McDOWELL, Judge.
This is an action in replevin. The petition was filed July 6th, 1948, in the Circuit Court of New Madrid County, Missouri.
Plaintiff seeks to recover possession of an automobile by virtue of a lien created by chattel mortgage securing a note assigned to plaintiff. The defense is that the chattel mortgage is void because the lien was not shown on the certificate of title to said car. The cause was tried before the court on an agreed statement of facts and judgment rendered for the defendant. From this judgment plaintiff appeals to this court.
The only question presented in this appeal is whether or not the failure to have the mortgage endorsed on the certificate of title, at the time it was filed for record, rendered it invalid as against the defendant who purchased said car without notice of said mortgage lien.
The cause comes here on an agreed statement of facts. We state such part of the evidence as is necessary for the determination of the issues involved.
Ernest Anderson of Pemiscot County, Missouri, owned an automobile with certificate of title No. 7599579. On November 27th, 1942, he turned the possession of said car over to Downing Brothers Auto Sales, used car dealers, for the purpose of sale; said company displayed said car on its sales lot and, on August 25th, 1947, sold and delivered possession thereof to A. J. Meatheany. On the date of the purchase of said car, Meatheany executed his promissory note for $804.75, due and payable in 15 monthly installments of $53.65, secured by chattel mortgage on said car, the first installment becoming due September 25th, 1947. At the time the car was delivered by Downing Brothers Auto Sales to A. J. Meatheany, said company also delivered to Meatheany an assignment of title signed by Ernest Anderson, but said title had not been transferred from Anderson to Downing Brothers Auto Sales, but was transferred direct from Anderson to Meatheany.
It is agreed by the parties that the note and chattel mortgage executed by Meatheany to Downing Brothers Auto Sales was given as a part of the purchase price of said car.
On August 25th 1947, Downing Brothers Auto Sales endorsed the note executed by Meatheany to them and transferred it and the mortgage, securing same, to the Butler County Finance Corporation, who took same as purchasers in due course for value. The Butler County Finance Corporation filed said mortgage for record in Scott County, Missouri, on August 28th, 1947, which mortgage bears file No. M-6-26, recorded in Book 14, at page 168, in Scott County, Missouri. Scott County was the residence of A. J. Meatheany.
At the time plaintiff filed the chattel mortgage for record it did not ask or require the recorder to note the fact of the filing of the mortgage on the certificate of title to said car.
The evidence shows that A. J. Meatheany secured a new certificate of title from the State of Missouri, October 3rd, 1947, being title No. 930447; this certificate of title was endorsed on the back to P. M. Sales Company, December 4th, 1947. The same title was reassigned to the defendant, Edward Prince, December 4th, 1947. Defendant, Edward Prince, February 4th, 1948, made application for title to said car, which was duly issued to him.
None of the certificates of title had mentioned thereon the lien in question and, at the time defendant acquired said automobile, he had no actual knowledge of the outstanding lien. The defendant purchased the automobile in question from Elroy Pickett and Clyde McCrea, through their agent in New Madrid County, Missouri.
It will be noted from the facts agreed upon that plaintiff-company purchased the note and chattel mortgage in question for value and had the same recorded before the certificate of title was issued by the state to Meatheany and, therefore, could not have had the recorder note such lien upon the certificate of title.
It is admitted there remains due on the note sued on $429.25, plus interest and attorney fees as provided in the note.
Defendant, by third party petition brought in Elroy Pickett and Clyde McCrea, from whom he purchased the car and prayed for judgment against them for the purchase price plus attorney fees, should plaintiff recover against defendant.
The trial court found for the defendant and against the plaintiff and dismissed the third party petition without prejudice to the defendant.
We will refer to appellant as plaintiff and to the respondent as defendant in this opinion.
Plaintiff's first contention on this appeal is that the mortgage in question having been given for the purchase price of the motor vehicle, it was not necessary that the same be stamped or noted on the certificate of title at the time the mortgage was recorded.
Section 3488, R.S.Mo. 1939, Mo.R.S.A., as amended, is cited to support this contention. This section was amended by the legislature in 1941, and later the section was repealed in 1947, and a new section enacted, entitled Section No. 3488, Laws of Missouri, 1947, Vol. II, page 221, which reads as follows: "It shall be the duty of the recorder of deeds, on request of the mortgagee, or his assignee, to certify on the certificate of title to the mortgaged motor vehicle, that such chattel mortgage has been filed showing the date, the amount of the mortgage and the name of the payee. * * * Provided, however, that the provisions of this section shall not apply to chattel mortgages given to secure the purchase price or any part thereof or to a motor vehicle sold by the manufacturer or their distributing dealers, or to a chattel mortgage given by dealers to secure loans on the floor plan stock of motor vehicles."
