Untitled Texas Attorney General Opinion

OFFICE OF THE AlTORNEY GENERAL OF TEXAS Honorable Homer mrriron, Jr. Dlraotor, Dapartment of PublSo Saiety Auatln, Texae . Dear Sir: or other aoou- or eridonoe that ruoh ih has bean 8atlrflsd. private sale in aa- oordanoe with the term of the mortgage, and that suah Oertifloate 0r Title may not nata the ssoond or inferior llene',;whioh exl8tad against said motor vehiole p&r to the time of repossession and forealoeure of the prior li0n. Honorable Homer Harrison, Jr., Page 8 WWe now ask the tollowlng question: *Shall the Department iesue a Certifioate of Title against a mo- tor vehlole upon affidavit of repoa- session and under the olroumstanoes outlined above, when there is ot re- cord a first lien against tires, radio or other aocsssorles, without requiring from the applicant either a notation on the application of auoh first lien against tires, radio or other aooassorlss, or rvfdsnae that such first lien haa been ratis- fied?” Thie Department ruled in opinion No. O-1984 as roilowe t “By way of 8ummary, it ia the opinion of this department that where a mortgagee repoa- se~sea a motor rehfalo and sells the same at a private sale, whloh prooedurd is in aooord- anoe with the terms of the mortgage, your Ds- partment Is authorized to issue a Certifloate of Title in the name of the purohaser at suah private forooloeure aale wbioh oertitioate may not note on the same the aeoond or inrerior liens which existed againat said motor vehl- 018 prior to the time of repossession and iore- oloeure of the prior llen.w In euoh opinion this Department reoognized that the rule of law stated therein applied only to a forsolo- sure of the rirst or prior lien and.the efieot of suoh foreolosure on a second or mubsequent lien. It 1s a rule or law too well settled to nead the oltation of authority that where a eeoond or inferior lien is roreoloasd, euoh foreclosure does not prejudice the right or extinguish the lien of the first or prior nortga$e holder. Your question therefore resolves itself down to thls: Ii the lien whloh the vendor of the tires, radio and other ao- oeseories takes against euoh artioles is a first lien against euoh artioles even though they are put on to a mo- tor vehlole which bears a prior and first lien against Honorable Homer Oarrison, Jr., Page $ such motor vehicle, then the foreolosure of such lien on the motor rehiale by the mortgage holder on the came would not extinguish the first lien whioh the vendor of the tires, radio or other aooessorles had against suoh aoaesaorlee. However, on the other hand, if when suoh tire, radio or other aooessory is attaohed to the mo- tor vehiole, the party holdtng a first and prior lien against such motor vehicle gets a first lien against auoh tire, radio or other aocessory whioh Is superior to the lien held by the vendor of suoh aoaessory; then in such 0886, the rorsolosure of the lien on the entire motor ve- hicle would be a foreclosure of the tire, radio or aooes- sery also, and the rule of law announced in our opinion No.O-1984 would apply SO that pour Department could not note on the Certliioate of Title of the new applicant who purchased the motor vehicle at the foreolorure sale, the lien which the vendor of the tire, radio or other aooss- sorg held against suoh artiale. ~180 if the lien of the vendor of suoh tire, radio or other aooessory is a superior lien against suoh article over the holder of the original first mortgage on the motor vehiale, then your question would have to be answered in the affirmative and the ap- plioatfon of the party who purohased the niotor vehicle at the foreclosure sale with suoh tire, radio or other aooes- sory lnoluded thereon would have to note suoh lien of the vendor of euah aocessory on suoh applioatlon or show other etvidonosthat suoh first lien against suoh aooessory has been satisfied or extinguished. We are able to find but one ease on this point in Texas. That Is the oasb of Firestone Service Stores, Ino., vs. Darden, 98 S. W. (a) 916, San Antonio Court 0r Civil Appeale, deolded May 0, l.938. The iaots in that oass were stated by the Court as followsr '1116. w. Wrden, or Bexar Oounty, Texas, on the 7th day or July, 1934 purohasec rr00 the Motor