Court Opinion

ID: 9853621
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:51:18.341497+00
Date Added: 2024-06-11T09:19:56.373731
License: Public Domain

Chief Judge HEDRICK
concurring in the result in part and dissenting in part.
While I would not have treated NCNB’s appeal as cavalierly as have my colleagues, I concur in affirming summary judgment for defendant as to any claims alleged by NCNB against defendant. I also question the authority and propriety of this Court’s ordering that NCNB’s purchase money security interest be noted on the certificate of title when there has been no trial court disposition of NCNB’s claims against the Robinsons.
I vote to affirm summary judgment for defendant with respect to the Robinsons’ claims.
The Motor Vehicles Act, in pertinent part, provides that when the transferee of a vehicle is a dealer that:
To assign or transfer title or interest in such vehicle, the dealer . . . shall execute in the presence of a person authorized to administer oaths a reassignment and warranty of title on the reverse of the certificate of title . . . and title to such vehicle shall not pass or vest until such reassignment is executed and the motor vehicle delivered to the transferee.
G.S. 20-75. Under this Act, no title passes to the purchaser of the motor vehicle until the vendor executes an assignment and warranty of title on the reverse of the certificate of title, there is actual or constructive delivery of the motor vehicle, and the duly assigned certificate of title is delivered to the transferee. See, Insurance Co. v. Hayes, 276 N.C. 620, 174 S.E. 2d 511 (1970). In enacting the Motor Vehicles Act, the legislature used the word “title” as a synonym for “ownership.” Id.
In Hayes, the Supreme Court held that the provisions of the UCC do not override the motor vehicle statutes relating to the transfer of ownership of a motor vehicle for the purposes of tort law and liability insurance coverage. The Court reasoned that the Motor Vehicles Act contains specific, definite and comprehensive terms concerning the transfer of ownership of an automobile, while the UCC only refers to the passing of title of property de*13scribed as “goods,” and that the more specific statute must control.
Plaintiffs and intervening plaintiff distinguish Hayes on its facts and contend that even if the Robinsons were not owners for the purposes of the Motor Vehicles Act, they were buyers in ordinary course of business and as such were protected from repossession by Barclays by G.S. 25-9-307(1). This section provides that “[a] buyer in ordinary course of business . . . takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.” “Buyer in ordinary course of business” is defined as “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. . . G.S. 25-1-201(9). The word “buyer” is not further defined for the purposes of Article 9 of Chapter 25.
As discussed by the Supreme Court in Hayes, the Motor Vehicles Act is concerned only with automobiles, and although the word “automobile” falls within the general term of “goods” as defined in the UCC, automobiles are a special class of goods which have long been heavily regulated by public regulatory acts. I hold, therefore, that a purchaser of a motor vehicle is a “buyer” for the purposes of G.S. 25-9-307(1) when he has become an “owner” under the provisions of the Motor Vehicles Act when the old certificate of title has been assigned by the vendor, the motor vehicle has been delivered, and the assigned certificate of title has been delivered to the vendee.
In holding that the UCC, rather than the Motor Vehicles Act, controls in this case, the majority relies upon the recent Supreme Court decision in American Clipper Corp. v. Howerton, 311 N.C. 151, 316 S.E. 2d 186 (1984). In that case, the manufacturer of a recreational vehicle retained the manufacturer’s certificate of origin after shipping the vehicle to a dealer in an attempt to secure itself against loss by default of the dealer, in violation of G.S. 20-52.1, a provision of the Motor Vehicles Act. The Court held since the statute required that the manufacturer supply the transferee with a certificate of origin, the manufacturer could not protect itself from default by retaining the certificate and decided *14the priorities of the parties under the provisions of the UCC. In the present case, however, Barclays did not violate a statute by retaining the certificate of title to the vehicle. Thus, the American Clipper decision is not controlling in this case.
Additionally, I note that the Robinsons should have had/ knowledge that the sale of the automobile was in violation of the rights of another party when Colclough failed to assign the certificate of title to them. Obviously, Colclough could not deliver paper title because it was held by defendant Barclays.
