Hawkes v. First Nat. Bank of Telluride

• Decision Date: 03 March 1924
• Docket Number: 10552.
• Parties: HAWKES v. FIRST NAT. BANK OF TELLURIDE.
• Court: Colorado Supreme Court

224 P. 224

75 Colo. 47

HAWKES v. FIRST NAT. BANK OF TELLURIDE.

No. 10552.

Supreme Court of Colorado, En Banc.

March 3, 1924

Error to District Court, San Miguel County; Straud M. Logan, Judge.

Action by the First National Bank of Telluride against Charles E Hawkes. Judgment for plaintiff, and defendant brings error.

Affirmed.

Catlin & Catlin, of Montrose, for plaintiff in error.

L. W Allen, of San Francisco, Cal., for defendant in error.

BURKE J.

The question here presented is one of priority as between a chattel mortgage and a subsequent repairman's lien. The parties appeared in reverse order in the trial court, and are hereinafter designated as there.

October 7, 1920, the owners of an automobile truck mortgaged it to plaintiff for $460 due January 7, 1921, and the mortgage was recorded the following day. Thereafter the owners brought the truck to defendant's garage 'in a broken and dilapidated condition.' For repairs thereon amounting to over $300 the truck was sold under defendant's alleged lien, and he bought it in for the amount of the repair bill and costs, totaling $503. At that time the truck was worth $800. This was an action in conversion. The court found for plaintiff, and judgment was accordingly entered in its favor for $572.40, with interest and costs. To review that judgment defendant brings error.

A valid recorded chattel mortgage creates a lien prior 'to any subsequent lien created by contract of any kind to which the mortgagee is not a party or to which he does nor give consent, actual or implied.' Ellison v. Tuckerman, 24 Colo.App. 322, 134 P. 163.

This mortgage recited that the owners might retain and use the truck, 'provided such use and enjoyment shall not impair the value thereof.' Was actual or implied consent thereby given to create this lien? We think not. Ordinary wear and tear only could have been contemplated. Certainly such use as reduced the truck to a 'broken and dilapidated condition,' necessitating a repair bill amounting to more than one-third of its value, was excluded by the express terms of the mortgage.

This mortgage further provided that, if the truck should be 'attached or claimed by any other person or persons at any time before payment,' the mortgagee might take immediate possession. This fixed plaintiff's rights under the circumstances, when defendant's claim of a lien was made. Littell v. Brayton M. & A. Co., 70 Colo. 286, 201 P. 34.

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