60-110.
Liens on motor vehicles; when valid; notation on certificate;
inventory, exception; priority; notation of cancellation; failure
to deliver certificate; penalty; release; consolidation of
services; effect.
The provisions of article 9, Uniform Commercial Code, shall never be construed
to apply to or to permit or require the deposit, filing, or other record
whatsoever of a security agreement, conveyance intended to operate as a
mortgage, trust receipt, conditional sales contract, or similar instrument or
any copy of the same covering a motor vehicle. Any mortgage, conveyance
intended to operate as a security agreement as provided by article 9, Uniform
Commercial Code, trust receipt, conditional sales contract, or other similar
instrument covering a motor vehicle, if such instrument is accompanied by
delivery of such manufacturer's or importer's certificate and followed by
actual and continued possession of the same by the holder of such instrument
or, in the case of a certificate of title, if a notation of the same has been
made by the county clerk or the Department of Motor Vehicles on the face
thereof, shall be valid as against the creditors of the debtor, whether armed
with process or not, and subsequent purchasers, secured parties, and other
lienholders or claimants but otherwise shall not be valid against them, except
that during any period in which a motor vehicle is inventory, as defined in
section 9-102, Uniform
Commercial Code, held for sale by a person or corporation that is licensed as
provided in Chapter 60, article 14, and is in the business of selling motor
vehicles, the filing provisions of article 9, Uniform Commercial Code, as
applied to inventory, shall apply to a security interest in such motor vehicle
created by such person or corporation as debtor without the notation of lien on
the instrument of title. A buyer at retail from a licensed dealer of any
vehicle which is subject to Chapter 60, article 14, in the ordinary course of
business shall take such vehicle free of any security interest.
Subject to the foregoing, all liens, security agreements, and encumbrances
noted upon a certificate of title shall take priority according to the order of
time in which the same are noted thereon by the county clerk or the Department
of Motor Vehicles. Exposure for sale of any motor vehicle by the owner thereof
with the knowledge or with the knowledge and consent of the holder of any lien,
security agreement, or encumbrance on such motor vehicle shall not render the
same void or ineffective as against the creditors of such owner or holder of
subsequent liens, security agreements, or encumbrances upon such motor vehicle.
The holder of a security agreement, trust receipt, conditional sales contract,
or similar instrument, upon presentation of such instrument to the county clerk
of the county where such certificate of title was issued or, if issued by the
department, to the department together with the certificate of title and the
fee prescribed by section 60-115, may have a
notation of such lien made on the face of such certificate of title. The county
clerk or the department shall enter the notation and the date thereof over the
signature of such officer or deputy and the seal of office and shall also note
such lien and the date thereof on the duplicate of same on file. If noted by a
county clerk, he or she shall on that day notify the department which shall
note the lien on its records. The county clerk or the department shall also
indicate by appropriate notation and on such instrument itself the fact that
such lien has been noted on the certificate of title.
The county clerk or the department, upon receipt of a lien instrument duly
signed by the owner in the manner prescribed by law governing such lien
instruments together with the fee prescribed for notation of lien, shall notify
the first lienholder to deliver to the county clerk or the department, within
fifteen days from the date of notice, the certificate of title to permit
notation of such junior lien and, after such notation of lien, the county clerk
or the department shall deliver the certificate of title to the first
lienholder. The holder of a certificate of title who refuses to deliver a
certificate of title to the county clerk or the department for the purpose of
showing a junior lien on such certificate of title within fifteen days from the
date when notified to do so shall be liable for damages to such junior
lienholder for the amount of damages such junior lienholder suffered by reason
of the holder of the certificate of title refusing to permit the showing of
such lien on the certificate of title.
When such lien is discharged, the holder shall, within fifteen days after
payment is received, note a cancellation of the lien on the face of the
certificate of title over his, her, or its signature and deliver the
certificate of title to the county clerk or the department which shall note the
cancellation of the lien on the face of the certificate of title and on the
records of such office. If delivered to a county clerk, he or she shall on that
day notify the department which shall note the cancellation on its records. The
county clerk or the department shall then return the certificate of title to
the owner or as otherwise directed by the owner. The cancellation of lien shall
be noted on the certificate of title without charge.
