National Trailer Convoy Co. v. Mount Vernon Nat. Bank & Trust Co. of Fairfax County
| Decision Date | 11 October 1966 |
| Docket Number | No. 41107,41107 |
| Citation | 420 P.2d 889 |
| Parties | 3 UCC Rep.Serv. 831, 1966 OK 197 NATIONAL TRAILER CONVOY COMPANY, Inc., a corporation, Plaintiff in Error, v. MOUNT VERNON NATIONAL BANK & TRUST COMPANY OF FAIRFAX COUNTY, Defendant in Error. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court
Where a security interest in personal property is properly perfected, a common carrier, who subsequently transports such property for hire, does so with notice of the perfected security interest.
Appeal from the Court of Common Pleas of Tulsa County; Donald D. Cameron, Judge.
Defendant in error, holder of a perfected security interest in a trailer, brought an action in replevin against plaintiff in error, holder of a carrier's lien. The trial court found the carrier's lien was inferior to the security interest of defendant in error and plaintiff in error appeals from the order overruling its motion for a new trial. Judgment affirmed.
Gable, Gotwals, Hays, Rubin & Fox, Tulsa, for plaintiff in error.
N. E. McNeill, Jr., Tulsa, for defendant in error.
The primary issue herein involved is the priority of claims arising under a conditional sales contract on a trailer coach entered into in the State of Virginia and a carrier's lien resulting from transporting said trailer from the State of Virginia to Oklahoma.
Defendant in error, Mount Vernon National Bank and Trust Company, herein referred to as plaintiff, (holder of the conditional sales contract) commenced an action in replevin against plaintiff in error, National Trailer Convoy Company, Inc., herein referred to as defendant, (holder of the carrier's lien) to recover the trailer under its conditional sales contract.
The trial court found the plaintiff's claim under its conditional sales contract was superior to the defendant's claim under its carrier's lien and rendered judgment accordingly. Defendant has appealed from the order overruling its motion for a new trial.
On April 10, 1961, a certain described trailer coach was purchased in the State of Virginia under a conditional sales contract. On the same date the conditional sales contract was assigned to plaintiff. This conditional sales contract specifically provided that title to the trailer shall remain in the seller or its assigns; and that the trailer could not be removed from the State of Virginia without the consent of the seller or its assigns. Thereafter, the trailer was transferred to another purchaser in Virginia with the written consent and approval of plaintiff.
In April, 1963, the new purchaser contacted defendant in Virginia and requested it move the trailer to Tulsa, Oklahoma. Thereafter, defendant, who holds an interstate certificate as a common carrier, transported the trailer from Virginia to Oklahoma and was holding the same until the charge for its services was paid. The trailer was moved to Oklahoma without the knowledge and consent of plaintiff.
Default was made in payments on the conditional sales contract and plaintiff instituted this replevin action. Plaintiff acquired possession of the trailer and prior to judgment moved the trailer to Virginia. Although the trial court's judgment ordered the trailer to be sold pursuant to the laws of Oklahoma and in the State of Oklahoma, the trailer was subsequently sold in the State of Virginia after notice to defendant of such sale and defendant's appraisal of the trailer.
Defendant contends that where a perfected security interest holder permits a person to retain possession of the goods and that person contracts for their transportation contrary to the terms and conditions of the security interest, a carrier's lien asserted thereon is superior to the prior perfected security interest where the carrier had no actual knowledge of the person's lack of authority to authorize the transportation charges; and that constructive notice of the public records reflecting the perfected security interest is not sufficient to give actual knowledge to the common carrier.
In considering this contention we find that plaintiff's claim is based on a conditional sales contract entered into and duly perfected in the State of Virginia; and defendant's claim is based on a carrier's lien under Title 12A O.S.1961, § 7--307, which became effective January 1, 1963. We also find the trailer was in Oklahoma less than 120 days prior to the commencement of this action and there is no argument concerning the perfection or validity of either parties' claim. In this connection see Title 12A O.S.1961, § 9--103. Therefore the basic issue presented is which of the two claims has priority.
This is a case of first impression under the new Uniform Commercial Code and defendant argues its carrier's lien has priority over plaintiff's security interest based on the provisions of Title 12A O.S.1961, § 9--310, which provides:
'When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise.'
It is to be noted that the above, section contains a conditional provision, i.e., the lien takes priority over a perfected security interest 'unless the lien is statutory and the statute expressly provides otherwise.' This directs our attention to the statutory provision creating defendant's lien, which is Title 12A O.S.1961, § 7--307. This section in pertinent part is as follows:
'(1) A carrier has a lien on the goods covered by a bill of lading for charges subsequent to the date of its receipt of the goods for storage or transportation (including demurrage and terminal charges) and for expenses necessary for preservation of the goods incident to their transportation or reasonably incurred in their sale pursuant to law. * * *.
'* * *'
Under this section the carrier's lien takes priority over other liens or security interests on the same property 'unless the carrier had notice that the consignor lacked authority to subject the goods to such charges and expenses' or 'unless the carrier had notice that the bailor lacked such authority.'
Plaintiff's security interest under its conditional sales contract was created in Virginia and defendant does not question the validity of the same. Defendant entered into the contract in Virginia to move the trailer from Virginia to Oklahoma. The parties stipulated to the pertinent Virginia laws and our attention is directed to the Virginia Code of 1950, Section 46.1--68 thru 46.1--71; 1958, c. 541. Section 46.1--71 is in pertinent part as follows:
'Such certificate of title, when issued by the Division showing a lien or encumbrance shall be deemed adequate notice to the Commonwealth, creditors and purchasers that a lien against the motor vehicle exists and the recording of such reservation of title, lien or encumbrance in the county or city wherein the purchaser or debtor resides or elsewhere is not necessary and shall not be required. * * * nor shall recordation of such lien in any other place for any other purpose be required or have any effect.'
The Certificate of Title on this trailer clearly reflects this conditional sale in a designated sum, the date, the name and address of the lienor.
The Supreme Court of Appeals of Virginia in Chavis v. Gibbs, 198 Va. 379, 94 S.E.2d 195, considered their recordation statutes and held their main purpose is to give constructive notice to purchasers and encumbrancers who acquire or seek to acquire some interest or right in property; and the recordation of an instrument gives constructive notice of all the facts expressly stated in the instrument and of other matters therein suggested which might be disclosed upon prudent inquiry. Therein the court cited a North Carolina case (Massachusetts Bonding & Ins. Co. v. Knox, 220 N.C. 725, 18 S.E.2d 436, 138 A.L.R. 1438) and quoted the following statement therefrom with approval:
'The record of an unsatisfied mortgage is...
To continue reading
Request your trial