Manchest v. Long Island Finance Corp.

Per Curiam. This was an action in replevin. The jury returned a verdict of $700 in favor of the plaintiff. Plaintiff’s title was predicated upon a purchase at a foreclosure sale. The car was sold to the plaintiff’s husband under a conditional bill of sale. The chattel mortgage under which she purchased was subsequent thereto. The conditional sales agreement was recorded on April 19th, 1928, at eleven-twenty a. m., and the chattel mortgage went on at two twenty-five p. m. the same day. The car was sold March 31st, 1928, so that the recordation occurred nineteen days after the sale. Section 5 of the Uniform Conditional Sales act is as follows: “Every provision in a conditional sale reserving property in the seller, shall be void as to any purchaser from or creditor of the buyer, who, without notice of such provision, purchases the goods or acquires by attachment or levy a lien upon them, before the contract or a copy thereof [719] shall be filed as hereinafter provided, unless such contract or copy is so filed within ten days after the making of the conditional sale.” 2 Cum. Supp. Comp. Stat., p. 3130. The trial court took the view that this section voided the conditional sales agreement as against a purchaser under the chattel mortgage. Not so. The chattel mortgagee neither purchased the car nor acquired by attachment or levy a lien lien thereon before the conditional sales agreement went on record. The conditional sales agreement was, therefore, not void as against the chattel mortgagee, and a purchaser at a foreclosure sale under that mortgage could acquire no greater rights than the chattel mortgagee had. The prior filing of the conditional sales agreement was notice. Morey & Co. v. Schaad et al., 98 N. J. L. 799; 121 Atl. Rep. 622. The proceeding in the United States District Court, in which it was found that the making of the chattel mortgage upon a conditionally sold car was a fraud which would bar a discharge, was not an adjudication which would debar the defendant from asserting its right to the car in suit under its duly recorded conditional sales agreement. The issues were obviously different. The judgment is reversed.