Shephard v. Van Doren

Decision Date11 August 1936
Docket Number4068.
Citation60 P.2d 635,40 N.M. 380,1936 -NMSC- 051
PartiesSHEPHARD v. VAN DOREN.
CourtNew Mexico Supreme Court

Rehearing Waived Sept. 15, 1936.

Appeal from District Court, Chaves County; Charles R. Brice, Judge pro tem.

Action by T. D. Shephard, doing business as Shephard Chevrolet Company, against Elwood Van Doren. From a judgment for plaintiff, defendant appeals.

Reversed and remanded, with directions.

J. C Gilbert, of Roswell, for appellant.

H. C Maynard, of Roswell, for appellee.

SADLER Chief Justice.

This appeal is for review of a judgment in replevin. The plaintiff, who prevailed below, does business at Plainview Tex., in the name of Shephard Chevrolet Company, conducting an automobile agency, selling new and used cars. He sold to one C. H. Little a certain used Chevrolet automobile, 1931 model, bearing engine number 2456779, under a conditional sales contract, duly filed with the county clerk in Lamb county, Tex., county of the purchaser's residence, so as to constitute constructive notice of plaintiff's contract. Under the laws of the state of Texas, the conditional sales contract was the equivalent of a chattel mortgage in plaintiff's favor on the automobile in question.

Little, original purchaser, placed the automobile in possession of one Leo Parks, who transported same to Roswell and there had the motor number changed from 2456779 to 1392476. Parks subsequently pleaded guilty before the district court of Chaves county to a criminal offense involving this alteration of the engine numbers and received a sentence which was suspended. After this change in numbers, the car came again into possession of Little, who returned it to Texas. While there the plaintiff checked same and finding it to be the identical car theretofore sold Little, but with the motor number changed, made notation of the change in motor number on his (plaintiff's) copy of the conditional sales contract and redelivered same into Little's possession. Little returned it into Park's possession. The latter took the car to Roswell, where he sold it to one Carl Johnson, who in turn sold same to Elwood Van Doren, the defendant herein. Neither Johnson nor Van Doren had actual knowledge of plaintiff's lien at the time of their respective purchases.

Little having defaulted in meeting the payments due under his purchase contract, and the plaintiff's right to possession arising by its terms, he located the car with defendant and demanded its return to him. Possession being refused, he instituted this action in replevin. From a judgment in his favor, the defendant prosecutes this appeal.

While several points are presented and argued, only one of them need be considered, since it appears decisive. It is, in substance, that plaintiff's act, after regaining possession of the automobile bearing a false engine number, in restoring the automobile to the original purchaser still bearing such false and altered number, denied to any subsequent good-faith purchaser the intended means of connecting it with plaintiff's conditional sales contract; and that by reason thereof the plaintiff is estopped from asserting his lien against such a purchaser.

The trial court of its own motion made findings as follows:

"On the date of the purchase of said automobile by C. H. Little, the plaintiff gave to C. H. Little a bill of sale thereto and at the same time and a part of the same transaction C. H. Little gave to the plaintiff the conditional sales contract heretofore mentioned which, under the laws of the State of Texas is a mortgage.
"That the said C. H. Little turned the said automobile over to one Leo Parks, who brought the same to Roswell, New Mexico, and while in Roswell, New Mexico, had the motor number to said car changed from 2456779 to 1392476.
"Thereafter, one Carl A. Johnson bought from Leo Parks the said automobile paying therefor a valuable consideration without actual knowledge of any interest of the plaintiff in and to said automobile.
"Thereafter the said Carl A. Johnson sold to the defendant the automobile in question and the defendant had no actual knowledge of any claim, right, title or interest of the plaintiff in and to said automobile. That both Carl A. Johnson and the defendant were purchasers in good faith believing the said Leo Parks was the owner of said car.
"That the conditional sales contract from the plaintiff to Little heretofore mentioned duly filed for record in the chattel mortgage records of Lamb County, Texas, on the 21st day of June 1932.
"That under the laws of the State of Texas the filing of such conditional sales contract (or chattel mortgage as it is under the laws of the State of Texas) is constructive notice to all the world as to its contents."

