32 Cal. App. 2d 244 | Cal. Ct. App. | 1939
In an action involving various claims to a small motorboat the trial court denied the defendants any relief under a mortgage they claimed to hold on the boat. From that judgment the defendants have appealed.
When the boat was being constructed the owners executed a mortgage to the defendants. That mortgage was never recorded in the office of the United States collector of customs of San Francisco, the home port of the vessel. For that ■ reason the plaintiff claims that as to it the mortgage was invalid. For various reasons the defendants claim it was valid and an enforceable obligation against the plaintiff and its vendees. An understanding of the controversy involves the following facts:
In 1929 Antonio Di Maggio resided in the county of Monterey and was engaged in fishing in that neighborhood. He commenced the construction of the boat in Monterey Bay. He contacted Antonio Criscuolo, one of the defendants, who agreed to make him a loan for the purpose of building the boat. As a result of that agreement Di Maggio and his wife executed to Criscuolo and his wife a chattel mortgage on the boat which was then being constructed. That chattel mortgage was recorded in 1929 in the office of the recorder of Monterey County, but at no time was it ever recorded in the office of the collector of customs at San Francisco. On the 27th day of November, 1929, Di Maggio entered into a conditional sales agreement with Atlas Imperial Diesel Engine Company under the terms of which the latter agreed to install a ninety horsepower engine in the vessel. At that time the vessel was described as “to be called the General Persh*246 ing”. The contract price mentioned in said instrument was $6,900. The contract further provided that as soon as the vessel was completed and documented in the office of the United States collector of customs as a vessel of the United States the owner would execute a promissory note and a mortgage to secure its payment. On January 23, 1930, the hull was taken to the plaintiff’s plant at Oakland and the conditional sales contract was performed. On February 14, 1930, the vessel was licensed by the United States Department of Commerce as “a licensed vessel of the United States under twenty tons ’ ’. On February 12,1930, the owners executed the note and mortgage hereinabove mentioned and on the 18th day of February, 1930, the mortgage was duly recorded in the office of the collector of customs of the port of San Francisco. Except as will hereinafter be mentioned, neither the plaintiff nor its vendees knew of the existence of a mortgage in favor of the defendants nor of the recordation of said mortgage in Monterey County. On March 8, 1932, Di Maggio was in default of his payments and, in the presence of Criscuolo, he executed a bill of sale to M. A. Dent, assistant secretary of the plaintiff company, who took title to the vessel as trustee. It was recorded in the office of the collector of customs on April 18, 1932. After the vessel had been completed it was taken to Monterey and operated by Di Maggio. It was so operated until March 28, 1932, when it was taken to San Francisco by M. A. Dent, the said trustee. While in San Francisco, on the 15th day of July, 1932, the vessel was sold to Matts Werner Sweins, who paid the plaintiff $5,000 therefor. The trial court made a finding that Sweins “was a bona fide purchaser for value without notice of said Criscuolo’s said mortgage”. Later Sweins took the vessel to Eureka, where he is now operating it and claims to be the owner. Such other facts will hereinafter be stated as it becomes necessary.
