Securities Credit Corp. v. Pindell

• Decision Date: 03 November 1950
• Docket Number: No. 32804,32804
• Citation: 44 N.W.2d 501,153 Neb. 298
• Court: Nebraska Supreme Court
• Parties: SECURITIES CREDIT CORP. v. PINDELL.

Page 501

44 N.W.2d 501

153 Neb. 298

SECURITIES CREDIT CORP. v. PINDELL.

No. 32804.

Supreme Court of Nebraska.

Nov. 3, 1950.

Syllabus by the Court.

1. The Certificate of Title Act was enacted for the protection of owners of motor vehicles, those holding liens thereon, and the public.

2. The Certificate of Title Act eliminates the practice of filing and recording chattel mortgages on motor vehicles in the chattel mortgage records, and substitutes the recording of such upon the certificate of title itself.

3. One holding a lien upon a motor vehicle must, insofar as he can reasonably do so, protect himself and others thereafter dealing in good faith, by complying and requiring compliance with applicable laws concerning certificates of title to motor vehicles.

4. Under the act relating to certificates of title to motor vehicles, no valid lien can be asserted against a motor vehicle unless it is disclosed by a valid certificate of title regularly issued by the county clerk of the county in which the applicant resides.

5. A motor vehicle mortgage lien, not shown in title certificate, is not valid against a subsequent holder of a mortgage lien shown in the certificate of title.

6. A public record is a written memorial made by a public officer authorized by law to make it. It is required by law to be kept, or necessary to be kept, in the discharge of a duty imposed by law, or directed by law to serve as a memorial and evidence of something written, said, or done.

Heaton & Connors, Sidney, for appellant.

Martin & Davis, Sidney, for appellee.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.

MESSMORE, Justice.

The Securities Credit Corporation brought this action at law in the district court for Cheyenne County against I. L. Pindell, the county clerk of said county, to recover damages, charging negligence on the part of the defendant in failing to perform the duties of his office by not noting the lien of the plaintiff upon the certificate of title of a motor vehicle. The parties, by stipulation, waived trial to a jury and agreed that the case be submitted to the court. The trial court found generally in favor of the defendant and against the plaintiff; specifically found that the defendant was not guilty of mulfeasance either in the issuance of the certificate of title to the purchaser of the automobile or in the recording and noting of the mortgage lien held by the Platte Valley Finance Company without first recording and noting the mortgage lien of the plaintiff upon the certificate of title; further found that the evidence did not sustain the allegations of the plaintiff's petition; and adjudged and decreed that the plaintiff's petition be dismissed with prejudice. Upon the overruling of the plaintiff's motion for a new trial, the plaintiff perfected its appeal to this court.

The parties stipulated to most of the material evidence in the record. The rest of it is not in much dispute.

For convenience the parties will be referred to as originally designated in the district court.

It appears from the record that on August 5, 1948, one Ray E. Walker, hereinafter referred to as Walker, purchased a Plymouth club coupe from the Paul Long Motors Company, Sterling, Colorado. On the same day Walker executed a note and chattel mortgage to the Paul Long Motors Company in the amount of $1,958.16, which constituted a lien upon the automobile purchased from it. On the same day this note and mortgage were assigned by the Paul Long Motors Company to the plaintiff, Securities Credit Corporation. The dealer issued a bill of sale to Walker. This bill of sale does not show the existence of any lien on the automobile. On August 11, 1948, the plaintiff mailed a letter to the defendant enclosing the note and mortgage and a check in the amount of sixty-five cents to cover the filing fees, and requesting that the defendant note the lien on the certificate of title when Walker came into the county clerk's office for his new title. On Saturday evening, August 14, 1948, Walker contacted the defendant at his apartment with reference to procuring a certificate of title to the automobile. Walker presented to the defendant the bill of sale upon which no liens were noted. The clerk then filled out an application for a certificate of title which was signed and sworn to by Walker. This instrument did not show that there was a lien on the automobile. Thereafter Walker accompanied the defendant to the county clerk's office where a certificate of title to the motor vehicle was issued by the defendant to him. The lien of the plaintiff was not noted on the certificate of title.

