Court Opinion

ID: 9766836
Source: CourtListenerOpinion
Date Created: 2023-08-29 05:00:20.156198+00
Date Added: 2024-06-11T07:30:26.592715
License: Public Domain

Dissenting Opinion.
Tapley, J.
I find myself unable to agree with my associates and, therefore, I respectfully dissent.
The majority of the Court has determined the recording of the conditional sales contract is valid between the parties and with this, of course, I agree. I take issue, however, on the matter of constructive notice to the defendant. The line of analysis which I am taking involves the question of whether this defendant, according to the facts of the case, takes title as against the conditional vendor.
The instrument was recorded in its entirety and was indexed :
“Mortgages 1943-1958 Gill’s Self Service Mkt. Globe Slicing Machine Co., Inc. Vol. 369, Page 163.”
Defendant’s mortgage, among other items of personal property, contained a slicer, chopper and scales, being the same articles as were identified in the conditional sales contract *67by the same serial numbers as were used for identification in defendant’s mortgage. The conditional sales contract shows at a position near the top of the instrument in print “print name of purchaser” and then there is supplied by personal printing “Gill’s Self Service Mkt.” At the bottom of the instrument there are to be found lines for signatures. The purchaser is instructed by the printed portion of the instrument to print the name under which the business is conducted, whether as individual, firm or corporation, and directly below these instructions is a line with the printed word “by” and underneath this line are the words “if signing for a corporation, show title after signature.” According to the position of the signature, it is apparent that these lines were disregarded by the purchaser and he signed in longhand “Gill’s Self Service Mkt.” and underneath “Frank M. Gill.” My interpretation in analyzing the instrument is that the purchaser was conducting a business under the name “Gill’s Self Service Mkt.” and his personal signature indicated his responsibility as one to be charged individually. We have as a premise a conditional sales contract which appears on its face to have been executed by a purchaser as an individual doing business under a trade or an assumed name, the business name containing the surname of the purchaser.
The majority opinion narrows the issue to the validity of the recording as to third parties. There appears to be no question that between the parties the agreement was valid, as was the recording. The majority opinion, in part, reads:
“The fatal defect in the plaintiff’s claim lies in the fact that it chose to name the purchaser under his trade name. Thus the record, in our construction of the statute, gave no constructive notice to the mortgagee of the reservation of title in the vendor.
---It is proper recording, and the recording alone, that breathes validity against a third party into the retention of title in the vendor.
*68“The issue before us does not arise from an error in the records, but from the recording as effective constructive notice to third parties.”
There is no element of fraud on the part of the original vendee or any other party involved in this case.
The procedure by which a conditional vendor retains title against third parties is prescribed in Sec. 9, Chap. 119, R. S. 195U. The pertinent portion of this section reads:
“No agreement that personal property bargained and delivered to another shall remain, the property of the seller till paid for, is valid unless the same is in writing and signed by the person to be bound thereby;---it shall not be valid except as between the original parties thereto, unless it or a memorandum thereof is recorded in the office of the clerk of the city,---in which the purchaser resides at the time of the purchase;---.” (emphasis mine).
Referring to the instrument, the name of the purchaser is not the trade name “Gill’s Self Service Mkt.” but is “Gill’s Self Service Mkt., Frank M. Gill” as the signature of the purchaser shows on the contract. According to the record, Mr. Gill is using a trade name but he evidences his intention to be bound by the contract by signing his individual name along with the trade name he has adopted. The trade name is not a legal entity but is merely a designation under which the individual who uses it is conducting his business. The party responsible for carrying out the terms of the contract and to respond in damages for its breach would be the individual, Frank M. Gill, so to reiterate, we have an agreement in writing, signed by the person to be bound thereby and this instrument, which satisfies the statutory requirements, was properly recorded. In the customs and usages of the trade, it is not unreasonable to say that the execution of contracts in a trade name by an individual as owner is not an uncommon practice.
*69The next question to be determined is whether the defendant under all the circumstances had constructive notice. The majority opinion takes the position that there was no error in the indexing by the City Clerk. The matter of indexing is of no moment in this case as affecting constructive notice. There is no statutory provision in this State making the index an essential part of the record.
Teweles vs. Clearance Holding Corporation, 156 A. 447 (N. J.). The index in this case was in error. The Court said, on page 449:
“It is therefore apparent that when a contract of this character has been prepared and filed in accordance with the statute, it will operate as constructive notice, and the fact that the county clerk failed to comply with the provisions of another section of the statute, which requires him to keep a proper index of such documents, cannot affect the validity or effect of the filing, although it may subject him to an action at the instance of a party who may suffer by his error. We therefore conclude that even if the contract in question was not indexed, it was properly filed, and would operate as a protection to the vendor.”
