Opinion
No. 7004.
November 13, 1951.
APPEAL FROM THE CIRCUIT COURT, DIVISION NO. 2, JASPER COUNTY, WOODSON OLDHAM, J.
Burden Shortridge, Joplin, for appellant.
Birkhead Teters, Carthage, for respondent.
Action in replevin to recover a 1946 Oldsmobile club coupe. The Universal C. I. T. Credit Corporation, a corporation, brought the action against Griffith Motor Company, a corporation, in the Circuit Court of Jasper County, Missouri, October 25, 1947. The cause was tried before the court and judgment rendered for defendant. Plaintiff appealed.
Plaintiff's petition states that on the 12th day of September, 1947, Carl Moore, d/b/a Moore Auto Company, executed and delivered to it a chattel mortgage on the automobile in question (with other security) to secure a $3,000.00 note; that said mortgage was duly filed for record in Dade County, Missouri, where said Moore lived and conducted his business. Plaintiff claims that, by the terms of this mortgage, it was entitled to the possession of the automobile in question; that defendant is in possession of the same and that demand has been made of defendant for the possession of said car and by defendant refused; that the reasonable value of said car was $1750.00.
The answer is a general denial and an affirmative plea by way of counterclaim that defendant purchased said automobile on the 13th day of September, 1947, for a valuable consideration and that said car was delivered to it, together with the certificate of title; that the title was transferred from one, Vernie Pruitt, to defendant, duly acknowledged; that there is no stamp of a recorder of deeds showing any outstanding liens.
The answer denies that plaintiff has any valid chattel mortgage against said automobile and that, if there was, it was released by plaintiff October 21, 1947.
The answer also seeks damages by way of counterclaim, which part of the answer is not in issue in this case.
Plaintiff's reply denies the affirmative allegations that said chattel mortgage has been released and satisfied of record and denies the other allegations in defendant's counterclaim.
The judgment of the trial court is as follows:
"* * * the Court finds the issues in favor of the defendant; that the defendant is entitled to possession of the property in controversy. * * *
"It is therefore ordered and adjudged by the Court that the defendant retain possession of the property described together with the costs of this suit, and that execution issue therefor."
The facts necessary to a proper solution of the issues are undisputed.
Carl Moore, d/b/a Moore Auto Company, in Dade County, Missouri, executed a chattel mortgage on the car in question, with other cars, to plaintiff, securing an indebtedness of $3,000.00, dated September 12, 1947. This mortgage was recorded about noon on that day. When the agent of plaintiff prepared the mortgage from Moore to plaintiff, he saw the title to the Oldsmobile in question was in Vernie Pruitt, and at the time was endorsed on the back by said Pruitt but not acknowledged. The car, at the time, was in the possession of the mortgagor and this title so endorsed on the back thereof.
The Griffith Motor Company, defendant, purchased four automobiles from the said Carl Moore about 6:30 P.M., September 12, 1947, took possession on that day of this car in question and paid for same by a check in the sum of $6900.00. This check was paid by the bank September 22, 1947. Moore delivered title to the car in question September 13, 1947, endorsed in blank. At the time the title was delivered to defendant it was signed by Vernie Pruitt, acknowledged before Carl Moore, Notary Public, on the 13th day of September, 1947.
Defendant testified that Moore said Pruitt owned the car and that he was selling it on commission.
October 21, 1947, plaintiff filed a purported release of the chattel mortgage with the recorder of deeds of Dade County. The release recited that the chattel mortgage "has been fully paid and satisfied in the amount of $800.00." Plaintiff contends this was meant only for a partial release.
The mortgage in question was introduced in evidence and the release was merely placed in a blank on said mortgage which had the printed form released in full.
No representative of defendant checked the records to see if there was a chattel mortgage until after demand had been made for possession of the car of defendant and suit brought.
The promissory note held by plaintiff was due thirty days after date and therefore the mortgage and note were due at the time of suit and there was admittedly a balance of $2200.00 due on the note.
Defendant completed the certificate of title and sold same after the bringing of suit by plaintiff.
The only question presented to the court in this case is the sufficiency of the evidence to support the judgment of the trial court.
We find there is but one question involved in this cause and that is, did Carl Moore have a mortgagable interest in the Oldsmobile in question at the time he executed the chattel mortgage relied upon by plaintiff so as to convey a valid lien to plaintiff thereon by such mortgage?
In this opinion we will refer to appellant as plaintiff and to respondent as defendant, the same positions they occupied in the trial court.
