Medico Leasing Company v. SmithMedico Leasing Company v. Smith
Plаintiff, Medico Leasing Company, sought in this action below to replevin an automobile from the defendants, W. C. and Dorene Carter. Plaintiff had turned over possession of the automobile to a used car dealer named Smith to sell. Smith, representing himself as owner, sold the automobile to the defendant Wessel Buick Company who later resold it to Country Cousins Motors, Inc. Smith did not remit the purchase money to the plaintiff. Subsequеntly Carters purchased the car from Country Cousins Motors. No redelivery bond was posted and plaintiff took possession of the automobile. Defendants, W. C. and Dorene Carter and Country Cousins Motors each filed cross petitions against the plaintiff seeking damages for wrongful taking.
The case was tried to a jury and at the close of plaintiff’s evidence, the trial court sustained demurrers to the evidence of all defendants. The case then proceeded to trial on the cross-petitions of the defendants. At the close of all the evidence, defendants, W. C. and Dorene Carter and Country Cousins Motors, moved for a directed verdict. The motion was sustained, leaving for the jury only the amount of damages to be assessed. The jury returned a verdict in favor of the Carters in the amount of $741.00 and in favor of Country Cousins Motors in the amount оf $2100.00.
The principal issue presented by this appeal is the trial court’s ruling that the defendant, Wessel Buick Company, was a “buyer in the ordinary course of business” in good faith as defined by Sections 1-201(9) and 2-403(2) of the Oklahomа Uniform Commercial Code when they purchased the automobile from defendant Smith, a used car dealer, whom plaintiff had entrusted possession of the car. The-trial court found that Wessel Buick acquired sufficient legal title even though the sale was made without the actual transfer of the automobile’s Certificate of Title, and therefore the defendants, Carters and Country Cousins Motors, were entitled to damages for the wrongful taking.
The evidence shows substantially the following facts: Plaintiff corporation was engaged in the business of leasing various items of equipment and had leased a 1962 Buick automobile for a period of two years. Subsequent to the termination of the lease the car was offered for sale by means of advertising in the newspaper. In answer to the ad the defendant Smith telephoned the treasurer оf the corporation,
Some time following the sale of the car to defendant Wessell an employee of Wes-sell designated as the title clerk called Smith for the certificate of title and was informed by him that the certificate had been left with her previously. Subsequent to that conversation the clerk again contactеd Smith and was informed that he did not have the certificate but that he would try to get it. Not receiving the certificate, the clerk made application to the Tax Commission for a lost certificate of titlе and in time received it. Prior to making application for lost title defendant Wessell sold the Buick to the defendant Country Cousins Motors/who subsequently sold the car to defendants W. C. and Dorene Carter.
Meanwhile, plaintiff had not received any money for its car and further, could not find the car. Through the Tax Commission it traced the ownership registration of the car and found it to be in the possession of W. C. and Dorene Carter. Plaintiff then filed a suit in replevin, posted bond, took possession of the car from the Carters and sold it to a third party.
Plaintiff does not contest the fact that Smith is their agent, but they maintain that he was a limited agent аnd did not: have title to the automobile or authority to convey title. They assert that Smith could not convey any better title than he had, and as he had no title, none was conveyed. It is further asserted by plaintiff that dеfendant Wessel was not a buyer in good faith as required by our Uniform Commercial Code, because they purchased the car without a certificate of title under facts and circumstances which would havе put an ordinarily prudent businessman on inquiry.
The provisions of the code pertinent to the issues in this case are in part set out:
“12A O.S. § 2-403(2) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power 'to transfer all rights of the en-truster to a buyer in ordinary course of business.
“12A O.S. § 1-201(9) ‘Buyer in ordinary course of business’ means a person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind but does n'ot include a pawnbroker. ‘Buying’ may be for cash or by exchange of other property or on secured or unsecured credit and includes receiving goods or documents of title under a pre-existing contract for sale but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.”
The “entruster” in the instant case, the plaintiff, had good title to the Buick, which was a used car. The one to whom the. automobile was entrusted, Smith, as a used car dealеr, is a “Merchant who deals in goods of that kind” within the meaning of the statute. Smith was known by the plaintiff to be a used car dealer. The uni
Since Smith had apparent authority to convey legal title, the question then arises as to whether Wessell was a buyer in good faith when they purchased the car without a certificate of title.
It has long been held by this court that a certificate of title to an automobile issued under the motor vehicle act is nоt a muniment of title which establishes ownership, but is merely intended to protect the public against theft and to facilitate recovery of stolen automobiles and otherwise aid the state in enforcemеnt of its regulation of motor vehicles. Adkisson v. Waitman,
“Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with referenсe to the physical delivery of the goods, despite any reservation of a security interest and even though a document of title is to be delivered at a different time or place; * *
In the case оf Mahar v. White, supra, an agent of the owner of a truck clothed with apparent authority to sell had the vehicle in his possession but did not have actual authority to sell the vehicle. The agent sold the truck and absconded with the money. The agent did not have the certificate of title. The court held that even' though the agent informed the buyer of the truck that he did not have the certificate of title and that it wоuld have to be completed by the owner, it was still a valid sale to an innocent purchaser. This conclusion was based on the rule that where the loss falls upon one of two innocent persons, it should fall on the principal who has armed the agent with apparent authority-
There was no proof in the instant case that defendant Wessell knew of the plaintiff’s instructions to Smith or that he should have known. Further, the рlaintiff’s own evidence was contradictory regarding instructions given to Smith pertaining to the sale of the vehicle. The actions of the title clerk and Smith regarding' the certificate to title taking place some time following the sale of the car by Smith to Wessell have no bearing upon the question of good faith. The sale had been completed and subsequent actions would be immaterial, especially sinсe these discussions took place after the car had been sold by Wessell to Country Cousins Motors.
The plaintiff introduced no evidence to show a lack of good faith upon the part of defendаnt Wessell and under the rules announced in this case the agent
Judgment affirmed.