Crawford Finance Co. v. Derby

• Decision Date: 01 May 1939
• Citation: 25 N.E.2d 306,63 Ohio App. 50
• Parties: CRAWFORD FINANCE CO. v. DERBY.
• Court: Ohio Court of Appeals

25 N.E.2d 306

63 Ohio App. 50

CRAWFORD FINANCE CO. v. DERBY.

Court of Appeals of Ohio, Sixth District, Huron.

May 1, 1939

Syllabus by the Court.

1. The holder of a chattel mortgage on, and a manufacturer's certificate of title to an automobile given to him by a dealer, has a lien on the automobile superior to any claim of a subsequent buyer of it from that dealer.

2. A chattel mortgage on a motor vehicle given by a dealer and accompanied by the manufacturer's certificate of title to such mortgaged vehicle, cannot be filed or recorded or registered by the holder, as long as he holds the certificate of title.

3. The Ohio certificate of title law for the registration of titles to motor vehicles, Sections 6290-2 to 6290-20, General Code, is exclusive, and the only way a buyer can acquire a good title to such a vehicle from a dealer is by procuring a certificate of title from the proper clerk of courts as provided for in Sections 6290-3, 6290-4 and 6290-5 General Code.

Strelitz & Dowler, of Marion, and Carpenter & Freeman, of Norwalk, for appellant.

Young & Young and Earl S. Miller, all of Norwalk, for appellee.

Kenneth R. Derby, of Norwalk, in pro. per.

George D. Welles, of Toledo, amicus curiae.

CARPENTER Judge.

This was an action in replevin for an automobile. At the close of the evidence the trial court, on motion of the defendant entered a judgment for the defendant. The plaintiff appealed on questions of law.

Numerous errors are assigned, but the only ones that will receive consideration herein are the granting of defendant's motion for judgment, and the overruling of a similar motion by the plaintiff.

The material facts are undisputed. In substance, they are: For some time prior to August 13, 1938, Harry N. Bedell had been an authorized dealer in Hudson-Terraplane automobiles. On May 31, 1938, he obtained from a distributor, a new automobile of that make and with it a manufacturer's certificate of title, as provided for in Section 6290-2, General Code. Thereupon Bedell, for a valuable consideration, gave to plaintiff, the Crawford Finance Company, a chattel mortgage on that automobile and with it gave the company the manufacturer's certificate of title which he held. The chattel mortgage was not filed for record or registered with any official. That automobile remained in the possession of Bedell and was kept in his display room and offered for sale, and plaintiff knew this would be done.

On August 16, 1938, defendant, Kenneth R. Derby, without any knowledge of the chattel mortgage, constructive or otherwise purchased the automobile and paid for it in full by transferring to Bedell a used automobile and paying the cash difference, and the automobile was delivered to Derby and he duly signed and left with Bedell an application for a certificate of ownership as required by Section 6290-5, General Code, but no such certificate was ever issued to Derby, although under that section it was the duty of Bedell to file an application for one 'within three days after the delivery of such motor vehicle.'

Shortly after August 13, 1938, Bedell became involved in serious financial and legal difficulties. On October 11, 1938, this action in replevin was filed and on a proper writ plaintiff took possession of the automobile in question, claiming the right to do so under the terms of its chattel mortgage which contained a covenant that upon various conditions, including sale or attempted sale by the mortgagor, the mortgagee might take possession of the property.

The rights of the parties must be determined by the so-called Certificate of Title Act of Ohio, Section 6290-2 et seq., General Code. Since this cause was tried, the Supreme Court has upheld the constitutionality of that law in State ex rel. City Loan & Sav. Co. v. Taggart, 134 Ohio St. 374, 17 N.E.2d 758.

By Section 6290-9, it is expressly provided that the chattel mortgage filing sections, Sections 8560 to 8572, 'shall never be construed to apply to or to permit or require' filing or other record of a chattel mortgage covering a motor vehicle. Continuing, that section provides, in part: 'Any mortgage, conveyance intended to operate as a mortgage, trust receipt, conditional sales contract, or other similar instrument made hereafter and covering a motor vehicle, if such instrument is accompanied by delivery of said manufacturer's or importer's certificate and followed by actual and continued possession of same by the holder of said instrument, or in the case of a certificate of title if a notation of same has been made by the...