    ; ‘.
                               ,-

                                                                          R-571


                                               OFFICE         OF

                               THE ATT~ORNEY GENERAL
                                              AUST~,     TEXAS
                                                        I
.          PRICE  DANIEL
           ATTORNEYGENERAL                      June 30, 1947


                   Honorable D. C e Greer               Opinion X0. V-288
                   State Highway Engineer
                   Texas Hi hway Department             Re:   The effect    to be ac-
                   Austfn 22 p Texas                          corded the exls’tenc6-
                                                              of a lien recorded 6n
                                                              a previous certificate
                                                              of title when issuing
                                                              8 new certificate     of
                                                              title   to a purchase*
                                                              at a sheriff’s    sale.
                   Dear Sir:
                         Your request   for    our opinion    is on the following
                   question:
                              ..“When title  has been issued on a motor
                         vehicle and when such title     records a lien,
                         should this Department obtain a release of
                         that lien in the event the motor vehicle      Is
                         sold at a sheriff’s    sale?”
                          In connection with this question,      you state that
                   you have heretofore     asked the question bf this Depart-
                   ment:    “What evidence was needed to Issue title        to
                   the purchaser of a motor vehicle which was sold at
                   sheriff ss sale?”     That question applied to:      (1) motor
                   vehicles    on which no title had been issued;      (2) motor
                   vehicles    on which title   had been issued and no lien
                   recorded and; (3) motor vehicles       on which title   had
                   been issued and a lien recorded.        In response to that
                   question,    Opinion IVo. 0-3842 was rendered.     You were
                   advised to Issue a certificate       of title  to a purchaser
                   of the automobile at a sheriff’s       sale made pursuant to
                   a court order.      This answer was made on the assumption
                   that a lien against a motor vehicle had been foreclosed
                   by judicial    process and that the rights of all the par-
                   ties had been fully adjudicated       by the coui%.    You ad-
                   vise that pursuant to said opinion your policy has been
                   to issue a clear title      to a purchaser of a motor vehl-
                   cla at a sheriff’s     sale regardless    of whether there was
                   or was.,not a lien recorded on the previous title.
Hon. D. C. Greer,       Page 2    v-288


        Opinion O-3842 assumed that any lien against
the motor vehicle had been foreclosed           by,judlcial    RI;-
cess.     The conclusion      in the former opinion that,
Is the duty of your Department to issue a certificate
of title    to the purchaser at a sheriffIs         sale made pur-
suant to the court’s        order,” Is correct.      But. where the
motor vehicle baa been seized under exeoutlon,              not to
foreclose    a lien against the automobile but to satisfy
a judgment debt of the mortgagor to a third party, a
different     situation    arises.   Your question Involves the
effect    of a prior lien recorded upon a certificate           of
title    when your Department Is reque,sted to Issue a new
cer’lflcate      of title,    on a motolr vehicle sold at a sher-
lff~*s sale where the prior lien remains outstanding on
the record.
      It may be stated as a general rule that prior lien
holders have the right OS protection  against subsequent.
judgment or execution liens.   In 18 Texas Jurisprudence,
page 766, paragraph 193, we find:
              “Where the property of the defendant ia
        execution has been mortgaged, its sale under
        execution conveys only the Interest   of the
        mortgagor, subject to the rights of the mort-
        gageen
      Rule 643 of Vernon’s Texas Rules of Civil Procedure,
replaces,  but does not change, Art. 3797, V.C.S,, and
reads as Sollowe:
              “Goods and chattels   pledged, assigned or
        mortgaged as security    for an9 debt or contract,
        may be levied upon and sold on execution against
        the person making the pledge, assQ&nent or
        mortgage subject thereto;    and the yurchaselr
        shall be entitled  to the possession      when It Is
        held by the pledgee, assignee or mortgagee,       on
        complying with the conditions     of the pledge,
        assignment or mortgage.”               .,
        Section   35 of Article   1436-l   V.P.C.,   provides   in
part:
                “Whenever the ownership of a motor vehicle
        registered     or licensed within this E&ate IS
        transferred     by operation of law, as upon l * l
        judicial    sale or any other Involuntary dlvesture
        of ownership, the Department shall Issue a new
        certificate     of title  upon beiag provided with
 Hon. D. C. Greer, Page 3    V-288


        certified.cop9 of * * t order, or bill of
       'stilefrom the oSflcer *king the judicial
        stile.l **.*“’
            Section 42 OS the same Article provides:
            'No lien on any motor vehicle shall be
       valid as against third parties without actual
       knowledgb thereof or enforceableagainst the
       motor vehlole of any such third parties as
       tbe,lssuanceof e certificateof tltle'therq-
~. .
       of;un1esa an application for a ndw title Is
       niadeas prescribed In this Act and all first
       and stibordlnateliens-notedby the Department
       thereon."
           Thus, under the rule that a prior lien holder
 Is entitled to protectl6n as agalnst,the purchaser of
 the automobllb under a tiherlff'asale, we conclude tbat
 ~lt.l6'~th&duty~'of
                   your Department ln Issuing a new cer-
 tificate of title on a motor vbhlcle sold at a sheriff's
 sale to satisfy a judgment debt owing,to a third part9
 to r&cord-thdreon'theprior recorded lien or liens. You
 are not charged with the duty of obtaining'arelease of
 any li&; .yourdutJr~in~l,ssulng,anew certificateof
 tltle'ls,torecord thereon the prior existing liens ln
 order to protect the rights of the lien holders.
                        SUMMARY       .
             Where a'purchaser of a motor vehicle sold
       ,at a sherlffts sale to satisfy CLjudgment debt
        owing to,a third pert9 makes sppllcstlon for a
        certlflcate.oftitle, It Is the duty of the
       ~TexasHighway Department to Issue a new certifi-
        cate of title and recordson the new certificate
        all prior liens recorded on a previous certlfl-
        cate of title. Article 1436-1, Sections 35 and
        42, V. P. C.; Rule 643,: Vernon's Texab Rules of
        Civil Procedure.
                                 Very trulj yours,
  APPROVED:                 ~ATTORNEYGENERAL OF TEXAS


  ATTORNEY
         GER'ERAL
                                  Charles E. Crenshaw
   CEC:rt:e~t                               Assistant
