Universal C. I. T. Credit Corp. v. Walters

• Decision Date: 25 May 1949
• Docket Number: 670
• Citation: 53 S.E.2d 520,230 N.C. 443
• Parties: UNIVERSAL C. I. T. CREDIT CORPORATION v. WALTERS, Sheriff, et al.
• Court: North Carolina Supreme Court

53 S.E.2d 520

230 N.C. 443

UNIVERSAL C. I. T. CREDIT CORPORATION v. WALTERS, Sheriff, et al.

No. 670

Supreme Court of North Carolina

May 25, 1949

Civil action in claim and delivery for the possession of an automobile.

On 22 December 1947, one Charles R. Brumer, a resident of Chicago, purchased from K-F Motors, Inc., the Frazer Manhattan Sedan described in the pleadings, not for resale but for his personal use. He executed a conditional sale contract to secure the purchase price. This contract was duly registered in the office of the Secretary of State of Illinois as required by the Illinois uniform sales statute but was not recorded under the Illinois general recording act. It has not been recorded in any county in this State.

On or about 22 January 1948, Brumer came to North Carolina on said automobile for a visit or other purpose and was on said date temporarily in North Carolina.

On 22 September 1947, defendant Kriegsman obtained a judgment against Brumer in Guilford County, N. C. On 22 January 1948 the sheriff of Guilford County, under authority of an execution issued on said judgment, seized and levied upon said automobile for the purpose of selling same to satisfy said judgment.

Thereupon the plaintiff, on 7 February 1948, instituted this action and sued out the ancillary writ of claim and delivery under which it acquired possession of said automobile. The automobile was advertised for sale under the provisions of the conditional sale contract and sold to a third party for the sum of $2100.

At the time said automobile was levied upon by the sheriff and later delivered to plaintiff, Brumer was indebted to plaintiff on the conditional sale contract in the sum of $2439.53, and to Kriegsman on his judgment in the sum of $800 with interest from 22 September 1947 and costs.

The automobile having been sold, the case resolved itself into a contest over the ownership of the proceeds of sale. The court below, on facts agreed, held that plaintiff is the owner and entitled to the possession of said automobile or the proceeds from the sale thereof, and its lien is superior to the lien acquired by defendant by levy under execution. It thereupon adjudged that plaintiff have and recover the proceeds of sale together with its cost, free and clear of any claim of defendant Kriegsman or any one of the other defendants herein. Defendant Kriegsman appealed. Other defendants judgment creditors, did not appeal.

G C. Hampton, Jr., Greensboro, for plaintiff appellee.

York & Boyd, Greensboro, for defendant Kriegsman.

BARNHILL Justice.

The rule of comity, the effect of the Uniform Sales Act on the law of registration and the rights of the parties and other interesting questions have been attractively and ably presented by counsel. However, it is conceded that the one question posed for decision is this: If the nonresident owner of an automobile, which is subject to a conditional sale contract, temporarily has the automobile in this State, is a lien thereon, acquired by levy under execution in this State, superior to the lien of the conditional sale contract? It would seem to us that the answer is no, without regard to whether the conditional sale contract is or is not registered in this State. That is, neither our registration statute nor the rule of comity has any substantial bearing on the question presented.

Illinois has adopted the Uniform Sales Act, Illinois Rev.Stat. of 1947, Chap. 121 1/2, and the contract was registered in the office of the Secretary of State of Illinois as therein required. This Act recognizes the validity of conditional sales contracts and specifically provides that no title can be passed by the purchaser of goods under such a contract without the consent of the owner 'unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell. ' Ill.Rev.Stat.1947, c. 121 1/2; Sherer-Gillett Co. v. Long, 318 Ill. 432, 149 N.E. 225; Gordon Motor Finance Co. v. Aetna Acceptance Co., 261 Ill.App. 536. Under such agreement, title never passes to the purchaser but is reserved to the seller even though there is an actual delivery, the possession of the purchaser being the possession of the seller. Ford Motor Co. v. National Bond & Investment Co., 294 Ill.App. 585, 14 N.E.2d 306. The rights of one who acquires title through the purchaser are subordinate to the rights of the original vendor under the conditional sale contract. Sherer-Gillett Co. v. Long, supra; In re Abell, 7 Cir., 19 F.2d 965.

This being true, plaintiff insists that its lien takes priority under the rule of comity. But comity is not permitted to operate within a State in opposition to its settled policy as expressed in its statutes, or so as to override the express provisions of its legislative enactments. Applewhite Co. v. Etheridge, 210 N.C. 433, 187 S.E. 588; Ritchey v. Southern Gem Coal Corp., D.C., 12 F.2d 605. Our Legislature in enacting our registration statutes, G.S. ss 47-20, 23, made no exception in favor of a conditional sale contract or chattel mortgage executed and effective in another State where the property embraced in such instrument is subsequently brought into this State.

However, the requirements of our statute have no application to personal property in transit through or temporarily within the State. It provides, in respect to personal property, that no mortgage shall be valid at law to pass any property as against creditors or purchasers for a valuable consideration from the donor, bargainor, or mortgagor but from the registration of such mortgage in the county where the donor, bargainor, or mortgagor resides out of the State, then in the county where the said personal estate, or some part of the same, is situated. G.S. s 47-20; and the provisions as to mortgages apply to conditional sales contracts. G.S. s 47-23.

'Where the said personal estate, or some part of the same, is situated ' signifies something more than the mere temporary presence of the property within this State. 'Situated' means having a site, situation or location; permanently fixed; located. Webster's New International Dictionary; Oklahoma City v. District Ct., 168 Okl. 235, 32 P.2d 318, 93 A.L.R. 489; Burlington State Bank v. Marlin Nat. Bank Tex.Civ.App., 166 S.W. 499. See also 39 Words and Phrases, Perm. Ed., page 350. 'It connotes a more or less permanent location or situs, and the...