Opinion
No. 42735.
November 12, 1951.
APPEAL FROM THE CIRCUIT COURT OF THE CITY OF ST. LOUIS, DAVID A. McMULLAN, J.
Jones, Hocker, Gladney Grand, and James C. Jones, III, all of St. Louis, for appellant Howard Nat. Bank Trust Co.
Mattingly, Boas Richards and Lloyd E. Boas, all of St. Louis, for E.B. and Madrene Jones.
Action for $1200.00 damages for conversion of an automobile. Verdict and judgment for $800.00 from which both parties appealed to the St. Louis Court of Appeals. The Court of Appeals reversed and remanded with directions to enter judgment for plaintiff for $937.65. Howard National Bank Trust Co. v. Jones, 238 S.W.2d 905. We transferred the case here on application of defendants.
Harold F. Mayo, an automobile dealer in Burlington, Vermont, sold a 1941 Dodge sedan to Eugene Valiquette for $1300.00 on a conditional sales contract with a balance due of $800.00. (He traded in a 1936 Chevrolet.) Insurance, recording and finance charges increased the debt to $937.65 and this contract was assigned to plaintiff. For contents of contract and memorandum of sale see Court of Appeals opinion, 238 S.W.2d, loc. cit. 907. Valiquette brought the car to Missouri and two months after the sale made application to the Secretary of State for a certificate of title. On the part of his application which called for method of payment and liens, was written "All paid." A Missouri certificate of title was issued to Valiquette, although the application stated, if a car was purchased in a State not issuing titles, "notarized bill of sale and last license receipt required", and this was not furnished. About two months later, Valiquette sold the car to defendants who later sold it to Francis Elder. A more detailed statement of the facts will be found in the Court of Appeals opinion.
Defendants contend that plaintiff is not entitled to maintain this action because it had charged Mayo's reserve account with the amount due on the conditional sales contract. However, the assignment remained in effect so that the title was still in plaintiff and it was entitled to sue as the real party in interest under Section 507.010 although the proceeds were to be held in trust for Mayo. 39 Am.Jur. 871-877, Secs. 17-29; 67 C.J.S., Parties, § 7k, pages 906-907, § 113, pages 1114; and cases cited in Court of Appeals opinion, 238 S.W.2d loc.cit. 905. Nevertheless, it is true as defendants contend that, under these circumstances, plaintiff does not have the rights of a holder in due course of a note, see Sec. 401.057, R.S. 1949, and any defense good against Mayo would be good against plaintiff.
Defendants attempted to make the defense of estoppel, on the facts hypothesized in their Instructions A and C, set out in the Court of Appeals opinion. 238 S.W.2d, loc.cit. 909. We fully agree with and adopt the ruling of the Court of Appeals on Instruction A. The estoppel submitted by Instruction C was based on a paper given Valiquette by Mayo, which was apparently accepted by the Secretary of State of Missouri as the basis for issuing a Missouri certificate of title. Defendants' claim of estoppel is that this paper indicated an outright sale and did not show that any lien or conditional sales agreement existed. It was as follows:
(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"
A photostatic copy of this paper is in the record and it is a printed form about the size of a Missouri motor vehicle registration form. Our conclusion is that the giving of this completed from by Mayo to Valiquette cannot be the basis of estoppel and, therefore, the trial court correctly refused Instruction C. In the first place, no estoppel was pleaded by defendants. This would not be fatal to this defense if estoppel appeared from the case made by plaintiff. State ex rel. Consolidated School Dist. No. 2 of Pike County v. Haid, 328 Mo. 739, 41 S.W.2d 806; Grafeman Dairy Co. v. Northwestern Bank, 315 Mo. 849, 288 S.W. 359; Fairgate Realty Co. v. Drozda, Mo.Sup., 181 S.W. 398. However, we find that facts sufficient to show estoppel do not appear from plaintiff's evidence. These facts are not similar to those in the case of Southern Illinois Finance Co. v. Strubel, Mo.App., 228 S.W.2d 374, cited by defendants, where the invoice and car keys were turned over to the defrauding seller by the dealer's agents in the presence of the buyer and his bill of sale was also given to the buyer in their presence.
