Untitled Texas Attorney General Opinion

OFFICE OF THE ATTORNEY GENERAL OF TEiAS
AUSTIN

ifonorble icalh 1. l3ud.l
Chiet of Cert‘p
flaate OS Title Dlvlubn
Dqsartmt of Publia Gaf’ety
.T’. ,
cwip %abry ‘\
NlMAll, TWA8
h6r six:

rtwnt krur CIrElfla*te
on by the t&et li&n
eationIB aoo~aaled by
rtt wrtLfyln& that tw
IIha* bwa regomesae4 ao-
o? the eoatraot betwea
e ~mrtt(DItjpr even thorrs,h
than be a awend lbm agaiu&8 & vshitis.
*((L) Gkould the Deparoleentrcrwlre a re-
Aewe algned by the reeoa& l&errBsldw, er ir
th6 tmidavic of r6powei0omi oertitxra to by
tb first 116s holder SutiicrZIJIcavldonw to
jurtify the 18*utanoeof t&6 Pitls.
 857

“(b) ibat lnlorrnation ahould thlsis
De-
&ksrt&?ultre;ruirr under 8UOh a sltution
before we imy fsrruea Certtfioate~o~ Title
to the holder of the oar under reportmxslon.w
In your firet queutlon you rap0ooaoerned with
the type of infor~tlon whioh should be reqzlred by your
Dopartnmnt rmrn a applleant who hae puroheamd a motor ve-
hlole at t3judicial foreclosure sale barore you issw a
aertlrieate in the nase or said puraheser. Tour attmtlon
fa oellad to hotion 33 of the CertLt1oet.tof Tlt;lo&et
whiah has been lnoorporated Into Vornon*s Xwototed Penal
Code a8 irtlole 14364..
"sec. a&i. #'heneverthe ovmsrahip ot
a mtor vohlale rogllrtersdor lloeased with-
ln this State ie transferred by operation
of law, as upon inhsrftaace, dalee or be-
quest, hankruptep, rsoslv8rahlp jtadlciail
sale, or allyothw lavoluntary &mlzu
0r ouwrahlp, the Departaeat shku tiarrua a
new oertlriovlte of title upon being provided
rrlthcertltied wpy or the probate pr0043ea-
inge, if say (U a0 adminlrtratlolaia neu-
wafmry, than upan arribilrlt shssiag au&
fuot and all of the heirs rt lau and rpeol-
flo&lon by the heir8 as to la whoas nam
the oertltlaate shall iabuaf, or order, or
bill of aale fraiz the ofiloer rmakln&the
judlcli~lsale, exoept hmeiver, that where
foraalomre lo had uader tbr term of a
Slen, the attidavlt ot the gemon, flna,
aszsoaletlon,or oorparatics or authorl%ed
aGent, of the fact of reyosaeeslon enb
dlvestlturo of tltle in awordume withthe
terrs of the lien, shall be auitlaiegtto
authorizethe lseuanue OS a new cerki.U.eate
or title in the ntuneof the puraherer at
suoh eale, cindsxoept further that in the
oaas 0r the foreclosure of any Canetltutlonal
or Statutory lima, tha aifldavit OS the
holder or YUO~ Uen, or it a crorporation,
its *tint, oifthe act 0t tbc tmatLoa 0r
ouch lien :m& ths dlveotltura at title by
matson these& 5.neccordanaa with law, .~hsll
be etU'ficlsntto authorize thn lasurrnceof a
new osrtlfioats of title U the ~~JISUef the
purohaaer."
 In the above QUOted ertfoin ths Luglnlatum hu
ryeai?loallg provfded thet your Department q iesae e
CartlflicateOS Title In the 0-e OS the purohfieerat Y
judicial forealoare sale uipon~esentutlon or the bU+l
of sale from the of?laormklngtht4 judlclfil8ale.
In this amneotlcua you am alno advired thet the
purchiielrr at th
Soreclomure sala, it suoh foreolcrure wan
o? the ilrst and prior lien a&abut aaid Inrtorvehlole,
taken title to the ame free of all aubaoqurnt liem whloh
previouely existed prior to said sale egafxut said motor
vehlole. That a foreeloaure sale bee euoh stfwt la the
well e8tabllehe4 rule o? law of the eourta of this State.
