Appeal, No. 245, April T., 1954, from order of Court of Common Pleas of Allegheny County, Jan. T., 1954, No. 405, in case of Mellon National Bank and Trust Company v. Saul Cabin et ux. and Rebecca Hoffman. Order affirmed.
J. Leonard Smith, Jr., with him Reed, Smith, Shaw & McClay, Pittsburgh, for appellant.
Sidney Baker, with him Morris, Boreman, Parker & Krause, Pittsburgh, for appellee.
Before Rhodes, P.j., Hirt, Ross, Gunther and Wright, JJ. (woodside and Ervin, JJ., absent).
[ 177 Pa. Super. Page 418]
This appeal is from a decree of the lower court discharging a rule to show cause. It involves interpretation of the law relating to motor vehicle title certificates having recorded thereon notations of encumbrances.
Saul Cabin was the owner of a certain Nash Sedan on May 15, 1953, free of any encumbrances. On June 6, 1953, he caused an encumbrance to be noted on his certificate by the Bureau of Motor Vehicles in favor of Rebecca Hoffman, appellee, who was given possession of the said certificate. The car remained in the possession of Saul Cabin. On May 15, 1953, he "orally pledged" his car as collateral security for a debt which he and his wife, Belle Cabin, owed appellee. There was no note or any other instrument evidencing the transaction.
On November 25, 1953, appellant, Mellon National Bank and Trust Company, issued a writ of fieri facias
[ 177 Pa. Super. Page 419]
on a judgment which it held against Saul and Belle Cabin, and directed the sheriff of Allegheny County to levy upon and sell the automobile. It was sold for the sum of $200. The Bureau of Motor Vehicles refused to recognize the bill of sale giving its reason for such refusal the existence of the encumbered title in favor of appellee. Appellee later filed an affidavit with the sheriff claiming the proceeds of the sale basing her claim on the oral pledge and the encumbrance notation on the certificate of title. The proceeds of the sale were impounded pending the entry of an order of court. On motion of the appellant, a rule was granted on appellee to show cause why an order should not be entered directing the net proceeds to appellant on account of its judgment. On July 26, 1954, the court entered an order discharging the rule.
The question involved is whether an oral pledge of a motor vehicle in favor of the pledgee creates a valid lien where possession of the vehicle remains with the pledgor and the pledge is evidenced only by an encumbrance notation on the certificate of title held by the pledgee. The Act of June 27, 1939, P.L. 1135, amended section 203(b) of The Vehicle Code by adding the following provision: "The certificate of title, when issued by the secretary showing a lien or encumbrance, shall be adequate notice to the Commonwealth, creditors, and purchasers that a lien against the motor vehicle, trailer, or semi-trailer exists, and failure to transfer possession of the vehicle, trailer, or semi-trailer shall not invalidate said lien or encumbrance." The language of the amendment, we believe, clearly established a method of creating liens on motor vehicles ...