General Credit Corp. v. First Nat. Bank of Cody, 2656
| Decision Date | 10 May 1955 |
| Docket Number | No. 2656,2656 |
| Citation | 283 P.2d 1009,74 Wyo. 1 |
| Parties | GENERAL CREDIT CORPORATION, a Corporation, Plaintiff and Respondent, v. The FIRST NATIONAL BANK OF CODY, a Corporation, Defendant and Appellant, and A. F. Leggett and Motor Sales Co., Defendants. |
| Court | Wyoming Supreme Court |
Goppert & Fitzstephens, Jerry W. Housel, Cody, for appellant.
Steadman & Steadman, Cody, for respondent.
For clarity and convenience the parties will herein be referred to as follows:--General Credit Corporation as the plaintiff; the defendant, the First National Bank of Cody, as the appellant or as the entruster; the defendant, Motor Sales Company, as the dealership or the trustee; and the defendant, A. F. Leggett, as Liggett, (it is noted that Liggett's name is misspelled as Leggett in the title of this cause and elsewhere in the transcript and exhibits).
This litigation grows out of a dispute over priority of liens upon an automobile. The dealership is a Wyoming corporation, almost entirely owned by its President, Liggett, and his wife. This dealership was principally financed by appellant through trust receipt transactions, appellant paying for cars consigned and delivered to the dealership and taking from the dealership a trust receipt for the vehicles.
Under date August 5, 1949, with obvious purpose to take advantage of the provisions of Section 13(1), Ch. 110, Session Laws of Wyoming, 1947, of our Uniform Trust Receipts Act, the appellant addressed the following letter to the Secretary of State, paying the required fee and receiving a receipt therefor:
'August 5, 1949
'Secretary of State
'Cheyenne, Wyoming
'Statement of Trust Receipt Financing
'The entruster, The First National Bank, Cody, Wyoming, whose chief place of business within this state is at Cody, Wyoming, is or expects to be engaged in financing under trust receipt transactions the acquisition by the trustee, Motor Sales Company, whose chief place of business within this state is at Cody, Park County, Wyoming, of goods of the following description:
'Motor Cars and Motor Trucks
'The First National Bank of Cody
'/s/ W. F. Messenger, Cashier
'Entruster
'Motor Sales Company
'/s/ A. F. Liggett, President
'Trustee'
On May 22, 1950, to secure the repayment of $200,000 borrowed from appellant and evidenced by its eight promissory notes, the dealership gave appellant a chattel mortgage on 'All new and used cars, automobiles, trucks and other automotive vehicles, together with equipment and spare tires thereon, owned by the Mortgagor and carried in its inventory.' Following this description, the mortgage stated:
'The Mortgagor has the right to make sales of said merchandise hereby mortgaged in regular course of business, provided only that replacements shall be made for any merchandise sold from inventory with items of similar kind and description and that this Mortgage shall apply to all new and used cars, automobiles, trucks and other automotive vehicles, together with equipment and spare tires thereon, hereafter obtained by Mortgagor.'
The chattel mortgage was filed for record with the local county clerk on May 23, 1950.
On May 26, 1950, appellant sent the following letter to the county clerk:
'The First National Bank
'Cody, Wyoming
'May 26, 1950
'Miss Eva E. Larson
'County Clerk
'Cody, Wyoming
'My dear Miss Larson:
'With reference to the $200,000.00 blanket mortgage which is filed in your office on the entire stock of automobiles, both new and used, of the Motor Sales Company, of Cody, we wish to advise that we have given the Motor Sales Company permission to sell these automobiles in regular course of business with the understanding, of course, that they replace them with other vehicles of similar kind and quality.
'For your own protection we hereby authorize you to issue Certificates of Title on any vehicle which the Motor Sales Company of Cody, Wyoming, may present to you in regular course of their business operations without notation of this lien upon the new certificate of Title because any vehicle so sold is released from the mortgage under the terms and provisions thereof.
'Yours very truly,
'First National Bank
'/s/ By Ernest J. Goppert
'EJG/jm
President'
The dealership also gave appellant an instrument entitled 'Trust Receipt and Judgment Note', dated October 7, 1950, which gave the description and price of the vehicle in question, acknowledged it had been received from the bank, and set forth as follows:
'The Undersigned hereby agrees to safely keep said property, to have the same properly covered with comprehensive insurance against fire, theft and collison (sic), to keep the same unencumbered and as the property of the First National Bank of Cody Wyoming, and to pay to the First National Bank of Cody, Wyoming, the amount listed after each unit plus $1.00 and interest at the rate of 6 Percent per annum within due 10/15 days from date hereof. Upon the payment of the amount against any specific unit, title thereto shall pass to the Undersigned.