The Ccm-i.~loa of kppea1.sin the ease o? Sabine Uotor Com-
p&uy v. $. c. zugilrh rut0 wrb#euy; 291 3.g. 1086, etated
as P0llowa:
0* I I St goes without stqlng thrt a
woper aotion in oourt cuts 0rr*tp,,~ftit3or
the sxmtgagar or hla ass&w.

In answer to your flxist question, therefore, you
are eclrfeedthat when the bill Cat rala of the offinir r&U-
in& the motor vehiole rt the foreolomre 061s irr?unsLshed
your Department as regulnd b$ Beetian 35 of the Certiiloate
of Title irctyou are alrtborisedto ieaue a Certi?laata o?
Title ln the narPro? the purehanr at the ?oreo&mtg& sale
without noting thereon any of'the Uene wbiahwcrs eeoord
to the lie,nwhlah me ?oreolo6ed iat ha ootut aotloa

In your mooad question pu are oenoenmd with a
situation where the'mortg8&ee reposoe6m~s Q oar under tlia
8x~eias temfs or the mmtgage vilthmt reoouTamto’ jgd~oial
prosedun. are uaeuthorlued to
In euah a sltwtlon ~0'0~
leaue u new Certif'ioarte
ot Title in the bdl~ul
af the nkopt-
gag- beoalue mid mortgage by sare repoastssioz~ o? fbr
motor vehlole doea not auguire title to the sanm. It Ii a
,~ll eettled luw of thi8 Stat8 that prior to mpo5ses810n
the mortmgoor has title to the sortmed property. As stated
by the Corrpnfealon of ~~pepla irrthe OZISOof Gablncs Wtos Cola-
pany .v. ;i’.c. fin&s& kuto Cemmny, augra,

*In Texas, the la@ title to mxtgqed
property rwdw In the mart&a&ax.*
St i8 also u well aettlod rule of lo* inthLrs St&e that
wheathe mrtga2ee re~aseaeee @opmrfy he bolde the Babe be
mortgagee and Pot (~a ounef. The @t&prei~Court 3.8~
Terraain
 859

the caee of Barling Y. Creaoh, al S.S. 337, stated as fol-
lovte
:
n* t . ohs lnstrunante being ahattel
xartgaam, t’hevendor had the rights of a
~~~@gtte under a ahsttel ~rort&ageoontaln-
in& the stlpulatlons or right to take POfBSe8-
slon, uhloh would ba to take powss88ton of
the proyerty it he da&aid hlmself insecure,
or the debt aot being paid, and to hold or
dlspose of the proserty La the aharaoter of
aortg4sDPgoe.
ulldsot k&sovaer. * * +* (mlder-
sooringioura. I
The lan&iage of the Eiarlingaam, aupra, wee aogied
intc~the opinion OP the Su~eae court of the &ate ot Texa6
ia the ease or sin&m ivg. co. '1.Rio%, 71 S&G. 275.
Thla lina 0r authority was reaiflrrtsdby tha COJIU&+
don of ~ppeale in the Sablna w&or Comar~r ease, eupra, aoL
the Court atate& UI)followa:
*+ * * But, Eden titer saoh e ~rnkmre~
it would have beon neoesecuy to handle ~tbb
onra 88 nrortgagees and 8Qt a6 QvJmFS, until
the title h&d passedd,either under ~?meolooure
or in aooord with the parer of aale ooatained~.
in the awrtgage. * * **
T&m above Gtwted rule wa6 amI.8 aaaouneed inthe on80 0r
-;&da t. Bowera, e;LS.W. (2-d)590. The Court stated ae rob
.*
“A mortgagee
la not satitZsd to aat a8
the om8r of propcrrtyIn Its di*imsltiaa,
but must aat aaoarding to tb parer0 given
in the siartgeae. * * * aI& tb asart*gee
baa 110 right to take ;looeeraloa of tha gmop-
ertp na hla OWIZand ~pgraprlrrteit.”
