Court Opinion

ID: 6697147
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:56:05.278303+00
Date Added: 2024-06-11T16:01:17.347422
License: Public Domain

:ClabksoN, J.
The questions presented: (1) Can automobiles bought •for the purpose of sale to the general public, exposed for such sale at the place of business of a licensed dealer; be the subject of a valid chattel mortgage as against a purchaser for value and without actual notice ? (•2) Is the indexing and cross-indexing of a chattel mortgage in the front of the chattel mortgage book in which it is recorded alone a sufficient compliance with sections 3560 and 3561 of the Consolidated Statutes? Under the facts and circumstances of this case, we think both questions must be answered in the affirmative..
C. S., 3311, is as follows: “No deed of trust or mortgage for real or personal estate shall be valid at law to pass any property as against creditors or purchasers for-a valuable consideration from the-donor, bar-ghin'or or mortgagor, but from the registration, of'such deed of trust or mortgage in the county where the land lies; or in case of personal estate; where-the donor, bargáin'or'or mortgagor resides; or’.in case the'donor, bai'gainor or mortgágor resides out of the:State, then in the county *157where the said personal estate or some part of the same, is situated; or in case of choses in action, where the donee, bargainee or mortgagee resides. For the purposes mentioned in this section the principal place of business of a domestic corporation is its residence.”
■ It is said in Door Co. v. Joyner, 182 N. C., at p. 521: “In the construction of our registration laws this Court has very insistently held that no notice, however full and formal, will supply the place of registration. Dye v. Morrison, 181 N. C., 309; Fertilizer Co. v. Lane, 173 N. C., 184; Quinnerly v. Quinnerly, 114 N. C., 145. And under such interpretation there is doubt whether this doctrine of title by estoppel would be'allowed to prevail against one holding by a prior registry, whether with or without notice. In the Georgia case heretofore cited (Way v. Arnold), 18 Ga., at p. 193, Lumpkin, J., gives decided intimation that the doctrine of title by estoppel no longer prevails as against the provision and policy of our registration acts.” Bank v. Smith, 186 N. C., p. 635; Cowan v. Dale, 189 N. C., 684.
In Boyd v. Typewriter Co., 190 N. C., at p. 799, it is said: “In Ijames v. Gaither, 93 N. C., 361, it is held: ‘When a mortgage or deed of trust is registered upon a proper probate, it is held to have the effect of notice to all the world and attaches itself to the legal estate, and' is notice to a subsequent purchaser from thé mortgagor. Flemming v. Burgin, 2 Ired. Eq., 584; Leggett v. Bullock, Busb., 283; Robinson v. Willoughby, 70 N. O., 358.' Collins v. Davis, 132 N. C., 106; Dill v. Reynolds, 186 N. C., 293; Bank v. Smith, 186 N. C., 642.”
In this jurisdiction, under O. S., .3311, the registration of deeds of trust and mortgages on real and personal property have been held of prime, importance. Boyd v. Typewriter Co., supra. It gives stability to business. When properly probated and registered, they are constructive notice to all the world. Creditors or purchasers for a valuable consideration from the donor, bargainor or mortgagor, obtain 310 title as against a properly probated and registered conveyance, sufficiently describing the property. Ordinarily the cases in this jurisdiction where a purchaser for a valuable consideration from the donor, bargainor or mortgagor obtains title after' the registration of the mortgage, it is bottomed on agency — express or implied — as where the mortgagee by the terms of the mortgage or the nature of the property conveyed,' either in express language or by implication, gives the mortgagor the right to dispose of the property on which he has a lien.
In Bynum v. Miller, 89 N. C., at pp. 395-6, it is- said by Ashe, J,: “The consent then given by'plaintiff to defendant to replenish the stock from time to timé, gave him the right to sell,- and constituted him -his agent for -that purpose; and especially is this to be so considered when the deed provides that' the entire stock on hand on 15 November, inélud-*158ing not only tbe original stock, but the stock as increased by new purchases, should belong to the mortgagee.” See Etheridge v. Hilliard, 100 N. C., 250; Merritt v. Kitchin, 121 N. C., 148; Edwards v. Supply Co., 150 N. C., 171; R. R. v. Simpkins, 178 N. C., 276.
In Rogers v. Booker, 184 N. C., at p. 186, it is said: “This was not the case of a mortgage upon a stock of goods which was left in the hands of the mortgagor for sale. There was nothing to indicate in the remotest degree such state of facts. The evidence is that Carr E. Booker borrowed money from the plaintiff and gave him a mortgage upon a single automobile as security, and that this mortgage was duly and properly recorded, and upon the charge the jury found that Carr E. Booker had no authority, express or implied, to sell it free from the lien of the recorded mortgage.”
