Gen. Motors Acceptance Corp. v. Brackett & Shaw Co.

• Decision Date: 02 June 1930
• Parties: GENERAL MOTORS ACCEPTANCE CORPORATION v. BRACKETT & SHAW CO.
• Court: New Hampshire Supreme Court

150 A. 739

GENERAL MOTORS ACCEPTANCE CORPORATION

v. BRACKETT & SHAW CO.

Supreme Court of New Hampshire. Strafford.

June 2, 1930.

Transferred from Superior Court, Strafford County; Young, Judge.

Proceeding by the General Motors Acceptance Corporation and another against the Brackett & Shaw Co. Case transferred on question with stipulation that, in the event of a negative answer, the petition should be dismissed.

Petition dismissed.

Petition to dissolve an attachment. Facts found by the court. On June 1, 1929, the H. M. Parker Chevrolet Company, Inc., of Portsmouth sold an automobile to Nigel D. Chapman of Lee. The sale was witnessed by a conditional sale contract whereby title to the car was not to pass to the purchaser until payment of the full purchase price. This contract was executed with all necessary formalities including the affidavit required by P. L. c. 216, § 28. When completed, it was sent to the town clerk of Lee for record. The clerk omitted to copy the part of the instrument containing the affidavit, so that the record did not show that the affidavit had ever been made or subscribed. Neither the vendor nor the Acceptance Corporation knew this fact, and both were justified in assuming that the entire contract had been recorded. Subsequently the defendant brought suit against Chapman and attached the car. The balance due on the purchase price has never been paid. The question whether the contract was properly recorded within the meaning of the statute was transferred by Young, J., with a stipulation that, in the event of a negative answer, the petition should be dismissed.

Hughes & Burns, of Dover, for plaintiff.

Albert P. Sherry, of Dover, for defendant.

MARBLE, J.

The interest of the General Motors Acceptance Corporation does not appear from the reported facts, but is assumed to be that of the vendor, since the petition alleges that the balance due on the purchase price is "payable at the office of the General Motors Acceptance Corporation, said corporation having financed the purchase of said car."

Section 27 of chapter 216 of the Public Laws provides that "no lien reserved on personal property sold conditionally and passing into the hands of the conditional purchaser," with certain exceptions not material to the present controversy, "shall be valid against attaching creditors, or subsequent purchasers without notice, unless the vendor of such property takes a written memorandum, signed by the purchaser, witnessing the lien, the sum due thereon and containing an affidavit as provided" in section 28, "and causes such memorandum to be recorded in the town clerk's office."

Section 28 requires each vendor and purchaser to make and subscribe an affidavit to the effect that the memorandum "is made for the purpose of witnessing the lien and the sum due thereon as specified in said memorandum, and for no other purpose whatever, and that said lien and the sum due thereon were not created for the purpose of enabling the purchaser to execute said memorandum, but said lien is a just lien, and the sum stated to be due thereon is honestly due thereon and owing from the purchaser to the vendor."

Unless, in the absence of notice, the memorandum shows "that each party made and subscribed the requisite oath, the lien attempted to be retained cannot be enforced against a subsequent purchaser from or attaching creditor of the conditional purchaser in possession (Pub. St. c. 140, §§ 6, 12, 23, 24; Lovell v. Osgood, 60 N. H. 71; Stone v. Marvel, 45 N. H. 481); for it is the intent of the statute 'that an inspection of the record should inform all parties whether the memorandum 'had been legally executed' (Stone v. Marvel, 45 N. H. 481, 482)." Churchill v. Demeritt, 71 N. H. 110, Ill, 112, 51 A. 254, 255.

This construction has received legislative approval by the re-enactment of the statute without change. Peaslee v. Evans, 82 N. H 313, 316, 133 A. 448; Waterman v. Lebanon, 78 N. H. 23, 24, 95 A. 657, and cases cited.

While the cases are not in agreement on the subject, clearly the better rule required the vendor in the present case "to see that all of the prerequisites of a valid and complete recordation" were complied with. 23 R. C. L. 224. And the mistake of the town clerk, being a material one, invalidated the record as notice. Jones, Chattel Mort. (5th Ed.) § 273.

"A record is a constructive notice only when and so far as it is a true copy, substantially even if not absolutely correct, of the instrument which purports to be registered, and of all its provisions. Any material omission or alteration will certainly prevent the record from being a constructive notice of the original instrument, although it may appear on the registry books to be an instrument perfect and operative in all its parts. The test is a plain and simple one. It is, whether the record, if examined and read, * * * would be an actual notice * * * of the original instrument and of all its parts and provisions." 2 Pom. Eq. Jur. (4th Ed.) § 654. "The registry is notice of no other facts than those that appear upon the record." In re A. E. Savage Baking Co. (D. C.) 259 F. 976, 979.

It is true that, where the requirement that certain proceedings be recorded is merely directory, the neglect of the recorder to make a proper record will not affect the validity of the proceedings. Converse v. Porter, 45 N. H. 385; Randall v. Conway, 63 N. H. 513, 3 A. 635. Similarly it has been held that, where by statute a deed is operative as a record from the time it is filed for record, no error of transcription can prejudice the grantee or mortgagee. Under such circumstances the mortgagee "is regarded as having discharged his entire duty when he has delivered his...