Colorado § 42-6-133 - Foreign mortgages and liens.

§ 42-6-133. Foreign mortgages and liens.

A mortgage or lien on a motor or off-highway vehicle filed for record in a state other than Colorado is not valid and enforceable against the rights of subsequent purchasers for value, creditors, lienholders, or mortgagees having no actual notice of the existence of the mortgage or lien. If the certificate of title for the vehicle bears any notation adequate to apprise a purchaser, creditor, lienholder, or mortgagee of the existence of a mortgage or lien at the time a third party acquires a right in the motor vehicle, the mortgage or lien and the rights of the holder of the mortgage or lien are enforceable in this state as though the mortgage were filed in Colorado and noted on the certificate of title or noted in the record of the authorized agent for the vehicle under section 42-6-121.

Source: L. 94: Entire title amended with relocations, p. 2464, § 1, effective January 1, 1995. L. 2000: Entire section amended, p. 1668, § 24, effective July 1, 2001. L. 2005: Entire section amended, p. 818, § 22, effective August 8. L. 2013: Entire section amended, (SB 13-280), ch. 407, p. 2392, § 28, effective June 5.

Editor's note: This section is similar to former § 42-6-131 as it existed prior to 1994, and the former § 42-6-133 was relocated to § 42-6-135.

ANNOTATION

Annotator's note. Since § 42-6-133 is similar to § 42-6-131 as it existed prior to the 1994 amending of title 42 as enacted by SB 94-1, relevant cases construing that provision have been included in the annotations to this section.

Purpose, application, and limitations of section. The purpose of this section, being to apprise a local purchaser of the existence of a foreign lien, it applies only to a regular and nonfraudulent foreign title, and its operation is limited to the protection of a local innocent purchaser where a foreign title is issued without notation of lien. Federico v. Universal C.I.T. Credit Corp., 140 Colo. 145, 343 P.2d 830 (1959).

Refusal to give effect to mortgage filed for record in foreign state. In the first sentence of this section the general assembly has changed the prior law by refusing to give effect to a mortgage that is filed for record in a foreign state and nothing more, at least in a state which uses the system of certificates of title. Federico v. Universal C.I.T. Credit Corp., 140 Colo. 145, 343 P.2d 830 (1959).

Modified by second sentence of section. If taken literally, the first sentence of this section would indicate that no foreign mortgage shall be enforceable against a subsequent purchaser for value in Colorado. However, the second sentence of the same section refers to the "certificate of title for such vehicle ... under the laws of ... any other state". Thus, it would appear that the second sentence modifies and thus limits the first sentence to application to mortgages originating in certificate of title states. Doenges-Glass, Inc. v. GMAC, 175 Colo. 518, 488 P.2d 879 (1971).

In view of this section, the provisions of § 42-6-119 requiring filing of mortgages does not apply to foreign mortgages. First Nat'l Bank v. Chuck Lowen, Inc., 128 Colo. 104, 261 P.2d 158 (1953).

The recognition of a foreign mortgage depends not upon its being filed for record, but upon its appearing on the certificate of title. First Nat'l Bank v. Chuck Lowen, Inc., 128 Colo. 104, 261 P.2d 158 (1953); Fleming v. Gevelhoff, 133 Colo. 436, 296 P.2d 748 (1956).

The present statutory method of protection is by means of showing of encumbrances on the title certificate. Fleming v. Gevelhoff, 133 Colo. 436, 296 P.2d 748 (1956).

This section is clearly designed to encourage other states to require notation as a means of protecting their citizens holding mortgages on motor vehicles which can easily be moved into this state as well as to other states. Federico v. Universal C.I.T. Credit Corp., 140 Colo. 145, 343 P.2d 830 (1959).

Where the title to a truck bore a notation adequate to apprise a purchaser, creditor, or mortgagee and the chattel mortgage is therefore entitled to the same effect as though it were filed in this state in the manner prescribed by statute. First Sec. Bank v. Crouse, 374 F.2d 17 (10th Cir. 1967).

An attaching creditor with notice that there is doubt as to the title to a vehicle may not prevail over a foreign mortgage regardless of a failure of the mortgagee to comply with the requirement of the foreign state for filing mortgages by failure to note the mortgage on the original certificate of title. Federico v. Universal C.I.T. Credit Corp., 140 Colo. 145, 343 P.2d 830 (1959).

The rule of comity requires that a foreign lien on a motor vehicle is enforceable in this state provided it is valid in the state where it is executed. Doenges-Glass, Inc. v. GMAC, 28 Colo. App. 283, 472 P.2d 761 (1970), aff'd, 175 Colo. 518, 488 P.2d 879 (1971).

Only if a certificate of title is issued and delivered to the buyer will this rule be disregarded. Doenges-Glass, Inc. v. GMAC, 28 Colo. App. 283, 472 P.2d 761 (1970), aff'd, 175 Colo. 518, 488 P.2d 879 (1971).

This section does not render a foreign mortgage unenforceable against a third party where a sale is without a certificate of title. Federico v. Universal C.I.T. Credit Corp., 140 Colo. 145, 343 P.2d 830 (1959).

The defense provided by this section to the enforceability of foreign lien is applicable only if the subsequent purchaser acquired superior rights to the motor vehicle, and the acquisition of such rights is dependent upon compliance with § 42-6-108. Doenges-Glass, Inc. v. GMAC, 28 Colo. App. 283, 472 P.2d 761 (1970), aff'd, 175 Colo. 518, 488 P.2d 879 (1971).

This section must be read together with § 42-6-108. Federico v. Universal C.I.T. Credit Corp., 140 Colo. 145, 343 P.2d 830 (1959).