Consolidated Garage Co. v. Chambers

• Decision Date: 22 June 1921
• Docket Number: (No. 3340.)
• Parties: CONSOLIDATED GARAGE CO. v. CHAMBERS.
• Court: Texas Supreme Court

Page 1072

231 S.W. 1072

CONSOLIDATED GARAGE CO. v. CHAMBERS.

(No. 3340.)

Supreme Court of Texas.

June 22, 1921.

Error to Court of Civil Appeals of Eighth Supreme Judicial District.

Sequestration proceedings by the Consolidated Garage Company against F. H. Nichols, in which Ray Chambers filed a claimant's oath and bond. Judgment for plaintiff was reversed on claimant's appeal (210 S. W. 565), and plaintiff brings error. Affirmed.

Louis Oneal, of San Jose, Cal., and Beall, Kemp & Nagle and H. Potash, all of El Paso, for plaintiff in error.

Hudspeth & Harper, of El Paso, and Judkins & Perkins, for defendant in error.

PIERSON, J.

For the material facts of the case we quote the following statement from the opinion of the Court of Civil Appeals:

"The Consolidated Garage Company is incorporated under the laws of California with its principal place of business in San Jose, Santa Clara county, Cal. Appellant, Chambers, is a resident of El Paso county, Tex. On July 6, 1917, appellee owned and was in possession of a certain automobile of the value of $1,700. On the date mentioned appellee and F. H. Nichols at San Jose, Cal., entered into a written contract by the terms whereof Nichols agreed to purchase the car from the company for the sum of $1,670.00, $600 being paid in cash, and the balance to be paid in monthly installments of $90 each; the deferred payments to bear interest from date. Nichols agreed not to sell or dispose of the automobile, nor take the same out of the state of California, nor permit the same to be removed from his possession, attached, levied upon, nor create any liens against same. Nichols was to pay all taxes against the property. The contract provided that title should remain in the company until all payments were made and all of the conditions contained in the contract fully complied with, and that upon the performance of all of said conditions and terms by Nichols the company would execute to him a bill of sale to the property. The contract was to be performed wholly within the state of California. The automobile was removed from Santa Clara county, Cal., by Nichols without the knowledge or consent of the company and without any negligence on the latter's part. The company used due diligence to collect the amount due upon the contract and exercised due diligence in trying to locate the car after it had been taken from San Jose and the state of California. The car was finally located in El Paso, Tex., where it had been brought by Nichols, and immediately upon ascertaining its location the company brought suit in the district court of El Paso county against Nichols and sequestered the car. The contract was not filed for record in California, nor in any county in Texas. The car was purchased in El Paso county by Chambers from Nichols for a valuable consideration and without notice of any defect in Nichols' title.

"When the car was sequestered in the suit against Nichols, Chambers filed a claimant's oath and bond and possession was surrendered to him. Under the laws of California the contract between the company and Nichols was a conditional sale, and title to the automobile did not pass from the company to Nichols, and under the laws of California it was not necessary to file or register the contract, and under the laws of that state any subsequent purchaser from Nichols paying a valuable consideration without notice would not get any better title than Nichols had. The contract under the laws of that state being not a mortgage, but a conditional sale, the title remained in the company. The amount due by Nichols under the contract is $1,060, with interest.

"The trial court's conclusion of law was that Chambers in his purchase of the automobile from Nichols acquired no greater title than Nichols had; that the contract between the company and Nichols was a conditional sale, and, Nichols having defaulted, the company became entitled to the possession of the automobile. Judgment was rendered against Chambers and the sureties upon his bond for the value of the automobile, with interest."

The Court of Civil Appeals reversed and rendered the case in favor of Ray Chambers, defendant in error.

Article 5654, Vernon's Sayles' Texas Civil Statutes 1914, provides:

"All reservation of the title to or property in chattels, as security for the purchase money thereof, shall be held to be chattel mortgages and shall, when possession is delivered to the vendee, be void as to creditors and bona fide purchasers, unless such reservations be in writing and registered as required of chattel mortgages."

Article 5655 provides:

"Every chattel mortgage * * * which shall not be accompanied by an immediate delivery and be followed by an actual and continued change of possession of the property mortgaged * * * shall be absolutely void as against the creditors of the mortgagor or person making same, and as against subsequent purchasers * * * in good faith, unless such instrument, or a true copy thereof, shall be forthwith deposited with and filed in the...