The defendant testified that Walker presented to him a clear bill of sale, and in the application for the certificate of title he took the affidavit of Walker that the motor vehicle was clear of all mortgages. The defendant gave further testimony to the effect that prior to the time the Certificate of Title Act became the law chattel mortgages on automobiles were filed with other chattel mortgages and a record of all chattel mortgages was kept. When a transfer of an automobile was made the chattel mortgage records were searched to ascertain the encumbrance against such automobile, if any. After the act became effective and the county clerks were required by law to issue certificates of title to automobiles, it was required that the mortgage be presented with the application for a certificate of title, and it was noted on the certificate of title. There were no other records of the chattel mortgages on automobiles kept. The previous practice had been superseded.

The parties stipulated that Sterling, Colorado, is approximately 50 miles distant from Sidney, Nebraska, and that there is overnight mail service between the two cities.

The defendant did not know whether he had the plaintiff's mortgage in his possession at the time he issued the certificate of title to Walker, or whether it had ever been in the office prior to the issuing of the certificate of title. He made no search for it. He did not know whether or not the plaintiff requested him to issue the certificate of title to Walker prior to the time it was issued.

A deputy county clerk testified that it was her duty to make deposits, and that the sixty-five-cent check for filing fees which accompanied the mortgage and note sent by the plaintiff to the defendant was deposited by her. It appears that this check was paid by the bank in Sterling, Colorado, on August 18, 1948, so it must have been deposited prior to that date. She testified further that in her official capacity she noted mortgage liens upon the certificates of title to automobiles.

On September 7, 1948, Walker executed another mortgage on this automobile to the Platte Valley Finance Company of Sidney. This mortgage lien appears as a first lien upon the certificate of title to the automobile.

There is evidence of the deputy clerk to the effect that representatives of the plaintiff, having previously obtained the certificate of title issued to Walker from the Platte Valley Finance Company, presented the mortgage together with the certificate of title, and she recorded the plaintiff's mortgage on the certificate of title as a second lien, on February 17, 1949. She recalled that the original mortgage of the plaintiff was in the county clerk's office at one time. She did not know how long it remained there. When the files were cleaned out, it was mailed back to the plaintiff.

On November 5, 1948, the plaintiff sent a letter to the defendant, calling his attention to the fact that on August 11, 1948, the plaintiff mailed him the original mortgage which was executed by Walker on the date the automobile was purchased, and that plaintiff requested that the lien be recorded and the mortgage returned; that plaintiff had not received the title and mortgage; and wondered if Walker had ever brought the certificate of title to the clerk's office; and if not, to let the plaintiff know by return mail so it would have an opportunity to contact Walker and have the papers properly recorded. The reply of the defendant appeared on the same letterhead, to the effect that his office was holding the mortgage in the name of Walker, and he had not yet brought in his title so that the mortgage could be recorded on the certificate of title.

A witness for the plaintiff testified that as a representative of it he procured the title from the Platte Valley Finance Company, made an investigation of the matter, and found that the Platte Valley Finance Company had a mortgage on the automobile; that Walker had taken the automobile to Orosi, California, and there it was found in about three weeks. Walker was not located. The automobile was sold by proper legal proceedings, and the plaintiff paid the amount due the Platte Valley Finance Company on its mortgage. The damage the plaintiff claimed was the amount the plaintiff had to pay the Platte Valley Finance Company to get a release of its mortgage.

The plaintiff contends that the judgment rendered by the trial court is contrary to law, and is not sustained by sufficient evidence.

The parties are in agreement that the following questions are presented under the assignment of errors: (1) Is a county clerk liable to the owner of a chattel mortgage lien for failure to note such lien upon the title to a motor vehicle, when such lien is in his possession at the time he issues a new certificate of title? (2) Is a county clerk liable to the owner of a chattel mortgage lien on a motor vehicle for failure to make a diligent search of his records to ascertain whether or not he has in his possession such lien and a request for it to be noted upon a certificate of title of a motor vehicle at the time he accepted the application for a new certificate of title? (3) Is a county clerk liable for damages sustained by reason of his failure to note a lien upon the certificate of title to a...