Universal Credit Co. v. Marks

• Decision Date: 19 January 1933
• Docket Number: 93.
• Parties: UNIVERSAL CREDIT CO. v. MARKS ET AL.
• Court: Maryland Court of Appeals

163 A. 810

164 Md. 130

UNIVERSAL CREDIT CO. v. MARKS ET AL.

No. 93.

Court of Appeals of Maryland

January 19, 1933

Appeal from Baltimore City Court; George A. Solter, Judge.

Action by the Universal Credit Company against Morris Marks and another, trading as Auto Radiator Fender & Body Works. From the judgment for defendants, plaintiff appeals.

Affirmed.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, PARKE, and SLOAN, JJ.

Palmer R. Nickerson, of Baltimore (Paul F. Due, of Baltimore, on the brief), for appellant.

Samuel Krelow, of Baltimore (Melvern R. Krelow, of Baltimore, on the brief), for appellees.

PARKE J.

The Universal Credit Company began an action of replevin against Morris Marks and Morris Kronberg, copartners trading as Fallsway Auto Radiator Fender & Body Works, and William McDaniel in the Baltimore city court to recover possession of an automobile alleged to be seized and taken and unjustly detained by the defendants. The chattel was replevied and delivered to the plaintiff, and the two copartners were summoned, but McDaniel was not summoned, and the action proceeded against the copartners, who pleaded non cepit, and property in the partnership. After replication by a joinder of issue on the plea of non cepit, and a traverse to the plea of title in the partnership, and issue joined on the traverse, the case went to trial before the court, sitting as a jury, and a verdict was rendered in favor of the defendants for the property replevied, or $200, the value thereof, with 1 cent damages and costs. A judgment was so entered and this appeal taken by the plaintiff. The sole exception is to the refusal of the court to grant the single prayer offered by the plaintiff which presents a question whose answer depends upon the correct application of statute law to these facts.

One William McDaniel bought a used Ford automobile of the Fordham Motor Sales Company, and possession was delivered to him under a conditional sales contract, which provided for a cash payment on the execution of the contract, and for the payment of the residue of the purchase price in monthly installments. Among the express terms of sale were that the title to the automobile should not pass to the buyer until all sums due under the contract were paid in full, and that the buyer should keep the automobile free from all liens, taxes, and incumbrances, and that the buyer should not remove the automobile from the state of New York nor transfer any interest therein without the written consent of the seller whose assignee shall be entitled to all the contractual rights of the seller. The delivery of the automobile was in the city of New York where the buyer lived and the seller had its place of business. The contract was assigned to the plaintiff by the seller, and was duly recorded, according to the laws of New York, in the city of New York, where the buyer resided, but was not recorded anywhere in the state of Maryland.

At a time when the buyer was in a default in his payments that entitled the seller or its assignee to repossession of the automobile, which neither had enforced, the buyer drove the automobile out of the state of New York and into the state of Maryland, where he had an accident in Baltimore city, which badly damaged the automobile. The buyer sought the defendants, who were associated in the business of general repair work on automobiles, and who were unaware of the recording of the conditional contract of sale in New York and requested them to move the damaged automobile to their garage and there to make the necessary repairs in order to enable the buyer to take the automobile back to the city of New York. The buyer never returned, and the account for the repair and storage was not paid. After a continuance of the default in the payment of the charge for the repairs and storage, and after a compliance with the prerequisites of the statute in reference to the subject-matter (Code, art. 63, § 54 et seq.), the automobile was sold to enforce a lien asserted by the garagemen for repair and storage, and was bought at public auction by the defendants; and, on application, the commissioner of motor vehicles of the state of Maryland issued on December 9, 1931, a certificate of title to the automobile and registration thereof in the name of the defendants as owners.

