Court Opinion

ID: 9883434
Source: CourtListenerOpinion
Date Created: 2023-10-06 01:42:42.221572+00
Date Added: 2024-06-11T07:48:23.312263
License: Public Domain

RANDALL, Judge,
dissenting.
I respectfully dissent. The majority concentrates on the trial court’s finding that Tabata was the equitable owner of the vehicle at the time Soule brought the certificate of title to his bank for loan purposes. I agree that Tabata could claim to be at least the equitable owner of the vehicle as of that date, March 3, 1983. His attorney stipulated at the June 17, 1986, hearing that:
Mr. Tabata would testify for the jury on those questions that he had made payments on the vehicle from 1980 and that he had in fact paid off the vehicle some*560time in late ’82 or 83 in full prior to Mr. Soule coming to the bank to pledge the vehicle; that based upon those facts, it is my belief and I would stipulate that the jury would come back finding that Mr. Tabata believed himself to be the owner of that vehicle, and that they would find that at least equitable interest had transferred.
However, I disagree with the majority conclusion that Tabata’s “equitable” claim of ownership was enough to defeat the bank’s secured interest. Minn.Stat. § 168A.10, subd. 3 (1984) sets out the specific statutory sections to be complied with to transfer ownership of a motor vehicle.
I do not agree the fact that equitable title may have passed in March of 1983 affects the transaction between Soule, who held the certificate of title, and the bank, which relied on Soule’s possession of the certificate as evidence of legal title.
Here, Soule presented a certificate of title to a bank for purposes of obtaining a loan. The bank, in good faith, relied on the certificate of title as evidence of ownership. The cases cited to show how the presumption of ownership, as evidenced by a certificate of title, may be rebutted, do not address the situation. Welle v. Prozinski, 258 N.W.2d 912 (Minn.1977) and BLC Insurance Co. v. Vivent, 869 N.W.2d 815 (Minn.Ct.App.1984) allowed a good faith seller to rebut the presumption of ownership to avoid liability under Minnesota’s vicarious responsibility rule1 governing the effective transfer of motor vehicles.2 Ameson v. Integrity Mutual Insurance Co., 844 N.W.2d 617 (Minn.1984) (Expanded the rule to the avoidance of the compulsory insurance provisions of Minn.Stat. § 65B.48 (1982).
The rationale of giving bona fide sellers a defense to a lawsuit, if they can prove a legitimate sale, has no application to these facts. Lending institutions making motor vehicle loans must be able to rely on the certificate of title. They are not pawn shops where the collateral is held in storage and then only released when the debt is paid. They commonly make loans on mobile collateral which may be miles, states, or even countries apart from the lender.
Until the Minnesota Supreme Court or the legislature specifically extends the re-buttable presumption rule formulated in vicarious liability cases to lending institutions, I would apply the strict provision of Minn.Stat. § 168A.10, subd. 5, and hold that Soule’s physical delivery of the car to Tabata unaccompanied by the owner’s certificate of title did not deprive appellant bank of its first lien.

. Minn.Stat. § 170.54 (1984).

. The purpose for this rebuttable presumption to benefit sellers is basic fairness. Once a person has made a bona fide sale of a vehicle, the seller no longer has control over who drives it and is not in a position to establish a "permissible driver." Thus, the seller is not accountable if the permissive driver of the new owner has an accident. Without this rebuttable presumption, Minnesota's vicarious liability rule could hold liable a previous owner of a vehicle who no longer has any knowledge of who is driving it, but is unaware that the buyer has not completed the necessary paper work to transfer title to himself.