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                        A-wevmm    11. TEXAS

                         July 20, 1951

     Han. D. C. Greer
     State Highway Engineer
     Texas Rlghway Department
     Austin, Texas      Opinion Bo, V-1211
                         Re:      Evidence of ownership required
                                  to accompany an Initial applica-
                                  tion for a certificate of title
                                  for a new motor vehicle on the
                                  effective date of House Bill 409,
                                  Acts 52nd Leg., which amends
                                  Article 1436-1, V.P.C., the Cer-
     Dear Sir:                    tlflcate of Title Act.
               You have requested the opinion of this office
     with regard to what dvldence of ownership will be re-
     quired to aoeompany $he initial application for a cer-
     tiflc8te of title for a motor vehicle In Texaa on and
     after the effective date of House Bill 409, Acta 52nd.
     Leg., 1951, which amends certain sections of Article
     1436-1, y.a.c., known as the,Certificate of Title Act.
               You state that in the past Texas citizens and
     dealers have purchased many new vehicles upon whiahit
     was not necessary to furnish a manufacturer's certif-
     icate in connection wfth the Issuance ,ofa certfflcate
     of tftle. Many of such vehicles are still in the pos-
     sesrion of dealers and no certificate of title has been
     isrued thereon. You then ask whether suuh vehicles
     which are on hand with dealers as of the effective date
     of House Bill 409 may be regfstered and titled ueder
     present requirements or ~1x1 they have to be titled un-
     der the provisions of House Ball 409.
               House Bill 409 ameads Sections 7, a, and 9
     of Article 1436-1, V.P.C., as follows:    ,~
                 "Section 1. The Certificate of Title
            Aat af the State of Texas, being Acts,:,,S939,
            Forty-sixth Legislature, Page 602, Is here-
            by amended by deleting therefrom Sections
            7, 8, and 9, and substituting In lieu there-
            %T the following:
Hon. D. C. Greer, page 2   (V-1211)


         "'Section 7* The term "First Sale" means
    the bargain, sale, transfer, or delivery with
    Intent to pass an interest therein, other than
    a lien, of a motor vehicle which has not been
    previously registered or licensed In this State
    or elsewhere; and such a bargain, sale, transfer
    or delivery, accompanied by registration or ll-
    censlng of said vehicle In this State or else-
    where, shall constitute the first sale of said
    vehicle, Irrespective of where such bargain,
    sale, transfer> or delivery occurred.
         "'Section a. The term "Subsequent Sale"
    means the bargain, sale, transfer, or delivery,
    with Intent to pass an interest therein, other
    than a lien, of a motor vehicle which has been
    registered or licensed within this State or
    elsewhere, save and except when such vehicle
    Is not required under law to be registered or
    licensed In this State; and any such bargain,
    sale, txansfer, or delivery of a motor vehicle
    after same has been registered or licensed shall
    constitute a subsequent sale, Irrespective of
    where such bargain, sale, transfer, or delivery
    occurred.
         "'Section q* The term "Hew Car" means a
    motor vehicle which has never been the subject
    of a first sale either within this State or
    elsewhere.8
         "Sec. 2. If any section, subsection, or
    clause of this Act Fs for any reason held to
    be unconstitutional, such decision shall not
    thereby affect the validity of any of the re-
    maining portions of this Act, and It Is hereby
    declared that this Act would have been passed
    notwithstanding the absence of such portion
    hereof so declared unconstitutional.
         "Sec. 3.  All laws or parts of laws In
    conflict herewith are hereby repealed to the
    extent of such conflict.
         "Sec. 4. The fact that hundreds of new
    motor vehicles are now being brought Into the
    State of Texas as used cars, thereby endanger-
    ing the title of such vehicles under the Cer-
    tificate of Title Act and thereby rendering
    .       z




        Hon. D. C. Greer, page 3     (v-1211)


                uncertain the legal status of such vehicles,
                creates an emergency and an imperative public
                necessity that the Constitutional Rule requlr-
                ing bills to be read on three several days be
                suspended, and said Rule is hereby suspended,
                and that this Act shall be effective from and
                after the date of its passage, and it is so
                enacted,'!
                  Prior to the passage of House Bill 409, it was
        held In State Bighway Department v0 Texas Automotive
        Dealers Esoclation, 239 S*W"2d 662-(TeK, Clv. App. 1951,
        errer appl,iedfox   that as to motor vehicles purchased
        or or,herwiseacquired outside of the State of Texas,
        and imported into Texas for the purpose of resale in
        Texas, the bargain, sale, transfer, or delivery of the
        motor vehicle outside the State of Texas, prior to im-
        portation, transposed the legal status of such motor
        vehicle to that of a "used car," as then defined in
/       Article 1436-~1,V.P.C. Thereafter, upon resale being
        accomplished in Texas, since such motor vehicles were
        "used cars" regardless of the presence or absence of
        registration of such motor vehicles in Texas or else-
        where, the appropriate evidence of ownership to accom-
        p3ny sn initial application for a certificate of title
        for such motor vehicles was held to be a properly ac-
        complished Importer's certificate and such additional
        evidence of title aspthe Righway Department might re-
        quire to show good title and the mortgage condition
        pertaining ,tothe motor vehIc?e, That procedure was
        expressly Iheldas precludl;g the necessity for present-
        ing a manufacturer's certificate,
                  B;cuseBill 409 was signed by the Governor on
        May 23, 19%   and since it psssed the Texas Senate by
        a viva vote vote,,it becomes effective ninety days after
        th??&teij?; adjournment, which will be September 7,
        1951" The biil is unquestionably pertinent to the con-
        strugctionof Article 1436-l sdopted in State Highwa
        Department-v. Texas Automotive Dealers Association,
        supra.O Under-e   definition of a "first sale," as
        amended by House Bill 409, for a "first sale" to be
        consumma,tedIt must be accompanied by the Initial reg-
        istration or licensing of the motor vehicle, either
        in Texas or elsewhere, This, of course, was not true
        prior to the passage of House Bi3.1409,
                                                  ,




