.. .
NE NE
s
A-wevmm 11. TEXAS
July 20, 1951
Han. D. C. Greer
State Highway Engineer
Texas Rlghway Department
Austin, Texas Opinion Bo, V-1211
Re: Evidence of ownership required
to accompany an Initial applica-
tion for a certificate of title
for a new motor vehicle on the
effective date of House Bill 409,
Acts 52nd Leg., which amends
Article 1436-1, V.P.C., the Cer-
Dear Sir: tlflcate of Title Act.
You have requested the opinion of this office
with regard to what dvldence of ownership will be re-
quired to aoeompany $he initial application for a cer-
tiflc8te of title for a motor vehicle In Texaa on and
after the effective date of House Bill 409, Acta 52nd.
Leg., 1951, which amends certain sections of Article
1436-1, y.a.c., known as the,Certificate of Title Act.
You state that in the past Texas citizens and
dealers have purchased many new vehicles upon whiahit
was not necessary to furnish a manufacturer's certif-
icate in connection wfth the Issuance ,ofa certfflcate
of tftle. Many of such vehicles are still in the pos-
sesrion of dealers and no certificate of title has been
isrued thereon. You then ask whether suuh vehicles
which are on hand with dealers as of the effective date
of House Bill 409 may be regfstered and titled ueder
present requirements or ~1x1 they have to be titled un-
der the provisions of House Ball 409.
House Bill 409 ameads Sections 7, a, and 9
of Article 1436-1, V.P.C., as follows: ,~
"Section 1. The Certificate of Title
Aat af the State of Texas, being Acts,:,,S939,
Forty-sixth Legislature, Page 602, Is here-
by amended by deleting therefrom Sections
7, 8, and 9, and substituting In lieu there-
%T the following:
Hon. D. C. Greer, page 2 (V-1211)
"'Section 7* The term "First Sale" means
the bargain, sale, transfer, or delivery with
Intent to pass an interest therein, other than
a lien, of a motor vehicle which has not been
previously registered or licensed In this State
or elsewhere; and such a bargain, sale, transfer
or delivery, accompanied by registration or ll-
censlng of said vehicle In this State or else-
where, shall constitute the first sale of said
vehicle, Irrespective of where such bargain,
sale, transfer> or delivery occurred.
"'Section a. The term "Subsequent Sale"
means the bargain, sale, transfer, or delivery,
with Intent to pass an interest therein, other
than a lien, of a motor vehicle which has been
registered or licensed within this State or
elsewhere, save and except when such vehicle
Is not required under law to be registered or
licensed In this State; and any such bargain,
sale, txansfer, or delivery of a motor vehicle
after same has been registered or licensed shall
constitute a subsequent sale, Irrespective of
where such bargain, sale, transfer, or delivery
occurred.
"'Section q* The term "Hew Car" means a
motor vehicle which has never been the subject
of a first sale either within this State or
elsewhere.8
"Sec. 2. If any section, subsection, or
clause of this Act Fs for any reason held to
be unconstitutional, such decision shall not
thereby affect the validity of any of the re-
maining portions of this Act, and It Is hereby
declared that this Act would have been passed
notwithstanding the absence of such portion
hereof so declared unconstitutional.
"Sec. 3. All laws or parts of laws In
conflict herewith are hereby repealed to the
extent of such conflict.
"Sec. 4. The fact that hundreds of new
motor vehicles are now being brought Into the
State of Texas as used cars, thereby endanger-
ing the title of such vehicles under the Cer-
tificate of Title Act and thereby rendering
. z
Hon. D. C. Greer, page 3 (v-1211)
uncertain the legal status of such vehicles,
creates an emergency and an imperative public
necessity that the Constitutional Rule requlr-
ing bills to be read on three several days be
suspended, and said Rule is hereby suspended,
and that this Act shall be effective from and
after the date of its passage, and it is so
enacted,'!
