Doenges-Glass, Inc. v. General Motors Acceptance Corp., DOENGES-GLAS

• Decision Date: 20 September 1971
• Docket Number: INC,No. C--21,DOENGES-GLAS,C--21
• Citation: 175 Colo. 518,488 P.2d 879
• Parties: , 9 UCC Rep.Serv. 1139 , a Colorado Corporation, Petitioner-Appellant, v. GENERAL MOTORS ACCEPTANCE CORPORATION, a corporation, Respondent-Appellee.
• Court: Colorado Supreme Court

Page 879

488 P.2d 879

175 Colo. 518, 9 UCC Rep.Serv. 1139

DOENGES-GLASS, INC., a Colorado Corporation, Petitioner-Appellant, v. GENERAL MOTORS ACCEPTANCE CORPORATION, a corporation Respondent-Appellee.

No. C--21.

Supreme Court of Colorado, In Department.

Sept. 20, 1971.

Henry, Cockrell, Quinn & Creighton, Victor Quinn, Peter J. Wiebe, Jr., Denver, for petitioner-appellant.

Robert D. Charlton, Denver, for respondent-appellee.

Ronald Lee Cooke, Elwyn F. Schaefer, Denver, amicus curiae Colorado Auto Dealers Ass'n.

HODGES, Justice.

This court granted certiorari to review the decision rendered by the Court of Appeals reported at 28 Colo.App. 283, 472 P.2d 761. We agree with the result reached by the Court of Appeals; however, we disagree with the rationale upon which the court obtained the result.

The facts in the instant case are set forth at length in the Court of Appeals' opinion and will only be summarized herein. In May 1966, one Taibi purchased an automobile in New York State (Suffolk County) from Anthony Buick, Inc., under a retail installment contract. The contract was assigned to respondent General Motors Acceptance Corporation (GMAC). A financing statement was filed in the office of the County Clerk, Suffolk County where Taibi resided as is required by New York law in order to perfect a security interest in a motor vehicle. Subsequently, in November of 1966, without notice to GMAC, Taibi brought the car to Denver and sold it to petitioner Doenges-Glass. Taibi signed the New York certificate of registration over to Doenges-Glass, using the form provided for such transfer on the back of the registration certificate; he also signed an affidavit warranting that there were no liens outstanding against the car. GMAC, shortly thereafter, traced the car to Doenges-Glass and brought suit for conversion. The trial court entered a summary judgment in favor of GMAC and the judgment was affirmed by the Court of Appeals.

Extensive briefs have been submitted by both parties as well as by amicus curiae Colorado Auto Dealers Association. The sole issue upon this review is whether the lien held by GMAC and properly perfected under New York law is enforceable against Doenges-Glass, who purchased the car in reliance on the New York registration certificate, which did not show GMAC's lien, and the affidavit of Taibi that there were no outstanding liens.

Since the transaction between Taibi and Doenges-Glass took place in November of 1966, it comes after the date of July 1, 1966 upon which the Colorado version of the Uniform Commercial Code became effective. Vol. 7A, Perm.Supp., C.R.S.1963, 155--9--103(3) states that the validity of foreign security interests in personal property is governed by that section '(e)xcept to the extent that motor vehicle titles are governed by section 13--6--32, C.R.S.1963. * * *' The usage of the broad term 'motor vehicle titles' indicates the legislative intent that whenever the question as to title to a motor vehicle arises with regard to a foreign security interest, the question is to be answered by application of C.R.S.1963 13--6--32 and is precluded from the application of the provisions of Vol. 7A, Perm.Supp., C.R.S.1963, 155--9--103(3).

C.R.S.1963, 13--6--32 reads as follows:

'Foreign mortgages.--No mortgage, as defined in section 13--6--2, On a motor vehicle, filed for record in any state other than the state of Colorado shall be valid and enforceable against the rights of subsequent purchasers for value, creditors or mortgagees, having no actual notice of the existence thereof. If the certificate of title for such vehicle, whether Issued under the laws of this state or Any other state, bears thereon any notation adequate to apprise a purchaser, creditor, or mortgagee of the existence of such mortgage at the time any third party acquires a right in the motor vehicle covered thereby, such mortgage and the rights of the holder thereof shall be enforceable in this state the same and with like effect as though such mortgage were filed in the state of Colorado and noted on the certificate of title in the manner prescribed in section 13--6--20.' (Emphasis added.)

Initially, we note the well established rule of construction that words and sentences in a statute must be construed in relation to the rest of the paragraph. People ex rel. Marks v. District Court of Adams County, 161 Colo. 14, 420 P.2d 236. When the meaning of language in a statute is unclear, the legislative intent must be determined by consideration of the language in the context of the statute together with the object of the statute and the consequences which would follow either construction of the statute. Kirschwing v. O'Donnell, 120 Colo. 125, 207 P.2d 819.

If taken literally, the first sentence of C.R.S.1963, 13--6--32 would indicate that no foreign mortgage shall be enforceable against a subsequent purchaser for value in Colorado. However, the second sentence of the same section refers to the 'certificate of title for such vehicle * * * under the laws of * * * any other state.'

Thus, it would appear that the second sentence modifies and thus limits the first sentence to application to mortgages originating in certificate of title states.

The object of C.R.S.1963, 13--6--1 et seq., 'The Certificates of Title Act,' was undoubtedly to make transfer of title easier and less vulnerable from the attendant risks of stolen cars and secret liens. Additionally, as stated by former Justice Doyle in Federico v. Universal C.I.T. Credit Corporation, 140 Colo. 145, 343 P.2d 830:

'(S)ec. 13--6--32 seems clearly designed to encourage other states to require notation as a means of protecting their citizens holding mortgages on motor vehicles which can easily be moved into Colorado as well as to other states. * * *'

As noted by counsels' briefs,...