{ "id": 8562753, "name": "NINA H. FERGUSON v. JACK MORGAN, d/b/a J. E. MORGAN TRUCKING", "name_abbreviation": "Ferguson v. Morgan", "decision_date": "1972-10-11", "docket_number": "No. 17", "first_page": "83", "last_page": "91", "citations": [ { "type": "official", "cite": "282 N.C. 83" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "188 S.E. 2d 672", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": -1 }, { "cite": "14 N.C. App. 520", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550738 ], "opinion_index": -1, "case_paths": [ "/nc-app/14/0520-01" ] }, { "cite": "125 S.E. 2d 369", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1962, "pin_cites": [ { "page": "372" }, { "page": "372" } ], "opinion_index": 0 }, { "cite": "257 N.C. 87", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565641 ], "year": 1962, "pin_cites": [ { "page": "91" } ], "opinion_index": 0, "case_paths": [ "/nc/257/0087-01" ] }, { "cite": "55 S.E. 2d 201", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1962, "opinion_index": 0 }, { "cite": "230 N.C. 580", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8631195 ], "year": 1962, "opinion_index": 0, "case_paths": [ "/nc/230/0580-01" ] } ], "analysis": { "cardinality": 696, "char_count": 20156, "ocr_confidence": 0.549, "pagerank": { "raw": 2.764231421506162e-07, "percentile": 0.8338269914578031 }, "sha256": "1c314066cb24590e97862b369dc2ae6882ff86449f6ee07d68c2fbc820f0fbd7", "simhash": "1:f95d147f9b2fed68", "word_count": 3379 }, "last_updated": "2023-07-14T21:08:27.476898+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "NINA H. FERGUSON v. JACK MORGAN, d/b/a J. E. MORGAN TRUCKING" ], "opinions": [ { "text": "BOBBITT, Chief Justice.\nPlaintiff excepted to each of the court\u2019s conclusions of law, to the court\u2019s failure to adopt the conclusions of law tendered by plaintiff, and to the judgment.\nThe judgment of Judge Thornburg and the decision of the Court of Appeals are based on the legal conclusion that plaintiff failed to perfect her security interest as required by G.S. 20-58 et seq. For the reasons stated below, we take the opposite view.\nThe security agreement dated 21 March 1968, executed by Rock Products, Inc., to The Northwestern Bank as security for a $6,000 debt, was and is a first lien on the subject truck and was so noted on the title certificate.\nDefendant bases his alleged ownership of the subject truck on his purchase thereof on 25 May 1970 from the Sheriff of Buncombe County, at a sale pursuant to an execution issued 26 February 1970 for enforcement of a judgment obtained by The Northwestern Bank in an action entitled, \u201cThe Northwestern Bank v. Rock Products, Inc. and United Bonding Co.\u201d As stipulated in this Court, the first lien of The Northwestern Bank created by the security agreement of 21 March 1968 was not involved in that action. The judgment obtained therein was based on an independent and unrelated claim. A judgment creditor \u201cacquires no lien on the personalty until there has been a valid levy. G.S. 1-313(1); Finance Corp. v. Hodges, 230 N.C. 580, 55 S.E. 2d 201.\u201d Credit Co. v. Norwood, 257 N.C. 87, 91, 125 S.E. 2d 369, 372 (1962). Hence, there was no lien on the subject truck on account of that judgment and execution until the seizure and levy by the sheriff on 15 April 1970.\nThe subject truck was purchased by Rock Products, Inc., in 1963. Upon its registration with the Department of Motor Vehicles, the certificate of title was issued to Rock Products, Inc., in accordance with G.S. 20-50 and G.S. 20-52.\nDefendant\u2019s contention that plaintiff\u2019s deed of trust was not recorded in the proper county is beside the point.\nWith reference to vehicles subject to registration with the Department of Motor Vehicles, the provisions of G.S. 20-58 through G.S. 20-58.10 govern the perfecting and giving notice of security interests obtained on and after 1 January 1962. Chapter 835, Section 6, Session Laws of 1961 (G.S. 20-58.10). Section 12 of the 1961 Act added the following new subdivision to G.S. 47-20.2 (b): \u201c(5) If the personal property concerned is a vehicle required to be registered under the motor vehicle laws of the State of North Carolina, then the provisions of this Section shall not apply but the security interest arising from the deed of trust, mortgage, conditional sales contract, or lease intended as security of such vehicle may be perfected by recordation in accordance with the provisions of G.S. 20-58 through G.S. 20-58.10.