Prior to the passage of House Bill 409, it was
held In State Bighway Department v0 Texas Automotive
Dealers Esoclation, 239 S*W"2d 662-(TeK, Clv. App. 1951,
errer appl,iedfox that as to motor vehicles purchased
or or,herwiseacquired outside of the State of Texas,
and imported into Texas for the purpose of resale in
Texas, the bargain, sale, transfer, or delivery of the
motor vehicle outside the State of Texas, prior to im-
portation, transposed the legal status of such motor
vehicle to that of a "used car," as then defined in
/ Article 1436-~1,V.P.C. Thereafter, upon resale being
accomplished in Texas, since such motor vehicles were
"used cars" regardless of the presence or absence of
registration of such motor vehicles in Texas or else-
where, the appropriate evidence of ownership to accom-
p3ny sn initial application for a certificate of title
for such motor vehicles was held to be a properly ac-
complished Importer's certificate and such additional
evidence of title aspthe Righway Department might re-
quire to show good title and the mortgage condition
pertaining ,tothe motor vehIc?e, That procedure was
expressly Iheldas precludl;g the necessity for present-
ing a manufacturer's certificate,
B;cuseBill 409 was signed by the Governor on
May 23, 19% and since it psssed the Texas Senate by
a viva vote vote,,it becomes effective ninety days after
th??&teij?; adjournment, which will be September 7,
1951" The biil is unquestionably pertinent to the con-
strugctionof Article 1436-l sdopted in State Highwa
Department-v. Texas Automotive Dealers Association,
supra.O Under-e definition of a "first sale," as
amended by House Bill 409, for a "first sale" to be
consumma,tedIt must be accompanied by the Initial reg-
istration or licensing of the motor vehicle, either
in Texas or elsewhere, This, of course, was not true
prior to the passage of House Bi3.1409,
,
Hon. D. C. Greer, page 4 (v-1211)
Therefore, after the effective date of House
Bill 409, an owner, as defined in Article 1436-1, may
not buy or otherwise acquire a motor vehicle at a
"first sale" as defined in the amended ,definitfonQrO-
vided in House Bill 409, without presentation of a
manufacturer's certificate as the evidence of owner-
Ship required under Section 28 to accompany the in-
itial application for a certificate of title. This
is true whether +&e motor vehicle was acquired in
Texas or elsewhere. Possession of the motor vehicle
by the seller prior to the effective date of House
Bill 409 will not alter or change the application of
House Bill 409, as the requirement of applying for a
certificate of title under Article 1436-l is occa-
sioned by the sale or disposition of the motor vehl-
), the registration of the motor vehicle
p1"z&$ or the operation of the motor vehicle
f
Your request reveals the particular adminis-
trative QrOblem which will.ar:se after House Bill 409
becomes effective. A great number of automobile deal-
ers have acquired QbeViOuSly unregistered and unoperated
motor vehicles outside the State of Texas, in States
under the laws of which manufacturer's certificates are
not required to be furnished by manufacturers to their
vendees. Those motor vehicles are resting on dealers'
lots in Texas where they are exposed for sale or will
soon be, and up until this ,timethey were titied by the
vendee who purchased the motor vehicle by presentfng
an importer's certificate and a bill of sale or an in-
voice D As to all of these motor vehicles, which are
not previously titled or registered prior to the effec-
tive date of House Bill 409, they must be sold or dis-
posed of prior to September 7, 1951, or beginning on
that date it will be necessary to furnish a manufact-
urer's certificate with the initial application for a
certificate of title,
We point out in this connection that although
dealers are not required to secure certificates of title
to motor vehicles whirthey have for sale bee Texas
--
Automotive Dealers Association v. Harris Count Tax
Assessormzor, 229 S.W.2d 787 (Tex, Sup. 53
1 m?
there is nothing ,n the law which would prevent the
dealers themselves from applying for titles prior to
September 7, 1951, on all unregistered or unlicensed
motor vehicles acqulsed outside of Texas and which are
now on hand and will be affected by the provisions of
. -
Hon. D. C. oreer, page 5 (V-1211)
House Bill 409, Under the decision in State Highway
Department,8. Texas Automotive Dealers Association,
m, dealers may title such vehicles-n the pre-
sentation of an importer's certificate and an invoice
or a bill of sale, prior to September 7, 1951.
The foregoing observations also apply to
mctor vehicles in the hands of individuals, but there
should be no substantlal administrative difficulty as
to individuals because Individuals normally import
registered vehicles, After the effective date of
House Bill 409, all motor vehicles which are regis-
tered, in Texas or elsewhere, are used motor vehicles
within the incidence of Section 29 of Article 1436-1,
V,P0C., and a manufacturer's certificate is not re-
quired to accompany a title application for a used
motor vehicle.
SUMMARY
House Bill 409, Acts 52nd Leg,, ROS.
1951, amending Sections 7 8, and 9 oftthe
Certificate of Title Law (Art. 1436-1,
V.P.C,) becomes effective ninety days
after adjournment of the Legislature, or
September 7( 1951. Its provisions with
respect to 'first sale," "subsequent
sale'land "new car'Ias those terms are
therein defined are applicable to, and
must be complied with after its effec-
tive date, in the iesusnce of a certif-
icate of title on a motor vehicle brought
Into Texas prior to the effective date of
the Act but upon which no certificate of
title had been Issued,
APPROVED: Yours very truly,
Bed McDaniel PRICE DANIEL
State Affairs Dlvisioa Attorney General
Everett Hutchinson
Executive Assistant
BY
Charles D. Mathews
First Assistant