Sales Coapny, a partnership oom- posed or Lester 0. Fox and Milton welnrield, one 19Bd Paokard Sedan, 1934, License No. 93,307, 00t0r NO. 67300-A for the sum or (b.lOS.00, paying therefor b3S.00 in oash and leaving a balanoe of #lO.OO for whloh the said Darden exeouted to the Motor Sales Oom- pany a ohattel mortgage on the automobile, complete with standard attaobmenta, aooesso- ries and equipment, The chattel mortgage was Honorable Homer Garrison, Jr., page 4 duly filed of reoord with the County Clerk of Bexar County, Texafl,on the 0th day of July, 1934, a oopy of whioh mortgage ia here- to attached and marked Exhibit *A”. mlThereafter, on or about the 15th of AU- gust, 1934, K. 91.Darden drove to the Flre- stone Service Storee, Inc., In San Antonio, Bexar County, Texas, and purohased three au- tomobile tlree and tubes, size 600x23, being Firestone Heavy Duty Tires and tubes, bearing serial No. L-9630054U, L-964526U, and L- 97004itJ. That at the time of the purohase of the tires and tubes and prior to the delivery or the aame to M. w. Darden, a ohattel mort- gage lien was execut6d from k. W. Darden to the Blrestone Servloe Stores, Ino., to seoure a balance of $66.00 of the purohase prloe of said tires and tubes, a copy of said mortgage 1s hereto attached, marked Exhibit eB*. That the ohattel mortgage was flied of reoord with the Oounty clerk of Dexar County, Texas, on the 27th day of August, 1934; that the tires and tubes when purchased by E. K. Dardan wers placed on the Packard Sedan above desorlbed by the employees of the Firestone Servloe Stores Inc., at the lnstanos and under the dlreotion of 1yi.w. Darden while the said Paok- ard Sedan was stl3.1on the premlsea of and at the plaoe ot buslnese of the Firestone Servlos Stores, Inc. ; that the old tire8 and tubes were taken off said Packard Sedan Automobile by Firestone Servloe Stores, Ino.*a employees and were delivered by them to X. W. Darden. . . ln In deoidlng the issue as to who had the superior lien to those tlrea and tubes in question, the Court held as r0n0w8: “It will be noted that appelleeta chattel mortgage only oovered the automobile and the standard attaahments, aooessorles, and equlp- ment dellvered to M. a. Darden, and does not have any provision that such ohattel mortgage shall include other accessories and equipment thereafter placed upon this automobile. There- fore the only theory on which appeliees 0Oui.d Honorable Homer Garrison, Jr., Page % oontend that their mortgage extended to anfin- oluded the tires purchased rrom appellant by Darden would be that the tires when plaaed up- on the autokobile became a part thereof as an aoaration or aconssion thereto. These tIrea being easily Identif'iedby serial numF.ers,and being so attaohed that they are easily removed, without Injury to the automobile, do not be- oome a part of the automobile by the rule or accretion or aocession . . .* The rule of law announoed by the San Antonio Court of Civil Appeals In the Firestone oase that tires, tubes, eto., do not become part of the motor vehiole by aooeesion, is a rule of law recognized throughout the United States. See also the oasesof Rotor Credit Company VS. Smith, 24 S.W. (Sd) 974, (Sup. Ct. Ark.); Rosquet vs. kiaokMotor Truok Company, 168 N.E. 800, (sup. Jud. Ct. Ease.); Clarke v. Johnson, 187 P. 510, (Sup, Ct. Rev.)~ Meisel Tire f@ipang v. Edwards Finance Corp., 14 EJ.E.(IZ) 870; Franklin Service Station, Inc., vs. Sterling Motor Truok Company of W.E., 147 Atl. 754, (Sup. Ct. R.I.). You are therefore advised that in a aase where a motor vehicle I.ssold Andya chattel mortgage taken on tha same whioh does not aontaln any provision that tha ohattel mortgage shall include other acoessorles and aquipment thereafter plaoed upon the automobile, and where later a tire, tube, radio, or other aoaessory is sold and the vendor of suoh article retains a lien upon the sama, that under the authority of the Firestone Servioa Stores oasa, supra, the lien of the vendor of the aaoessory is superior against suoh article to the 1%~ placed on the motor vehiole upon its original sale. we oall to your attention, however, the faot that the San Antonio Court of Civil Appeals did not pass on this question if the original mortga: