Title: Rauh v. Dumler

State: kansas

Issuer: Kansas Supreme Court

Document:

170 Kan. 698 (1951)
228 P.2d 694
J.R. RAUH and FRANK BUSBOOM, a copartnership, doing business under the firm name and style of Finance Credit Company, Appellants,
v.
DONALD H. DUMLER and THE HOME STATE BANK, Appellees.
No. 38,178

Supreme Court of Kansas.
Opinion filed March 10, 1951.
Charles Boyle, of Russell, argued the cause and was on the briefs for the appellants.
C.R. Holland, of Russell, argued the cause, and Marvin E. Thompson, of Russell, was with him on the briefs for the appellees.
*699 The opinion of the court was delivered by
WEDELL, J.:
This was an action to replevin an automobile. Judgment was for defendant and the plaintiffs appeal.
In order to avoid confusion we shall continue to refer to J.R. Rauh and Frank Busboom, copartners doing business under the firm name and style of Finance Credit Company, as plaintiffs, and to Donald H. Dumler as the defendant. The defendant Home State Bank filed no pleadings and is not now involved. It was stipulated there should be no trial on the cross petition of the defendant, Dumler, for damages until the issue of ownership and right to possession of the automobile was finally determined. That issue of damages is, therefore, not before us.
The primary issue here is whether the trial court properly concluded the defendant who purchased the automobile from one Leroy Jones, a registered dealer in new and secondhand cars, should prevail over plaintiffs, holders of a chattel note and mortgage previously executed and delivered to them by Leroy Jones.
It appears this action arises out of the fact Leroy Jones failed to pay off plaintiffs' note and mortgage out of the proceeds of the sale of the car and became a fugitive from justice. The parties stipulated as to certain facts. The stipulation reads:
Charles Boyle represented the plaintiffs and C.R. Holland tried the action for defendant. The record further discloses the following:
"The Court: Is that in dispute?
"Mr. Holland: No we bought it as a new car.'"
The foregoing stipulations were supplemented with oral testimony of the parties. On oral argument before this court counsel for plaintiffs frankly and commendably admitted this was actually a new car. He contended, however, under the facts of the case the sale from Jones to defendant was, in legal effect, the sale of a secondhand car. The trial court filed a memorandum opinion which, though accurately speaking probably cannot be denominated findings *701 of fact and conclusions of law, contains some facts in addition to those stipulated and reflects the fundamental basis for the court's decision. It reads:
On review this court, of course, is never concerned with the precise correctness of every statement contained in a memorandum opinion such as this or, for that matter, even with the reasoning disclosed therein. Our concern is with the correctness of the decision.
Plaintiffs insist the delivery of the bill of sale from the Joe Green Nash Company to Leroy Jones and his payment for the automobile constituted an outright sale of the car to Jones; that Jones was obliged to obtain a certificate of title from the state; that he failed to do so and, therefore, failing to make an assignment of a certificate of title to the defendant, the latter did not obtain title. That contention, of course, pertains solely to defendant's title. What about plaintiffs' title? This is a replevin action. Generally a plaintiff in a replevin action must recover, if at all, on the strength of his own title or right of possession and not on the weakness of his adversary's title or right of possession. (46 Am. Jur., Replevin, § 23.)
If plaintiffs are correct in contending Leroy Jones, having no certificate of title, could vest no title in the defendant, what about the validity of their own claim based on the chattel mortgage? Jones exhibited no certificate of title to them. Notwithstanding his failure to exhibit such a certificate they made a loan to him and accepted a note and a mortgage on the car as security.
Furthermore plaintiffs participated in engineering this entire setup for their profit. It was they who advanced the money which made it possible for Leroy Jones to obtain the car and to offer it to the public as a new car, being sold by a registered dealer. They were the ones who insisted the car should not be driven by Jones and should be sold by him as a new car. They helped work out *703 the agreement whereby Jones was able to obtain the car from the Joe Green Nash Company which agreement provided that the latter would receive nine percent of the retail price of the new car. Manifestly in the face of these facts plaintiffs are not in a good position to claim this car was not sold to the defendant by a registered dealer as a new car.