The defendant requested, and the trial court made, the following findings touching the issue under discussion, to wit:

"That subsequent to the original sale of said automobile by plaintiff to C. H. Little, and prior to the purchase of said automobile by the defendant, the engine therein had been changed or the numbers on the engine therein had been changed from 2456779 to 1392476 of which fact plaintiff had full knowledge, and that plaintiff after such change in engine or numbers had been made, had said automobile in his or its possession and noted on the original conditional sales contract, which he had in his possession such change in numbers, and thereafter allowed said automobile to go out of his possession and back to the possession of said C. H. Little, and that at the time of the purchase of said automobile by the defendant there was no record in any county in the State of Texas that plaintiff had a conditional sales contract with anyone on an automobile with an engine in the same numbered 1392476, and that defendant had no knowledge constructive or otherwise of such engine change or number changes.
"That at the time of the purchase by defendant of the automobile in question from Carl Johnson, the engine in said automobile was numbered 1392476, and that the plaintiff had knowledge that the engine in said car had such number, and that he had no conditional sales contract on record in the State of Texas with anyone upon an automobile bearing engine number 1392476."

The two findings just quoted stand before us unchallenged by any exception on plaintiff's part. Read in connection with other findings of the court, it must be taken as the fact that no substitution of the engine occurred, only the identifying numbers thereof being changed. Indeed, Parks, charged with having altered the motor numbers, pleaded guilty to having done so and received a suspended sentence therefor.

We have then this situation: The plaintiff, by instruments duly executed and filed for record in Lamb county, Tex., has a lien on a certain 1931 model Chevrolet automobile, bearing engine number 2456779. We may assume for purposes of our decision, as contended by the plaintiff and held by the trial court, that pursuant to the holding in Hart v. Oliver Farm Equipment Sales Company, 37 N.M. 267, 21 P.2d 96, on the facts here shown and under ordinary conditions, this lien would be recognized and enforced in New Mexico. Subsequent to reservation of the lien the automobile comes back into possession of the mortgagee bearing a false engine number. With knowledge that such is the case, the mortgagee, after noting the false number on his copy of the contract or mortgage, redelivers the car into original purchaser's possession, and thereafter it passes into the hands of one who pays value without actual knowledge of any claim, right, title, or interest of the plaintiff in and to said automobile.

Is the mortgagee under such conditions in position to assert the lien of his mortgage against said good-faith purchaser? We hold him estopped from doing so.

For purposes of identification in chattel mortgages and conditional sales contracts, the make, model, and engine number of automobiles are almost universally employed in describing the property mortgaged.

"A description of mortgaged automobiles by the make and engine number completely and absolutely identifies them, since that is all that is necessary to impart constructive notice to subsequent purchasers." 7 Blashfield's Cyclopedia of Automobile Law and Practice (Permanent Edition) § 4684, p. 314.

"It is common knowledge, and the uncontradicted evidence shows, and the jury would have been warranted in finding, that automobiles of various mechanical designs, made by numerous manufacturers under multiform trade-names, are constantly in the market for purchase and sale, and that cars of any one of the makers can be distinguished with reasonable certainty from other automobiles of the same class, only by the number by which each car is designated." Wise v. Kennedy, 248 Mass. 83, 142 N.E. 755, 756.

It is well settled that "where the descriptions given are intrinsically false and misleading, the mortgage given thereon is not valid." 7 Blashfield Cyclopedia of Automobile Law and Practice (Permanent Edition) § 4684, p. 312; McQueen v. Tenison (Tex.Civ.App.) 177 S.W. 1053; First National Bank v. Gardner, 222 Mo.App. 858, 5 S.W.2d 1115; Shearer v. Housch, 32 Ga.App. 663, 124 S.E. 356; First Mortgage Loan Co. v. Durfee, 193 Iowa 1142, 188 N.W. 777; Becker v. Dalby (Iowa) 86 N.W. 314.

One of the chief objects of particularity in description is to enable a prospective purchaser or incumbrancer to identify the tendered property as that previously mortgaged. If this purpose is to be fully served, the description in the mortgage and that borne by the property should be found in continuous reconcilement throughout the life of the mortgage. To say the least, this purpose is wholly defeated if the identifying marks on the property...

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