\u201d \u201cIt is no longer necessary to record the mortgage or other lien in the county where the debtor resides.\u201d Credit Co. v. Norwood, supra at 91, 125 S.E. 2d at 372. Plaintiff\u2019s security agreement having been entered into in 1966, neither the recording in Jackson County nor the failure to record in Buncombe County has legal significance.\nG.S. 25-9-302(3) provides: \u201cThe filing provisions of this article do not apply to a security interest in property subject to a statute ... (b) of this State which provides for central filing of, or which requires indication on a certificate of title of, such security interests in such property.\u201d Provisions of the Uniform Commercial Code with reference to the place for filing financing statements have no application to the present factual situation.\nAn application signed by Rock Products, Inc., accompanied by the required fee, was mailed by plaintiff to the Department of Motor Vehicles on 30 March 1970 and received on 31 March 1970. The certificate of title of Rock Products, Inc., was then in the possession of The Northwestern Bank with notation thereon of the bank\u2019s first lien. No notation of plaintiff\u2019s security interest was entered thereon prior to the sheriff\u2019s seizure of the subject truck and levy thereon on 15 April 1970. The crucial question is whether plaintiff\u2019s security interest was perfected prior to 15 April 1970.\nDecision depends upon the provisions of the General Statutes quoted below:\n\u201c\u00a7 20-58. Perfection by indication of security interest on certificate of title. \u2014 Except as provided in G.S. 20-58.8, a security interest in a vehicle of a type for which a certificate of title is required shall be perfected only as hereinafter provided.\n\u201c (2) If the vehicle is registered in this State, the application for notation of a security interest shall be in the form prescribed by the Department, signed by the debtor, and containing the amount, date and nature of the security agreement, and the name and address of the secured party from whom information concerning the security interest may be obtained. The application must be accompanied by the existing certificate of title unless it is in the possession of a prior secured party. If there is an existing certificate of title issued by this or any other jurisdiction in the possession of a prior secured party, the application for notation of the security interest shall in addition, contain the name and address of such prior secured party.\u201d (Our italics.)\n\u201c\u00a7 20-58.1. Duty of the Department upon receipt of application for notation of security interest.\u2014 (a) Upon receipt of an application for notation of security interest, the required fee and accompanying documents required by G.S. 20-58, the Department, if it finds the application and accompanying documents in order, shall either endorse upon the certificate of title or issue a new certificate of title containing, the name and address of each secured party, the amount of each security interest, and the date of perfection of each security interest as determined by the Department. The Department shall deliver or mail the certificate to the first secured party named in it and shall also notify the new secured party that his security interest has been noted upon the certificate of title.\n\u201c(b) If the certificate of title is in the possession of some prior secured party, the Department, when satisfied that the application is in order, shall procure the certificate of title from the secured party in whose possession it is being held, for the sole purpose of noting the new security interest. Upon request of the Department, a secured party in possession of a certificate of title shall forthwith deliver or mail the certificate of title to the Department. Such delivery of the certificate does not affect the rights of any secured party under his security agreement.\u201d (Our italics.)\n\u201c\u00a7 20-58.2. Date of perfection. \u2014 If the application for notation of security interest with the required fee is delivered to the Department within ten days after the date of the security agreement, the security interest is perfected as of that date. Otherwise, the security interest is perfected as of the date of delivery of the application to the Department.\u201d (Our italics.)