The defendants contend that they held and now hold a valid, subsisting chattel mortgage on the vessel. (Foster v. Perkins, 42 Me. 168; Stinson v. Minor, 34 Ind. 89.) The plaintiff replies it concedes the claim of the defendants was sound down to February 14, 1930, when the vessel was enrolled and duly licensed as hereinabove set forth. However, continuing, the plaintiff asserts that the effect of the enrollment and licensing was to terminate as to the plaintiff the
Perkins v. Emerson, supra, is, we think, directly in point and supports the contention of the plaintiff in this case. Perkins built the sloop Emma. While she was still on the stocks and incomplete, July 6, 1869, Perkins executed the note and mortgage. The mortgage was recorded in the office of the city clerk on August 11, 1869. The sloop was launched in August, 1869. She was licensed on August 6, 1869. The mortgage was never recorded with the collector of customs. On August 15, 1870, she was sold to the defendant, who had no notice whatever of the mortgage except the record in the city clerk’s office. The court held that such recordation was no notice to the defendant and that he was entitled to replevy the vessel. In that case, as in this case, it was contended that a recordation pursuant to the state statute would be valid even after the vessel was enrolled and licensed. Replying to that contention, on page 320, the court said: “We think it will not. Before registry or enrollment a vessel, like any other article of personal property, is subject to the laws of the state. After registry or enrollment it comes under the operation of the laws of the United States. Before the vessel is registered or enrolled, a mortgage of it will be valid if recorded agreeably to the laws of the state. After it is registered or enrolled, a mortgage of it will not be valid unless recorded as required by the laws of the United States. To hold otherwise would go far to defeat the very object which the registry lawrs of the United States were intended to secure. ’ ’
In effect the rule stated in the case last cited has been followed in California from an early date. In “An Act Concerning Fraudulent Conveyances and Contracts”, passed April 19, 1850, section 17, it was provided: “No mortgage of personal property hereafter made shall be valid against any other persons than the parties thereto, unless possession of the mortgaged property be delivered to and retained by the mortgagee.” In section 1 of chapter 27, United States Statutes at Large, 1850, it was provided: “That no bill of sale, mortgage, hypothecation, or conveyance of any vessel, or part of any vessel, of the United States, shall- be valid
The weight of the above-mentioned authorities is to the effect that the enrollment of a vessel pursuant to section 1012, U. S. C. A., has the effect of nullifying all purported encumbrances executed prior to such enrollment except as provided in said section. Turning to sections 2955-2978 of the Civil Code we think it is clear that they were designed to give the rule stated in section 1012, U. S. C. A., full and complete operation and effect. This is so because the federal statutes clearly contemplate that when a vessel is enrolled, each party may protect his rights by obtaining a new conveyance and filing it in the office of the collector of customs as provided in the federal statutes. (In re Empire Shipbuilding Co., 221 Fed. 223.) But it is equally clear that said statutes provide that the records of the collector shall be inclusive and exclusive as shown above.
In re Empire Shipbuilding Co., supra, states a rule that is also controlling in this case. In 1911 United Shores was being constructed by Shipbuilding Company for Buffalo and Fort Erie Ferry & Railway Company. On May 31, 1911, the Shipbuilding Company executed a bill of sale of the vessel then in process of being constructed. The vendee executed a mortgage thereon to Commonwealth Trust Company. The vendee then executed a bill of sale back to Shipbuilding Company. On August 9, 1911, the vessel was enrolled and licensed. On the same day the bill of sale and the mortgage were recorded in the office of the collector of customs. The court stated: “In our opinion the mortgage was not one recordable in the custom house, and the collector should have refused the request to record it. Since it is not recordable, its improper recording does not operate as constructive notice under section 4192.” (Section 4192 of Revised Statutes being the same statute codified as section 1012, 46 U. S. C. A.)
Heretofore Criscuolo commenced an action in equity to obtain the enforcement of his rights. That action was commenced in the District Court of the United States for the Northern District of California and was later appealed to the Circuit Court of Appeals, Ninth Circuit. The result of that litigation was a dismissal of his bill. (Criscuolo v. Atlas Imperial Diesel Engine Co., 84 Fed. (2d) 273.) At this time Criscuolo claims said decision was res judicata in his favor. We think it is sufficient to state that we have carefully read the decision and we find nothing in it that was res judicata of any issue involved in this action.
The defendants also contend the plaintiff had actual notice of their mortgage at the time the above-mentioned mortgage was executed by Di Maggio to the engine company. That question was made an issue and was fully tried out in the trial court. The trial court made a finding in favor of the plaintiff to the effect that the latter did not have actual notice of the mortgage recorded in Monterey County. The defendants assert said finding is contrary to the evidence. They base that assertion on the fact that about thirty days before the mortgage was executed in favor of the engine company an agent of an insurance company mailed to said
We find no error in the record. The judgment is affirmed.
Nourse, P. J., and Spence, J., concurred.
A petition for a rehearing of this cause was denied by the District Court of Appeal on May 18, 1939, and an application by appellants to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on June 15, 1939.