                                               No.    12265

         I N THE SUPREME COURT O THE STATE OF MONTAP4A
                                F

                                                   1972



JACK PARKER,

                                       P l a i n t i f f and A p p e l l a n t ,

         -vs   -
FLOYD WEST, e t a l . ,

                                       Defendants and Respondents.



Appeal from:              D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t ,
                          Honorable Gordon R. B e n n e t t , Judge p r e s i d i n g .

Counsel o f Record:

    For Appellant :

               William Dee M o r r i s , Helena, Montana.
               Withdrew from c a s e and made no appearance.

    F o r Respondents:

               Gough, Booth, Shanahan and Johnson, Helena, Montana.
                                   .
               Ronald F Waterman argued, Helena, Montana.



                                                           Submitted:              October 26, 1972

                                                               Decided:               7.2, j n
                                                                                            $
         *I," : :     """?
                       t;.
Filed:              $ a    . !%,
Chief J u s t i c e James        T, H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court.

          P l a i n t i f f Jack Parker brought t h i s a c t i o n i n t h e d i s t r i c t
c o u r t of t h e f i r s t j u d i c i a l d i s t r i c t , county of Lewis and C l a r k ,
a g a i n s t F i r s t N a t i o n a l Bank & T r u s t Company of Helena, F i r s t

N a t i o n a l Bank. of Great F a l l s , Bison Motor Company, and Dave
Middlemas, s h e r i f f of Lewis and C l a r k County, t o r e c o v e r f o r an

a l l e g e d c o n v e r s i o n of an automobile,
          Defendant F i r s t N a t i o n a l Bank & T r u s t Company moved t o
d i s m i s s f o r f a i l u r e t o j o i n i n d i s p e n s a b l e p a r t i e s and f o r f a i l u r e

t o s t a t e a claim f o r r e l i e f .         Before t h e c o u r t could r u l e on t h e
motion, p l a i n t i f f amended h i s complaint by adding a s d e f e n d a n t s
Floyd West, Donald S i b l e y and Russel S, J o n e s .                        The c o u r t t r e a t e d

t h e motion t o d i s m i s s a s i f d i r e c t e d t o t h e amended complaint.
It g r a n t e d t h e motion and dismissed the complaint f o r f a i l u r e of
p l a i n t i f f t o s t a t e a c l a i m upon which r e l i e f could be g r a n t e d
a g a i n s t any p a r t y .    From t h e o r d e r d i s m i s s i n g t h e c o m p l a i n t ,
p l a i n t i f f appeals.
         The f a c t s a r e f a i r l y s t r a i g h t f o r w a r d .   P r i o r t o May 29, 1971,

p l a i n t i f f J a c k Parker was approached by Donald S i b l e y and a

d i s c u s s i o n was had between them i n r e l a t i o n t o t h e r e p a i r of a
1965 C h e v r o l e t EL Camino pickup t r u c k ,                Parker operates a small

automotive and r a d i z t o r r e p a i r shop,                The E l Camino, which was i n
need nf e x t e n s i v e r e p a i r s , was i n t h e p o s s e s s i o n of S i b l e y ,

         Parker repai-red t h e pickup,                   However, S i b l e y d i s a p p e a r e d

and n e v e r r e t u r n e d t o e i t h e r pay t h e b i l l of $1,113.20 o r t o
o b t a i n p o s s e s s i o n of t h e pickup.         Parker t h e n ettempted t o e x e r c i s e

h i s p o s s e s s o r y l i e n and f o r e c l o s e under s e c t i o n 45-1106, R.C.M.
1947, which p r o v i d e s f o r a g i s t e r ' s l i e n procedure.                The s h e r i f f
of Lewis and Clark County r e f u s e d t o s e l l t h e pickup under t h e
a g i s t e r ' s l i e n procedure.