\nThe provisions of the General Statutes quoted above are based on and brought forward from Chapter 838, Session Laws of 1969. Section 1 of this 1969 Act contains the following: \u201cChapter 20 of the General Statutes is hereby amended to conform to the Uniform Commercial Code by rewriting G.S. 20-58 through G.S. 20-58.8 to read\u201d as set forth therein. The following provision of the Uniform Commercial Code is noted: \u201c\u00a7 25-9-403. ... (1) Presentation for filing of a financing statement and tender of the filing fee or acceptance of the statement by the filing officer constitutes filing under this article.\u201d The Official Comment and the North Carolina Comment are to the effect that, contrary to the rule under prior law, subsection (1) of G.S. 25-9-403 provides that the security instrument serves as constructive notice from the time of filing, i.e., the presentation thereof and the payment of the fee, notwithstanding any failure on the part of the registrar to perform his or its statutory duty. Similarly, G.S. 20-58.2 provides expressly that the security interest evidenced by a security agreement is perfected as of the date of the delivery of the application to the Department and the payment of the required fee.\nAttached to the affidavit of James H. Stamey, the Director of the Registration Division of the Department of Motor Vehicles, is a certified copy of the application executed in behalf of Rock Products, Inc., by Thomas H. Ferguson. It is on the required form and gives in detail the required information concerning plaintiff\u2019s security agreement and all other information required by G.S. 20-58(2).\nBoth Rock Products, Inc., and plaintiff as of 31 March 1970 had done all they were required to do and could do to perfect plaintiff\u2019s lien. Under G.S. 20-58.2, which relates solely and specifically to the date of perfection of the lien, plaintiff\u2019s security interest was \u201cperfected as of the date of delivery of the application to the Department,\u201d that is, 31 March 1970.\nThe record is silent as to whether the Department of Motor Vehicles requested or obtained from The Northwestern Bank the certificate of title of Rock Products, Inc., for the purpose of noting thereon the facts concerning plaintiff\u2019s lien. G.S. 20-56 requires the Department to maintain indexes and records with reference to each registered vehicle. Presumably, the Department of Motor Vehicles could have and would have provided the exact facts concerning liens on the subject truck in response to inquiry for this information.\nThe present factual situation discloses no element of estop-pel. At the execution sale on 25 May 1970 defendant was given actual notice that plaintiff claimed a security interest which constituted a lien on the subject truck prior to that based on the sheriff\u2019s levy. Nothing indicates that defendant had seen the title certificate or had knowledge of its contents prior to his purchase of the subject truck at the execution sale. Too, the amount of defendant\u2019s successful bid at the execution sale is not disclosed.\nIn his brief, defendant makes contentions which are not supported by the facts set forth in Judge Thornburg\u2019s judgment. Two illustrations are noted. Although paragraph 2 of the un-controverted facts states that plaintiff\u2019s deed of trust created a lien on the subject truck, defendant asserts plaintiff\u2019s deed of trust is invalid on account of insufficiency in the description. Although paragraph 13 of the uncontroverted facts states that Rock Products, Inc., had \u201cdefaulted\u201d in the payment thereof, plaintiff\u2019s brief asserts that there was no evidence that the debt secured by plaintiff\u2019s deed of trust was in default.\nIn view of the provision in the judgment that the parties had stipulated that there was no genuine issue as to any material fact, we must accept as stipulated facts the facts set forth and referred to in the judgment as facts which \u201care not controverted.\u201d\nSince plaintiff\u2019s security interest was perfected on 31 March 1970, it had priority over the lien acquired 15 April 1970 by the sheriff\u2019s seizure and levy. Hence, as purchaser pursuant to foreclosure of the prior lien, plaintiff\u2019s title to the subject truck is superior to any rights acquired by defendant by reason of its purchase at the execution sale on 25 May 1970. Therefore, plaintiff is the owner and entitled to the possession of the subject truck encumbered by the first lien of The Northwestern Bank.\nAccordingly, the decision of the Court of Appeals is reversed; the judgment entered by Judge Thornburg is vacated; and the cause is remanded to the Court of Appeals with direction that it remand the cause to the Superior Court of Buncombe County for the entry of summary judgment for plaintiff.