If a county board consolidates services under the office of a designated county
official other than the county clerk pursuant to section 23-186, the
designated county official shall make notations of all liens and cancellation
of liens on motor vehicles and collect fees pursuant to section 60-115.
Source:
Laws
1939, c. 81, 9, p. 333; C.S.Supp.,1941, 60-1009;
Laws 1943, c. 134, 4, p. 452; R.S.1943, 60-110;
Laws 1969, c. 491, 2, p. 2026; Laws 1977, LB 47, 1;
Laws 1988, LB 305, 2; Laws 1988, LB 833, 3; Laws 1993, LB 112, 9;
Laws 1999, LB 550, 40.
Operative date July 1, 2001.
Cross Reference
Certificate
of title,negligent execution by government employee,
see sections 13-910
and 81-8,219.
~1.
Priority of liens 2. Notation of lien on certificate 3. Miscellaneous~
~1. Priority of liens~ If procedure of this section followed, lienor's interest shall take priority and marshalling of assets cannot be required. Platte Valley Bank of North Bend v. Kracl, 185 Neb. 168, 174 N.W.2d 724 (1970). Conditional sales contract shown on certificate of title is superior to artisan's lien. Allied Inv. Co. v. Shaneyfelt, 161 Neb. 840, 74 N.W.2d 723 (1956). Attorney who paid off balance taxpayer owed on purchase of automobile and took taxpayer's equity as payment for prior legal fee was subrogated to amount of encumbrance discharged, and, as to such, attorney, whose interest in vehicle was otherwise junior to federal tax lien, was entitled to priority over the government. Gallup v. United States, 358 F.Supp. 776 (D. Neb. 1973). ~2. Notation of lien on certificate~ Claims of a purchase money mortgage, a conditional interest established by an agreement, and other security interests not shown on the certificate of title are invalid as to subsequent purchasers under the express terms of the certificate of title act. Nelson v. Cool, 230 Neb. 859, 434 N.W.2d 32 (1989). The practice of filing and recording chattel mortgage on motor vehicles has been eliminated and under that section security interests must be noted on the certificate of title itself. Cushman Sales & Service of Nebraska, Inc. v. Muirhead, 201 Neb. 495, 268 N.W.2d 440 (1978). There is no legal requirement that a lien be noted on a certificate of title purportedly covering property not subject to the Certificate of Title Act, even though a certificate of title for such property has been issued. Cushman Sales & Service of Nebraska, Inc. v. Muirhead, 201 Neb. 495, 268 N.W.2d 440 (1978). A security interest noted on the certificate of title to a vehicle is valid against creditors of the debtor whether armed with process or not. White Motor Credit Corp. v. Sapp Bros. Truck Plaza, Inc., 197 Neb. 421, 249 N.W.2d 489 (1977). An unrecorded lien is invalid as to a subsequent purchaser or lienholder. First Nat. Bank v. Provident Finance Co., 176 Neb. 45, 125 N.W.2d 78 (1963). Filing of conditional sales contract is not required, but notation on certificate of title is. Universal C.I.T. Credit Corp. v. Vogt, 165 Neb. 611, 86 N.W.2d 771 (1957). Chattel mortgage was void as to creditors where notation on certificate of title was made after levy of execution. Alliance Loan & Inv. Co. v. Morgan, 154 Neb. 745, 49 N.W.2d 593 (1951). ~3. Miscellaneous~ This section applies to dealers as well as general purchasers. Bank of Keystone v. Kayton, 155 Neb. 79, 50 N.W.2d 511 (1951). Legislature intended to eliminate the previous practice of filing chattel mortgages on motor vehicles in the chattel mortgage records. Securities Credit Corp. v. Pindell, 153 Neb. 298, 44 N.W.2d 501 (1950). For purpose of perfecting security interest in mobile homes manufactured by debtor and assigned to trust, debtor corporation's president could not act as agent of trust and president's possession of homes and certificates of origin was not possession of trust and did not give trust possession sufficient to perfect interest. In re North American Builders, Inc., 320 F.Supp. 1229 (D. Neb. 1970).