On Ghe other hand, tha Court8 at this State have
long rsoognlsed rhe foreolosure OS iilien by repossession
and sale aab private sale under the t ema of the aortgmget
Chief Jwtioe &inoe In the Singer IQcg.Co, aaee, suwa, rtat-
ea as rollaws, ln this oonnsation:
“ee are or the epialar that c ha qtmsticm
 860

should be aaswred la the aftirmtlva. Clear-
ly, unless the sti$u&tIon la t&e mrtgotga,
whloh surparted ta give to appellantthe right
to take poevewloa of the aerring Ipaohine upon
default or piryaentbe h8lQ cf m &feat, U..to
agent oomitted ao won& by u pmoeable seicare
zzb;h8 proparty ror the4pumas0 of payiag the
0tipdati04i fo v8ua tw8r8 it ti
. ‘ii38
oontrpry to pub110 polloy. ’ l * Tin pro-
goeItIoa that auch a otiyuLation la vdia,
and that th martguges mag take peaceable pos-
session of the grope&J wit bout the ooaneat,
and even cmerthe~ prote8t, of the amtgtagor,
la staotainadby the great weight of authority.
* * am

In thn above guotcrdoa8e, the Su~~em Court was urrlrming a
aIm&u holding 0r aaid court In the oaam or lit~llngI.
Cfeeoh, oupra.
The TetrakmiaCourt of Oiril Appea]r reatilraed
the ValIAIty of maah B g~~vlsioa Ia a mortgage 1nthe aase
0r Jetme Frsnoh Mniw k Grgn Co. v. Zlli~tt, 166 a.%. 20.
The Court state6 ae follo*e:
“3~ th4 teras 0r tha mortgage omexi8g
the titan pianos, Elliott was authexiEe-4 te
take poonesnloa thereof *uhwevex thy may
or t%m be round, and uell the name at pxfvate
or pub&lo aale to the hi&ant bidder,’ In t&o
event ti5s Eopkiae rra6edefault in tha pay-
--meator the debt it wuured, or in the avant,
at any time beiare the ladobtadnes8 mtare&,
zlllott *reit urisareor %numare.* It I8

The above quot.4 rule wud aSfrhwd by ths i3oaumant Court ai
civil ~ppalsr in the OLIBBor Iuncik vutor co. t. uelia, 847
ki.*J;. aa. In thI3 aonaeotloa, tha Court state8 ae follow*:

The trial.aoun erred la hi6 ooltstxua-
 tioa or tka mortga&e. The jWovlsIon& of
the mortgage authorleln~ agpsllaatto seize
MA WU ths truak at grlvate sale and wlth-
out noties are mtvIolatlve of any At&tUt@
of this state, nor against the pdalla polisy
oi this state, es expretwed In the, deaI~Ion~
of our ooilrte. It Is aald in Al C.J. 706:
?lThs inortgageltseli may diepease with
notloo, as whom it prwldss thet the mort-
gagee may 8d.l et private sole.*
"Ths rule 18 anaouaasd as tollaus, In
Jaw 011Chattel AWrtgages (6th &id*) 0 792:
'?'fie paver or sele doer llotreq.alrs
the gfvlng et any notiae oi the sale, the
rrort&agee aun tmdcs a valid sale either at
public or private snle, and need not &ire
i3nynoti 0r it un.ha b O~OOW 89 t0 Q.
&at OsTerthslrss ths s$l,d,,t,o
bs bInding,
avmt be a fair one.*
The ralldlty of such a provlalon in a wtms
wns also reafflnwl la th6 oy8es OS Piduty ilnlonFire
Iwtua~oe co. 0. 35116w-sattexrleld co., 10 S.w. (34) 163,
Court or Civil kppsals of Texas, kaarillo, ad the ease of
CaSpb8ll v. aistexn See6 diOral8 Ccuupnn
yr 109 S&i. (24)
997, court 0r Civil dppcrslaor nwiw. a8 imtoalo.