         Meantime, Parker was approached by an agent of F i r s t N a t i o n a l
Bank & T r u s t Company of Helena, a c t i n g f o r defendant F i r s t N a t i o n a l

Bank of Great F a l l s .           This a g e n t d e c l a r e d t h a t a s e c u r i t y i n t e r e s t
e x i s t e J i n f a v o r o f t h e Great F a l i s Sank i n              he name of Floyd West,

X search of t:he r e c o r d s i n t h e o f f i c e of t h e r e g i s t r a r of motor
v e h i c l e s i n Deer Lodge r e v e a l e d t h a t defendant F i r s t N a t i o n a l Bank

( J iGreat     F a l l s had recorded i t s l i e n w i t h t h e r e g i s t r a r a s of
! u n e 2 , 1971.        Defendant Helena bank, a g a i n a c t i n g f o r defendant
b r e a t F a l l s bank, then caused t h e s h e r i f f of Lewis and C l a r k County
ir.o f o r c i b l y talce p o s s e s s i o n and d i s p o s e of t h e E l Camino, under

t h e Uniform Commercial Code,

          Defendant Helena bank appeared and moved t o d i s m i s s f o r

Caj-lure of p l a i n t i f f t o j o i n i n d i s p e n s i b l e p a r t i e s .       The t r i a l

c o u r t r u l e d t h a t p l a i n t i f f ' s c a u s e be d i s m i s s e d w i t h p r e j u d i c e

w i t h o u t l e a v e t o amend.        The b a s i s of t h e c o u r t ' s r u l i n g was t h a t
t h e r e c o r d r e v e a l e d p l a i n t i f f had n o t recorded h i s a g i s t e r ' s l i e n ;

<:onsequently, h i s l i e n d i d n o t have p r e f e r e n c e a s a g a i n s t a
recorded p e r f e c t e d l i e n f i l e d by defendant Great F a l l s bank.

          The f i r s t q u e s t i o n i s whether o r n o t t h e p l a i n t i f f had
a v a l i d , p r i o r a g i . s t e r l s l i e n on t h e E l Camino pickup.                W find
                                                                                                e

t h a t p l a i n t i f f d i d n o t have a v a l i d l i e n ,         S e c t i o n 45-1106, R.