    Hon. D. C. Greer, page 4   (v-1211)


              Therefore, after the effective date of House
    Bill 409, an owner, as defined in Article 1436-1, may
    not buy or otherwise acquire a motor vehicle at a
    "first sale" as defined in the amended ,definitfonQrO-
    vided in House Bill 409, without presentation of a
    manufacturer's certificate as the evidence of owner-
    Ship required under Section 28 to accompany the in-
    itial application for a certificate of title. This
    is true whether +&e motor vehicle was acquired in
    Texas or elsewhere. Possession of the motor vehicle
    by the seller prior to the effective date of House
    Bill 409 will not alter or change the application of
    House Bill 409, as the requirement of applying for a
    certificate of title under Article 1436-l is occa-
    sioned by the sale or disposition of the motor vehl-
                ), the registration of the motor vehicle
    p1"z&$        or the operation of the motor vehicle


f
               Your request reveals the particular adminis-
    trative QrOblem  which will.ar:se after House Bill 409
    becomes effective. A great number of automobile deal-
    ers have acquired QbeViOuSly  unregistered and unoperated
    motor vehicles outside the State of Texas, in States
    under the laws of which manufacturer's certificates are
    not required to be furnished by manufacturers to their
    vendees. Those motor vehicles are resting on dealers'
    lots in Texas where they are exposed for sale or will
    soon be, and up until this ,timethey were titied by the
    vendee who purchased the motor vehicle by presentfng
    an importer's certificate and a bill of sale or an in-
    voice D As to all of these motor vehicles, which are
    not previously titled or registered prior to the effec-
    tive date of House Bill 409, they must be sold or dis-
    posed of prior to September 7, 1951, or beginning on
    that date it will be necessary to furnish a manufact-
    urer's certificate with the initial application for a
    certificate of title,
              We point out in this connection that although
    dealers are not required to secure certificates of title
    to motor vehicles whirthey   have for sale bee Texas
                                                    --
    Automotive Dealers Association v. Harris Count Tax
    Assessormzor,       229 S.W.2d 787 (Tex, Sup. 53
                                                  1 m?
    there is nothing ,n the law which would prevent the
    dealers themselves from applying for titles prior to
    September 7, 1951, on all unregistered or unlicensed
    motor vehicles acqulsed outside of Texas and which are
    now on hand and will be affected by the provisions of
.      -




Hon. D. C. oreer, page 5       (V-1211)


House Bill 409, Under the decision in State Highway
Department,8. Texas Automotive Dealers Association,
m,     dealers may title such vehicles-n    the pre-
sentation of an importer's certificate and an invoice
or a bill of sale, prior to September 7, 1951.
          The foregoing observations also apply to
mctor vehicles in the hands of individuals, but there
should be no substantlal administrative difficulty as
to individuals because Individuals normally import
registered vehicles, After the effective date of
House Bill 409, all motor vehicles which are regis-
tered, in Texas or elsewhere, are used motor vehicles
within the incidence of Section 29 of Article 1436-1,
V,P0C., and a manufacturer's certificate is not re-
quired to accompany a title application for a used
motor vehicle.

                          SUMMARY

                House Bill 409, Acts 52nd Leg,, ROS.
           1951, amending Sections 7 8, and 9 oftthe
           Certificate of Title Law (Art. 1436-1,
           V.P.C,) becomes effective ninety days
           after adjournment of the Legislature, or
           September 7( 1951. Its provisions with
           respect to 'first sale," "subsequent
           sale'land "new car'Ias those terms are
           therein defined are applicable to, and
           must be complied with after its effec-
           tive date, in the iesusnce of a certif-
           icate of title on a motor vehicle brought
           Into Texas prior to the effective date of
           the Act but upon which no certificate of
           title had been Issued,
    APPROVED:                       Yours very truly,
    Bed McDaniel                      PRICE DANIEL
    State Affairs Dlvisioa          Attorney General
    Everett Hutchinson
    Executive Assistant
                                    BY
    Charles D. Mathews
    First Assistant
