P. R. Smith Motor Sales v. Lay

• Decision Date: 12 June 1939
• Docket Number: Record No. 2079.
• Citation: 173 Va. 117
• Court: Virginia Supreme Court
• Parties: P. R. SMITH MOTOR SALES, INC. v. C. D. LAY, E. W. BOND, FRANK YEAR AND W. R. PETERS.

Page 117

173 Va. 117

P. R. SMITH MOTOR SALES, INC. v. C. D. LAY, E. W. BOND, FRANK YEAR AND W. R. PETERS.

Record No. 2079.

Supreme Court of Virginia, Wythebille.

June 12, 1939.

Present, All the Justices.

1. WORDS AND PHRASES — "Removal." — "Removal" connotes something more than a mere change of location; some reestablishment is suggested. It means to change or shift the location, position, station, or residence, of; to transfer, especially in order to reestablish.

2. CHATTEL MORTGAGES AND CONDITIONAL SALES — Recordation — Section 5197 of the Code of 1936 — "Removal" Alone Insufficient to Permit Levy on Chattel. — Within the meaning of section 5197 of the Code of 1936, providing that "no mortgage, deed of trust, or other encumbrance created upon personal property while such property is located in another State shall be a valid encumbrance upon said property after it is removed into this State," "removal" alone is not sufficient, and a levy can be made on such property only "after it is removed."

3. CHATTEL MORTGAGES AND CONDITIONAL SALES — Recordation — Section 5197 of the Code of 1936 — "Removed" Implies Gaining of Situs. — Section 5197 of the Code of 1936, which provides that "no mortgage, deed of trust, or other encumbrance created upon personal property while such property is located in another State shall be a valid encumbrance upon said property after it is removed into this State," unless recorded in this State, is not intended to include encumbrances on property which was only transitorily or temporarily in the State. The word "removed," as used in the statute, implies not only the taking of the property into Virginia, but also the allowing of the property to come to rest therein — the gaining of a situs therein.

4. DOCUMENTARY EVIDENCE — Authentication and Proof — Sections 6206, 6207 of the Code of 1936 — Proof Remains as at Common Law. — Sections 6206 and 6207 of the Code of 1936, relating to the admission in evidence of records and exemplifications of office books of the United States and foreign states, and copies of foreign records, were intended to make competent evidence theretofore incompetent, and proof at common law remained as it had theretofore been.

5. DOCUMENTARY EVIDENCE — Chattel Mortgage — Admission of Original Executed and Recorded in Another State — Case at Bar. — In the instant case, an action to determine priority between an attachment lien and the lien of a chattel mortgage made in South Carolina, a South Carolina lawyer of long experience testified that he was familiar with the law of that state relating to chattel mortgages and that the instrument in question was a valid lien in South Carolina. It was on record in the office of the clerk of court of Horry county in South Carolina. The agent of the South Carolina creditor testified that after execution and acknowledgment of the chattel mortgage he took it to the register of deeds for Horry county, South Carolina, and saw it recorded with the endorsement of the register of deeds thereon. Defendants in error contended that proof of the recordation of the original instrument offered in evidence in the Virginia court was not in accordance with the Virginia statutes, sections 6206, 6207 of the Code of 1936.

Held: That the execution of the chattel mortgage was proven; it was acknowledged and was in proper form for recordation; it was given to the proper officer for recordation, and, consequently, the original with the endorsements thereon was properly accepted in evidence by the trial court.

6. CHATTEL MORTGAGES AND CONDITIONAL SALES — Priorities — Foreign Chattel Mortgage as against Attachment in This State — Case at Bar. — In the instant case, an action to determine priorities between the lien of a Virginia attachment and a chattel mortgage executed and recorded in South Carolina, the evidence showed that the debtor executed the chattel mortgage on an automobile truck and at a later date took the truck to Virginia, without the knowledge of the South Carolina creditor, for the purpose of raising some money to pay to the South Carolina creditor. While in Virginia the truck was attached by Virginia creditors.

Held: That since the truck was covered by a duly recorded mortgage in a foreign state it could be attached only "after it is removed into this State" under the provision of section 5197 of the Code of 1936; that the temporary trip to Virginia did not constitute a removal and, consequently, the chattel mortgage lien was superior to the lien of attachment.

7. ATTACHMENT AND GARNISHMENT — Sale — Disposition of Proceeds of Sale of Chattel Subject to Prior Mortgage — Case at Bar. — In the instant case, an action to determine priorities between the lien of a Virginia attachment and a chattel mortgage executed and recorded in South Carolina, the evidence showed that the debtor executed the chattel mortgage on an automobile truck and at a later date took the truck to Virginia, without the knowledge of the South Carolina creditor, for the purpose of raising some money to pay to the South Carolina creditor. While in Virginia the truck was attached by Virginia creditors.

Held: That the truck must be sold, and after providing for the cost of sale, the proceeds thereof must be applied upon the chattel mortgage debt, any balance remaining to go to the attaching creditors.

Error to a judgment of the Circuit Court of Wise county. Hon. H. A. W. Skeen, judge presiding.

The opinion states the case.

H. J. Kiser and C. W. Hamilton, for the plaintiff in error.

Vernoy B. Tate and Bandy & Bandy, for the defendants in error.

HOLT, J., delivered the opinion of the court.

In issue here is the priority of liens.

In February, 1938, one Champ V. Moneyhun came to the office of P. R. Smith Motor Sales, Inc., a North Carolina corporation with its principal office at Wilmington, to purchase a Dodge commercial truck that he might do some hauling at Myrtle Beach, South Carolina. As a part of the purchase price he offered to trade in a Plymouth automobile represented as being free from all liens. That automobile was valued at $448.59, which sum was credited on this purchase and a note was given for the balance. Upon these conditions a conditional sales contract of date February 28, 1938, was executed. Afterwards the sales corporation found out that the car which it had taken in was not free from liens and sent its agent to South Carolina to see Moneyhun. This agent, J. D. White, demanded that the truck be returned. Moneyhun "refused to bring the truck back, said he neeed it and had a few dollars in his pocket and would come to Virginia and get the balance." He did return with White to Wilmington, paid $30 in cash, and for the balance due of $651 executed a new note of March 12, 1938, together with a chattel mortgage of even date on the truck. The conditional sales contract was never recorded but appears to have been abandoned. It was superseded by this mortgage which was filed for registration on March 14, 1938, with the Register of Deeds for Horry county, South Carolina, and was registered in Book J-2, p. 611.

Moneyhun, who had lived with his family in Coeburn, Virginia, went back in this truck to that town. Just where he then lived is not clear from the record. In the conditional sales contract he gave his home address as Ocean Drive, South Carolina, and Mr. White said that he then resided there, but he had not brought his family to South Carolina.

On September 9, 1937, Moneyhun, in Coeburn, executed a note payable to the Farmers Exchange Bank for $500, due in six months, which was endorsed by the defendants in error. He thereafter paid no attention whatever to it. These endorsers, defendants in error, paid it. When they found that Moneyhun was in town with this truck, they sued out an attachment on March 18, 1938, which was levied thereon on the same day.

Smith Motor Sales, Inc.,...