There is no question that the law in Missouri, by the plain words of the statute, is that a mortgage given for the purchase price or a part thereof of a motor vehicle is not required to be stamped on the certificate of title by the recorder of deeds on the request of the mortgagee, or his assignee.
This court passed directly upon that point in Butler County Finance Company v. Miller, Mo.App., 225 S.W.2d 135, 137. We quote from the opinion of the court in that case:
"The provisions of this statute are so clearly stated that there can be no doubt but the legislature intended it to apply to any mortgage given to secure the purchase price or any part thereof, of a motor vehicle, from whomsoever purchased.
"This note was given for part of the purchase price of the motor vehicle and therefore the requirement that a record of it be noted on the certificate of title does not apply."
In the case at bar Meatheany executed the note sued on and the chattel mortgage securing the same to Downing Brothers Auto Sales as a part of the purchase price of the car in question. It makes no difference that Downing Brothers Auto Sales did not have the actual title and that the legal title was in Ernest Anderson. The legal title was delivered to Meatheany at the time he received possession of the car and at the time he executed the note and mortgage sued on herein, and it matters not whether the note and mortgage were executed to Downing Brothers Auto Sales as agents for Anderson or who got the money, Meatheany had the title and the possession of the car and had the legal right to execute the mortgage and sued on herein, and Downing Brothers Auto Sales sold and delivered said note and mortgage to plaintiff for value vesting legal title to said note and mortgage in plaintiff.
We hold that this is the only point actually involved in this lawsuit, under the pleadings.
Defendant's answer states that he is, and was at all times mentioned in plaintiff's petition, the legal owner of the automobile in question, having a title duly registered; that there was not stamped upon any notice of any encumbrance as required by Section 3488, R.S.Mo. 1939, Mo.R.S.A., and amendments thereto.
And said answer states that defendant is a purchaser for value without notice of the purported mortgage of plaintiff and that said mortgage is void as to him.
We cannot agree with the trial court. We hold that the plaintiff was the owner of the note secured by the mortgage on the automobile and that said mortgage was valid as against the defendant, because it was given for a part of the purchase price of said car.
We have examined the authorities cited by the defendant, which authorities hold that, in order to pass legal title, the certificate of title to the automobile must be assigned to the purchaser and the signature acknowledged. Defendant cites Section 8382, R.S.Mo. 1939, Mo.R.S.A., as reenacted under the laws of 1947, and Peper v. American Exchange Nat. Bank in St. Louis, 357 Mo. 652, 210 S.W.2d 41, and Pearl v. Interstate Securities Co., 357 Mo. 160, 206 S.W.2d 975.
Defendant relies, under Section 8382, R.S.Mo. 1939, Mo.R.S.A., which holds: "It shall be unlawful for any person to buy or sell in this state any motor vehicle or trailer registered under the laws of this state, unless at the time of the delivery thereof, there shall pass between the parties such certificate of ownership with an assignment thereof, as herein provided, and the sale of any motor vehicle or trailer registered under the laws of this state, without the assignment of such certificate of ownership, shall be fraudulent and void. In the case of dealers, a separate certificate of ownership, either of such dealer's immediate vendor, or of the dealer himself, shall be required in the case of each motor vehicle in his possession * * *."
This section does not support defendant's cause for the reason that when this sale was made, the legal owner of the certificate of title properly assigned and acknowledged the legal transfer of the title.
Peper v. American Exchange Nat. Bank in St. Louis, supra, properly declares the law relating to the sale of automobiles in that the holder of a certificate of title must endorse thereon an assignment prescribed by the commissioner of motor vehicles and that the assignment must be acknowledged. We do not have that question in the case at bar. In the case cited, the car in question was sold to one, Duncan, and the certificate of title was assigned in blank on the reverse side thereof; no assignee named, and no acknowledgment made; then Duncan sold the car to plaintiff and handed her the certificate of title in the condition it was in when he received it. Then the seller took the certificate of title under promise to have it sent to Jefferson City and transferred in the name of plaintiff. Instead of transferring the title as he promised, he placed his own name in the place for assignment and gave the mortgages to others, which plaintiff seeks to set aside. The court held that plaintiff had a special interest in the car acquired by the payment of the purchase price and the delivery to her of the car; that the car was never legally transferred to Duncan or to the defendant but the title remained in Robert Wherry. The court said plaintiff was entitled to have her interest perfected into title and reversed the lower court; that the mortgages given by Duncan should be cancelled.
There is no question but what the statute must be complied with in passing legal title to an automobile but, as we have stated before, legal title did pass in the case at bar.
