In re Jackson
| Decision Date | 06 April 1967 |
| Docket Number | No. 66 B 1029(3).,66 B 1029(3). |
| Citation | 268 F. Supp. 434 |
| Parties | In the Matter of Imogene JACKSON, Bankrupt. |
| Court | U.S. District Court — Eastern District of Missouri |
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Wilson Gray, St. Louis, Mo., for Imogene Jackson.
Richard A. Gephardt, of Thompson, Mitchell, Douglas & Neill, St. Louis, Mo., for petitioner, Mercantile Trust Co. Nat. Assn.
Ben Zuke, St. Louis, Mo., trustee.
Wm. O'Herin, St. Louis, Mo., referee in bankruptcy.
This petition for review of an order of the Referee in Bankruptcy denying the reclamation petition of Mercantile Trust Company, National Association, (Mercantile) involves the construction of the Missouri statute governing the perfection of security liens on motor vehicles.
The facts were stipulated and are not in dispute. On July 7, 1965, the bankrupt, Imogene Jackson, a resident of Missouri, purchased from Thoms Pontiac, Inc., a Missouri dealer, a new automobile. She paid part of the purchase price in cash and by a trade-in, and for the balance she executed (jointly with her husband) a negotiable promissory note secured by a chattel mortgage security agreement. Shortly thereafter, the note and security agreement were sold and transferred for value and in the regular course of business to Mercantile, the present holder thereof.
On the date of the purchase, July 7, 1965, Thoms Pontiac, Inc. prepared and executed, and bankrupt also executed on form MMV-1 of the Missouri Department of Revenue an application for a Missouri certificate of title to the automobile in question.
The form used was one which was designated as "Application for Missouri Title and/or License", a form which had been utilized for a number of years for the dual purpose of making application not only for titles but also for registration of motor vehicles. This form consists of several identical copies of the application except that each copy is a different color, one of which is white and one is blue. Although the stipulated facts do not expressly so state, it appears to be conceded that bankrupt signed all four copies of this application, the first of which was apparently the white copy.
On July 21, 1965, the blue copy of the application was sent to the Office of the Supervisor of Motor Vehicle Registration, Department of Revenue of the State of Missouri, by Mercantile, together with the payment to the director of revenue of the sum of $1.00. The application and accompanying payment were received and validated in the office of the Supervisor on July 22, 1965 and held in a suspense file pending receipt of other copies of the application and the payment of the applicable Missouri sales or use tax and the license registration fee.
The Missouri use or sales tax was never paid nor was the automobile ever registered for licensing purposes. At no time prior to the filing of petition in bankruptcy on May 5, 1966 were any of the other copies of the Application delivered to the director of revenue (or to his subordinate, the Supervisor of Motor Vehicle Registration) and no certificate of ownership was issued to the bankrupt. Following his appointment, the trustee in bankruptcy took possession of the automobile and upon his refusal to surrender the same to Mercantile, the reclamation petition was filed.
Effective July 1, 1965, a radical change was effected in the Missouri law pertaining to the perfection of security liens on automobiles. Prior thereto, it was necessary for the chattel mortgage or other security instrument to be promptly filed or recorded in the appropriate county (usually the county of residence of debtor) in order to perfect the lien as against certain persons not parties to the instrument. Section 443.460, V.A.M.S. This statute (and others) were repealed as of July 1, 1965, by the Uniform Commercial Code (Laws of Missouri 1963, page 638, Section 10-102).
Article 9 of the Code pertains to secured transactions, and inter alia, in Section 400.9-401 prescribes the place of filing when filing is necessary to perfect a lien. However, the filing provisions of the Code have no application to motor vehicles and the perfection of liens therein. Instead, Section 301.600, V.A. M.S., part of a subsequently enacted statute also effective July 1, 1965, provides the sole and exclusive method to be followed for perfecting a security interest in a motor vehicle in the circumstances involved in this case. Section 301.650, V.A.M.S., expressly so states.
