Universal Credit Company v. Spinazzolo

Decision Date18 January 1938
Citation39 Del. 117,197 A. 68
PartiesUNIVERSAL CREDIT COMPANY, a corporation of the State of Delaware, v. ANGELO M. SPINAZZOLO, doing business as Angelo's Auto Repair Shop
CourtDelaware Superior Court

Superior Court for New Castle County, No. 51, November Term 1937.

Case heard on agreed statement of facts.

From the agreed statement the following facts appear. On June 12 1937, the Buckley Motor Company sold to one Claudius Williams a used truck, for the sum of $ 258.00, of which $ 78.00 was paid in cash and the balance of $ 180.00 was to be paid in twelve monthly payments of $ 15.00 each. The transaction was evidenced by a conditional sales contract whereby the title was reserved to the vendor, and possession of the truck placed in the vendee. On June 17, 1937, the conditional sales contract was assigned to the Universal Credit Company, the present plaintiff, and duly filed. Two monthly payments were made by Williams, thereby reducing the indebtedness to $ 150.00.

On September 24, 1937, the truck was damaged in an accident and Williams took it to the defendant's place of business and there prior to October 6, 1937, the truck was repaired at a cost of $ 90.25.

It is agreed that the Universal Credit Company, the plaintiff, was without knowledge of the accident, the delivery of the truck to the defendant, or of the repairs on said truck, until notified by Williams of such facts and that the truck was being held by the defendant under a claim of lien for the work and services performed in connection with said repairs. No question is made of the good faith of the charges or the amount thereof.

On October 6, 1937, Williams having defaulted in his payments, the plaintiff sued out a Writ of Replevin for the recovery of the truck, and the defendant having given counter bond the matter comes to this Court to determine the right of possession. The sole question arises from the divergent claims of the right of possession--that of the plaintiff arising from the reservation of title in itself in the Conditional Sales Contract, and that of the defendant arising from a claim of a common law lien originating in the repairs made to the truck. Among other terms of the Conditional Sales Contract the vendee agreed "to keep the property (truck) free of all taxes, liens and encumbrances" and "not to use said property for hire."

C. Stewart Lynch for plaintiff.

Leslie H. Gluckman for defendant.

LAYTON C. J., RODNEY and SPEAKMAN, J. J., sitting.

OPINION

RODNEY, J.

Section 4 of the Uniform Conditional Sales Act, Section 5954, Revised Code of 1935, is as follows:

"Every provision in a conditional sale reserving property in the seller after possession of the goods is delivered to the buyer, shall be valid as to all persons, except as hereinafter otherwise provided."

There being no material subsequent exceptions and the claim of the plaintiff being evidenced by the reserved title in the Conditional Sales Contract executed and filed of record in accordance with the Statute, and it being first in time so it will, tentatively, be assumed to grant a prima facie right and we will first examine the claim which disputes that right.

It is not and cannot be denied that at common law an artisan or mechanic having repaired or improved a chattel, thereby adding to its value, under a contract, express or implied, with the owner or his agent had, while the chattel remained in his possession, a lien on such chattel for the value of the labor and material expended in such repair.

Strictly speaking, the question before us is not the priority between two liens, for the plaintiff does not claim a lien but does claim the title itself by reason of the reservation of title, and the question is one of priority of an artisan's lien over a reserved title in a conditional vendor.

It is not and cannot be contended that a conditional vendee can solely by his own contract for repairs create a priority of lien over a valid and prior conditional sales contract, but some express or implied consent of the owner must be shown. Since it is admitted in the statement of facts that the plaintiff had no knowledge of the accident or of the repairs until some time after the repairs were made, so we come immediately to the single point and crux of the case--can an implied consent of a conditional vendor to the making of repairs to an automobile be presumed from the mere right of possession in the conditional vendee with the accompanying right of user? Many cases have considered the narrow question with much diversity of opinion. Many citations may be found in comprehensive notes in 20 A. L. R. 249; 30 A. L. R. 1227; 32 A. L. R. 1005; 104 A. L. R. 267; Jones on Cond. Sales, §§ 1122-1126; 7 Blashfield Cyclopedia of Automobile Law, Permanent Edition, § 5161; Huddy on Automobiles, Vol. 15-16, p. 114; 1 Jones on Liens, Sec. 744; Ann. Cas. 1916A, 630; L. R. A. 1915D, 1149; L. R. A. 1918D, 330. See American Digest, Automobiles, 383.

We can at once discard from consideration, as not material, those cases in which the Court found evidence of an express consent on the part of the person holding the prior claim. Etchen v. Dennis & Son Garage, 104 Kan. 241, 178 P. 408; Broom & Son v. S. S. Dale & Sons, 109 Miss. 52, 67 So. 659, L. R. A. 1915D, 1146.