See Pavlick vs. Reginald Oliver Co., Inc., et al., 148 A. 624 (N. J.).
The indexing may be completely erroneous but this fact in and of itself does not invalidate an otherwise valid recording.
The majority of the Court decides “the fatal defect in the plaintiff’s claim lies in the fact that it chose to name the purchaser under his trade name.” I do not agree that the purchaser executed the contract under a trade name. He executed it as an individual doing business under a trade or business name. It is the execution of the instrument which prevails, not the so-called named purchaser.
*70The purpose of recording a conditional sales contract is to retain title in the conditional vendor against third parties through the medium of constructive notice. When a written agreement is executed by the conditional vendor and vendee containing a description of personal property, with the terms of the sale and bearing the signature of the person to be bound, the original parties have satisfied the statutory requirements for its recording.
It is obvious that had the vendee used his own name, not in conjunction with his trade name, there would be no problem. There have been considerable number of opinions written throughout the country on the requirements of satisfying the provisions of conditional sales statutes in drafting conditional sales agreements as to the necessity of following statutory direction in the formation of agreements in order to make such agreements acceptable to recording and, if they meet the requirements, the recording in turn becomes constructive notice to third parties.
Jennings v. Schwartz, 144 P. 39 (Wash.). This cited case involves a conditional sales contract. The statute, among other conditions, requires the agreement to be signed by the vendor and the vendee. Schwartz, doing business under the trade name of Alaska Junk Company, made a conditional sale of personal property to the Pacific Coast Glass Company. A memorandum of the conditions of the sale was recorded. In the agreement the vendor was named Alaska Junk Company in the opening clause of the agreement. The instrument was signed by the vendee at the ordinary place for the signature but “it was not signed by the vendor personally, either with his proper or trade name, on any part of the instrument.” The Court held that the printed trade name in the opening clause of the agreement was not a sufficient signing by the vendor within the meaning of the statute and, therefore, failed to comply with the statutory provisions. The inference to be drawn by this *71case is that had the instrument been “signed by the vendor personally, either with his proper or trade name,” the recording would have been valid. See Chattel Mortgages and Conditional Sales (Jones) Vol. 3, Sec. 1062.
The conditional sales contract must be considered in its entirety in determining its validity for recording purposes. If the instrument satisfies the requirements of Sec. 9, Chap. 119, R. S. 1951, then the recording is valid, otherwise it is not. Some jurisdictions have similar statutes which are more specific in their requirements, such as the necessity of describing the property in detail; that the instruments must be signed by both vendor and vendee; or that it must contain a jurat. In so far as the agreement now under discussion is concerned, the Maine statute only requires that the instrument be “in writing and signed by the person to be bound thereby.”
The instrument, of course, was in writing but was it signed by the person to be bound thereby? The instrument on its face shows the signature of the individual vendee written under the trade name, both trade name and personal signature appearing to be in the same handwriting. It is reasonable to deduct from the instrument as a whole that the vendee signed it intending to be bound by its terms. The signature of “Frank M. Gill” gives life to the contract, binds him to its terms and, conversely, without his signature, there is lacking a vendee. There is no legal entity in the trade name “Gill’s Self Service Mkt.” which would support a contractual relationship.
In re Brown, Black v. Hobart Mfg. Co., et al., 88 F. Supp. 297. Under the Ohio law a conditional sales contract which is signed with a fictitious name is invalid against a subsequent lien. It appears that one Raymond A. Brown operated a meat department as a tenant of a partnership, the partnership being named “Food Center Super Market.” He executed a conditional sales contract which was directed *72to the Food Center Super Market. It was signed in the space provided at the end of the instrument as “Food Center Super Market by Raymond A. Brown.” The Referee in Bankruptcy found the contract invalid as against third persons. The petitioner claimed that the bankrupt Brown did business under the name of Food Center Super Market. The Court said, on page 298:
“The additional claim is made that bankrupt did business under the name of Food Center Super Market. If this were so a different result might have been reached. However, the Referee found that bankrupt did business in his own name, and there is nothing in the record to support a contrary finding.”
In the instant case, Mr. Gill was doing business under his own trade name which he had a legal right to do.
I come to no other conclusion than the agreement was executed by an individual using a trade name who was legally bound as an individual to satisfy the conditions and terms of the agreement in so far as the vendee was concerned.
The terms, conditions and execution of the conditional sales contract satisfy the requirements of Sec. 9, Chap. 119, R. S. 1954 and therefore its recordation gave constructive notice to the world.