Court Opinion

ID: 9650790
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:52:06.240872+00
Date Added: 2024-06-11T13:24:58.813673
License: Public Domain

*7FLAHERTY, Justice,
dissenting.
I respectfully dissent from the majority’s opinion. The clear result of the opinion announced today is that whenever a person takes his vehicle to a service garage for maintenance or repair, the garageman, in order to insure his right to assert a common-law possessory lien in the event that the work is not paid for, will be required to determine whether there is a security interest against the vehicle, and if so, he will then have the task of seeking permission from the secured party to perform the work. This approach is unreasonable and impractical. To say, as the majority does, that the garageman has a contract action against the non-paying customer, ignores reality. Further, if the garageman keeps possession of the car after the work is completed, the customer who will not pay presumably has an action in conversion or replevin against the garageman. This result is unjust.
To say that the garageman can protect himself by checking the title for indebtedness is commercially unrealistic. While it is true that in Pennsylvania there is an indication of encumbrance on the certificate of title, it is highly unusual for drivers to carry with them their certificates of title. In fact, if there is a security interest, the secured party most *8likely holds the certificate of title. If the owner, for whatever reason, then, does not have the title accessible, the garageman will not readily be able to determine the existence or non-existence of a security interest. Even if the title is accessible and the secured party has been identified, but has multiple offices, which office does the garageman call? And if he calls, what constitutes legal authority for him to proceed with the work? Is the telephone call adequate? If so, with whom must he speak?1
Thus, the majority’s approach not only makes it difficult for the small businessman to assert his common-law rights against a delinquent customer for whom he has rendered services, but also sidesteps the central question in this case: “Who is the owner?” The reason that this question is central is that, as the majority states, the law in Pennsylvania is that a common-law possessory lien arises when an artisan renders services affecting another’s goods at the request or permission of the owner of the goods. The majority, for reasons not explained, and contrary to the Vehicle Code, determines that O’Dell is not the “owner” of the truck. The Vehicle Code provides at 75 Pa.C.S.A. § 1133, Act of June 17, 1976, P.L. 162 No. 81 § 1:
*9If an owner creates a security interest in a vehicle for which a certificate of title has been issued by the Commonwealth, the owner shall immediately execute an application on a form prescribed by the department, naming the lienholder on the certificate, showing the name and address of the lienholder and the date of the security agreement. The certificate of title, together with the application and the required fee, shall be mailed or delivered to the department.
This section and those following consistently distinguish “owner” and “lienholder”. The lienholder is the secured party; the owner is the purchaser.
Contrary to the majority, I would find that O’Dell, the purchaser of the truck, was the owner of the truck; Associates, the lienholder, was merely the secured party. Therefore, in providing service at the request of O’Dell, Turley was performing at the request of the owner and should have a common-law possessory lien against the truck. This lien would take priority over the interest of the secured party under § 9-310 of the Uniform Commercial Code, which provides:
When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon the goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise.
Granting the common-law possessory lien in this case, in addition to being required by the Vehicle Code, is also eminently practical. The Vehicle Code at § 1311 requires that each operator of a vehicle shall have in his possession while operating the vehicle the state registration card. Section 1308 of the Vehicle Code requires that the registration card contain the following information:
(a) General rule. — The department, upon registering a vehicle, shall issue to the registrant a registration card which shall contain the registration number assigned to *10the vehicle, the name and address of the registrant and the name of the owner, if other than the registrant, a description of the vehicle including the vehicle identification number, the expiration date and such other information as may be determined by the department.
Since the registration card must contain the name of the owner and must be in the possession of the operator of the vehicle, the garageman could determine the identity of the record owner of the vehicle with ease, and, relying on his right to assert a common-law possessory lien against a non-paying owner, perform service on the vehicle at the request of the owner. This approach is simple and protects the interests of all parties: it is common for security agreements to provide that the debtor must keep the vehicle in good repair, a practice also in the interest of the owner. It is anomalous to make such a requirement, which obviously benefits both borrower and lender, and then make it difficult for the borrower-owner to secure services to maintain his vehicle.
But there are also other reasons to disagree with the majority view. Meyers v. Bratespiece, the nineteenth century case relied on by the majority to achieve its result, is inapplicable to the facts of this case. While it is true that Meyers sets out the rule that a workman must perform work at the request of the owner, it does not answer the question of who the owner is. In fact, in the Meyers case and in every other case cited in the majority opinion, some sort of bailment or installment lease is involved, not ownership, unlike the present case. In Meyers, for example, A owned cloth and contracted with B to make it into coats. B was a bailee of the cloth. B then contracted with C to make the coats at a price higher than A had agreed to pay B. C performed the work on the coats and sought payment from A after B absconded. The court observed:
The goods were in [C’s] possession without the consent or knowledge of [A] and it is quite probable that [C] knew [A] was the [owner] of them. There is no claim or pretense that [B] represented himself as the owner, and in *11the absence of evidence to the contrary the fair presumption is that he correctly advised [C] as to the ownership and explained to him how the goods came to his possession.
174 Pa. 119, 122, 34 A. 551 (1896) (Emphasis added). We do not have a bailment in this case. O’Dell’s name would have appeared both on the registration card and also on the title as the “owner” of the truck. In First National Bank of Bloomsburg v. Vargo Motor Company, 43 D. & C.2d 698 (1966), where repairs were ordered by the “record owner” of the automobile, the court held that the repairs took priority over the interest of the secured party based on the repairman’s possessory lien and § 9-310 of the Uniform Commercial Code. As the lower court pointed out, “If the secured party were to prevail, it would have the diminished value of its security restored at the expense of the repairman who would receive nothing for his labor, materials and storage charges.” 43 D. & C.2d at 702.2
Furthermore, one of the cases cited by the majority, Stern v. Sica, 66 Pa.Super. 84 (1917) positively contradicts the majority’s position. The Stem court distinguishes its case, involving a bailment lease contract, where no authority to charge the property with a lien may be inferred, from the case where the mortgagor has a definite and substantial interest in the property:
We certainly do not think . . . that a bailee of a chattel for hire or otherwise should have an unlimited right to charge that chattel with repairs to the undoubted prejudice of the owner of the chattel. As to the authorities cited where a chattel mortgage was under consideration and the title transferred by virtue of the statute to the mortgagee: The mortgagor, who retained the possession and use of the chattel, left it at a repair shop for repairs; he had, at all times, a substantial interest in the *12subject-matter itself. As was said by Chief Justice GRAY, in Hammond v. Danielson, 126 Mass. 294, “a means of earning the wherewithal to pay off the mortgage debt” and the increased value of the property by the repair inured to the mortgagor’s benefit. When the mortgagor paid his mortgage he was again the owner of the property. Authority to charge the property with a lien in such case might be inferred.
66 Pa. Super, at 89-90. In other words, according to Stern v. Sica, while an ordinary bailment lessee has no authority to encumber the property which it leases, a mortgagor may have such authority.3 This conclusion can hardly be said to be supportive of the majority’s position in the present case, where O’Dell holds title to the property and is not a bailment lessee.4
Finally, if there are good reasons to decide that O’Dell was an “owner” of the truck, viz., there was an actual sale and not a bailment or installment lease; O’Dell’s name would have appeared on the registration and title; only O’Dell could alienate the truck; O’Dell, prior to the truck’s breakdown would have had exclusive possession and control of the truck; there are no immediate apparent reasons to find, as the majority does, that Associates was the exclusive “owner”. I would decide that O’Dell has an “ownership” interest in the truck adequate to authorize service to the truck and establish Turley’s common-law possessory lien. It may be that Associates also has an ownership interest in the truck and that under certain circumstances, Associates too *13would be authorized to order services which would establish a common-law possessory lien against the truck.5
*12The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer (Section 2 — 401) is limited in effect to a reservation of a “security interest.”
*13I, therefore, dissent.
LARSEN, J., joins in this dissenting opinion.

