Opinion
Nos. 28020, 28063.
April 17, 1951. Motion for Rehearing or for Transfer to Supreme Court Denied May 18, 1951.
APPEAL FROM THE CIRCUIT COURT, CITY OF ST. LOUIS, DAVID A. McMULLAN, J.
Jones, Hocker, Gladney Grand and James C. Jones, III., all of St. Louis, for Howard Nat. Bank Trust Co.
Mattingly, Boas Richards and Lloyd E. Boas, all of St. Louis, for E.B. Jones and Madrene Jones.
This is a suit by Howard National Bank and Trust Company, a corporation of Burlington, Vermont, as plaintiff, against defendants E.B. Jones and Madrene Jones, co-partners doing business as E.B. Jones Motor Company. The action was for damages for the conversion of an automobile. The petition alleged plaintiff's ownership and right to possession of the automobile in question under the terms of a conditional sales contract. The prayer of the petition was for damages in the sum of $1200, which was averred to be the reasonable market value of the automobile at the time of the alleged conversion. The trial resulted in a verdict and judgment in favor of plaintiff for the sum of $800. From this judgment, cross-appeals have been taken by the parties.
The following pertinent facts appear from the evidence. On October 19, 1945, the automobile in question, being a 1941 Dodge, was sold to Eugene Valiquette by Harold Mayo, an automobile dealer. This sale occurred in Burlington, Vermont, where both Valiquette and Mayo resided. The sale was made on a conditional sales contract. The sale price of the car was $1300. There was a cash down payment of $225, and a trade-in allowance of $275 on a used car, leaving a balance on the purchase price of $800. To the balance due, $137.65 was added to cover insurance, recording and finance charges, making a total of $937.65 due Mayo on the conditional sales contract. Said balance was by the terms of the contract payable in fifteen monthly installments of $62.51 each, commencing November 19, 1945. The conditional sales contract provided:
"1. Purchaser agrees: that title to said property shall not pass to the Purchaser until all sums due under this contract or rearrangements thereof, together with interest after maturity and all other debts and money obligations arising out of this lien, are fully paid in cash; * * * not to remove property from the state or transfer any interest therein without written consent of the Seller; * * *.
"2. Time is of the essence of this contract and if any installment is not paid in full when due, or if Purchaser fails to perform any of his obligations or comply with any condition of this contract * * this contract shall be in default and the full amount remaining unpaid shall immediately become due and payable. * * Upon any such default, Seller may take immediate possession of said property, including any equipment or accessories thereto without legal process, without demand and for this purpose Seller may enter any premises where said property may be found and remove same. * * *
"3. Purchaser acknowledges notice of the intended sale of this contract to Howard National Bank and Trust Company of Burlington, Vermont."
Thereafter, and on the same date, to wit, October 19, 1945, said conditional sales contract was sold to Howard National Bank and Trust Company of Burlington, Vermont, for the sum of $800. The assignment, executed by Mayo at said time, reads as follows: "For value received, Undersigned does hereby sell, assign and transfer to the Howard National Bank and Trust Company of Burlington, Vermont, hereinafter called `Bank,' its successors and assigns, all of his, its or their right, title and interest in and to the contract on the reverse side hereof and the property referred to therein, with power to take legal proceedings in the name of the Undersigned or itself in respect thereto."
At the same time, Mayo executed the following written guaranty of said account "For value received, we jointly and severally guarantee to pay the Howard National Bank and Trust Company of Burlington, Vermont, on demand, the entire unpaid balance of the contract on the reverse side hereof if any installment is in default, * * *".
The parties to this transaction also at the time signed a memorandum of the sale showing the purchase of the car in question and an acknowledgment of its delivery to the purchaser. It contained a description of the car, and set out the terms of sale, as follows:
"The terms of this purchase and sale are as follows: $225.00 cash; $275.00 allowance on vehicle traded in; leaving a Deferred Balance of $937.65 payable in 15 equal, consecutive monthly installments of $62.51 each, commencing Nov. 20, 1945.
"Title to the above described vehicle together with all equipment and accessories already thereon or hereafter added, remains and shall continue in Seller or assigns until the full purchase price is paid in cash, as provided herein and in accordance with a promissory note and agreement executed contemporaneously herewith. If any deferred payments are not made when due, or if I/We shall be otherwise in default, Seller or assigns or representatives may take possession of said vehicle and all accessories thereon. The said vehicle shall not be removed from the above county and state, and I/We shall not lend, mortgage, assign, encumber, secrete or dispose of said vehicle or a interest therein until I/We have made all payments thereon. Said vehicle shall not be used in violation of any laws."
As a part of the above mentioned memorandum, and over the signature of Harold F. Mayo, appears the following:
"This Contract has been assigned to Howard National Bank and Trust Company of Burlington, Vt."
