Harris Motors v. Universal C.I.T. Credit Corp.

• Decision Date: 02 February 1950
• Docket Number: 1 Div. 375
• Citation: 253 Ala. 420,45 So.2d 1
• Parties: HARRIS MOTORS, Inc. v. UNIVERSAL C. I. T. CREDIT CORPORATION.
• Court: Alabama Supreme Court

Page 1

45 So.2d 1

253 Ala. 420

HARRIS MOTORS, Inc. v. UNIVERSAL C. I. T. CREDIT CORPORATION.

1 Div. 375.

Supreme Court of Alabama.

Feb. 2, 1950.

Rehearing Denied March 9, 1950.

Outlaw, Seale & Kilborn, of Mobile, for appellant.

Sidney J. Gray, of Mobile, for appellee.

FOSTER, Justice.

The question in this case may be simply stated and it is, whether or not a purchaser of an automobile in this State is protected againt a conditional sales contract made in another state, when such automobile is immediately thereafter brought into this State and immediately sold to such purchaser for cash without notice of the conditional sales contract and when such conditional sales contract is not recorded within the three months as provided by section 131, Title 47, Code; but when within said three months the conditional sales vendor brought a suit against such purchaser in this State for the conversion of the automobile, he having sold and disposed of it in the meantime. The suit served to give notice to the purchaser in Alabama of the existence of the conditional sales contract within the three month period.

To state the facts in detail they are that one Calvert lived in Mobile County and, on December 13, 1948, he went to Pensacola, Florida, and there bought from the Muldon Motor Company a Chevrolet automobile and executed a conditional sales contract. The seller immediately transferred said contract to the plaintiff in this case, the Universal C. I. T. Credit Corporation. Calvert on the same day on which he purchased the automobile brought it to Mobile, Alabama, and by the use of a faked bill of sale showing himself to be the purchaser the previous year and switching the license plate from a Florida to an Alabama tag, sold it to the defendant Harris Motors (appellant here) for a cash consideration then and there paid. The Harris Motors had no notice of any infirmity in the title of Calvert, such as the conditional sales contract. On December 28, 1948, Harris Motors sold the Chevrolet to a resident of Mississippi where the car was immediately carried and there left. On January 11, 1949, and within three months from December 13, 1948, the plaintiff brought this suit against Harris Motors in Mobile County for the conversion of the car. The conditional sales contract was not recorded in Mobile County.

The question is, did the notice which Harris Motors received by reason of the suit filed January 11, 1949, serve to dispense with the record of the contract within the three month period after December 13, 1948? Our decisions are to the effect that leaving out of consideration the matter of notice by bringing suit, if the contract under these circumstances was not recorded in Mobile County within the three month period from the time when the car was brought into Mobile County, which was the same day upon which it was sold to the defendant, the title which Harris Motors obtained would not be affected by the conditional sales contract. In other words, unless so recorded the condition in such conditional sales contract is void against a purchaser for valuable consideration without notice thereof. This defendant, Harris Motors, was a purchaser for value and without notice of any such conditional sale. The subsequent recording of the contract was not for the purpose of giving him notice because notice to him after such purchase could avail him nothing and the recording of a conditional sales contract after such purchase by him would be of little benefit to him. But the statute is specific and has long since been construed to mean just what it says that unless it is so recorded within three months the condition in the instrument is void as against a person who may have purchased said property for value and without notice within said period of three months. It is so said in Lynn v. Broyles Furniture Co., 3 Ala.App. 634, 57 So. 122, 124. That statute was also there construed to mean that the omission to record operates in the nature of a forfeiture of a reservation of title as to such purchaser and that 'the failure to record does not divest the original vendor of the title, but debars its assertion against third parties, conferring on them * * * a right prior and superior to the vendor's reservation of title.

We have frequently treated the case last cited as an authoritative construction of this statute and applied it to various situations. Pulaski Mule Co. v. Haley & Koonce, 187 Ala. 533, 65 So. 783, Ann.Cas.1916A, 877; Jackson v. Parker, 252 Ala. 167, 40 So.2d 649.

The result of all of our cases shows that the recording of the mortgage within the three month period, but after the purchase of the property, which has been brought into the State subject to a conditional sales contract, was not for the...