  .i 1947, p r o v i d e s :
C ?.
          1I
            A g i s t e r s ' l i e n s and l i e n s f o r s e r v i c e -- p r i o r i t y .
          Every person who, w h i l e l a w f u l l y i n p o s s e s s i o n of an
          a r t i c l e of p e r s o n a l p r o p e r t y , r e n d e r s any s e r v i c e t o
          che owner o r Lawful c l a i m a n t t h e r e o f by l a b o r o r s k i l l
          employed f o r t h e making, r e p a i r i - n g , p r o t e c t i o n , i m -
          ixovement, s a f e k e e p i n g , o r c a r r i a g e t h e r e o f , h a s a
          s p e c i a l l i e n t h e r e o n , dependent on p o s s e s s i o n , f o r t h e
          compensation, i f any, which i s due t o him from t h e
          owner o r l a w f u l c l a i m a n t f o r such s e r v i c e and f o r
          m a t e r i a l , i f any, f u r n i s h e d i n c o n n e c t i o n t h e r e w i t h .
          A ranchman, farmer, a g i s t e r , h e r d e r , h o t e l - k e e p e r ,
          l i v e r y , b o a r d i n g , o r f e e d s t a b l e - k e e p e r , t o whom any
          h o r s e s , mules, c a t t l e , sheep, hogs, o r o t h e r s t o c k a r e
          d n t r u s t e d , and t h e r e i s a c o n t r a c t , e x p r e s s o r i m p l i e d ,
          Eor t h e i r k e e p i n g , f e e d i n g , h e r d i n g , p a s t u r i n g , o r
          r a n c h i n g , h a s a l i e n upon such s t o c k f o r t h e amount due
          ?or k e e p i n g , f e e d i n g , h e r d i n g , p a s t u r i n g , o r r a n c h i n g
          che same. and i s a u t h o r i z e d t o r e t a i n p o s s e s s i o n t h e r e o f
          t l n t i l th; sum due i s p a i d . The l i e n &reby c r e a t e d s h a l l
          ]lot talce precedence over p e r f e c t e d s e c u r i t y i n t e r e s t s
          under t h e Uniform Commercial Code-Secured T r a n s a c t i o n s ,
          3r o t h e r recorded l i e n s on t h e p r o p e r t y i n v o l v e d , u n l e s s
          w i t h i n t e n days from t h e time of r e c e i v i n g t h e p r o p e r t y ,
          t h e person d e s i r i n g t o a s s e r t a l i e n thereon s h a l l g i v e
          n o t i c e i n w r i t i n g t o s a i d secured p a r t y o r o t h e r l i e n
          holder, stating h i s intention t o a s s e r t a l i e n
          3n s a i d p r o p e r t y , under t h e
          terms of t h i s a c t , and s t a t i n g t h e n a t u r e and
          approximate amount of t h e work, o r f e e d , per-
          formed o r f u r n i s h e d o r i n t e n d e d t o be performed
          or furnished theref or.
          "Such s e r v i c e may be made e i t h e r by p e r s o n a l
          s e r v i c e o r by m a i l i n g by r e g i s t e r e d m a i l a copy
          of s a i d n o t i c e t o t h e secured p a r t y o r o t h e r l i e n
          h o l d e r a t h i s l a s t known p o s t - o f f i c e a d d r e s s .
          Said s e r v i c e s h a l l be deemed complete upon t h e
          d e p o s i t of t h e n o t i c e i n t h e p o s t o f f i c e . I I
          (Emphasis added)           .
          W e have emphesized t h e s e c t i o n ' s two important a s p e c t s .
One porti.on of t h e s t a t u t e p r o v i d e s t h a t t h e l i e n i s p r o p e r l y
a s s e r t e d o n l y a g a i n s t t h e owner o r l a w f u l c l a i m a n t of t h e p r o p e r t y .
Thus, from t h e f a c e of t h e s t a t u t e a l o n e , i t i s a p p a r e n t o n l y t h e
owner o r la.wful c l a i m a n t can a u t h . o r i z e work on p e r s o n a l p r o p e r t y ,
which then, can b e charged. w i t h a l i e n .
          The second p o r t i o n of t h e s e c t i o n , which c o n t r o l s i n t h i s

c a s e , p r o v i d e s t h a t t o t a k e p r i o r i t y over t h e h o l d e r of a recorded
l i e n , t h e i n d i v i d u a l a s s e r t i n g an a g i s t e r ' s l i e n must, w i t h i n
t e n days of r e c e i p t of t h e p r o p e r t y , a s s e r t h i s l i e n by m a i l i n g
t o t h e r e c o r d e d l i e n h o l d e r a s t a t e m e n t of h i s i n t e n t i o n t o a s s e r t
such a l i e n .
          P l a i n t i f f ' s complaint f a i l s t o come w i t h i n t h e p r o v i s i o n s of
t h e a g i s t e r ' s l i e n s t a t u t e upon which he r e l i e s .           Plaintiff at-
tached t o h i s complaint a s                 exhibits         a copy of t h e r e t a i l i n s t a l l -
ment c o n t r a c t and t i t l e t o t h e automobile,                  N e i t h e r document s h o ~ \ ~ s
Donald S i b l e y a s t h e r e g i s t e r e d owner of t h e c a r .               Both documents
demonstrate t h a t Floyd West h e l d undisputed t i t l e ownership of t h e
car.      P l a i n t i f f does n o t contend S i b l e y a c t e d a s West's a g e n t
i n a u t h o r i z i n g r e p a i r s on t h e c a r ; r a t h e r , h e r e l i e s e x c l u s i v e l y
upon S i b l e y ' s a l l e g e d ownership.            P l a i n t i f f , however, cannot r e f u s e
t o aclcnowledge f a c t s wllich h e had knowledge o f , s p e c i f i c a l l y ,
t h e t i t l e ownership i n West's name and t h e s e c u r i t y i n t e r e s t of
t h e F i r s t N a t i o n a l Bank of Great F a l l s ,            It i s a p p a r e n t t h a t
p l a i n t i f f was aware of t h o s e i n t e r e s t s , a s i t was t h e s e p a r t i e s w i t h
whom h e d e a l t and i t was t h e s e p a r t i e s who were named i n t h e a g i s t e r ' s
lien notice.           The complaint and e x h i b i t s demonstrate p l a i n t i f f ' s
awareness t h a t p a r t i e s o t h e r t h a n S i b l e y owned t h e vehi-cl-e.
          .k   second element r e q u i r e d b y s e c t i o n 4 5 - 1 1 0 6 , R.C.M,               1-947,