The above document was filed for record in the City Clerk's office in Burlington, Vermont, on October 30, 1945, and recorded in Volume 60, page 199, of the conditional sales records of the said city of Burlington.
Also at the time of sale Mayo delivered to Valiquette the following certificate on a printed form:
(The parts italicized are in handwriting)
"This Is To Certify that the following described motor vehicle: Make Dodge, Type sed. cpe., Year Mfg. 1941, Engine No. D19-122139, Registration Plate No. 70777 has on this date 10/19 1945 been Sold To Eugene Valiquette
Address 24 St. Paul, Burlington, Vt.
"That the registration certificate and application for transfer of registration has been mailed to the Motor Vehicle Department Or Loaned To __________________________ Address _________________________ "a period not in excess of three days under the provisions of Section 5065, Motor Vehicle Laws and for the following reasons: ______________________________________________ Harold F. Mayo ........... Dealer No. 058 Original"
The circumstances in connection with the delivery of the foregoing memorandum to Valiquette are not developed in the evidence.
Mr. Mayo had never had any previous dealings with Valiquette, and Mayo's acquaintance with Valiquette covered a period of only two or three months. During that period Mayo knew that Valiquette operated a body and fender shop in Burlington. The only contact that Mayo ever had with Valiquette was when he talked to him about the sale of the car. Mayo knew nothing about Valiquette's business habits. One of the references that Valiquette gave was the Chittenden National Bank. Mayo testified that he called the Chittenden Bank and learned that Valiquette had a large note at that bank but that the note was being taken care of. Mayo made no further investigation.
On December 21, 1945, Valiquette made an application to the Secretary of State of Missouri for a certificate of title on said automobile. In said application Valiquette gave as his address 1618 Chestnut Street, St. Louis, Missouri. Also, across that part of the application which called for information concerning any liens or unpaid balance of the purchase price the words "all paid" are written. Along with said application Valiquette submitted the certificate which he received from Mayo at the time he purchased the car. Upon this application a Missouri certificate of title was issued to Valiquette by the Commissioner of Motor Vehicles.
Thereafter, Valiquette sold the car in question to the E.B. Jones Motor Company for $1,090, and assigned his certificate of title to said company on February 28, 1946. On the same day, February 28, 1946, the E.B. Jones Motor Company sold the automobile to Francis Elder for $1290, and on said date the title was reassigned by E. B. Jones Motor Company to Francis Elder.
Harold F. Mayo testified that the reasonable value of the automobile on October 19, 1945, was around $1300. He further testified that he first learned sometime in December, 1945, that Valiquette had left the State of Vermont with the automobile, and that he had not given Valiquette permission to take the car out of the State of Vermont. He further testified that when he learned that Mr. Valiquette had left Burlington he did not ascertain where Valiquette had gone.
Arthur E. Graves, credit manager of the Howard National Bank and Trust Company, testified that Valiquette made none of the payments called for by the conditional sales contract, and that according to the bank's records the entire amount of the note was due and payable. It was admitted by the defendants that on January 27, 1947, or January 28, 1947, they received a demand from the Howard National Bank and Trust Company through its attorneys — Jones, Hocker, Gladney and Grand — for the return of the 1941 Dodge automobile or payment of $966.41 due them on the conditional sales contract. At that time the car had been sold by the E.B. Jones Company and was not in its possession.
At the time Valiquette defaulted in his payments the plaintiff bank charged the full amount due against the account of Harold F. Mayo. It was admitted by plaintiff's counsel that any sum recovered in this action would be held in trust for Harold F. Mayo.
At the close of all the evidence both parties filed motions for directed verdicts. These motions were by the court overruled. The case was then submitted to the jury and a verdict was returned in favor of plaintiff and against the defendants in the sum of $800. Judgment was entered in conformity with this verdict. Both plaintiff and the defendants thereafter filed motions for judgment in conformity with their motions for a directed verdict, or, in the alternative, for a new trial. Said motions were overruled, and both plaintiff and defendants have appealed.
Defendants complain of the action of the trial court in failing and refusing to give and read to the jury instructions A and C. Both instructions presented a defense of estoppel based upon the principle of law that whenever one of two innocent persons must suffer by the acts of a third, he whose act, or omission, has enabled such third person to occasion the loss must sustain it if the other party acted in good faith, without knowledge of the facts, and altered his position to his detriment.
