Case Name: Meyer v. Equitable Credit Company
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1927-06-27
Citations: 174 Ark. 575
Docket Number: 
Parties: Meyer v. Equitable Credit Company.
Judges: 
Reporter: Arkansas Reports
Volume: 174
Pages: 575–578

Head Matter:
Meyer v. Equitable Credit Company.
Opinion delivered June 27, 1927.
John N. Cook, for appellant.

Opinion:
Hart, C. J.,
(after stating the facts). The record shows that, prior to the execution of the mortgage by Morrison to Meyer & Kiser, Arthur Wills purchased the automobile in question from the Stamps Motor Company at Stamps, Arkansas, for the sum of $468. He paid $200 in cash and gave twelve installment notes for the balance of the purchase money. He executed a written contract for the purchase of the automobile in which it is expressly stated that the title to the car shall remain in the seller or its assignee until the purchase price has been fully paid. The balance of the purchase price had not been paid at the time the present suit was instituted. The plaintiff in the present case became the purchaser of the notes for the balance of the purchase money of said auto- . mobile for value before date of maturity, and the conditional sales contract was also transferred to it. Thus it will be seen that whatever rights it had under the conditional sales agreement attached before the mortgage was executed by Paul Morrison to Meyer & Kiser. It is the settled law of this State that, when a chattel is sold with a reservation of title in the seller, the title remains in it until the condition is performed, and a purchaser from the vendee acquires no title, though he buys in good faith for a valuable consideration and without notice of the condition. McIntosh & Beam v. Hill, 47 Ark. 363, 1 S. W. 680; Garner Mfg. Co. v. Cornelius Lbr. Co., 165 Ark. 119, 262 S. W. 1011; and Hachmeiser v. Power Mfg. Co., 165 Ark. 469, 264 S. W. 976.
But it was argued that this rule does not apply because the automobile was carried from the State of Arkansas into the State of Texas and there mortgaged to a person who had no knowledge of the conditional sales agreement or the rights of the plaintiff thereunder. This does not make any difference, if it is not shown that the seller of the automobile or the plaintiff knew that the automobile bad been carried from the Slate of Arkansas into the State of Texas, or that a mortgage was executed upon it in the latter State. In Fairbanks, Morse & Company v. Parker, 167 Ark. 654, 269 S. W. 42, it was held that, in conditional sales of personal property in which the title is retained, by the seller until the purchase price is paid, the buyer acquires an interest which he may sell or mortgage without the seller's consent, but the seller's right to recover the property, if not paid for, is not prejudiced by such sale or mortgage. Under our laws, in a.conditional sales agreement the seller is not required to file his agreement of record, and his rights aré fixed under the terms of the agreement, and are not affected by the subsequent sale or mortgage of the property by the buyer without his knowledge or consent. The burden of proof was upon the interveners to show that the seller or its assignee consented to the removal of the automobile to the State of Texas before its rights, which had become vested under the conditional sales agreement, could be affected by the subsequent mortgage of the property in the ' State of Texas,
It follows that the judgment of the circuit court was correct, and it will therefore be affirmed.