On appeal from Superior Court, Law Division.
For reversal -- Chief Justice Vanderbilt, and Justices Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For affirmance -- Justice Heher. The opinion of the court was delivered by Burling, J.
This is a civil action in which the plaintiff, the National City Bank of New York, a corporation (hereinafter called the plaintiff), sought to recover possession of an automobile or in the alternative to recover judgment for its value, from Dante Del Sordo and Ben Siciliano, individually and trading as Miami Motors, of Newark, New Jersey (hereinafter called the defendants), under a chattel mortgage made by a Robert William Conway, of Newark, New Jersey (hereinafter called Conway). The action was instituted in the Law Division of the Superior Court. Summary judgment was entered therein in favor of the plaintiff and the defendants appealed to the Superior Court, Appellate Division. Prior to hearing there the appeal was certified to this court on our own motion.
Conway, on September 26, 1952, made a chattel mortgage on a used 1950 automobile to the plaintiff as security for the payment of a loan of $2,250, with interest, which was to be paid to the plaintiff in equal monthly installments of
$68.15. The plaintiff caused this chattel mortgage to be recorded in the office of the Register of Deeds of Essex County, New Jersey, on September 27, 1952, but made no attempt to comply with the requirements of R.S. 39:10-11, as am. by L. 1939, c. 270, sec. 2; L. 1946, c. 136, sec. 7, and L. 1951, c. 334, sec. 1. The statutory provision adverted to, namely R.S. 39:10-11, as amended, supra, reads as follows:
"The purchaser of a motor vehicle in this State shall, within ten days after its purchase, submit to the director evidence of purchase. Upon presentation of the certificate of origin, or certificate of ownership, or bill of sale issued prior to the effective date of this amendment, with proper assignment and certification of the seller, to the director, record of the transaction shall be made and filed. Certificate of ownership will be issued by the director and delivered to the purchaser in the case of an absolute sale, and the director shall collect a fee of one dollar and fifty cents ($1.50) for the issuance and filing thereof.
In the case of a sale other than absolute, copy of the certificate of ownership recording the encumbrance shall be delivered to the purchaser, and the director shall collect a fee of two dollars ($2.00) for the issuance and filing thereof.
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.
In addition to the issuing and filing fee, there shall be paid to the director a fee of twenty five cents ($0.25) for notice of satisfaction of the lien or encumbrance on the record or abstract of contract, where the motor vehicle is subject to a lien or encumbrance as provided in section 39:10-14.
Provided, however, when any dealer licensed under the provisions of this act is the purchaser of a motor vehicle in this State, he shall, within ten days after its purchase, submit to the director the evidence of purchase. Upon presentation of the certificate of ownership with proper assignment and certification of the seller to the director, a record of the transaction shall be made and filed. Certificate of ownership will be issued by the director and delivered to such purchaser and the director shall collect a fee of fifty cents ($0.50) for the issuing and filing thereof.
Any purchaser of a motor vehicle who fails to comply with the provisions of this section shall pay to the director a penalty of five dollars ($5.00) plus the issuing and filing fee."
Note: The recent further amendment, L. 1954, c. 207, sec. 1, is not directly involved in this case.
The plaintiff's noncompliance with R.S. 39:10-11, as amended, supra, was its failure to present the chattel mortgage with the certificate of ownership to the Director of Motor Vehicles of New Jersey for recording, filing and issuance of a new certificate of ownership recording the encumbrance thereon.
Conway, having retained the certificate of ownership, on May 19 or 20, 1953 sold the automobile in question to the defendants and assigned to them the certificate of ownership therefor (which, as above indicated, by virtue of the plaintiff's failure to comply with R.S. 39:10-11, as amended, supra, contained no notice of the plaintiff's chattel mortgage).
The chattel mortgage being in default, the plaintiff on June 25, 1953 made a demand in writing on the defendants for possession of the automobile. Upon the defendants' refusal to comply with the demand, the plaintiff instituted this action by complaint. The defendants filed an answer asserting that as to them the chattel mortgage was void for failure to have a proper affidavit of consideration annexed thereto and for failure of the plaintiff to record the chattel mortgage with the Director of Motor Vehicles as required by R.S. 39:10-11, as amended, supra, and R.S. 46:28-5. (R.S. 46:28-5, supra, insofar as pertinent hereto declares a chattel mortgage to be void as to subsequent purchasers in good faith in the event of noncompliance with the pertinent statute.) The Superior Court, Law Division, conceiving R.S. 39:10-11, as amended, supra, to be unconstitutional, rendered summary judgment for the plaintiff. This appeal is from that summary judgment.
The questions involved on this appeal include: (a) whether the affidavit of consideration made by an assistant cashier of the plaintiff corporation was valid; (b) whether there was an invalidating discrepancy between the amount to be paid
as stated in the chattel mortgage and the amount stated to be due in the affidavit of consideration; (c) whether R.S. 39:10-11, as amended, supra, is constitutional; and (d) whether the plaintiff's rights were preserved to it in despite of R.S. 39:10-11, as amended, supra, by virtue of the decision of the Superior Court, Law Division, rendered in another matter between different parties on November 21, 1952, that this statutory ...