You em (11~0 a4vIsecLthat unksss tha tsms or ths
mortgage expressly prwlds far the earn, it ie aot aeoessary
for nation to be glveu to seoond or subsequent lfen holders
egfnst the 8ami prop8rty in a ouee of rorealtrsureby ths
prior lien holdor at a private asis under the terms of ths
mort@prge. See Campbell v. &stem %ed & oraln Coppcoy,
supa, and X4mpehire v. Greffes, 143 G.B. 147, SUwem Court
er Texas.
It may be a&ad t&e& ssottio 38 of the Certltisato
0r Title hot rNwgnIeestkrs *auuty 02 8 roroawbuxe by 0
mortgagee by pxlvats sale w&&r the terms of ths arrrtgiags
and Inthla sonnsatlonpmvidee as follows:
N4 * * that where foreoloaws ls had
uader the texts or a lken, ths aitkdavlt 02
thatpermn, firm, assoolWlon, Qp arperatlea
 or 4utbmlzed agsnt, vi t&s f&at vi r4pv6-
666SiVtI and diV46titlll.6Of title in 86vOrd-
MO4 with tht t6l7ilSVft&# UM&, 6hal1b6
&uiiiCi8ltt
to t!iUthOri60
the i86U6666 Of a
%WW 06rtiiht6 Of titb a tbs nUW5 Or the
~UW&666X &it 6UCh 8d10, ' * *"

YOU -0, thFdOr6, 6dVi66d that th4 abVV6 QUf3t.d
&fit016 r6QUlte6 M atti&'it irOP th4 XiWt@&66 I#hVMD&
the 6ti6 tUld6r the t6rPU Or th6, &QFt&+gS to 6 third party
WhG iS &pjdying for & C6rtiflvat6 Of Tit16 iIlhi6 -PI.
YGU 63-6 rlU%hW 6dVi66d that tk0 fhBrt6Mt -6% rtot t6QUir6
e re&as6 rigzled by the 6666n6 Ii66 hold6r olluie the s6aond
1%6n hQld6r'8 liell 4&lill6t t&6 m%vr V6hi616 uUd6r th6 OOII-
struotionof th6 Court8 of tbia Statcr hao b66nout oft by
the prfVltat6fOF6Q~OSlUZ6
6616. b6 @*rfoU6l~ 6trt4dl th6
CQlWt6 b&N6 h6ld that the ~~6ba66r at a judiOf& foS66~UE6
66&S aaqulrsd tit14 fr46 vf au ini6Xivr 1i6P6 a&d.tWtthe
property, Th4 6&66 Zti6 hati b.Olh 6XteS&cd by tW CotA't8 Of
thio St4t6 t0 fOr66l@MrO 66ti6whi6bar6 piVat 64le8 Ord6
by th6 SU.U’t$&&W ptt6r i6&?068666iOR. Th6 3t2~6I66 CVutt 6f
Texao lo the aP64 of E6mp6hlr6 v. Or66V68, ~UPP. 6t6t6d 6a
tOlbW6, hl thi6 CQllh6~tiVIl~

“Ths OUltcurtiOrrOf ~lail!tltf’S 6OlUU6l
Tao thQ 6freet th4t ‘t&e rlglat Qf xeaeapt~nn
vi CL unior 1i6ahold6r is nQt cut dr by a.
proab d9$6tow&ieBth6 Janiarllsabold6r ir
not tt purtq is not ooond 06 w thla, and
neat sugported by au%hority' 41* r6amn. Ttu
a6 i6 thUiB t6WlY 6tSCOa in ihHL60 Oa ?&Wt-
&a&66, I l&97: ‘9h6 JXlZOba6W (U&W ihO-
albmre pzwudl.a~bymleum%erthr jwwmr
&.VM in th0 TM&&&i&S) t&B* t&6 Wt&#i@+t"8
tit16 &lve&44 of all lnaumbr~ee8 1pa4e atno.
