Case Name: GREYHOUND RENT-A-CAR, INC., a Florida corporation, Petitioner, v. Harry J. AUSTIN, Respondent
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 1974-07-17
Citations: 298 So. 2d 345
Docket Number: No. 43511
Parties: GREYHOUND RENT-A-CAR, INC., a Florida corporation, Petitioner, v. Harry J. AUSTIN, Respondent.
Judges: ADKINS, C. J., and ROBERTS and ERVIN, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 298
Pages: 345–351

Head Matter:
GREYHOUND RENT-A-CAR, INC., a Florida corporation, Petitioner, v. Harry J. AUSTIN, Respondent.
No. 43511.
Supreme Court of Florida.
July 17, 1974.
Robert E. Dubow of Walden & Dubow, Dania, for petitioner.
Barry J. Stone of Week & Stone, Pompano Beach, for respondent.
.Id. at 289.

Opinion:
BOYD, Justice.
This cause is before us on petition for writ of certiorari to review the per curiam affirmance without opinion by the District Court of Appeal, Fourth District, reported at 273 So.2d 152. Conflict has been alleged between the decision sought to be reviewed and May v. Citizens National Bank of Orlando, Castner v. Ziemer, Trumbull Chevrolet Sales Co. v. Seawright, and Ed Lane Auto Sales Co., Inc. v. Weinstein. Since the petition reflected apparent jurisdiction in this Court, we issued the writ. Upon further consideration of the matter, we have determined that the cited decisions present no direct conflict as required by Article V, Section 3(b)(3), Florida Constitution. The writ must be, and hereby is, discharged for reasons which will be set out below.
Petitioner and Family Cars, Inc. initially entered into an arrangement for the sale of Greyhound's rental automobiles. Under this agreement, Greyhound would call Family Cars instructing them that certain cars could be picked up and placed on Family Cars' lot for sale, with Greyhound retaining the title and title certificate. When a car was sold, Family Cars would deposit the proceeds in its own account, draw a draft for the amount specified by Greyhound from their depreciation schedule, retaining the difference as profit. Upon receipt of payment, Greyhound would transfer the title certificate and warranty over to the purchaser. After several months, Greyhound changed this procedure, requiring Family Cars to pay for each car with a cashier's check at the time of sale. It appears from the record that Greyhound was not authorizing the removal of these vehicles by the purchaser from Family Cars until Greyhound first received the cashier's check. Additional controls were instituted by Greyhound to protect its interest. A representative of Greyhound would periodically call upon Family Cars and inventory the cars to further insure that all of the vehicles entrusted to Family Cars had not been sold or, if sold, that Greyhound had received the proceeds from the sale. Even the right of possession was not absolute in Family Cars. Greyhound would often withdraw cars from Family Cars' lot around the holiday seasons to bolster their rental fleet.
In the present case, a 1970 Chevrolet was placed with Family Cars and the respondent's son was interested in purchasing it. He and a mechanic friend went to the lot, examined the car and inquired about the title. They were told that these were cars used by Greyhound employees but that the dealer would furnish a clear title. An initial deposit was placed and the balance was paid four days later, after minor repairs were made.
Thereafter, Family Cars failed to pay to the petitioner the agreed upon balance on the used vehicle. Greyhound filed a re-plevin action against the respondent, and the Sheriff replevied the automobile. Prior to the actual return of the automobile, Austin was contacted by petitioner's counsel and told that the car was to be re-plevied. He became concerned over the absence of a title certificate and inquired at the tag agency. He was repeatedly told that the delay was probably caused by the holiday season. After a trial, final judgment was entered in favor of the respondent-purchaser and the District Court affirmed. We granted certiorari.
We find, however, that the instant case is distinguishable from those cited for conflict inasmuch as none contain the peculiar selling arrangement which exists in the present case and which existed in Motor Credit Corporation v. Woolverton, upon which the trial court relied. Petitioner's cited cases reassert the provisions of Sections 319.21 and 319.22, Florida Statutes, to the effect that a purchaser must obtain from an automobile dealer a certificate of title and also that notice of irregularities in the seller's title is imputed to the purchaser; the Woolverton holding is an equitable exception to these general rules of law. In noting the overriding logic of Woolverton, this Court must keep in mind that the Petitioner herein was a participant in the establishment of, and in the benefits derived from, the procedure which was set up for the purpose of disposing of Petitioner's cars to the public — a procedure that had the effect of disposing of between three hundred and a thousand of Petitioner's cars in a period of little more than one year, and in which the Petitioner's agents were active participants at all times. It was a procedure by which the Petitioner itself created the hazard of which it now complains, a hazard which could have been avoided by the very slightest notice or warning to the public.
