Opinion
No. 77-1927EG
October 27, 1978
Estates — Title to Property — Right to Possession — Motor Vehicles
A bankrupt corporation which made the downpayment and monthly payments on two vehicles was the legal and equitable owner of those vehicles. The bankrupt's president was in possession of the vehicles. The president first claimed that the payments made by the corporation on the vehicles were compensation to him for his duties as a corporate officer. However, at trial the president abandoned this theory and claimed that he purchased the vehicles and orally leased them to the corporation. The downpayment and monthly payments allegedly representing the rental payments. It was admitted that the vehicles were used primarily by the corporation for business purposes. Clearly, these vehicles are not the property of the president of the corporation who is in possession of them now. The defendant changed his story when he found himself unable to produce evidence to support his first theory, the lease was oral and made between himself in his capacity as a corporate officer and in a personal capacity without supporting documentation, the corporation paid for repairs on the vehicles, no evidence was introduced that the corporation deducted its payments on these vehicles as business expenses, and the court held that the defendant's demeanor at trial did not appear truthful. These vehicles are the property of the bankrupt's estate, and the trustee has the right to possession under Section 70a of the Bankruptcy Act. See Sec. 70a [§ 541(a)] at ¶ 9501.