On the other hand, as previously stated, if this was a secondhand car as plaintiffs contend it was after Jones received it from the Joe Green Nash Company, plaintiffs themselves accepted a mortgage thereon from a man who had no certificate of title. Also if plaintiffs' present position that this was a secondhand car in the hands of Jones is sound, then in order to protect themselves they should have demanded exhibition of a proper certificate of title from Jones. They knew Jones was able to obtain a bill of sale for this car only by reason of their own previous arrangement to finance its purchase and to take back a mortgage on it as security for their loan. Had they demanded a proper certificate of title it would have disclosed their mortgage. (G.S. 1949, 8-135.) An assignment of that certificate by Jones to the defendant would have imparted actual notice of their mortgage to the defendant. The plain fact is their entire conduct is consistent only with the view that they treated this car as a new car in the hands of Jones as a registered dealer. Plaintiffs did not demand such a certificate. They not only permitted but insisted that Jones, a registered dealer, offer the car to the public as a new car. In so doing they participated directly in throwing the defendant purchaser off guard, led him to believe he was the original purchaser of a new car from a registered dealer and that he was the first person who was required to apply for and obtain a certificate of title.
Should the defendant lose the car to the plaintiffs under such circumstances? We do not think so. This view is abundantly supported, and we think, by sound authority. (Emerson-Brantingham Implement Co. v. Faulkner, 119 Kan. 807, 241 Pac. 431; Trapani v. Universal Credit Co., 151 Kan. 715, 100 P.2d 735; Sorensen v. Pagenkopf, 151 Kan. 913, 101 P.2d 928; Gump Investment Co. v. Jackson, 142 Va. 190, 128 S.E. 506; Fogle v. General Credit, 122 F.2d 45, 136 A.L.R. 814, and anno. 136 A.L.R. 821. See, also, the more recent decision in General Motors Acceptance Corp. v. Davis, 169 Kan. 220, 218 P.2d 181, which contains somewhat similar facts and is persuasive in principle.
*704 We reaffirm what was said in the Sorensen case, supra, that a purchaser of a new car from a registered dealer under circumstances there existing, similar to those in the instant case, need not examine the records to ascertain whether there is a lien on such a car. In the Fogle case, supra, the following doctrine was asserted:
While plaintiffs cite other cases they rely primarily on the following involving automobile transactions: Sims v. Sugg, 165 Kan. 489, 196, P.2d 191; Bankers Investment Co. v. Meeker, 166 Kan. 209, 201 P.2d 117, and cases therein cited. Plaintiffs quite properly refer to statements therein contained relative to the plain and unambiguous language of the statute commonly referred to as the certificate of title statute, G.S. 1949, 8-135 and also to G.S. 1949, 8-142. They point out that we have said failure to comply with the certificate of title law renders the sale void. These opinions speak for themselves and we shall not again review them. A reading of those cases will disclose a dissimilar state of facts. It is sufficient to say those decisions were not intended to be controlling under the facts of this case heretofore narrated. We think the decisions previously cited herein in support of the instant decision are controlling. It simply will not do to say that a purchaser from a registered dealer of a car, treated by all the parties to the litigation as a new car, loses his car because he obtained no certificate of title from the registered dealer, who, under the law, is not a party who can obtain a certificate of title, when the mortgagees who engineered, or participated in engineering, the entire deal for their profit clearly misled the purchaser into his dilemma.
Plaintiffs also complain concerning the judgment rendered pursuant to the last paragraph of the court's memorandum opinion, heretofore quoted. They remind us Leroy Jones holds the original bill of sale, that he was not a party to this action and the court had no jurisdiction over him. They also argue the original bill of sale held by Jones and the judgment of the court granting title to the defendant will cause confusion in the records of the state vehicle commissioner. We fail to see what interest plaintiffs have in that *705 matter. They do not represent Leroy Jones. Plaintiffs' only concern is whether, as between them and the defendant, they are entitled to possession of the car. That question has been adjudicated against them.
The judgment is affirmed.