The controlling case in this instance, unquestionably, is Woolverton. In that case, the vehicle was sold by a dealer under a conditional sales contract financed by Motor Credit Corporation. The dealer assigned the conditional sales contract to the finance company, pursuant to an agreement which would have obligated the dealer to repurchase the vehicle if it were repossessed by the finance company. The finance company recorded its lien, and thereafter the dealer reacquired possession of the vehicle from the original purchaser. The dealer then sold it to Mrs. Woolverton without advising her of the finance company's lien, and without accounting to the finance company. When the finance compa ny learned of the sale to Mrs. Woolverton, they demanded payment. The dealer then made several payments on behalf of Mrs. Woolverton, without revealing to Motor Credit Corporation that the dealer had, in fact, been paid in full. The dealer then filed for bankruptcy. When Mrs. Wool-verton was advised that she had to pay the balance due, or be dispossessed from the trailer, she signed a conditional sales agreement with the finance company, pursuant to which the dealer sold the trailer to her and the president of the dealership as co-purchasers, whereupon the president of the dealership then assigned the contract back to the finance company. Mrs. Woolverton then filed suit for declaratory decree, for an injunction, and for cancellation of the agreement and the lien. On appeal, this Court held:
"Where one of two innocent parties must suffer through the act or negligence of a third person, the loss should fall upon the one who by his conduct created the circumstances which enabled the third party to perpetuate [perpetrate] the wrong or cause the loss."
We then adopted the following principle:
"Where a dealer has parted with possession of property conditionally sold but has regained possession of it, as upon retaking after default of the purchaser, without authorization of the assignee and without his knowledge or consent, a subsequent purchaser from the dealer does not obtain title as against the as-signee. However, if the assignee of the conditional sales contract expressly or impliedly consents to the resale after repossession, the purchaser from the conditional vendor secured good title."
In Woolverton, we were faced with the strong statutory language that the Petitioner relies upon in this case. However, this Court, faced with a factual situation which was not nearly as flagrant as in the instant case, and where there was even less reason than in the instant case to raise an estoppel on the part of the titleholder, noted:
"The weight of authority in other jurisdictions sustains the view that in circumstances substantially identical with or similar to those presented here the constructive notice generally afforded by compliance with the recording act is nullified.
"But the statute is a bulwark, not a trap. The mortgagee is favored so long as he acts consistently with the statutory conditions. But when he goes further and either by his conduct prevents the purchaser from making the usual investigation or takes advantage of circumstances which he knows or reasonably should know would have this effect, he destroys the foundation upon which his own protection rests. He cannot throw the purchaser off guard concerning the protection which the statute gives to him and take advantage at the same time of what otherwise would or might have been discovered. Thus, if the mortgagee clothes the mortgagor with indicia of ownership, or gives him authority to sell the property, or stands by in silence and watches the mortgagor deal with it as owner, he nullifies the effect of recording by his inconsistent representation."
Thus, in Woolverton, we noted that the business relationship between the dealer and Motor Credit Corporation had made it a custom for the repossessed trailers returned to be held on the dealer's lot and then resold by him, and that by its conduct, the Motor Credit Corporation had given the dealer the actual or the implied authority to resell the repossessed trailer, and that, as a result, the purchaser was not charged with constructive notice of the finance company's lien under Section 319.-27(2), Florida Statutes.
In Woolverton, we then made a most important distinction when we noted that merely because the statute, Section 319. 22(1), Florida Statutes, prevented a "marketable" title from being passed, it did not mean that there were no circumstances under which title could actually pass. As we know, under the law of real property, if a seller enters into a contract with a buyer to sell a piece of property which is' not marketable, and the contract calls for marketability, the buyer may reject the title as being unacceptable. Likewise, if a contract were entered into with a buyer for the sale of a motor vehicle, and the buyer examined the recording information and determined that the seller did not have a marketable title, the buyer could reject the contract without breaching it. However, as we said in Woolverton:
"[T]he failure of the purchaser to obtain the title certificate at the time of sale does not prevent the passage of title from the seller to the buyer.
*
"The Florida statute . . . provides that the purchaser shall not acquire a 'marketable' title until a certificate of title is issued to him. . . . [T]he statute 'does not provide that no valid title shall be perfected until the purchaser obtains a title certificate, but that no marketable title shall be perfected until that time. The term 'marketable title' does not connote that the vendor cannot sell, but that he cannot enforcq an agreement to buy, in absence of same.
*
"When the dealer has actual or implied authority to sell, a purchaser from the dealer takes title as if buying directly from the finance company, under the general principals of agency. . . . Thus, the fact that no certificate of title was obtained by Mrs. Woolverton does not, of itself, invalidate the sale. . . "
We then pointed out that in that case, as in the case at bar, although the dealer had authority to sell the vehicles and to deliver them to the purchaser before accounting for the proceeds, there was not a relinquishment of the certificate of title until cash was, in fact, paid. After noting this, Mr. Justice Roberts eloquently summarized the lack of logic in allowing the statutes to be so used as a shield:
"In these circumstances to allow the finance company to take advantage of the purchaser's not having a title certificate would be about as inconsistent as to allow the culprit who murdered his father and mother to beg for mercy on the ground that he was an orphan."
There can be no question that the Wool-verton case is the leading case in Florida involving a factual situation similar to that in the case at bar. Woolverton controls here, and mandates an affirmance of the District Court. There is, in fact, no conflict between this case and those relied upon by the Petitioner.
Accordingly, no direct conflict having been demonstrated, the writ must be, and hereby is, discharged.
It is so ordered.
ADKINS, C. J., and ROBERTS and ERVIN, JJ., concur.
DEKLE, J., concurs with result.
McCAIN, J., dissents with opinion.
. 100 So.2d 651 (Fla.App.1958).
. 125 So.2d 134 (Fla.App.1960).
. 134 So.2d 829 (Fla.App.1961).
. 143 So.2d 210 (Fla.App.1962).
. 99 So.2d 286 (Fla.1957).
. Id. at 288.
. Id. at 288-289.
. Id. at 290.
. Id. at 291.