Hence, although the Code and other statutes to be discussed infra are relevant in ascertaining the meaning and intent of the language employed in Section 301.600, we must measure what Mercantile did against the requirements of subsection 2 of Section 301.600 in determining whether its lien was perfected as of the time of the creation thereof. This subsection provides that a lien or encumbrance on a motor vehicle is perfected by the delivery to the director of revenue of (1) the existing certificate of ownership, if any, (2) an application for a certificate of ownership containing the name and address of the lien holder and the date of his security agreement, and (3) the required certificate of ownership fee. The statute further provides that if the delivery of the foregoing "is completed within thirty days" after the creation of the lien or encumbrance, it is perfected as of the time of its creation, otherwise as of the time of the delivery. There being no existing certificate of ownership on the automobile purchased by Mrs. Jackson, there was concededly neither the necessity nor the possibility of delivering such an instrument to the director of revenue.
The stipulated facts demonstrate that there were delivered to the director of revenue an instrument in writing purporting to be an application for a certificate of ownership signed by the owner of the motor vehicle, together with the required certificate of ownership fee in the sum of $1.00. The "application" contains the name and address of the lien-holder, Mercantile, and the date of the chattel mortgage security agreement. The "application" and the fee were "delivered" to the director of revenue on July 22, 1965, less than 30 days after the execution of the chattel mortgage. Hence, unless the written instrument delivered to the director of revenue is not "an application for a certificate of ownership" within the meaning of Section 301.600, the requirements of this statute have been fully and literally met and the lien perfected as of July 7, 1965.
For many years, Missouri statutes have provided for annual registration of motor vehicles for license purposes and prescribed the procedure to be followed for that purpose. Section 301.020 et seq. V.A.M.S. An application for registration must be made "on a blank to be furnished by the director of revenue for that purpose." The application for registration must contain (1) "a brief description of the motor vehicle, including the name of the manufacturer," (2) the manufacturer's or other identifying number, (3) information as to the horse-power, and (4) the name, residence and business address of the owner of the motor vehicle. Additional information is required for the registration of commercial and specially constructed or reconstructed motor vehicles. Section 301.020, V.A.M.S. This application must be accompanied by certain required proof of payment of the Missouri personal property tax, or of the owner's non-liability therefor.
Section 301.190, V.A.M.S., prohibits the director of revenue from issuing a certificate of registration unless the applicant therefor also makes application for and is granted a certificate of ownership of the motor vehicle. Such application must be made "upon a blank form furnished by the director of revenue." The latter application must contain (1) "a full description of the motor vehicle," (2) the manufacturer's or other identifying number, (3) a statement of the source of the applicant's title, and (4) a statement of any lien or encumbrance on the motor vehicle.
Effective July 1, 1965, Section 301.190 was amended to provide that the application for a certificate of ownership must be made within 30 days after the applicant acquires the motor vehicle, and if not made within such period a delinquency penalty of $5 per month, but not to exceed a total of $25, is imposed upon the owner. It is unlawful to operate a motor vehicle in Missouri which is required to be registered for licensing unless a certificate of ownership has been issued therefor. Section 301.190, subsection 4.
Complicating the problem is the Missouri Sales Tax Law, Chapter 144, V.A. M.S., as it applies to sales of motor vehicles. In general, retail sellers of property are required to collect the applicable tax from the purchaser thereof. However, dealers in motor vehicles are expressly relieved of any obligation to collect the sales or use tax imposed by Sections 144.070 and 144.440, V.A.M.S., upon purchasers of automobiles. Section 144.080, subsection 2, V.A.M.S. In the case of motor vehicles, the applicable statutes provide that "at the time" the owner "makes application to the director of revenue for an official certificate of title and the registration of said automobile," he must "present" to the director of revenue satisfactory evidence of the amount of the purchase price and also "pay or cause to be paid" the proper amount of the sales or use tax based upon such purchase price. Sections 144.070 and 144.440, V.A.M.S. These statutes prohibit the director of revenue from issuing a certificate of title until the tax has been paid, and require the director to endorse on the certificate of title an entry showing the payment of the tax.
It is thus evident, under Missouri law, that without regard to the question of the perfection of security interests, a person who acquires title to an automobile must make "an application" for the registration thereof on a form furnished by the director of revenue, but he cannot...
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