Fourteen days later the action of replevin was instituted by the plaintiff on the theory that it had a superior title which had not been divested by the sale. Neither the existence of the conditional sale contract nor its recording in the state of New York was known to the garagemen. Nor did the recording of the conditional sales contract in the state of New York affect the garagemen in Maryland with constructive notice. So, the possession and control of the automobile being in the buyer at the time he delivered it to the garagemen for repair and storage, and the injury to the automobile being so extensive and serious as to make it impossible to proceed with the automobile on its own power to the distant residence of the buyer, and the repairs requested and made having arisen accidentally and being limited to what was necessary forthwith to move the automobile back to New York, the defendants, as copartners making such repairs and affording storage thereafter, would have had a statutory lien on such motor vehicle for all rightful charges so incurred, and might have lawfully retained the vehicle until the charges were paid or until the lien was extinguished or discharged as by the statute was provided, unless the lien of the garagemen is subordinated by law to the claim of the plaintiff by virtue of its being the assignee of the contract of conditional sale of record in the state of New York. Code, art. 63, §§ 54-58.

The language of the Code, which is in substitution and amplification of the rule at common law, as was declared in the opinion written by Judge Offutt for the court in Goldenberg v. Finance & Credit Company, 150 Md. 298, 303, 133 A. 59, is clear to this point: "54. Whenever a motor vehicle or any part thereof is left by the owner or by any other person with his authority, express or implied, in the custody of any corporation, firm or individual, association, or person for repair, rebuilding, storage, or for the purpose of having furnished for or on account of the same any parts, accessories, or tires, the corporation, firm, individual, association or person in whose custody said motor vehicle or part thereof is left for all or any of the purposes aforesaid, shall have a lien on said motor vehicle or part thereof for all charges so incurred, and may lawfully retain the same until said charges have been paid, or until said lien is extinguished or discharged as hereinafter provided." As to storage when goods are kept by reason of bailor's default, see Benjamin on Sales (5th Ed.) 825, 826.

No doubt is entertained that the buyer under a conditional sales contract is, to paraphrase a clause of this sentence of section 54, an owner or another person acting in the matter with his express or implied authority. Although the seller has retained the legal title as security for the payment of the residue of the purchase price, the buyer is the substantial owner. It is he who has the control, possession, care, and maintenance of a machine which was secondhand when bought and which must frequently require repair that it may continue in operation and be kept in proper condition, and this possession, use, and custody is exclusive of every one else but the seller or its assignee and of it only if and when he make a default in his obligation to pay or to perform some of the terms of the contract looking to the preservation of the security afforded by the reservation of title in the article sold. In fact, the law itself prevents any different opinion by prescribing the conditions under which the lien upon the automobile for repair or storage, inter alia, is superior or subordinate to the rights of the holder of conditional sale contract by declaring in the succeeding sentence of section 54: "Said lien shall be superior to the rights of the holders of conditional sale contracts, bills of sale, chattel mortgages or other liens or claims of any kind which are not theretofore executed and recorded or filed for record as required by law, but shall be subordinate thereto when the same have been theretofore executed and recorded as required by law." Goldenberg v. Finance & Credit Co., 150 Md. 298, 303, 133 A. 59; Meyers v. Neeley & Ensor Auto Co., 143 Md. 107, 108-111, 121 A. 916, 30 A. L. R. 1224.

The statute and the decisions cited make it indisputable that the motor vehicle was left by a person within the meaning of the law in the custody of the defendants for necessary repair, and that the charges therefor, and for the ensuing storage, an item which was not disputed, were a lien upon the motor vehicle which the defendants held. If this lien is superior to the rights of the holder of the conditional sale contracts depends upon whether or not the execution and record of the conditional sale contract in the state of New York, before the services mentioned were rendered, is an execution and recording within the meaning of the words of the act: "executed and recorded or filed for record as required by law," because the conditional sale contract under which the plaintiff derives was never either recorded or filed for record anywhere within the state of Maryland. The problem is solved when the legislative intent of the General Assembly of Maryland is ascertained.

The statute charges the repairman or warehouseman with knowledge of the seller's rights under the conditional contract of sale, if it be executed or filed for record as required by law at the time of the...