Instruction A is as follows: "The Court instructs the jury that if you find and believe that Harold F. Mayo and the plaintiff failed and neglected to make any investigation into the character or credit of Eugene Valiquette before selling him the automobile in question, and find that they failed and neglected to check all the credit references given to them by Eugene Valiquette, and if you find that in so failing they failed to exercise ordinary care and were negligent and if you further find that the negligence of Harold F. Mayo and plaintiff, if you find they were negligent, was solely responsible for the said Eugene Valiquette being placed in a position to obtain possession of and a clear Missouri certificate of title to the automobile in question and if you further find that the defendants relied in good faith on that Missouri title, then you are instructed that plaintiff cannot recover and your verdict must be for the defendants."
The facts hypothesized in the above instruction could not form the basis of an estoppel. For negligence to operate as an estoppel there must have been the neglect of some duty owing to the party claiming the estoppel or to the public generally. It would be placing too great a burden on business to require a vendor to investigate the character and financial responsibility of his customers and sell only to those who in his judgment would not likely make improper use of the commodity sold to the detriment of others. The Court did not err in refusing to give said instruction.
Instruction C is as follows: "The Court instructs the jury that if you find from the evidence that on October 19, 1945, Harold F. Mayo issued to Eugene Valiquette a statement certifying that on said day he had sold the automobile in question to the said Eugene Valiquette, and if you further find that said certificate failed to show any lien or any conditional sales agreement and on its face showed an outright sale, and if you further find that by reason of placing said certificate in the hands of Eugene Valiquette, if you so find, the said Harold F. Mayo enabled the said Eugene Valiquette to present said certificate to the Missouri Motor Vehicle Registration Department as a part of his application for a Missouri certificate of title, and to obtain a Missouri certificate of title showing that Eugene Valiquette was the owner of said automobiles, free and clear of any incumbrances, liens, or conditional sales contracts, and if you further find that the defendants relied on said certificate of title and purchased said automobile in good faith and without knowledge of the conditional sales contract, and if you further find that the said seller Harold F. Mayo and his act in furnishing Eugene Valiquette said certificate of sale, if you find he did so, was responsible for the said Eugene Valiquette being able to obtain a Missouri certificate of title and if you further find that plaintiff Howard National Bank Trust Company charged the account of Harold F. Mayo with the full amount due it on the conditional sales contract and that the plaintiff has been reimbursed and has by reason thereof sustained no loss or damage, if you so find, then you are instructed that plaintiff cannot recover and your verdict should be for the defendants."
The theory presented by Instruction C was that, by delivery to Valiquette of the certificate which recited that the car had on the 19th day of October, 1945, been "sold to Eugene Valiquette," without noting thereon that the sale was conditional, Mayo made it possible for Valiquette to secure a Missouri certificate of title showing ownership in him free and clear of liens and encumbrances, and enabled Valiquette to defraud defendants; and, since it was the act of Mayo which made the fraud possible, plaintiff, Howard National Bank Trust Company, grantee of Mayo, should be estopped from asserting title to the car.
It is a fundamental rule that before the real owner of personal property can be estopped to assert his title against one who has dealt with the apparent owner on the faith of the latter's apparent ownership, something more is required than mere possession on the part of the apparent owner. In order to successfully invoke said doctrine there must be a showing of some act, or failure to act, of a nature calculated to mislead persons as to the true possession of the title. Also, the act, conduct or omission warranting imposition of liability under the principle relied on must be the cause of the party's loss.
It is not clear from the evidence what purpose was intended to be served by the certificate in question. It was on a printed form and recited that the automobile was on the 19th day of October, 1945, sold to Eugene Valiquette. perhaps it was given to Valiquette to enable him to secure a registration certificate from the proper Vermont authorities. It did not purport to be a bill of sale. Nor can it be designated a muniment of title. It was merely a memorandum containing a statement that was, in fact, true. The car was actually sold to Eugene Valiquette on October 19, 1945. No prudent person could take this to mean absolute possession of the title free from liens. A party to whom a car is sold might be the absolute owner thereof, or own the car subject to a lien, or he might be a vendee under a conditional sales contract. The rule applicable here is stated in Bigelow on Estoppel (6th Ed.), page 634, as follows: "The representation in order to work an estoppel must be of a nature to lead naturally, i.e., to lead a man of prudence, to the action taken."
The same author, on page 641, says: "The representation, further, to justify a prudent man in acting upon it, must be plain, not doubtful, or matter of questionable inferences. Certainty is essential to all estoppels. The courts will not readily suffer a man to be deprived of his property where he had no intention to part with it."
In our opinion, the memorandum in question did not have the effect of clothing Valiquette with apparent absolute ownership of the car.
There was nothing in the record to show that Mayo gave the document to Valiquette intending that it be acted upon as a representation of absolute ownership in Valiquette. Nor did the mere giving of said document raise a presumption that it would likely be so used, and that Valiquette would be able to secure from a foreign state a certificate of ownership showing title in him free from liens. Defendants, therefore, are in no position to invoke the doctrine of estoppel, having failed to show an intention on the part of Mayo, either actual or apparent, that the document in question should be so used. Bigelow on Estoppel (6th Ed.), page 684. Said document could not be used as the basis of a defense of estoppel. The court did not err in refusing Instruction C.