Plaintiff's second contention is that even if there had been no certificate of title in this case, the plaintiff being an innocent purchaser and holder for value, the mortgage is enforceable against the defendant. To support this contention, he cites Interstate Securities Co. v. Barton, 236 Mo.App. 325, 153 S.W.2d 393, 396.
This case supports our holding herein that where a chattel mortgage is given to secure payment of the purchase price of an automobile, the mortgagee was not required to request the recorder to certify on the certificate of title that the chattel mortgage had been filed and, especially, where the certificate of title was not issued until after the chattel mortgage was filed.
The facts in this case show that Ray Browne was a Studebaker dealer in 1940. He sold one, Sterling, a resident of Wright County, a new car for $1200.00. He took, as part payment, a Nash Coupe, the balance to be paid in cash or by mortgage. Relying upon Sterling to pay cash, Browne delivered to Sterling a dealer's certificate or application for title stating therein that no encumbrance existed. The car was turned over to Sterling, who sent the dealer's application for title to Secretary of State and received back, February 26th, 1940, a certificate of title showing car free from encumbrance. Previous to the issuing of the title, February 20th, 1940, Sterling executed a note secured by chattel mortgage for $775.18, for the balance of the purchase price, which note and mortgage were made to Smith Pyatt Motor Company, a Chevrolet Agency in Webster County, Missouri. The mortgage was filed for record in Wright County, Sterling's place of residence, on February 26th, 1940. This note and mortgage was sold and transferred to Interstate Securities Company, Springfield, Mo., for a consideration of $640.00. Browne received the money and Pyatt's position was that they were merely accommodation endorsers.
Sterling sold the automobile in question to Lane, later, and signed transfer of title in blank. He acknowledged his signature. In this assignment of title he certified that the car was unencumbered. Lane made a deal with one, Barton, and got Sterling to place Joe Barton's name in the blank line for the assignee. Lane's name, nowhere, appeared as assignee in the title. The Interstate Securities Company, plaintiff, was still the owner of the note on which there was an unpaid balance of $700.15.
Defendant testified he purchased the car, received the title duly acknowledged; that he did not investigate the records of Wright County, since no lien was shown on the title; that he had possession of the car at the time the replevin suit was filed.
The court, in its judgment stated that defendant proceeded upon the theory that under Section 3488, R.S.Mo. 1939, Mo.R. S.A., Mo.St.Ann., Section 3097A, page 1919, it was the duty of the mortgagee to have requested the recorder at the time the mortgage was filed to certify on the certificate of title that such chattel mortgage had been filed and that otherwise it would not be notice to the world.
The court stated that defendant lost sight of the fact that the certificate of title had not been issued at the time the mortgage was filed but the court states that said section specifically eliminates such chattel mortgages from the application of the statute. Then the court stated this rule of law: "It has also been held in a case analogous in some respects to the case at bar, that a finance company, in a suit to replevin an automobile, may recover although the transaction between the parties to the sale of such automobile was void from the fact that there was a failure to comply with the provisions of Section 7774, R.S.Mo. 1929, Mo.St.Ann. § 7774, p. 5193, said section appearing as Section 8382, R.S.Mo. 1939, Mo.R.S.A., and in substantially the same language, assuming that plaintiff had no notice of failure to deliver a certificate of title or of any infirmities therein. National Bond Investment Co. v. Miller, Mo.App., 76 S.W.2d 703."
In the case cited, to-wit, National Bond Investment Co. v. Miller, Mo.App., 76 S.W.2d 703, where the defendant traded automobiles with G. T. O'Malley, Inc., and gave a mortgage for $200.00 for the difference in purchase price on the car he received, in defendant's presence, said mortgage was sold to the plaintiff. G. T. O'Malley, Inc., later refused to execute a certificate of title as required by law, which made the transaction between the parties void because there was no consideration for the note and mortgage but, under the evidence, plaintiff had no knowledge of the lack of consideration and the court held that a verdict for plaintiff was properly directed.
Under the evidence in this case, plaintiff had no notice of any defects in the title to the car in question when it purchased the note and chattel mortgage and, therefore, was a holder in due course and entitled to recover and was not barred by want of consideration.
However, in this case, since the mortgage and note held by plaintiff were given for the purchase price of the automobile and, since plaintiff had the mortgage properly recorded or filed for record in the county where Meatheany lived, it was notice to the defendant and to the world that there existed a lien against the property acquired by the defendant.
We hold the trial court erred in finding its judgment for the defendant.
Judgment is reversed and remanded with instructions to enter a judgment for plaintiff.
VANDEVENTER, P. J., and BLAIR, J., concur.