It is uncontroverted in this case that the Robinsons never acquired an assigned certificate of title to the Pontiac as required by G.S. 20-75. In my opinion, therefore, the Robinsons were not the “owners” of the vehicle at the time of repossession and thus did not have an interest paramount to that of Barclays under the provisions of the UCC. Therefore, they do not have a claim for conversion against Barclays. Colclough Auto Sales was the “owner” of the automobile, and Mr. Reese validly repossessed it on Colclough’s lot pursuant to the security agreement signed on April 1', 1970.
Assuming, however, that the Robinsons were the owners of the automobile and were entitled to the possession thereof, as the majority declares, I cannot agree that there are no genuine issues of material fact with respect to plaintiffs claim for conversion so as to require the trial court to enter summary judgment for plaintiffs on the issue of defendant’s liability to plaintiffs for wrongfully converting the automobile. Conversion is defined as “an unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another, to the alteration of their condition or the exclusion of an owner’s rights.” Spinks v. Taylor and Richardson v. Taylor Co., 303 N.C. 256, 264, 278 S.E. 2d 501, 506 (1981). To establish a claim for conversion, plaintiff must prove both ownership in himself and the wrongful possession or conversion of the property by defendant. Gadson v. Toney, 69 N.C. App. 244, 316 S.E. 2d 320 (1984). Summary judgment is inappropriate where the evidence raises a genuine issue as to whether defendant’s possession of plaintiffs property is authorized or wrongful. Id. Where defendant has rightfully come into possession of the goods and then refused to surrender them, demand and refusal are necessary to the ex*15istence of a claim for conversion. Hoch v. Young, 63 N.C. App. 480, 305 S.E. 2d 201, disc. rev. denied, 309 N.C. 632, 308 S.E. 2d 715 (1983).
With respect to the manner in which Barclays got possession of the vehicle Mr. Robinson testified in his deposition as follows:
Another day I went and got my car, again, and drove to Raleigh, and come back and parked it in the lot and that’s the time David come in. He said (pointing to David Reese, manager of Barclays-American), “Mr. Robinson is this your car?” He said “Well you can’t get title to it, I have title to it.” I said, “Here, I know you want the keys.” He said, “I was fixin to ask you for them.”
In a second deposition, Mr. Robinson further testified:
I went back to see Mr. Reese a number of times, several times, but I do not know the exact number. He said he was waiting on Colclough to do something. To pay the money that they owed to Barclays. He has been very nice and I have nothing against that man. Mr. Colclough owed Barclays some money on that car and that’s why they were holding the car.
With respect to how Barclays obtained possession of the automobile, Mr. Reese testified in his deposition as follows:
I went over there and walked up to the car and the gentlemen was getting out of it and I identified myself. I told him I was David Reese with Barclays American Financial across the street and I would like to know what he was doing driving that car. He said that he owned the car. I said what do you mean you own the car? He said that this car belongs to me. I said I want to advise you that Barclays American has the title to the car, that we have a lien on it, that the dealer owes us money on it and that we have an interest in this automobile. I asked him whether he had a bill of sale or could identify any ownership and he said that he could not. He did state that he thought there were some papers in the car at one time, but that they were missing. I told him that I thought he was going to have to talk with Mr. or Mrs. Col-clough to verify what was going on and see if they could do anything about it. I said in the meantime, I’m going to take the car over to my office and I’m going to lock it up. He did *16not resist me at all. I took out the set of keys and he said, well, here I’ve got another set of keys to the car. He says, you want these, too? I asked him how he had a set of keys to it and he said he had owned the car previously and had a set that he had never turned in when he traded it back in. And so he just gave me the keys and I told him that he needed to get in touch with the Colcloughs to see if they could work out an agreement.
In the present case, all the evidentiary matter discloses that Barclays came into possession of the automobile rightfully. Mr. Robinson voluntarily surrendered the vehicle to Mr. Reese. The record before us is devoid of any evidence that Barclays wrongfully obtained possession of the automobile or exercised unauthorized control over it. In fact, all of the evidentiary matter contained in this record affirmatively discloses that Barclays’ possession of the vehicle was authorized by plaintiffs themselves. In my opinion, summary judgment for plaintiffs on the issue of defendant’s liability for wrongful conversion of the automobile would be improper, and on this record summary judgment for defendant on the issue of defendant’s liability for wrongful conversion was proper.