\nReversed and remanded.", "type": "majority", "author": "BOBBITT, Chief Justice." } ], "attorneys": [ "Hendon & Carson, by George Ward Hendon, for plaintiff appellant.", "Wade Hall for defendant appellee." ], "corrections": "", "head_matter": "NINA H. FERGUSON v. JACK MORGAN, d/b/a J. E. MORGAN TRUCKING\nNo. 17\n(Filed 11 October 1972)\n1. Execution \u00a7 5\u2014 judgment creditor \u2014 lien on personalty \u2014 valid levy\nA judgment creditor acquires no lien on personalty until there has been a valid levy. G.S. 1-313(1).\n2. Chattel Mortgages \u00a7 10; Registration \u00a7 2\u2014 lien on motor vehicle \u2014 where recorded\nIt is no longer necessary to record the mortgage or lien on a motor vehicle in the county where the debtor resides.\n3. Chattel Mortgages \u00a7 10; Registration \u00a7 2\u2014 security interest in motor vehicle \u2014 delivery of application for notation \u2014 absence of notation on title certificate\nPlaintiff\u2019s security interest in a truck was perfected as of the date of delivery to the Department of Motor Vehicles of an application for notation of the lien signed by the registered owner and accompanied by the required fee, 30 March 1970, notwithstanding the security interest was never actually recorded on the truck\u2019s certificate of title; consequently, plaintiff\u2019s lien had priority over a judgment creditor\u2019s lien acquired 15 April 1970 by the sheriff\u2019s levy on the truck, and as purchaser pursuant to foreclosure of her lien on 30 June 1970, plaintiff\u2019s title to the truck is superior to any rights acquired by defendant by reason of its purchase at the execution sale held on 25 May 1970.\nAppeal by plaintiff under G.S. 7A-80(2) from decision of the Court of Appeals which affirmed the judgment entered by Thornburg, J., at the 4 January 1972 Session of Buncombe Superior Court.\nThe plaintiff instituted this action on 10 November 1970. She alleged she was the owner of a 1963 Mack Dump Truck with Serial No. B61SX44385 and was entitled to recover possession thereof from defendant. Answering, defendant denied plaintiff\u2019s essential allegations, asserted his ownership and right to possession of the subject truck and prayed for summary judgment in his favor.\nPlaintiff filed affidavits of Bob Monteath, Thomas H. Ferguson, Nina H. Ferguson and James H. Stamey, together with a motion for summary judgment in her favor. Defendant filed no affidavit in response to those offered by plaintiff but renewed his prayer that summary judgment be entered in his favor.\nThe judgment entered by Judge Thornburg recites that \u201cthe Plaintiff and the Defendant ha[d] stipulated, by and through their respective counsel in open court, that there is no genuine issue as to any material fact in this action\u201d; that \u201cthe Court ha[d] considered the affidavits ... of Nina H. Ferguson, Thomas H. Ferguson, James H. Stamey and Bob Mon-teath\u201d; and that this was a proper action for summary judgment pursuant to Rule 56 of the Rules of Civil Procedure.\nThereafter, the judgment sets forth that \u201cit appear [ed] to the Court\u201d that the facts quoted below were not controverted.\n\u201c1. That in December 1963, Rock Products, Inc. purchased a 1963 Mack Dump Truck, Serial Number B61SX44385 from Eason Truck Sales, Inc., of Asheville, North Carolina for the approximate purchase price of $22,000.\n\u201c2. That by Deed of Trust dated April 30, 1966, Rock Products, Inc. created a lien on said vehicle in favor of the Plaintiff to secure a promissory note for a cash loan actually made by the Plaintiff to Rock Products, Inc. in the amount of $82,178.67. That said Deed of Trust was recorded in the Office of the Register of Deeds of Jackson County, North Carolina, on July 15, 1966 but was never recorded in Buncombe County, North Carolina. That said Deed of Trust included all trucks and other vehicles owned by or in which Rock Products, Inc. had an interest.\n\u201c3. That by Security Agreement dated March 21, 1968, Rock Products, Inc. created a lien on said vehicle in favor of The Northwestern Bank in the amount of $6,000.00; which lien was noted as a first lien on the Certificate of Title to said vehicle.