We can also pass over those cases in which the artisan's lien arose, not as a common law lien but as a statutory lien, and in which statute the vendee is either expressly made the agent of the owner, or the word "owner" is defined as the possessor rather than the legal owner, or the Court so construed them. Pacific States Finance Corp. v. Freitas, 113 Cal.App. Supp. 757, 295 P. 804; Ponsler v. Wilson, 144 Ore. 337, 24 P. 2, 24 P.2d 26d 26; Twin City Motor Co. v. Rouzer Motor Co., 197 N.C. 371, 148 S.E. 461; Davenport v. Grundy Motor Sales Co., 28 Cal. App. 409, 152 P. 932; Yellow Mfg. Accept. Corp. v. Linsky, 99 Ind. App. 691, 192 N.E. 715; New Hampshire Finance Corp. v. La Marche, 85 N.H. 205, 155 A. 697; Commercial Acc. Corp. v. Hislop Garage Co., (N. H.) 89 N.H. 45, 192 A. 627.

Many states have enacted Statutes relative to artisan's liens and we cannot so readily dismiss from consideration all cases in which the priority of lien is sought by reason of a statutory lien rather than as a common law lien, nor are we prepared to give unqualified approval to the statement in Sullivan v. Clifton, 55 N.J.L. 324, 26 A. 964, 965, 20 L. R. A. 719, 39 Am. St. Rep. 652, and followed in Ruppert v. Zang, 73 N.J.L. 216, 62 A. 998, and other cases:

"It is one of the characteristics of common-law liens which arise upon considerations of justice and policy, by operation of law, as distinguished from liens created by contract or statute, that the former, as a general rule, attach to the property itself without any reference to ownership, and override all other rights in the property, while the latter are subordinate to all prior existing rights therein."

We understand that statutory liens as a general rule are subordinate to prior existing rights, but are not so clear that all common law liens attach without reference to the ownership. So far as we are aware that was true only in the case of an innkeeper or other person bound by law to serve the public. Bennett v. Brittingham, 3 W. W. Harr. (33 Del.) 519, 140 A. 154. Certainly an artisan's lien existed at common law but was dependent upon the consent, express or implied, of the owner, and no lien was ever created for repairs made at the instance of a wrongdoer. Where a lien is provided by a Statute, which is merely declaratory of the common law and does not change the common law we see no reason why the status of the lien should be changed. Of course if the statutory language modifies the common law lien, then consideration must be given to the language of the Statute. Watts v. Sweeney, 127 Ind. 116, 26 N.E. 680, 22 Am. St. Rep. 615; Grusin v. Stutz Motor Car Co., 206 Ind. 296, 187 N.E. 382; Terminal & Town Taxi Corp. v. O'Rourke, 117 Misc. 761, 193 N.Y.S. 238.

Some Courts have seized upon language making it the duty of the vendee to keep the chattel in repair as evidence of the implied consent on the part of the vendor to the making of such repair. So in Keene v. Thomas, [1905] 1 KB 136, the Court construed the words that the vendee "keep and preserve the said dog cart from injury." Other Courts have taken the precisely opposite view and hold that an affirmative promise on the part of the vendee to make the repairs effectually negatives any implied consent on the part of the vendor that a lien may be placed on the chattel which shall have priority to the vendor's claim. Goldstein v. Mack Motor Truck Co., (R. I.) 56 R.I. 1, 183 A. 136, 104 A. L. R. 261; Ehrlich v. Chapple, 311 Ill. 467, 143 N.E. 61, 32 A. L. R. 989; Baribault v. Robertson, 82 N.H. 297, 133 A. 21.

In the present case there is no express mention of repairs in the Conditional Sales Contract, and so that question is not before us.

Even after the elimination of many cases which are obviously distinguishable there still remains an imposing list of authorities the distinction of which is more subtle.

Many cases may, directly or indirectly, be traced to the leading case of Williams v. Allsup, 10 C. B. (N. S.) 417, 142 Eng. Rep. 514. There a shipwright was determined to have priority of lien for repairs over a mortgage, though the repairs were made at request of the mortgagor without the knowledge of the mortgagee. In that case it was, at least, a material element that the property itself was to be used for hire. Erle, C. J., said:

"I put my decision on the ground * * * that the mortgagee having allowed the mortgagor to continue in the apparent ownership of the vessel, making it a source...

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  • Colonial Finance, Inc. v. All Miami Ford, Inc.
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    ...by an express provision in the contract that the purchaser should keep the property free of any such lien claim. Universal Credit Co. v. Spinazzolo, 39 Del. 117, 197 A. 68; General Motors Acceptance Corp. v. Goldboges, 260 Ill.App. 474; Goldenberg v. Federal Finance & Credit Co., 150 Md. 29......

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