the ar6aBion oi the p0lw6f.* Aad, aah, In
th6 664m aaatl6n: ‘A 66x6 xe&pl6rly ereraia64
UJl6.T a &IO-l’ Ir, OqtiVahSt t0 66l’iOb f QP6-
clo6un,.by B 6ourt of 6Qtitj PropaTlJl pIUW4d.'*

Th6 Am&~@ COwt Of ab$l Applrab r64ffina*d
this prQpV6itiGkl In the Fldrlity Elnion Fir6 ~UXX3U66 CQB-
psa~ aa68, augxa, an4 stat64 a6 ra.m6at
*Under the pewr oi sale in the mart-
@@I, the fiuanqe Qol~~y had the ri@ht t0
t&kite
pv4a466ion of the Oar W&d 6611 it with-
lionoroSle ii&h L. Bwll, Bag;6 6

out nOtiC to mber ior the pUm666 OS
&tying the id6bt6dO666 6&6&R6tth6 Cti,
&Uld 6UCh 4 6614 V66t6 title in the ptWChU66r.
%oak Amor Co. v. iiilelia (Tex. Cit. ~@p.)
247 3.X. 668; Orrhoer V. Tadr, 11 'Tax.Civ.
xpp. Ire, 32 ii.%.373; slngatrsuing Maehi
Cu. v. hiv6, 98 Tex. 174, 7L 3.W. 8'15,60
L.ii.a.143, 97 AR. St. R6p. 8011 f6Ue -Innah
Piano Co. v. jstliott(Ter. Cit. Appp.)166 S.
W. 29; Stat. Bxsbm56 Bank Y. Sd8h (Tax. Clv.
A&Q.) 166 2.K. 666..

The rule was again 6tut6d. by th6 36awnt Court
or Civil Appeal6 iu th6 Q&66 Of &tfabt ‘1. 86b6rt, 8% 8.pi.
(2d) 929. The CvLWt 6tut6d a6 fO~666:

"Th6 jU&Sl.Ut in taVQr Of 164r66Qtfl6
Trust Corporation ir afflrrasb. Ia t6kf.q
pVU6U6iOii Of t&B PUtWbib it iOuOU6a
literary the gOU6r6 6iVOai by it8 a5Ftae.
Shi6 BsthVd Vr fOreOlolllU66rt~Ui6hed 6Q-
pellan8*8 6666od lien. *bin6 Mittor Co. v.
‘A. C. kn&lsh &auto Co. tT6r. 0018. App.) 291
3.x. 1088."

81 WI&&’Oi 6-r. it i8 the O&&iM Or thf6 469
~rtW.&t that kh6r6 6 S6t't&8~U N$bO6666666 6 awtOrV6hiO16
end 60116 th4 661~ at a prlv*ite 8ale, which pro66dPr6.26 in
acaOrbanO4 mith thO.t6m Of th6 'afst&aBQ, YotW ~~ptU%RWt
16 authorized to fnws a $6rtlfbate of Title ia th6 n6m6 ot
the purahaur at 6uCh priYit6 fclr66kWAE6 68& WI&ah Wrtiti-
Oata, 8WJ Bat ZlGt4OE th6 46M6 tbs 666Qd Or ini6riCS Zi6lU
WhiCh 6‘ii6t6d 6@iIi6t 66&d aotor VOhiOlO jWiQr t 0 t h6 t&O
Oi lW~8666iQS 6ti fOf6a&6Pre Of th0 prior l.l6B. l-b6 &Jr
inmreiatienthat rbarlldb6r6cyriT64 by ywr Departmtin
auoh a aaae da ootlin66 under 23eetlon35 at the CertlCiart8
Qt Tit16 ACt icS 80 &ifidaV%t Ot tb@ U!@l-t&lg66 ObaUbQ Uttoh
r6~0684OSiOn aab pdVat6 Sal0 Utld6l'thOt6W63 6f th6 IlOl-t&V3136.
Moth- in thii5 Op$.XtiC#6kdi b0 OCXI6tnt6d 66 W-
z;&I~ to 116n6 whiohWrr6, ~2?~@~t0 t&4 l&HI that W66 fra?6-
.
TQUU V6Ty frrnlf
APPROVEDMAR 18, lg4'

-%ccrc*LQ.&4

A~~cp,~~y GiBERAL 03 TEXAS
30:&S