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Sayre & Fisher Brick Co. v. Dearden

Decided: November 21, 1952.

SAYRE & FISHER BRICK COMPANY, A CORPORATION OF NEW JERSEY, PLAINTIFF,
v.
WILLIAM J. DEARDEN, AS ACTING DIRECTOR OF DIVISION OF MOTOR VEHICLES OF STATE OF NEW JERSEY, AND THEODORE D. PARSONS, AS ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, DEFENDANTS



On motion to dismiss complaint.

Woods, J.s.c.

Woods

The plaintiff in this matter is the holder of a chattel mortgage secured by 18 motor vehicles given by one Peter Fonsetto, dated August 20, 1952 and recorded in the office of the County Clerk for Bergen County on the same date. On that date, too, pursuant to N.J.S.A. 39:10-11 Fonsetto signed 18 statements of encumbrance affecting the 18 individual motor vehicles on the forms prescribed by the Director of Motor Vehicles, and all of the statements were also signed by the Clerk of Bergen County certifying that the chattel mortgage had been recorded by him on August 20, 1952.

N.J.S.A. 39:10-11 provides as follows:

"* * * Whenever a chattel mortgage is placed on a motor vehicle it shall be recorded in the county as provided in sections 46:28-5 and 46:28-7 of the Revised Statutes, and shall also, unless it is given to secure an agricultural loan, be presented to the director with a certificate of ownership and a statement of the encumbrance on a form prescribed by the director; otherwise there shall be the same result of failure to record as provided in section 46:28-5 of the Revised Statutes. The director shall issue a new certificate of ownership recording the encumbrance thereon and shall collect a fee of two dollars ($2.00) for the issuance and filing thereof."

R.S. 46:28-5 and 46:28-7 state that unless a chattel mortgage is duly executed, acknowledged and recorded as therein provided, it shall be absolutely void as against the creditors of the mortgagor and as against subsequent purchasers and mortgagees in good faith.

In the instant case the plaintiff recorded its chattel mortgage with the county clerk after proper and correct execution, and was ready to deliver to the Director of Motor Vehicles the statements required by the statute. However, it is unable to obtain the certificates of ownership which are presently in the possession of five different financial institutions which hold conditional sales or first mortgages on the 18 motor vehicles, and therefore cannot comply with the provisions of N.J.S.A. 39:10-11.

By letter dated August 18, 1952, the Supervisor of the Certificate of Ownership Bureau of the Division of Motor Vehicles wrote the plaintiff as follows:

"In the absence of the certificate of ownership, therefore, you would not be in position to comply with the law, and the chattel mortgage lien could not be recorded with the Director of Motor Vehicles; furthermore, we wish to advise that the certificate of ownership form itself is not designed for the recording of a second lien, and this office is not equipped to handle the recording of second liens."

Again, on September 11, 1952, the Supervisor wrote the plaintiff:

"We are returning to you herewith, eighteen (18) statements of encumbrance forms received at this office with your letter of September 9th.

We regret to advise that we are not in a position to follow the suggestion offered in your letter. Chapter 334, Laws of 1951, places the burden of compliance with the law upon the chattel mortgagee."

Plaintiff filed its complaint in lieu of prerogative writ and for declaratory judgment and demanded a declaratory judgment as follows:

1. That chapter 334, Laws of 1951 is unconstitutional and void as against plaintiff's mortgage.

2. That, in the alternative, chapter 334, Laws of 1951, is not applicable to a ...


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