Montague Bros. v. WC Shepherd Co.

58 S.E.2d 118 (1950)

231 N.C. 551

MONTAGUE BROS., Inc., v. W. C. SHEPHERD CO., Inc., et al. (BANK OF MANSFIELD, Intervenor).

No. 235.

Supreme Court of North Carolina.

March 22, 1950.

*120 Scott B. Berkeley, Goldsboro, for plaintiff-appellee.

James N. Smith, Goldsboro, for defendant W. C. Shepherd Co. and intervenor, Bank of Mansfield, appellants.

ERVIN, Justice.

Chattel mortgages and conditional sales are nearly allied to each other. Poindexter v. McCannon, 16 N.C. 373, 18 Am. Dec. 591. For this reason, G.S. § 47-20, which covers chattel mortgages, and G.S. § 47-23, which embraces conditional sales, prescribe identical requirements for their recording. These statutes expressly provide that a chattel mortgage or a conditional sale of tangible personal property is valid as against creditors or purchasers for a valuable consideration from the mortgagor or vendee only from its registration in the county where the mortgagor or vendee resides if he resides in the State, or in the county where the property is situated if he resides out of the State.

Under these statutes, such an instrument takes effect as against such interested third persons from and after its registration in the place appointed by law as if it had been then and there executed. M. & J. Finance Corp. v. Hodges, 230 N.C. 580, 55 S.E.2d 201. This being so, the recordation of a chattel mortgage or a conditional sale in any county other than that specified by law is of no effect. Industrial Discount Corporation v. Radecky, 205 N.C. 163, 170 S.E. 640; Foy Shemwell v. Hurley, 172 N.C. 575, 90 S.E. 582; Bank of Colerain v. Cox, 171 N.C. 76, 87 S.E. 967; Weaver v. Chunn, 99 N.C. 431, 6 S.E. 370.

Since the place where the law requires it to be recorded is fixed by either the residence of its maker or the location of the property covered by it at the time of its registration, a chattel mortgage or a conditional sale, which is originally registered in the proper county, retains its full legal vigor in case the maker afterwards changes his residence to some other place within the State, or the property is subsequently removed to another county. Smoak v. Sockwell, 152 N.C. 503, 67 S.E. 994; Barrington v. Skinner, 117 N.C. 47, 48, 23 S.E. 90; Hornthal v. Burwell, 109 N.C. 10, 13 S.E. 721, 13 L.R.A. 740, 26 Am. *121 St.Rep. 556; Harris v. Allen, 104 N.C. 86, 10 S.E. 127; 10 Am.Jur., Chattel Mortgages, section 95; 14 C.J.S., Chattel Mortgages, § 155. There is no requirement of a second recordation in this State in either of these events. Harris v. Allen, supra.

As Walker was a nonresident of the State, the trial court rightly made the case to turn upon the question whether the truck was situated in Wayne County within the meaning of the law at the time of the registration of the plaintiff's conditional sale contract, i. e., on August 1, 1947. Sloan Bros. v. Sawyer-Felder Co., 175 N.C. 657, 96 S.E. 39.

Although G.S. § 47-20 was enacted in 1829 and G.S. § 47-23 was adopted in 1883, we have found no decision in this jurisdiction establishing any practical criterion for determining when a specific chattel is situated in a particular place. Universal C. I. T. Credit Corporation v. Walters, 230 N.C. 443, 53 S.E.2d 520, 522, does not do so. Indeed, it does not deal with the precise problem which confronts us. It is concerned with a question of conflict of laws, and rightly adjudicates that a movable chattel does not lose its original situs in one State until it acquires "a more or less permanent location" elsewhere.

Standard lexicographers define "situated" as "having a site or location; located." The word ordinarily implies more than mere temporary presence. 58 C.J. 741. The significance of the term in the statutes relating to the recording of chattel mortgages and conditional sales of tangible personal property becomes plain when due heed is paid to the reasons for their enactment.

These statutes are designed to give notice of the mortgage or conditional sale to persons of the classes mentioned therein, i. e., creditors and purchasers for a valuable consideration from the mortgagor or vendee, and "to prevent fraud and deception by protecting them from the effects of secret liens and from losses which they might otherwise sustain by relying upon the possession and apparent ownership of the chattels in the mortgagor" or vendee. 10 Am. Jur., Chattel Mortgages, section 83. See, also: Empire Drill Co. v. Allison, 94 N.C. 548, 549.

In adopting these statutes, the legislature took into account the palpable fact that a chattel, unlike land, has no fixed or permanent location, and endeavored to procure the registration of each chattel mortgage or conditional sale in the place where third persons interested in the state of title to a chattel ostensibly owned by the mortgagor or vendee would ordinarily look for information on that point.

The requirement that such an instrument is to be recorded in the county where its maker has his actual personal residence is based on the legislative realization that "persons interested to have knowledge in such respect would go to the county where a person resides to see what disposition he had made of his personal property by deeds and other instruments required to be registered." Bank of Colerain v. Cox, supra [171 N.C. 76, 87 S.E. 968].

In fixing the place for registration of a chattel mortgage or a conditional sale executed by a mortgagor or vendee residing out of the State, the legislature acted upon the assumption that persons interested in a chattel ostensibly owned by a nonresident will seek information in respect to the title to such chattel in the place where such chattel is likely to be found under normal conditions. For this reason, it incorporated in the recording statutes the provision which specifies that a chattel mortgage or a conditional sale made by a nonresident is to be registered in the county where the chattel is situated. This necessarily implies that the chattel is situated where it is regularly kept and maintained; for that is the place where it is likely to be found under normal conditions. Century Ins. Co., Limited, v. Glidden Buick Corporation, 174 Misc. 149, 20 N.Y.S.2d 108. Hence, we conclude that a chattel is situated within the meaning of the recording acts where it is regularly used day by day, or where it is regularly kept when not in actual use. Lathe v. Schoff, 60 N.H. 34; Jones on Chattel Mortgages and Conditional Sales, 6th Ed., section 255.

*122 When these principles are applied to the instant case, it is manifest that the testimony adduced by the plaintiff was sufficient to support the determinative finding of the jury that the truck was situated in Wayne County at the time of the registration of the conditional sales contract under which the plaintiff claims. The exceptions of the appellants are, therefore, overruled.

Judges must interpret and apply statutes as they are written. We have performed this task.

Nevertheless, we think it not altogether beside the mark to observe that chattels were virtually localized at the time of the adoption of our recording statutes. Nowadays, however, a substantial part of the resources of the people is invested in automobiles, whose utility and value consist solely in their high degree of mobility. In instances without number, the exigencies of industry drive automobiles from place to place at short intervals, affording their ostensible owners rare opportunities to victimize innocent third persons. For this reason, students of commercial problems suggest that the recordation statutes as they pertain to the mortgage or sale of automobiles on credit are outmoded, and ought to be replaced by a central system for registering automobile liens covering the entire State. 26 N.C.L.R. 173. This is a matter, however, which falls within the legislative realm.

The trial and judgment will be upheld; for there is in law

No error.