i s :hat       txo a c h i e v e p r i o r i t y over a r e c o r d l i e n h o l d e r n o t i c e o f

,he    l i e n must be given w i t h i n ten days of when t h e p r o p e r t y was
r e c e i v e d by t h e mechanic.               P l a i n t i f f did n o t f o l l o w t h i s requirement.

His complaint f a i l e d t o a s s e r t t h a t n o t i c e , a s r e q u i r e d , was e v e r

d i r e c t e d t o t h e r e c o r d l i e n h o l d e r , F i r s t N a t i o n a l Bank of Great

Falls.

          P l a i n t i f f s u r e l y had n o t i c e of t h e Great F a l l s b a n k ' s
i i i t e r e s t i n t h e automobile, a s i n t h e n o t i c e of t h e a g i s t e r ' s l i e n

he named t h a t p a r t y a s one of t h e owners of t h e automobile.

Y i a i n t i f f cannot deny he had n o t i c e o r lcnowledge of t h e b a n k ' s

i n t e r e s t when i n t h e n o t i c e f i l e d i n J u l y 1971, h e recognized t h e

e x i s t e n c e of t h a t i n t e r e s t ,      Since p l a i n t i f f was charged w i t h
knowledge, t o g a i n p r i o r i t y over t h e bank h e had t o f i l e h i s

n o t i c e of a g i s t e r ' s l i e n and send a copy of t h e n o t i c e t o the bank
w i t h i n t e n days of when h e o b t a i n e d p o s s e s s i o n of t h e automobile,

By t h e a l l e g a t i o n i n p l a i n t i f f ' s c o m p l a i n t , t h e d a t e of h i s

p o s s e s s i o n i s s e t a t May 28, 1 9 7 1 .           Yet t h e complaint shows t h a t

more than t e n days e l a p s e d between t h e day possessi.on was o b t a i n e d

and when n o t i c e of t h e l i e n was g i v e n , which was sometime a f t e r

J u l y 1 3 , 1971.
          S e c t i o n 45-1106, R.C.M.              1947, s p e c i f i c a l l y p r o v i d e s t h a t
" n o t i c e s h a l l b e given" and u n l e s s g i v e n w i t h i n t e n days t h e

" l i e n c r e a t e d " does n o t t a k e precedence over o t h e r recorded l i e n s

on t h e propercy i n v o l v e d .              F a i l u r e t o comply with t h i s s t a t u t o r y
provision r e s u l t s i n p l a i n t i f f ' s l i e n being i n f e r i o r t o the l i e n

o? F i r s t N a t i o n a l Bank of Great F a l l s .               Thus, t h e bank c o u l d and
J i d p r o p e r l y r e p o s s e s s t h e automobile; i t s a g e n t s were n o t l i a b l e

t o r t h e r e p o s s e s s i o n , and n e i t h e r i t s a c t i o n n o r t h e a c t i o n of

-ne s h e r i - f f w a s c o n v e r s i o n a s t o t h e p l a i n t i f f .

