recorded encumbrances. On May 23, 1957, the court below dismissed appellant's exceptions and on May 28, 1957, the court below ordered that the trucks were sold free and clear of all encumbrances and directed the Bureau of Motor Vehicles of the Commonwealth to remove any encumbrances noted on the titles to the said vehicles. The only encumbrances so recorded were in favor of appellant. This appeal was then taken from the final orders of the court below dated May 23 and May 28, 1957.

The entire proceeding is based upon the Motor Vehicle Code. We are concerned primarily with the penalty portion of § 5 of that act ² which reads as follows: 'In case any vehicle * * * shall remain unredeemed, * * * for a period of sixty (60) days after notice of impoundment is given as aforesaid, the same shall be deemed to be abandoned and shall be disposed of by the sheriff * * * in accordance with the procedures outlined in section 4 of the act [of July 3, 1941, P.L. 263, 75 P.S. § 1291.4] * * * and provided further, That the proceeds of such sale after the payment of encumbrances shall be applied to the payment of fine and costs and the balance thereof shall be remitted to the owner * * *.' (Emphasis added.) The Act of 1941 pertains to the forfeiture and condemnation of vehicles in which narcotics are stored, contained or transported. Section 4 of that act, which is incorporated into the 1955 act, provides for the seizure, condemnation and public sale of any vehicle used to transport narcotics. The portion of § 4 of the 1941 act with which we are primarily concerned is as follows: 'In the event that any such vehicle is, when so seized, held and possessed, under a bailment lease or contract and the legal title thereto is in another person, or in the event that any such vehicle is, when so seized, subject to the lien of a chattel mortgage or to a contract of conditional sale, and if the person holding the legal title thereto or holding such chattel mortgage or contract of conditional sale thereon shall prove that the unlawful use for which the same was seized was without his knowledge or consent, then the claim of the bailor for money due under said bailment lease or contract or the claim of the mortgagee or conditional seller for money due under said chattel mortgage or contract of conditional sale shall attach to and be paid out of the funds derived from said sale after payment of costs and the balance distributed as above provided.' (Emphasis added.) In awarding the sum of $2,432.07 to the sheriff for his costs, the storage company for storage charges and the City of Corry for its fine and alderman's costs, the court below ignored the appellant as an encumbrancer on each truck. To accomplish this result the court below said that § 5 of the Act of 1941 had been incorporated into the Act of 1955. The court below said:

'In construing the relationship of these two statutory enactments we feel that the incorporation of the Act of 1941, P.L. 263, into the 1955 Amendment by reference had relation only to the procedure relative to sale which was to attach and not to the disposition of the proceeds of the sale involved as each of the acts has its own dispositive clause. If we are correct in this interpretation then it is important to bear in mind that Section 5 of the Act of 1941 specifically makes the procedure of that Act 'in rem'. In this situation what our Superior Court said on Commonwealth v. Beloff, 166 Pa.Super. 291 , becomes significant: 'And under statutes in which the prescribed proceeding to enforce the forfeiture is in rem, the automobile itself is regarded as the offender, and the true owner's knowledge of, or consent to, or participation in, the acts which constitute grounds for the forfeiture, is not essential. 37 C.J.S. Forfeitures § 5; 23 Am.Jur., Forfeiture and Penalties, §§ 6 and 7.'

'In passing it must also be noted that the 1955 Amendment specifically differs from the Act of 1941, P.L. 263, in the matter of the disposition of the proceeds of the condemnation sale in that the 1955 Amendment says that the same '* * * shall be applied to the payment of fine and costs and the balance thereof remitted to the owner' whereas the earlier Act (1941) simply makes reference to disposition '* * * from said sale after payment of costs.', making no mention of the payment of fine. Having in mind the time-honored maxim, 'Specialia...