Eckhardt v. Morley

THE COURT.

This is an áction to enjoin an execution sale. H. M. Kurtz made a promissory note to plaintiffs and appellants for $1700, and to secure payment executed on May 18, 1932, a chattel mortgage on certain automobiles, among them the Buick sedan involved in this action. The mortgage was recorded in Yolo County, where the property was situated, on May 27, 1932. On May 28, 1932, a certified copy of the mortgage and certificates of ownership of the ears were deposited with the Division of Motor Vehicles, with a request for registration. The registrar refused to file them for the reasons first, that the certificates of ownership had not been signed by the plaintiffs as mortgagees, and second, that the filing fees of $1 for the mortgage and $1 for change of legal ownership on each vehicle had not been paid. On July 14, 1932, more .than a month later, the certificates, properly signed, and the necessary fees, were forwarded to the division, and on July 15, 1932, the new certificates were issued. Prior thereto, however, on July

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12, 1932, the defendant constable levied an attachment on the Buick sedan, in an action against Kurtz, the mortgagor herein. Judgment followed in the action, and execution was issued. The present suit by plaintiffs is to enjoin the execution sale.

A single issue is clearly presented by these facts. Did the mortgage become effective as against creditors of the mortgagor at the time of its deposit with the registrar, or only upon its actual registration after properly signed documents and fees had been forwarded? The lower court held that it became effective only upon registration, and that therefore the intervening attachment was prior. We are of the opinion that no other holding is possible under our statutes.

The California Vehicle Act (Deering’s General Laws, 1931, Act 5128) makes a distinction between the “owner” of a vehicle, the party having the use thereof, and the “legal owner”, the party having either legal title or a mortgage thereon. Section 45% of the act provides that no chattel mortgage on a motor vehicle shall be valid until the mortgagee is registered as the legal owner; and that registration of the mortgagee as legal owner and deposit of a certified copy of the mortgage, gives constructive notice thereof to subsequent purchasers and encumbrancers. Section 49 provides that the division shall not grant any application for transfer of registration unless the correct fee therefor has been paid; and section 77 provides that such fee shall be paid at the time registration is applied for. It seems obvious that the act contemplates payment of fees in advance, and that prior thereto there is no duty to register the transfer.