The principal case relied on by defendant is Boice v. Finance and Guaranty Co., 127 Va., 563. In the case of Rudolph v. Farmers Supply Co., Inc., 131 Va.., at p. 313, 108 S. E., 638, the same Court said: “The question presented was, who had the superior claim to the automobile — Boice or the guaranty company? Boice was a subsequent purchaser for value from Gordon, without actual notice of the existence of the mortgage. The Court held that If (when) the owner stands by and permits a seller who is a licensed dealer in such goods to hold himself out to the world as owner, to treat the goods as his own, to place them with other similar goods of his own in a public show room, and to offer the same indiscriminately with his own to the public, he will be estopped by his conduct from asserting his ownership against a purchaser for value without notice of his title. The constructive notice furnished by the recorded mortgage, or deed of trust in such cases, is not sufficient. The act of knowingly permitting the goods to be so handled and used by the seller in the ordinary and usual conduct of his business, is just as destructive of the rights of the creditor as if such permission has been expressly granted in the mortgage or deed of trust.’ Boice v. Finance and Guaranty Co., 127 Va., 563, 102 S. E., 591, 10 A. L. R., 654. It will be noted in this case that the owner loses his lien because' his conduct estops him from enforcing it. . . . (p. 314). The controlling
principle asserted and established in Boice v. Finance and Guaranty Co., supra, is that the company’s conduct was as destructive of its right to assert its lien as if it had expressly included in the mortgage provisions adequate to defeat its purpose.”
Chapter 236, Public Laws of 1923, requiring a certificate of the transfer of title to an automobile to be issued to purchaser by the Secretary of State (now Commissioner of Bevenue), making its violation a misdemeanor, is a penal statute and strictly construed, in pari materia *159with our registration laws, C. S., 3311, 3312, relating to the registration of mortgages. It does not repeal the latter statutes so as not to require the registration of title-retaining contract to secure the balance due on the purchase price of an automobile, as against subsequent purchaser for value, and no notice however formal is sufficient to supply that of registration required by the statute. Carolina Discount Corporation v. Landis Motor Co., 190 N. C., 157.
"Whatever may be the holding elsewhere, the registration of mortgages are favored in this jurisdiction. The" mortgage in the present action was to secure a loan made at the time. The mortgaged property was carefully described in the mortgage, the kind of car and the serial and motor numbers. The mortgage was recorded before the sale to defendant. An attorney examined the title before the loan was made. Under the facts and circumstances of this case, we cannot hold that the fact that the automobiles were in the show or display room of Lane, a licensed dealer, for sale to the general public, that the purchase by defendant for value gave him a superior title to plaintiff, who had a valid chattel mortgage duly recorded on same. • There is no sufficient evidence to show an implied agency giving the mortgagor a right to sell free from the mortgage lien. Defendant took title subject to the mortgage lien.
As to the second question: C. S., 3560, is as follows: “The board of county commissioners, at the expense of the county, shall cause to be made and consolidated into one book a general index of all the deeds and other documents in the register’s office, and the register shall after-wards keep up such index without any additional compensation.
C. S., 3561: The register of deeds shall provide and keep in his office full and complete alphabetical indexes of the names of the parties to all liens, grants, deeds, mortgages, bonds and other instruments of writing required or authorized to be registered; such indexes to be kept in well-bound books, and shall state in full the names of all the parties, whether grantors, grantees, vendors, vendees, obligors or obligees, and shall be indexed and cross-indexed, within twénty-four hours after registering any instrument, so as to show the name of each party under the appropriate letter of the alphabet; and reference shall be made opposite each name, to the page, title or number of the book in which is registered'any instrument. A violation of this section shall be a misdemeanor.”
Davis v. Whitaker, 114 N. C., 279, was overruled in Ely v. Norman, 175 N. C., at p. 299 (concurring opinion), and it was held: “That the indexing of deeds is an essential part of their registration, just as much so as the indexing of judgments is an essential part of their docketing as is held in Dewey v. Sugg, 109 N. C., 328.” Fowle v. Ham, 176 N. C., 12; Hooper v. Power Co., 180 N. C., 651; Trust Co. v. Currie, 190 N. C., 260; Clement v. Harrison, 193 N. C., 825.
*160It was held in the Clement case, supra, at p. 828: “O. S., 3560, apparently contemplates that the index provided by the county commissioners shall be one book, constituting -a general index o£ all instruments admitted to registration or required to be registered. The only requirement of cross-indexing specified in the statute is that such index and cross-index shall ‘show the name of each party under the appropriate letter of the alphabet, and reference shall be made opposite each name to the page, title, or number of the book in which is registered any instrument.’ ”
In the instant case the chattel mortgages in each chattel-mortgage book are indexed and cross-indexed in an index in the front of that book. It may be burdensome to the investigator, but we think, under the facts and circumstances of this case, that there has been a substantial com-: pliance with the statutes. Defendant, if he had investigated before purchasing the automobile, could, have easily found the chattel mortgage as he did afterwards.
In speaking to the subject of protecting creditors and subsequent purchasers for value, the necessity of indexing and cross-indexing, Hohe, J., in. the Ely case, supra, at p. 298, says: “In eases upholding this view; it is held: ‘That an index will hold a subsequent purchaser to .notice thereof if enough is disclosed by the index to put a careful or prudent examiner upon inquiry, and if, upon such inquiry,.the instrument would-have been found. Jones v. Berkshire, 15 Iowa, 248.
For the reasons given, the judgment below is
Eeversed.