\n\u201c4. That on March 30, 1970, the Plaintiff mailed to the North Carolina Department of Motor Vehicles an application for recording the lien of the Deed of Trust dated April 30, 1986 on Form MVR-6, which form indicated the make, style, title number, year model and serial number of said vehicle and, in addition to the lien of said Deed of Trust, indicated a first lien in the amount of $6,000.00 dated March 21, 1968 to The Northwestern Bank. Said form was executed by the registered owner of said vehicle and the application was accompanied by the required fee in the amount of $1.00.\n\u201c5. That there was received by the North Carolina Department of Motor Vehicles on March 31, 1970 the Form MVR-6 Application for Recording of a Lien which had theretofore been filled out and mailed by the Plaintiff on March 30, 1970.\n\u201c6. That on March 31, 1970 the Certificate of Title to said vehicle was in the possession of The Northwestern Bank, which was a prior lienholder, under the custody and control of its employee, Robert Vannoy.\n\u201c7. That Rock Products, Inc. had used said vehicle in the hauling of crushed stone and other materials from December, 1963 until Saturday, April 11, 1970, at which time said vehicle was taken to R. T. Clapp Co., Inc., in Asheville, North Carolina for repairs to its electrical system.\n\u201c8. That, pursuant to execution issued on February 26, 1970 in the case entitled \u2018The Northwestern Bank v. Rock Products, Inc. and United Bonding Co.\u2019, on Tuesday, April 14, 1970, the Sheriff of Buncombe County, North Carolina, by his deputy, George W. Sutton, employed Monteath\u2019s Gulf Service to send its wrecker to R. T. Clapp Co., Inc., to seize said vehicle and on Wednesday, April 15, 1970, the wrecker of Monteath\u2019s Gulf Service was dispatched to R. T. Clapp Co., Inc., on Coxe Avenue, Asheville, North Carolina, and on said date said vehicle was brought to the storage yard of \u25a0 Monteath\u2019s Gulf Service and retained there until May 25, 1970.\n\u201c9. That on May 25, 1970 the Sheriff of Buncombe County sold said vehicle to the Defendant pursuant to the execution issued on February 26, 1970.\n\u201c10. That said execution sale was held at Monteath\u2019s Gulf Service on Ashland Avenue in Asheville, North Carolina and that Thomas H. Ferguson was present at said sale and notified each and every person in attendance at said sale, including the Defendant, of the lien and security interest of the Plaintiff in said vehicle prior to the sale of said vehicle to the Defendant.\n\u201c11. That at the time of the levy and at the time of the sale of said motor vehicle to the Defendant, there was no lien to Nina H. Ferguson recorded on the Certificate of Title for said vehicle for the amounts set forth in said Deed of Trust, nor has there been to this date.\n\u201c12. That after said sale on May 25, 1970 the North Carolina Department of Motor Vehicles issued a Certificate of Title for said vehicle to the Defendant and such Certificate is presently issued in his name. That Plaintiff\u2019s security interest has not been recorded on the Certificate of Title for said vehicle to this date.\n\u201c13. That Rock Products, Inc. defaulted in the payment of said promissory note and, Marcellus Buchanan, the Trustee in said Deed of Trust having renounced said trust, the Plaintiff appointed Jerry L. Hensley as Substitute Trustee on June 30, 1970.\n\u201c14. That on June 30, 1970 said Substitute Trustee gave notice of sale at public auction of said vehicle and on August 7, 1970 conducted a public sale at which sale the Plaintiff purchased said vehicle for $3,200.00 and subject to the lien of The Northwestern Bank created by the Security Agreement dated March 21, 1968.\n\u201c15. That the Plaintiff is not presently nor at any time has she ever been any of the following: the owner, whether directly or indirectly, of any of the capital stock in Rock Products, Inc., a corporate officer of said corporation, an employee of said corporation or a director of said corporation. That the Plaintiff is the wife of Thomas H. Ferguson who was during the times complained of Secretary of Rock Products, Inc.\u201d\n\u201cBased upon the foregoing uncontroverted facts,\u201d the court set forth \u201cConclusions of Law\u201d and adjudged that defendant was the owner and entitled to the possession of the subject truck.\nThe Court of Appeals affirmed Judge Thornburg\u2019s judgment. 14 N.C. App. 520, 188 S.E. 2d 672. One member of the hearing panel having dissented, plaintiff appeals to this Court as a matter of right under G.S. 7A-30(2).\nHendon & Carson, by George Ward Hendon, for plaintiff appellant.\nWade Hall for defendant appellee." }, "file_name": "0083-01", "first_page_order": 103, "last_page_order": 111 }