H. B. 2273
(By Delegate H. K. White)
[Introduced January 15, 1999; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact sections two and three, article
four-a, chapter seventeen-a of the code of West Virginia,
one thousand nine hundred thirty-one, as amended; and to
amend and reenact section three hundred two, article nine,
chapter forty-six of said code, all relating to the creation
and perfection of a lien against a vehicle held as inventory
for lease by a person in the business of leasing vehicles.
Be it enacted by the Legislature of West Virginia:
That sections two and three, article four-a, chapter
seventeen-a of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted; and
that section three hundred two, article nine, chapter forty-six
of said code be amended and reenacted, all to read as follows:
CHAPTER 17A. MOTOR VEHICLE ADMINISTRATION, REGISTRATION,
CERTIFICATE OF TITLE, AND ANTITHEFT PROVISIONS.
ARTICLE 4A. LIENS AND ENCUMBRANCES ON VEHICLES TO BE SHOWN ON
CERTIFICATE OF TITLE; NOTICE TO CREDITORS AND PURCHASERS.
§17A-4A-2. Liens and encumbrances subsequently created.
(a) Liens or encumbrances placed on vehicles by the
voluntary act of the owner after the original issue of title to
be properly recorded must be shown on the certificate of title.
In such cases, 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 kind of and nature of the 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 lienholder shall make a written request upon the lienholder in possession of the certificate of title,
accompanied by proof of the existence of the subsequent lien,
stating his need to have possession of the certificate of title
for the purpose of having his lien recorded thereon by the
division of motor vehicles. Thereupon, the lienholder 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
lienholder.
Upon delivery of the certificate of title, the subsequent
lienholder shall immediately forward it and the lienholder's own
application to the division of motor vehicles for the filing of
the lien and for the recording of 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.
(b) The provisions of subsection (a) of this section shall
not apply to vehicles held as inventory for sale or lease by a
registered dealer holding title by assignment entered upon a
certificate of title, or held as inventory for lease by a person
who is in the business of leasing vehicles. Any lien or
encumbrance placed on such vehicles by the voluntary act of the
owner shall be created and perfected in accordance with the
provisions of article nine, chapter forty-six of this code.
§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; exceptions.
(a) 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, to
the United States government and its agencies, boards and
commissions, to creditors and to 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. Notwithstanding any other provision
of this code to the contrary, and subject to the provisions of
subsection (b) of this section and of section four of this
article, any lien or encumbrance placed upon a vehicle by the
voluntary act of the owner but not shown on such certificate of
title 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.
(b) The creation and perfection of a lien against a vehicle
held as inventory for sale by a registered dealer holding title
by assignment or a vehicle held as inventory for lease by a person who is in the business of leasing vehicles in accordance
with the provisions of article nine, chapter forty-six of this
code shall be deemed adequate notice to the state and its
agencies, boards and commissions, to the United States government
and its agencies, boards and commissions, to creditors and to
purchasers that a lien against the vehicle exists, subject to the
provisions of section three hundred seven, article nine, chapter
forty-six of this code, except that any lien or encumbrance on
such a vehicle shall not be effective against the rights of any
purchaser for value who purchases such vehicle primarily for
personal, family, household or agricultural purposes unless such
lien or encumbrance is recorded on the certificate of title or
specified on the bill of sale.
CHAPTER 46. UNIFORM COMMERCIAL CODE.
ARTICLE 9. SECURED TRANSACTIONS; SALES OF ACCOUNTS AND CHATTEL
PAPERS.
§46-9-302. When filing is required to perfect security interest;
security interests to which filing provisions of this article do not apply.
(1) A financing statement must be filed to perfect all
security interests except the following:
(a) A security interest in collateral in possession of the
secured party under section 9-305;
(b) A security interest temporarily perfected in instruments, certificated securities or documents without
delivery under section 9-304 or in proceeds for a ten-day period
under section 9-306;
(c) A security interest created by an assignment of a
beneficial interest in a trust or a decedent's estate;
(d) A purchase money security interest in consumer goods;
but filing is required for a motor vehicle required to be
registered; and fixture filing is required for priority over
conflicting interests in fixtures to the extent provided in
section 9-313;
(e) An assignment of accounts which does not alone or in
conjunction with other assignments to the same assignee transfer
a significant part of the outstanding accounts of the assignor;
(f) A security interest of a collecting bank (section 4-208)
or arising under the article on sales (see section 9-113) or
covered in subsection (3) of this section;
(g) An assignment for the benefit of all the creditors of
the transferor, and subsequent transfers by the assignee
thereunder;
(h) A security interest in investment property which is
perfected without filing under section 9-115 or section 9-116.
(2) If a secured party assigns a perfected security
interest, no filing under this article is required in order to
continue the perfected status of the security interest against creditors of and transferees from the original debtor.
(3) The filing of a financing statement otherwise required
by this article is not necessary or effective to perfect a
security interest in property subject to:
(a) A statute or treaty of the United States which provides
for a national or international registration or a national or
international certificate of title or which specifies a place of
filing different from that specified in this article for filing
of the security interest; or
(b) The following statute of this state: Chapter
seventeen-a of this code; but during any period in which
collateral is inventory held for sale or lease by a person who is
in the business of selling or leasing goods of that kind, the
filing provisions of this article (Part 4) apply to a security
interest in that collateral created by him as debtor; or
(c) A certificate of title statute of another jurisdiction
under the law of which indication of a security interest on the
certificate is required as a condition of perfection (subsection
(2) of section 9-103).
(4) Compliance with a statute or treaty described in
subsection (3) of this section is equivalent to the filing of a
financing statement under this article, and a security interest
in property subject to the statute or treaty can be perfected
only by compliance therewith except as provided in section 9-103 on multiple state transactions. Duration and renewal of
perfection of a security interest perfected by compliance with
the statute or treaty are governed by the provisions of the
statute or treaty; in other respects the security interest is
subject to this article.
NOTE: The purpose of this bill is to provide for the
creation of and perfection of a lien against a vehicle held as
inventory for lease by a person in the business of leasing
vehicles through the filing of a financing statement.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
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