Meyer Motor Car Co., Inc. v. First Nat. Bank

• Decision Date: 04 January 1928
• Docket Number: 12.
• Citation: Meyer Motor Car Co., Inc. v. First Nat. Bank, 140 A. 34, 154 Md. 77 (Md. 1928)
• Parties: MEYER MOTOR CAR CO., INC., v. FIRST NAT. BANK OF CUMBERLAND ET AL.
• Court: Maryland Court of Appeals

140 A. 34

154 Md. 77

MEYER MOTOR CAR CO., INC., v. FIRST NAT. BANK OF CUMBERLAND ET AL.

No. 12.

Court of Appeals of Maryland

January 4, 1928

Appeal from Circuit Court, Allegany County; Albert A. Doub, Judge.

"To be officially reported."

Claim case by the Meyer Motor Car Company, Inc., against the First National Bank of Cumberland and another. Judgment for defendant named, and plaintiff appeals. Affirmed.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, and SLOAN, JJ.

Arch A Young, of Cumberland, for appellant.

Walter C. Capper, of Cumberland (William A. Huster, of Cumberland on the brief), for appellees.

SLOAN J.

This is an appeal from a judgment entered on a directed verdict for the appellee, one of the defendants below.

The appellant, a New York corporation, doing business at Buffalo sold an automobile to Lillian Ellsworth, reserving title under a conditional sales contract to secure a balance of $1,820 on the purchase money. The vendee brought the automobile to Cumberland, Md., where, on June 30, 1926, she had a check on the People's Bank of Hamburg, N. Y., for $850, cashed at the First National Bank of Cumberland. The check was drawn by the vendee of the automobile to the order of Cora King, of Cumberland, indorsed by Mrs. King and C.J. Meadows. Mrs. King, who accompanied Mrs. Ellsworth to the bank, in response to the inquiries of the teller, said, in the presence of Mrs. Ellsworth, that she thought the check was good, that she had a large Studebaker sedan, and that the check of any one who had such a car should be good. While Mrs. King had no means, she was favorably known to the bank. The teller cashed the check, and in a few days it came back protested for nonpayment. Mrs. Ellsworth left Cumberland, but shortly thereafter returned, when the bank caused a foreign attachment to be issued and laid on the car. On September 2, 1926, the appellant brought a claimant case to recover the car, alleging in its petition that on February 10, 1926, it had sold the car to Lillian Ellsworth, reserving title under a conditional sales contract duly recorded at Hamburg, N. Y., February 12, 1926, and attached to the petition was a copy of the contract.

The appellee, First National Bank, filed a plea to the petition whereby it joined issue upon the claim of the appellant and alleged that the title to the property attached "was not in the claimant * * * but was in the said Lillian Ellsworth."

At the trial of the claimant case, an executed copy of the conditional sales contract between the appellant as vendor and Lillian Ellsworth as vendee was offered and introduced in evidence. The claimant proffered to prove the recording of the contract at Hamburg, N. Y., but an objection to the introduction of the copy tendered was sustained (and properly) because it was not certified as required by section 45 of article 35 of the Code of 1924. An exception was reserved and abandoned by the appellant, so that the sales contract under which the appellant claims title is, so far as this appeal is concerned, an unrecorded contract. The appellee by its president and the assistant cashier, the latter of whom cashed Mrs. Ellsworth's check, testified that they and the appellee had no notice of the sales contract. Frank G. Luman, deputy clerk, testified that the sales contract had not been recorded in the clerk's office at Cumberland. By agreement of counsel, the Uniform Sales Act as contained in volume 2 of Uniform Laws Annotated, published by the Edward Thompson Company, was offered in evidence as the law of New York, and sections 5, 6, 10, 13, and 14 were incorporated in the record.

There are five exceptions on which the defendant relies (six having been abandoned); four to the rulings of the trial court on the evidence, and one to the granting of the defendant's prayer to take the case from the jury.

This court has held, in the cases of Hall v. Hinks, 21 Md. 406, Levi v. Booth, 58 Md. 305, 42 Am. Rep. 332, and in Lincoln v. Quynn, 68 Md. 299, 11 A. 848, 6 Am. St. Rep. 446, that the common-law rule that a person in possession of goods cannot confer on another a better title than he himself has does not, in this state, apply to a purchaser without notice of the vendor's title under a conditional sale. The rule, however, was departed from in Dinsmore v. Maag-Wahmann Co., 122 Md. 177, 89 A. 399, Ann. Cas. 1916A, 1270, where it was held that, under the Uniform Sales Act (Code of 1924, art. 83,§§ 22 and 39, adopted in Maryland by Act of 1910, c. 346), "conditional sales, where the contract provides that the title and ownership of the thing sold * * * shall not vest in him until the purchase price therefor is paid," are recognized. In the same case it is further stated that the appellant or defendant was an "attaching creditor, and such defendant, under the general rule, can only assert such right as Keppler [the defendant in the attachment suit] had."

After the decision in the Dinsmore v. Maag-Wahmann Case, the Act of 1916, c. 355, now section 55 of article 21 of the Code of 1924, was passed, where it was provided that:

"Every note, sale or contract for the sale of goods and chattels, wherein the title thereto, or a lien thereon, is reserved until the same be paid in whole or in part, or the transfer of title is * * * to be delivered to the vendee, shall, in respect to such reservation and condition, be void as to third persons without notice until such note, sale or contract be in writing, signed by the vendee, and be recorded in the clerk's office of Baltimore City, or the counties, as the case may be, where bills of sale are now recorded."

Since the act of 1916, unrecorded conditional sales have been held valid as between the parties but void as to third parties without notice in Winton Co. v. Meister, 133 Md. 320, 105 A. 301, Roberts & Co. v. Robinson, 141 Md. 37, 118 A. 198, and in Stieff v. Wilson, 151 Md. 597, 135 A. 407. In the latter case the court said, quoting with approval from Roberts v. Robinson:

"The general terms employed indicate that the statute 'was designed to safeguard the interests of all persons, acting without notice of the unrecorded contract, who would be injuriously affected if it were permitted to be enforced.' "

The appellant contended that the only burden assumed by it was to prove its claim under its contract with Mrs. Ellsworth, and that the burden then shifted to the appellee, the attaching creditor, to show that it had no notice of the appellant's contract, and that this want of notice, even though not refuted, required submission of the appellee's claim to a jury, though we were furnished no authority to this effect. In 2 Jones' Commentaries on Evidence, p. 859, the rule is thus stated:

"Discrimination must be exercised in using the terms 'burden of proof'

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