'The Undersigned hereby irrevocably designates and authorizes any Attorney-At-Law to appear for the Undersigned after the maturity hereof in any Court of Record in any State of the United States either where this note may be held at or after maturity or where any of the makers or endorsers may reside or have any right, title, interest or claim in any property, either in term, time, or vacation, and to waive the issuance and service of process and confess a judgment against the undersigned in favor of the holder hereof for such amount as may then appear to be unpaid hereon including all Court costs and Fifteen Percent (15%) of amount appearing unpaid hereon for collection expenses and attorney's fees; all of which the Undersigned agrees to pay. The Undersigned hereby waives all benefits of valuation, appraisement and exemption laws and presentment and protest and notice of protest.
'Dated this 7th day of Oct., A.D., 1950.
__________
'Attest:
Motor Sales Company
'Edna Leggett
By A. F. Leggett
'Secretary
President'
On October 17, 1950, the dealership, acting through its president, sold the automobile to Liggett, taking in payment therefor his promissory note for the full purchase price together with a chattel mortgage on the car to secure its payment. On the same day the note and mortgage was assigned to the plaintiff, the plaintiff paying the dealership the face value of the note.
On November 6, 1950, application for a certificate of title for the automobile was made by Liggett and verified by him as owner as is required by Section 60-205, Wyoming Compiled Statutes, 1945, as amended by Chapter 151, § 25, Session Laws of Wyoming, 1949. The application stated the vehicle was new, that it was purchased by Liggett from the dealership and was subject to the lien of the October 17, 1950, chattel mortgage in favor of the plaintiff. It also contained a statement of transfer by the dealer as is also required by Section 60-204, W.C.S.1945, Chapter 151, § 24, Session Laws of Wyoming, 1949, as follows:
"To Be Executed By Dealer If Vehicle Is Sold New
"I, A. F. Liggett, Owner for Motor Sales Co
------------------------ ------------------------ -----------------------
"Name of Person Position or Title Name of Firm
do hearby transfer and warrant the title of the motor vehicle described
herein, to the owner named above, subject to the liens indicated
"Dealer License No. 11 D 1 /s/ A. F. Liggett
-----------------------
"Signature of Dealer or
"Authorized Agent
"Subscribed and sworn to before me this 6 day of November, 1950
"(Notary seal) /s/ Charles W. Whitlock
-------------------------------------------------
"Person Authorized to Administer Oaths"
On November 8, 1950, the county clerk issued to Liggett a certificate of title for the automobile conformably with the provisions of Chapter 60, § 207, W.C.S., 1945, as amended and re-enacted by Chapter 151, § 27, Session Laws of Wyoming, 1949, p. 251. The certificate of title gave the description of the automobile; showed Liggett's name as the owner; stated that the car was purchased on October 17, 1950, from the dealership and set forth that the vehicle was subject to the chattel mortgage lien in favor of the plaintiff and to no other lien.
The appellant obtained possession of the car from Liggett some time between November 8, 1950 and November 15, 1950, but it was replevined by plaintiff in this action wherein plaintiff has proved default in payment to it of the Liggett note, and appellant has proved the dealership failed to account to and pay it the price specified in the 'Trust Receipt and Judgment Note'.
To establish the priority of its lien, plaintiff relied upon the chattel mortgage given to secure payment of the Liggett promissory note and assigned to it; the certificate of title issued in Liggett's name showing only plaintiff's chattel mortgage and no other as a lien or encumbrance; the fact that appellant's blanket $200,000 mortgage of May 22, 1950, contained express permission to sell the automobile 'in regular course of business', coupled with the letter from appellant authorizing the county clerk to issue a certificate of title without notation of the $200,000 chattel mortgage 'on any vehicle which the Motor Sales Company of Cody, Wyoming, may present to you in regular course of their business operations * * *'.
The appellant, however, contends (1) that having conformed to the provisions of our Uniform Trust Receipts Act by filing the statement set forth above; paying for the automobile on its delivery to the dealership and taking the dealership's 'Trust Receipt and Judgment Note', the appellant retained title...
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