Court Opinion

ID: 879251
Source: CourtListenerOpinion
Date Created: 2013-06-04 23:16:37.628022+00
Date Added: 2024-06-11T09:07:29.924772
License: Public Domain

No. 85-30
                IN THE SUPREME COURT OF THE STATE OF MONTANA
                                    1986

FRANK KOVACICH ,
                 PI-aintiff a i Respondent,
                             rd
         -vs-
JIM NORGAARD,
                 Defendant and Appellant.

APPEAL FROM:     District Court of the Tenth Judicial District,
                 In and for the County of Fergus,
                 The Honorable Peter Rapkoch, Judge presidng.

COUNSEL OF RECORD:

         For Appellant:
                 Jon A. Oldenburg, Lewistown, Montana

         For Respondent:
                 Thomas P. Meissner, Lewistown, Montana

                                   Submitted on. Briefs: Dec. 19, 1985
                                     Decided.: April 15, 1986

Filed:   APH 1 2 l e
                 y
Mr. Justice John C. Harrison, delivered the Opinion of the
Court.

      This is an appeal from an Order of the District Court
of the Tenth Judicial District of the State of Montana in and
for Fergus County.         The Court set aside defendant's Writ of
Prohibition, permitting plaintiff to proceed with the sale of
a motor vehicle previously subject to execution.             We affirm.
      The single issue on appeal is whether the District
Court erred in allowj.ng Kovacich to proceed with the sale of
the vehicle in question.
      A complaint filed by Kovacich in January, 1983, alleged
Norgaard's   failure to make         payments to Kovacich      for the
purchase of farm machinery.          After a bench trial, the court
entered   judgment    in    favor of Kovacich in the amount of
$6,338.67, plus interest and costs.            Kovacich made several
attempts to collect on the judgment, one of which led to this
appeal.
      The    first   attempt    to   levy    against   the   truck   was
unsuccessful.    Norgaard, learning the truck was going to be
seized, removed it from a consignment lot in Lewistown,
Montana, and concealed its whereabouts.           A hearing was held
in March for the purpose of requiring Norgaard to testify
under oath as to his property.              Norgaard admitted he had
taken the truck to the consignment lot.          He testified he then
removed   it and     sold    it to   Don McNair, a close        friend.
Norgaard claimed NcNair loaned him $2,500 and also paid off
the lien the bank had against the truck.          He testified he did
not know the present location of the truck.
      In May McNair gave Norgaard $300 and three collector's
guns, and Norgaard gave him the certificate of title.           NcNair
did   not      re-register the truck     in his name, or purchase
insurance for the truck, although in July he testified he
considered himself to be the owner.
         No further action was taken until June. Norgaard had
returned the truck to the consignment lot, supposedly at
McNair's request.        The Registrar of Motor Vehicles verified
the truck was registered in Norgaard's name.          A second Writ
of Execution was issued, pursuant to which the Fergus County
Sheriff     seized the     truck.     Norgaard obtained a Writ   of
Prohibition preventing the sale of the truck.          At a hearing
on the Writ in July, Norgaard testified he had concealed the
truck in March by driving it to a consignment lot in Billings
so he "wouldn't loose it."          He further testified he paid off
the bank with the          $2,500 McNair had    given him.   McNair
testified that the $2,500 was a loan to be used as partial-
payment on the truck.
         The   truck was    levied against while    it was on the
Lewistown lot.       Norgaard obtained a Writ of Prohihition to
stop the Sheriff's sale of the vehicle.         Following a hearing,
the court set aside the Writ and allowed Kovacich to proceed
with the sale.       It is from this Order that Norgaard appeals.
      Norgaard argues the District Court erred in allowing
Kovacich to proceed with the sa.le of the 1980 Ford pick-up
truck.      The resolution of this issues turns on whether the
transaction between Norgaard and McNa.ir was an attempt by
Norgaard. to defraud his creditor.
      Norgaard argues there was a valid sale of the truck and
ownership was transferred to McNair.         In this case it is not
important whether or not ownership was transferred to McNair.
Of paramount significance is that neither Norgaard nor McNair
followed the procedure necessary for transferring title as
far as third persons are concerned.
        A   primary    purpose       of     the procedures      set     forth in
(S   61-3-201, MCA, is to provide a means either of actual or
constructive notice of ownership of motor vehicles.                             This
concept is implicit in the statute, particularly                           in the
language     of   subsect.ion             (7)     which   states      in    part:
"Certificates of ownership shall remain valid until cancelled
by the department       ...      "        In other words, the owner of a
motor vehicle     is that person whose name appears on the
certificate of        ownership, thus              providing   notice      to   al-l
third-persons of such ownership.
        The notice function of the registrar of motor vehicles
is further evident from a review of S 61-3-103, MCA.                            That
section specifies that motor vehicle security interests are
invalid unless a true copy is received by the division.
Creditors and subsequent purchasers must be protected from
failure of a      secured party to file proof of a security
interest.     Likewise, judgment creditors are entitled to rely
on ownership as reflected in the division's records.
        There is further statutory protection for Kovacich.
Unless any transfer of ownership from Norgaard to McNair was
accompanied by        an immediate delivery and                followed by       an
actual and continued change of possession of the truck, the
transfer     "is conclusively presumed                to be    fraudulent and
therefore void against those who are his creditors while he
remains in possession      ...        "         Section 31-2-315, MCA.      There
is no evidence of an immediate delivery or of any actual
change of possession of the truck.
             Ordinarily, as between the parties, a
             delivery is not essential to complete a
             sale, but as to creditors         it is   ...
              absolutely indispensable         .
                                         . . It is the
              general rule that to defeat the claim of
              a creditor of the vendor the change of
              possession must be so open and so long
              continued as to indicate to the world at
              large that there has been a transfer of
              title.
Perry v. Mullin (1928), 81 Mont. 482, 486, 263 P. 976, 977.
See also Puckett v. Hopkins (1922), 63 Mont. 137, 140, 206 P.

        In the case at bar it appears no one had. notice of a
transfer of title.          If there had been a valid sale from
Norgaard to McNair but the sale was "not accompanied by an
immediate delivery and followed by an actual and continual
change of possession, the vendee [McNair] takes title subject
to the claim of the vendor's creditors [Kovacich]                    ...   "
Tetrault v. Ingraham (1918), 54 Mont. 524, 528, 171 P. 1148,
1150.    If, on the other hand, there was not a valid sale from
Norgaard     to   McNair,   Kovacich      certainly can       levy   against
Norgaard's    truck.        The   Order   of       the   District Court   is
affirmed.

We Concur:

   '
        -4
         q        ,-4

        Chief Justice