In this case, defendants never saw or heard of Mayo before they bought the car. The paper given by Mayo to Valiquette was not and did not purport to be a bill of sale and defendants never saw it, as it was kept by the Secretary of State. From a consideration of the statutes of Vermont, of which we take judicial notice, Sec. 509.220, R.S. 1949 and Sup.Ct.Rule 3.14; Secs. 490.070 to 490.120, R.S. 1949, this paper appears to be a form which a dealer was required to give to a purchaser under certain circumstances. At that time, Vermont had a motor vehicle registration system but not a title certificate system. Sec. Chapter 429, Vermont Statutes 1947. This form was in the alternative. The second alternative was to be used if a car was loaned to a customer by a dealer, as authorized for three days by P.L. 5065. Sec. 10,115, Statutes 1947. The first alternative, which was filled out in this case, obviously related to the requirements for a transfer of registration under P.L. 5025. Sec. 10,075, Statutes 1947. This section provides in part, as follows: "Upon the transfer of ownership of any registered motor vehicle its registration shall expire. The person in whose name such transferred vehicle was registered shall immediately return direct to the commissioner the registration certificate assigned to such transferred vehicle, with the date of sale and the name and residence of the new owner endorsed on the back thereof. The transferer shall forthwith remove the registration number plates from such transferred vehicle and may attach the same to another unregistered motor vehicle owned by him. Upon the transfer of registration plates from a motor vehicle, the registration of which has expired as above provided, to another motor vehicle, owned by the transferer, the owner or operator shall not, for a period of five days, be subject to a fine for the operation of the latter motor vehicle without the proper registration certificate, provided he has, within twenty-four hours of such transfer, made application, as provided in the next section, for transfer of such registration number plates." Thus it appears that the purpose of the paper, which defendants seek to use as a basis for estoppel, is to show that a purchaser is in compliance with the Vermont law in using number plates from his transferred car (in this case Valiquette's traded in Chevrolet) until the transfer of his registration to his unregistered car has been completed. That is the dealer, from whom a car has been purchased, certifies that he has mailed the registration certificate, on the old car traded in, with an application to transfer registration to the new car described in the certificate.
Estoppel is an affirmative defense. Defendants did not plead it and we certainly cannot say that it appears from these facts shown by plaintiff's evidence. On the contrary, plaintiff's evidence shows that Mayo was performing a duty in conformance with the laws of his state when he gave this paper to Valiquette; and that certainly cannot be the basis of an estoppel. It appears that he used the regular form to do so or at least defendants, who would have the burden of proof on estoppel, made no showing to the contrary. He certainly was not giving this to him for the purpose of getting a title in another state. Defendants had no other defense, under the admitted facts, and, therefore, plaintiff was entitled to a directed verdict.
Defendants say that to allow recovery "is to establish a precedent holding that purchasers of automobiles cannot rely upon a clear Missouri title upon the assumption that the Commissioner of Motor Vehicles has complied with his statutory duty to use reasonable diligence in ascertaining the facts stated in connection with an application for a clear title." The short answer to this is that the Missouri certificate of title showed on its face that it would only show liens which were stated by the applicant. It also contained the additional warning: "Note: The Office of Commissioner of Motor Vehicles is not an office of record for the recording of liens and encumbrances other than shown on application for certificate of title. Chattel mortgages on motor vehicles or trailers are recordable in the County or City Recorder's Office." See also Sec. 8382, R.S. 1939, RSMo 1949, §§ 301.140, 301.180, et seq. Therefore, the question of whether the Missouri officers performed their duties properly in issuing the certificate title could not be an issue in this case. Absent estoppel, their acts of failures would have no relevancy because they could not be binding on plaintiff or Mayo. The Court of Appeals applied the correct measure of damages and reached the right result.
The judgment of the trial court is 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.
All concur.