H. B. 2099
(By Delegates Farris, Beane and Kelley)
[Introduced January 20, 1995; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact sections two, three and five, article
four-a, chapter seventeen-a of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, all
relating to the perfection of liens against vehicles held as
inventory by a registered dealer once title has been issued.
Be it enacted by the Legislature of West Virginia:
That sections two, three and five, article four-a, chapter
seventeen-a of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted, all to
read as follows:
§17A-4A-2. Liens and encumbrances subsequently created.
Liens or encumbrances placed on vehicles by the voluntary act of the owner (including a registered dealer holding title by
assignment entered upon a certificate of title) after the
original issue of title to be properly recorded must be shown on
the certificate of title, except when such vehicles are held as
inventory for sale by a registered dealer holding title by
assignment entered upon a certificate of title, in which case
liens and encumbrances shall be created and perfected in
accordance with article nine, chapter forty-six of this code. In
such cases other than such inventory liens, the owner or
lienholder shall file application with the department on a blank
furnished for that purpose, setting forth the lien or liens and
such information and evidence of the lien in connection therewith
as the department may deem necessary. Such information shall
include the name and address of the lienholder, the nature and
kind of his lien, the date thereof, and the amount thereby
secured. However, only the name and address of the lienholder
shall be endorsed on the title certificate with the endorsement
of the fact of such lien as hereinafter provided. The
department, if satisfied that it is proper that the same be
recorded, and upon surrender of the certificate of title covering
the vehicle, shall thereupon issue a new certificate of title, showing the liens or encumbrances in the order of their filing
being according to the date, hour and minute of receipt by the
department of the application for same. For the purpose of
recording a subsequent lien on a certificate of title, the
subsequent lienor shall make a written request upon the lienor in
possession of the certificate of title, accompanied by proof of
the existence of his subsequent lien, stating his need to have
possession of the certificate of title for the purpose of having
his lien recorded thereon by the department of motor vehicles.
Thereupon, the lienor in possession of the certificate shall
within a reasonable time, not to exceed ten days from the receipt
of said written request, deliver the certificate of title to the
requesting subsequent lienor.
Upon delivery of the certificate of title, the subsequent
lienor shall immediately forward it and his own application to
the department of motor vehicles for filing his lien and
recording the same on the certificate of title. Upon issuing the
new certificate, the department shall thereupon send or deliver
it to the holder of the first lien.
§17A-4A-3. Notice of lien; noninventory lien created by
voluntary
act of the owner not shown on certificate of title void as to subsequent purchasers and lien creditors; exception as to
deferred purchase money liens; existing liens excepted.
Such Except with respect to certain liens on vehicles held
as inventory for resale, a certificate of title, when issued by
the department showing a lien or encumbrance, shall be deemed
from and after the filing with the department of the application
therefor adequate notice to the state, and its agencies, boards
and commissions and the United States government and its
agencies, boards and commissions, creditors and purchasers that
a lien against the vehicle exists and the recording of such
reservation of title, lien or encumbrance in the county wherein
the purchaser or debtor resides or elsewhere is not necessary and
shall not be required or have any effect. Creation and
perfection of a lien against a vehicle held as inventory for sale
by a registered dealer in accordance with article nine, chapter
forty-six of this code shall be deemed adequate notice to the
state and its agencies, boards and commissions, the United States
government and its agencies, boards and commissions, and
creditors and purchasers that a lien against such inventory exists: Provided, That the provisions of section three hundred
seven, article nine, chapter forty-six of this code shall apply.
The provisions of any other article, chapter or section of this
code to the contrary notwithstanding, any lien or encumbrance
placed upon a vehicle by the voluntary act of the owner
(including a registered dealer holding title thereto by
assignment entered upon a certificate of title) but not shown on
such certificate of title by any other means shall be void as to
any purchaser for value or lien creditor, who, in either case,
without notice of such lien or encumbrance, purchases such
vehicle or acquires by attachment, levy or otherwise a lien
thereupon: Provided, however, That a purchase money lien or
encumbrance may be filed as hereinafter set forth in section four
of this article with the effect therein stated: Provided
further, That this section shall apply only to liens and
encumbrances created on and after the effective date of this
article.
§17A-4A-5. Priority of liens shown on certificate.
The liens shown upon such certificate of title issued by the department pursuant to applications for same shall have priority
over any other liens against such vehicle, however created and
recorded, except as hereinafter otherwise provided in this
article.
NOTE: The purpose of this bill is to clarify the lien
perfection procedures for used car inventory to remove
ambiguities between Chapter 17-A and the Uniform Commercial Code.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.