Becker v. La Core

Brooke, J. (after stating the facts). Plaintiff presents its case in this court under 47 assignments of error which we will not consider in detail. Determination may, we think, be predicated upon a single undisputed fact which is fatal to plaintiff’s contention, and that fact is that the conditional sale contracts were not filed in the office of the register of deeds for Grand Traverse county. The statute (Act No. 64, Pub. Acts 1915, 3 Comp. Laws 1915, § 11912) provides: “Whenever any personal property is sold and delivered to any person, firm or corporation regularly engaged or about to engage in the business of buying and selling such personal property, with the condition affixed to the sale that the title thereto is to remain in the vendor of such personal property until the purchase price thereof shall have been paid, with'the agreement express or implied, that the same may be re-sold, every such conditional sale in order for the reservation of title to be valid, except as between the vendor and vendee shall be evidenced in writing and the written contract of every such conditional sale or a true copy thereof shall be filed and discharged in the same manner as chattel mortgages are required to be filed and discharged.” The law covering the filing of chattel mortgages, as amended by Act No. 163, Pub. Acts 1915 (3 Comp. Laws 1915, § 11988), is as follows: “Section 10. Every mortgage or conveyance intended to operate as a mortgage of goods and chattels which shall hereafter be made which shall not be accompanied by an immediate delivery and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subse [690] quent purchasers or mortgagees in good faith, unless the mortgage or a true copy thereof shall be filed in the office of the township clerk of the township, or city clerk of the city, or city recorder of cities having no officer known as city clerk, where the goods or chattels are located, and also where the mortgagor resides, except when the mortgagor is a non-resident of the State, when the mortgage or a true copy thereof shall be filed in the office of the township, clerk of the township, or city clerk of the city, or city recorder of cities having no officer known as city clerk, where the property is. And unless the mortgagor named in such mortgage or conveyance intended to operate as a mortgage, or some person for him having knowledge of the facts shall, before the filing of the same, make and annex thereto an affidavit setting forth that the consideration of said instrument was actual and adequate, and that the same was. given in good faith for the purposes. in such instrument set forth. No officer shall receive such instrument or file the same in his office until such affidavit is made and annexed thereto. Every person who shall knowingly make any false statement in any such affidavit, upon conviction thereof shall be deemed guilty of the crime of perjury: ProvidedThat in case of corporations engaged in transporting passengers or freight, or conveying electricity or gas or telephonic or telegraphic communications, all that is or shall bé required is the filing of the copy of such mortgage with the register of deeds of each county through which the lines or property there-, of passes, and such mortgages shall not require any affidavit of renewal: Provided further, That when such mortgage or other conveyance intended to operate as a mortgage is given upon a stock of merchandise or merchandise and fixtures or any part thereof purchased for re-sale at retail then such instrument or a true copy thereof, and of the affidavit thereto attached shall also be filed in the office of the register of deeds of the county where the goods and chattels are located.” The last proviso in the section above quoted provides that whenever the mortgage or other conveyance intended to operate as a mortgage upon any stock of [691] merchandise or any part thereof purchased for re-sale at retail, then such instrument or a true copy thereof shall also be filed in the office of the register, of deeds of the county where the chattels are located. It is strenuously insisted by plaintiff that the automobiles in question in this case were not purchased for re-sale within the meaning of this section and did not constitute a part of' his stock of merchandise within such meaning and therefore that the provisions of the foregoing section do not apply. We are of the opinion that the exact converse is conclusively established by the records in these cases. The limited dealer’s contract provides in terms for the re-sale of the 25 automobiles therein ordered. Rice was a dealer in automobiles, maintaining an establishment for the sale of automobiles and the plaintiff dealt with him as such dealer. Moreover, the conditional sale contracts themselves contemplate the re-sale of the several machines by Rice, he agreeing to get orders for them and then secure from the plaintiff a bill of sale before delivery of possession thereof. There is no question that the plaintiff knew they were to be re-sold and that when they were delivered to Rice they became a part of his stock of merchandise held for re-sale (under the provisions of the conditional sale contracts). Under these circumstances, there can be no question but that the provisions of the act last above cited apply. No question arises as to the good faith of the defendants. They dealt with Rice under the belief that he was the owner of the cars purchased by them, clothed with full authority to convey title as well as possession. They had no actual notice of the plaintiff’s lease and may not be charged with constructive notice because of plaintiff’s failure to follow the statutory requirements. This determination based upon facts undisputed, disposes of the case. Many other questions touching the sufficiency of the [692] copies filed with the city clerk, the agency of Rice, the estoppel of plaintiff by its own acts, etc., are argued at large by counsel. Their consideration is unnecessary. The judgment is affirmed. Moore, C. J., and Steere, Fellows, Stone, Clark, Bird, and Sharpe, JJ., concurred.