Opinion
March 12, 1935.
July 18, 1935.
Motor vehicles — Transaction between finance company and dealer — Trust receipt — Right of possession — Third party pledgee of dealer — Failure of finance company to register title — Action in replevin — Disclaimer of interest by technical defendant — Proposed purchaser.
1. Where a finance company purchases a motor vehicle by an ordinary bill of sale from the manufacturer, and permits a dealer to take possession under a trust receipt stating the terms under which the dealer receives and holds the motor vehicle, such finance company is entitled to possession of the motor vehicle as against a third person who loans money to the dealer and, as security, without taking possession of the motor vehicle, accepts an assignment of a bailment lease entered into by the dealer with a proposed purchaser; and this is so although the finance company does not take possession of the motor vehicle until after the transaction between the dealer and the third party is entered into, and though it does not register its title with the highway department.
2. In an action of replevin by the third party pledgee, in which the finance company is an intervening defendant, it is immaterial that the proposed purchaser of the motor vehicle from the dealer is the technical defendant in the case, and his rights to the motor vehicle may be disregarded, where such defendant fails to appear as a party and disclaims any interest in the subject of the replevin suit.
3. Sunbury Finance Co., Inc. v. Boyd Motor Co., 119 Pa. Super. 412, followed.
Appeal, No. 27, March T., 1935, by plaintiff, from judgment of C.P., Dauphin Co., March T., 1931, No. 551, in case of Sunbury Finance Company, Inc. v. A.T. Scarborough and Universal Credit Company, intervenor.
Before KELLER, P.J., CUNNINGHAM, BALDRIGE, STADTFELD, PARKER, JAMES and RHODES, JJ. Affirmed.
Replevin. Before HENRY, P.J., specially presiding.
The facts are stated in the opinion of the Superior Court.
Verdict directed for plaintiff. Judgment entered for intervening defendant n.o.v. Plaintiff appealed.
Error assigned, among others, was judgment n.o.v.
F. Brewster Wickersham, of Metzger Wickersham, for appellant.
George L. Reed, with him William S. Bender and C.A. Wilson, for appellee.
Argued March 12, 1935.
This is a companion replevin case to that of Sunbury Finance Company, Inc. v. Boyd Motor Company, 119 Pa. Super. 412, 180 A. 103, in which the present intervening defendant, Universal Credit Company, was the intervenor. It was tried before the same jury; a verdict, as in the previous case, was directed for the plaintiff, but judgment n.o.v. was subsequently entered for the intervening defendant.
The car in question, a Ford coupe, was obtained from the same manufacturer by the same dealer, Boyd Motor Company, under a financial transaction identical with that involved in the purchase of the truck, and culminated in the giving of an identical Trust Receipt to the intervening defendant. The Boyd Motor Company first executed a bailment lease to one Scarborough, with the usual option to purchase, Scarborough, however, making no payments on account. The Boyd Motor Company then borrowed a sum in excess of $400 from the plaintiff on the strength of the transaction, and assigned to the plaintiff its lease with Scarborough. The car, however, was allowed to remain in the possession of the Boyd Motor Company until it was repossessed and removed to a garage by the intervening defendant shortly before the action of replevin was instituted.
The judgment in this case must be affirmed, for the reasons given at length in our opinion in the prior case. As between plaintiff and the Boyd Motor Company, the transactions in regard to the vehicles were identical. In each case the plaintiff made a loan to the Boyd Company upon the security of the motor vehicle, taking in the former case the direct obligation of the Boyd Company, and in this one an assignment of the obligation of a proposed purchaser. In both cases, the plaintiff, although technically the owner and lessor of the vehicle, occupied that position only to insure the repayment of its loan. In reality it was a pledgee. As we have already held, plaintiff is not within the class of those who can question the effectiveness of the paper transaction between Boyd Motor Company and the intervening defendant.
It is true that Scarborough is the technical defendant in this case. The issue actually tried, however, was not that between him and the plaintiff, or between him and the intervening defendant, but that of the respective rights of the plaintiff and the intervening defendant. Scarborough did not enter a formal appearance or take part in the proceedings as a party thereto. He was called as a witness for the intervening defendant. While he admitted the genuineness of his signature to the lease, he stated that he had made no payments of rental with respect to the car, that he was not familiar with the terms of the agreement, and that it was not his understanding that the lease was intended to give him the right to acquire title to any particular car. His failure to appear as a party in the case and his disclaimer upon the stand of any interest in the subject of the replevin suit, leave us free to disregard any rights which he may have had if he had seen fit to assert them. For the purposes of this review, therefore, the case may be treated as though no lease to him had ever been executed. We have heretofore defined the respective rights of the plaintiff and the intervening defendant.
Judgment affirmed.