. In a 1942 law review article cited by the majority, the writer, dealing with the problem of how a repairman determines whether an owner has authorized a bailee to create a lien on the bailment property, writes:
A rule that requires a repairman to search the chattel mortgage and conditional sale recording statutes prior to the doing of any repairs would work a tremendous hardship upon repairmen. A repairman would have to either demand costs in advance (something that cannot always be determined in advance) or at a great inconvenience to himself and the person in possession search the records for either a chattel mortgage or conditional sale. The burden would be far greater to a mechanic than to a purchaser from, or creditor of, the party in possession. Sales and execution proceedings usually are not required to be carried through with the speed of repairs; for example, repairs to an automobile.
Lee, “Power of Possessor of Personal Property to Create Lien for Repairs and Storage Charges Superior to Existing Interest of Others.” 90 U.Pa.L.Rev. 910, 917 (1942). As indicated, supra, similar concerns apply where a repairman is required to determine whether a security interest exists and then to get permission to proceed from the secured party before performing any work.

. Research indicates that there is a paucity of authority on the question of whether a garageman can assert a common-law possessory lien against a vehicle encumbered with a security interest, for repairs made at the request of the purchaser of the vehicle. It seems likely that the reason there have been no recent appellate decisions is that for years assertion of these liens has been unquestioned.

. One wonders, under the majority’s rationale, when, short of complete payment of its debt, the debtor may be said to become the “owner” of the property. Would the debtor be an “owner” if ten payments remained to be made? Would he be an “owner” if five payments remained to be made? One payment?

. Although the secured party in this case, under the terms of the sales contract, purports to reserve title in itself, § 1-201(37) of the Uniform Commercial Code operates to reduce this purported reservation of title to a mere security interest. Section 1-201(37) provides, in pertinent part:

. The creditor’s right to encumber the property would arise upon the debtor’s default when the secured party is in possession of the collateral. Section 9-501 of the Uniform Commercial Code governs this situation and provides in pertinent part:
(1) When a debtor is in default under a security agreement, a secured party has the rights and remedies provided in this Part. He may reduce his claim to judgment, foreclose or otherwise enforce the security interest by any available judicial procedure. If the collateral is documents the secured party may proceed either as to the documents or as to the goods covered thereby. A secured party in possession has the rights, remedies and duties provided in Section 9-207. The rights and remedies referred to in this subsection are cumulative.
(2) After default, the debtor has the rights and remedies provided in this Part, those provided in the security agreement and those provided in Section 9-207.
Section 9-207, in pertinent part, provides:
(1) A secured party must use reasonable care in the custody and preservation of collateral in his possession .
(2) Unless otherwise agreed, when collateral is in the secured party’s possession
(a) reasonable expenses (including the cost of any insurance and payment of taxes or other charges) incurred in the custody, preservation, of the collateral me chargeable to the debtor and are secured by the collateral.