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Security National Bank of Trenton v. Bell

Decided: January 28, 1941.

THE SECURITY NATIONAL BANK OF TRENTON, PLAINTIFF-RESPONDENT,
v.
JOHN BELL, DEFENDANT-APPELLANT



On appeal from a judgment of the Supreme Court, whose opinion is reported in 125 N.J.L. 13.

For the defendant-appellant, Mario H. Volpe and Joseph D. Kaplan.

For the plaintiff-respondent, Harvey T. Satterthwaite.

Donges

The opinion of the court was delivered by

DONGES, J. This appeal is from a judgment of the Supreme Court reversing a judgment of the Trenton District Court in an action in replevin for possession of an automobile truck.

The stipulated facts are that, on June 8th, 1939, plaintiff-respondent, Security National Bank of Trenton, lent to Cecil J. Edwards the sum of $368.75 and took his note as evidence of the debt. The loan was to be repaid in monthly payments.

To secure the loan, Edwards delivered to the bank an unconditional bill of sale of his automobile truck, which the bank registered with the Motor Vehicle department. It is stipulated that the conveyance was made as security and that, upon payment of the sum due the bank, the title was to be reconveyed to Edwards. Edwards continued in possession of the truck and operated it with his license plates thereon.

Subsequently, the truck was seized by a creditor under a garagemen's lien and stored in a garage in Princeton. On September 25th, 1939, the defendant-appellant herein, John Bell, recovered a judgment against Edwards in the Trenton District Court. Execution was issued thereon, a levy was made on the truck, and on October 2d, 1939, a constable sold the truck, at a sale under the execution, to appellant Bell for the sum of $150, being the highest bid at such sale. On October 3d, 1939, the Motor Vehicle Department issued a foreclosure bill of sale of the truck to Bell. The respondent bank thereupon instituted this replevin suit in the District Court. The sole question involved herein is, under the agreed facts, who has the title to and right of possession of the truck? No other question is raised.

The District Court judge gave judgment in favor of Bell; the Supreme Court reversed and held the bank's right was paramount.

Appellant contends that the conveyance to the bank, being merely as security for the debt, was in effect a chattel mortgage and, to be valid against creditors of Edwards, should have been recorded as required by the Chattel Mortgage act. N.J.S.A. 46:28-5. Admittedly, there was no change of possession of the chattel; nor was there compliance with the Chattel Mortgage act by recording the bill of sale in the local recording office as a chattel mortgage.

Respondent contends that the Motor Vehicle Transfer act alone is controlling in the situation presented. (N.J.S.A. 39:10-1 et seq.) The Supreme Court so held, saying: "The legislature wisely provided a convenient and expeditious manner for the transfer of title to automobiles. The original bill of sale filed with the commissioner ...


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