          Through e x h i b i t s i n h i s c o m p l a i n t , p l a i n t i f f demonstrates
I h a i 9n February 2 , 1972, t h e r e g i s t r a r of motor v e h i c l e s had only

the r e c a i l i n s t a l l m e n t c o n c r a c t on f i l e .      I t i s a l l e g e d and a d m i t t e d
t h e r e f o r e t h a t p l a i n t i f f had n o t a t any time p r i o r t o t h e r e -

possessi-on of t h e aet~omoL)i.le,placed h i s a g - k s t e r ' s l i e n on file
           C o n t r o l l i n g i s s e c t i o n 53-F10 ( a ) , & . ~ . h .~ Y L F ~ W ~, - L J _ ~ : ~ ;-xi
                                                                                       ~                  I

                    art
      i i l l e ~ ~ t      provides :

                                      - - .
           "No c h a t t e l mortnage, c o n d i t i o r i a l s a l e s conCraeL,
           l e a s e o r o t h e r l i e n on a motor v e h i c l e s h a l l be
           . ~ a l i d s a g a i n s t c r e d i t o r s , s u b s e q ~ i e n tp u r c h a s e r s
                      a
            ~r encumbrances u n l e s s and u n t i l such mortgage,
           t:onditional s a l e s c o n t r a c t , l e a s e o r o t h e r l i e n ,
           ~r a t r u e copy t h e r e o f c e r t i f i e d by a n o t a r y p u b l i c
           'las been f i l E b w i t h t h e r e g i s t r a r of motor v e h i c l e s
                                                                 .
           2s h e r e i n a f t e r provided +( ;k 5 " (Emphasis added).
                                                           :

 i'tlis   5tatute       s p e c 5 . f i c a l l y d e a l s w i t h the c i t u a t i o n h e r e .         It

provides t h a t u n t i l t h e l i e n o r a copy t h e r e o f h a s been f i l e d

with t h e r e g i s t r a r of motor v e h i c l e s , i t i s n o t v a l i d a s a g a i n s t
c r e d i t o r s of t h e motor v e h i c l e owner having a s e c u r i t y i n t e r e s t

ill   t h e automobile.             As a g a i n s t a l l p a r t i e s ,         lai in tiff's        lien
w a s n o t v a l i d ; i t was never f i l e d w i t h t h e r e g i s t r a r .

           P l a i n t i f f ' s complaint r e s t s e n t i r e l y upon t h e v a l i d i t y and

p ~ i . ~ r i t lof h i s l i - e n .
                 )r                       T h i s Court i s s a t i s f i e d h i s l i e n was

i i e - i t h e r p r i o r j.n t i m e , n o r f u l f i l - l e d t h e s t a t l u t o r y r e q u i r e m e n t s

JL?   s e c t i o n s 45-IlOG and 53-110(a), R.C.M.                           1947.        For t h i s r e a s o n
p l a i n t i f f ' s complaint must f a i l , and t h e d i s t r i c t c o u r t ' s judgment

Ls a f f i r m e d .
          W a l s o f i n d the d i s t r i c t court properly granted the
           e
motion t o d i s m i s s , b o t h a s t o t h e F i r s t N a t i o n a l Bank & T r u s t

Cuoipany of Helena and a s t o a l l o t h e r p a r t i e s .                           The c o u r t ' s a c t i o n

was a p p r o p r i a t e a s p l a i n t i f f ' s cl.aim a s t o each i n d i v i d u a l p a r t y
r u s t e d e x c l u s i v e l y upon t h e p r i o r i t y and v a l i d i t y of h i s a g i - s t e r ts

lien.       Once e s t a b l i s h . e d t h a t t h e l i e n was n e i t h e r v a l i d n o r p r i o r

a s t o t h e F i r s t N a t i o n a l Bank and T r u s t Company of Helena, i t
b g i c a l l y f o l l o w s t h a t t h e l i e n was l i k e w i s e i n v a l i d and subsequent
Co    t h e c l a i m o f any ocher og-
                                    ,.
                                    +-                                  defendants,
          The o r d e r of t h e d




                                                    i                     Chief J u s t i c e
                                                  ,ji
                                             //
fi'
 As ociate ~ u d t i c e s .
