National Bank of Sanford v. Greensboro Motor Co., 606

• Decision Date: 02 June 1965
• Docket Number: No. 606,606
• Citation: 264 N.C. 568,142 S.E.2d 166
• Court: North Carolina Supreme Court
• Parties: The NATIONAL BANK OF SANFORD v. GREENSBORO MOTOR COMPANY, t/a Greensboro Ford.

Page 166

142 S.E.2d 166

264 N.C. 568

The NATIONAL BANK OF SANFORD v. GREENSBORO MOTOR COMPANY, t/a Greensboro Ford.

No. 606.

Supreme Court of North Carolina.

June 2, 1965.

Teague, Williams & Love, Sanford, for plaintiff appellant.

Smith, Moore, Smith, Schell & Hunter, Herbert O. Davis, Greensboro, for defendant appellee.

RODMAN, Justice.

Prior to 1961, the title to motor vehicles and liens thereon could be transferred, created and protected in the same manner that title to and liens on other chattels could be transferred and created. The certificates of title issued by the Department of Motor Vehicles were mere means of protecting 'the general public from fraud, imposition, and theft.' That was the holding of this Court in Carolina Discount Corporation v. Motor Co., 190 N.C. 157, 129 S.E. 414, decided in September 1925.

Notwithstanding the conclusion reached in 1925, litigants continued their efforts to secure a judicial declaration that certificates of title for motor vehicles issued under then existing statutes were analogous to statutory certificates of title for real estate, registered as to title, pursuant to the provisions of c. 43 of the General Statutes. Our last answer to these contentions was given in December 1960, when Southern Auto Finance Co. v. Pittman, 253 N.C 550, 117 S.E.2d 423, was decided. We then said: 'The interpretation given in 1925 has not been rejected by the Legislature. If public policy now requires a different system of establishing ownership and encumbrances on motor vehicles, such policy must be declared by the Legislature. It can enact laws to accomplish that purpose. We have neither the power nor the desire to usurp its prerogative.'

The 1961 Legislature convened February 8, 1961. It enacted c. 835, S.L.1961. It would be difficult to read that Act and the decision in Finance Co. v. Pittman, supra, without reaching the conclusion that the Legislature did intend to make the very changes which we said were beyond our power to make, but within the power of the Legislature.

By express language, § 12 of the Act eliminated the necessity of recording mortgages on motor vehicles in the county in which the mortgagor resided. Creditors and purchasers, after January 1, 1962, did not have to go to the office of the Register of Deeds to ascertain if the vehicle was mortgaged; a purchaser or mortgagee need only look at the certificate of title. That paper would provide him with all necessary information as to ownership and liens created subsequent to Janurary 1, 1962. The other portions of the Act took effect July 1, 1961.

G.S. § 20-72(b), prior to the ratification of the 1961 Act (c. 835, S.L.1961), required the owner to endorse his certificate with a warranty of title and a statement of liens to a purchaser or mortgagee, which transfer and assignment the mortgagee was required to transmit to the Department of Motor Vehicles within twenty days. Failure of the owner to comply with the statute was made a misdemeanor, but such failure did not invalidate a mortgage or other transfer made by the owner. Corporation v. Motor Co., supra.

Sec. 8 of the 1961 Act amended the statute, G.S. § 20-72(b), expressly providing: 'Transfer of ownership in a vehicle by an owner is not effective until the provisions of this subsection have been complied with.' After July 1, 1961, the effective date of the amendment, no title passed to a purchaser until the certificate had been assigned, delivered to the purchaser and application made for a new certificate. Community of Lenoir Credit Co. v. Norwood, 257 N.C. 87, 125 S.E.2d 369.

The statement in Fields' assignment to Carolina that the date of sale was '12/4/61' had no effect on...