Defendants assign as error the refusal of the court in denying their motion for a directed verdict. Defendants have based their assignment upon the contention that the plaintiff was not the real party in interest within the meaning of Section 507.010, R.S.Mo. 1949. There is no merit to this contention. Plaintiff was possessed of the legal title to the automobile and the cause of action. This made plaintiff the real party in interest under the above mentioned statute, even though the beneficial interest was in Mayo. 30 Cyc. 78; Swift Co. v. Wabash Railroad Co., 149 Mo.App. 526, 131 S.W. 124; Guerney v. Moore, 131 Mo. 650, 32 S.W. 1132; Hartmann v. Owens, 293 Mo. 508, loc. cit. 519, 240 S.W. 113; Young v. Hudson, 99 Mo. 102, 12 S.W. 632; 13 C.J. 528, 17 C.J.S., Contracts, § 298; MacDonald v. Wolf, 40 Mo.App. 302, loc. cit. 308; Parlin and Orendorff Co. v. Boatmen, 84 Mo.App. 67, 72; Houck v. Frisbee, 66 Mo.App. 16; Western Advertising Co. v. Star Publishing Co., 146 Mo.App. 90, 123 S.W. 969; Waples v. Jones, 62 Mo. 440; 5 C.J. 852, 854; 6 C.J.S., Assignments, § 11; Cornell v. Mutual Life Insurance Co., 179 Mo.App. 420, 165 S.W. 858, loc. cit. 430; Key ex rel. Heaton v. Continental Insurance Co., 101 Mo.App. 344, 74 S.W. 162, 30 Cyc. 83; Keeley v. Indemnity Co. of America, 222 Mo.App. 439, 7 S.W.2d 434.
Plaintiff complains that the jury's award of damages was inadequate and not responsive to the evidence. The point made is well taken.
The proper measure of damages in actions of this kind is the amount of the debt unpaid, not exceeding the reasonable market value of the property at the time of the conversion. Hall v. Nix, 156 Ala. 423, 47 So. 335; Reed v. Rowell, 100 Vt. 41, 134 A. 641; Pugh Bros. Co. v. Marano, 44 R.I. 1, 114 A. 133; Woods v. Nichols, 21 R.I. 537, 45 A. 548, 48 L.R.A. 773.
The principal indebtedness due under the conditional sales contract in the case at bar was the sum of $937.65. The award of the jury was $800.
The alleged conversion took place on February 28, 1946. According to defendants' own evidence they purchased the car from Valiquette for $1090 and, on the same day, sold the car to Francis Elder for $1290. It was the sale to Elder that constituted the conversion. The fact that the car was sold to Elder for $1290 was the subject of a stipulation between the parties. Evidence of the purchase price paid by defendants, and the price obtained by them on said February 28, 1946, was competent evidence of value. Hyde v. Henman, Mo.App., 256 S.W. 1088; Parmenter v. Fitzpatrick, 135 N.Y. 190, 31 N.E. 1032; Norton v. Willis, 73 Me. 580; 65 C.J. 110. In fact, it was about the most convincing evidence available on the issue. No other evidence bearing on the issue of reasonable market value was offered by either party. Nor was there any contention at the trial that the car was worth less than the amount defendants received for it. We are, therefore, justified in saying that, under defendants' evidence, as well as under the stipulated facts in the record, the value of the car was shown to be in an amount in excess of the debt due and unpaid on January 27, 1947, the date of plaintiff's demand. The verdict was not responsive to the evidence and should not be permitted to stand. Johnson v. Lea, Mo.App., 229 S.W.2d 717; Cap-Keystone Printing Co. v. Tallman Co., Mo.App., 180 S.W.2d 802.
However, it will not be necessary, in order to correct the error complained of, to reverse the judgment and remand the cause for new trial. Section 512.160(3), R.S.Mo. 1949, provides: "The appellate court shall examine the transcript on appeal and, subject to the provision of subsections 1 and 2 of this section, award a new trial or partial new trial, reverse or affirm the judgment or order of the trial court, or give such judgment as such court ought to have given, as to the appellate court shall seem agreeable to law. Unless justice requires otherwise the court shall dispose finally of the case on appeal and no new trial shall be ordered as to issues in which no error appears."
Under the above mentioned statute it is our duty to order such judgment entered as in our opinion the trial court should have rendered. The judgment of the trial court is accordingly reversed and the cause remanded with directions to enter judgment for plaintiff in the sum of $937.65, plus interest from the date of demand, to wit, January 27, 1947.
McCULLEN and BENNICK, JJ., concur.