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Commercial Credit Corp. v. Smith

Decided: February 3, 1930.

COMMERCIAL CREDIT CORPORATION, A CORPORATION, APPELLANT,
v.
MINNIE SMITH, CLARK SMITH, JOHN A. MCCRANE MOTORS, INCORPORATED, A CORPORATION, AND WILLIAM N. NUSSMAN, RESPONDENTS



On appeal from the Passaic County Circuit Court.

For the appellant, Green & Green (David Green, of counsel).

For the respondents, Peter Cohn.

Trenchard

The opinion of the court was delivered by

TRENCHARD, J. This is the appeal of the plaintiff below in an action in replevin brought in the Passaic Circuit Court.

The situation was as follows: In August, 1928, Minnie Smith and Clark Smith purchased from the Erie Motor Car Company a Willys-Knight coupe and made a partial payment thereon. They executed a conditional sales contract to the vendor, by the terms of which the title was reserved to it until the balance of the purchase-money should be paid, payments being required to be made in monthly installments. This conditional sales contract was never recorded, as required by the statute. After it had been executed the contract was sold and assigned by the Erie Motor Car Company to the present plaintiff. The purchasers of the car paid the prior installments, but defaulted in the payment which fell due on March 14th, 1929. Under the terms of the contract, upon a default in payment the entire unpaid balance became immediately due and payable, and the seller became entitled to immediate possession of the car. In the meantime, and in February, 1929, the defendant John A. McCrane Motors, Incorporated, recovered a judgment in the Paterson District Court against the defendants Minnie Smith and Clark Smith, the purchasers of the car. An execution was issued on the judgment and delivered to a constable. He levied on the Willys-Knight coupe, which was then in the possession of the Smiths, and advertised it for sale. However, a few minutes before the hour fixed for the sale the sheriff of the county appeared with a writ of replevin, and took possession of the car. This writ was the one sued out in the present case, and, having been returned, the plaintiff filed its complaint, averring that it was entitled to possession of the property as against the purchasers and against the defendant John A. McCrane Motors, Incorporated. A motion was made to strike out the complaint by counsel for the McCrane Motors Company, and the hearing upon affidavits submitted resulted in the granting of the motion, with costs. The plaintiff appeals from this action of the Passaic Circuit Court.

We are of the opinion that the action of the court below was right.

The affidavits upon which it rests show conclusively that the conditional sales contract was void as to the defendant John A. McCrane Motors, Incorporated.

Section 5 of our Conditional Sales act (Pamph. L. 1919, p. 462) declares that:

"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 shall be filed as hereinafter provided, unless such contract or copy is so filed within ten days after the making of the conditional sale."

Neither the contract here in question, nor a copy thereof was filed as required by the statute. Counsel for the plaintiff seeks to avoid that difficulty by saying that the defendant motors company, the judgment creditor, had knowledge of the existence of the contract, because its attorney and the constable were informed of its existence at the time the levy was made. But that is not enough. We do not stop to consider whether or not notice to the attorney or to the constable was notice to the judgment creditor. But we point out that there was no showing or attempt to show that the judgment creditor, or its attorney, or the constable, had knowledge of the provision in the conditional sales contract reserving property in the plaintiff and the right to elect that the whole purchase price shall be due on default in payment of any installment. Upon this topic we have nothing but the affidavits of Mr. and Mrs. Smith, stating that they advised the attorney and constable that "the motor vehicle was covered by an unsatisfied conditional sales contract held by plaintiff."

It is to be borne in mind that the statute makes every provision in a conditional sale reserving property in the seller void as to any judgment creditor of the buyer, who, without notice ...


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