The facts are undisputed. Moore had possession of the car and had possession of the certificate of title thereto which was in Vernie Pruitt. Said certificate was signed on the back by Vernie Pruitt but not acknowledged. These facts were known to the agent of plaintiff at the time the chattel mortgage was executed. We think this question has been directly decided by the Supreme Court of this state.
In Pearl v. Interstate Securities Co., 357 Mo. 160, 206 S.W.2d 975, 978, the court states:
"It is true that recovery in either replevin or conversion depends on the strength of plaintiff's own claim and not on the weakness of defendant's. However, as held in Rankin v. Wyatt, 335 Mo. 628, 73 S.W.2d [764] loc.cit. 767, 94 A.L.R. 941, `the fact that a third person (in this case the original owners) may have some interest in the property will not preclude replevin by one having the right to possession as against the defendant sued.' Therefore, even though plaintiff did not have the legal title, he could recover from one without any right if he could show that he had a special property or interest in the cars which gave him the right to the possession thereof.
"Section 8382 requires for a valid sale of a used automobile that the holder of the certificate of ownership must endorse thereon an assignment in the form prescribed by the Commissioner. The statute does not require an acknowledgment before a notary, but the form prescribed includes such an acknowledgment. We think that the statutory authority was broad enough to authorize the Commissioner to require an acknowledgment as a part of the assignment form he was required to prescribe. Therefore, an acknowledgment was essential before new title certificates could be issued to purchasers of these automobiles. * * * However, in the case of dealers, the statutory requirement is only that a dealer must have `a separate certificate of ownership, either of such dealer's immediate vendor, or of the dealer himself.' For dealers, the Commissioner is authorized to make forms differing from those used for individuals. Documents in evidence show such forms, so that when a dealer is the buyer, while he must take an assignment directly to himself, he may make a reassignment direct to his vendee without getting a new title certificate in his own name as required in the case of sales between individuals. * * *
"Plaintiff did obtain the title certificates with assignments thereon signed by each owner at the time the cars described therein were delivered to him as Section 8382 required. However, plaintiff did not fully comply with the statute because he did not have the assignment of the certificates to him by the holders completed in the form prescribed by the Commissioner which included an acknowledgment before a notary. He had only an acknowledged assignment, and this was not sufficient to vest the legal title in him. Although he was a notary he had no authority to take an acknowledgment on as assignment to himself as he said he intended to do. 1 Am. Jur. 334-335, §§ 52-53; 1 C.J.S., Acknowledgments, §§ 52-53. Nor would he or anyone else have had the right to fill in the name of Security as assignee from the holders because he was the buyer and Section 8382 required the assignment to be made to him. To do so would be a misdemeanor. Sec. 8404 (d), R.S. 1939, Mo.R.S.A. Nevertheless, he had implied authority to fill in his own name because it was the intention of the parties that the same be made to him. National Bond Investment Co. v. Mound City Finance Co., Mo.App., 161 S.W.2d 664. Since a notary would not always be immediately available when an agreement for a sale is made, surely the buyer should have a reasonable time to complete the assignment by obtaining the seller's acknowledgment."
On page 979 of 206 S.W.2d in this opinion the court states the following law: "* * * that a purchaser, who obtained no assignment of a certificate of title, had no insurable interest in the automobile. It, therefore, follows that he would have no mortgagable interest. What was required to vest title in Security, even if it had paid the check for the purchase price, was both a completion of the assignments so as to vest title in plaintiff and on execution and acknowledgment of the dealers reassignment on the certificates by him to Security. Since neither was ever done, Security never got any title it could mortgage; and could not give defendant any lien on these cars. Therefore, defendant's mortgagor could get nothing by its foreclosure."
This opinion was followed and cited with approval by the Supreme Court in Peper v. American Exchange Nat. Bank in St. Louis, 357 Mo. 652, 210 S.W.2d 41, 44.
The same principle of law was followed by the Kansas City Court of Appeals in Wills v. Shepherd, Mo.App., 231 S.W.2d 843,847. This court stated:
"Even if defendant's name had been rightly inserted as assignee, the defendant acquired no title to the car in the absence of acknowledgment of the assignment by plaintiffs. * * *
"* * * The weakness of defendant's position is that defects in the title of its mortgagor were apparent on the face of the title certificates of these cars held by it. These defects at least were sufficient to put defendant upon inquiry to ascertain the true facts, and the true facts would have shown that Security had nothing to mortgage. * * *"
Following the law above set out, we hold that Carl Moore, d/b/a Moore Auto Company, did not have legal title to the Oldsmobile in question at the time the mortgage was taken by plaintiff. Moore did not have an interest that he could mortgage in said car. The weakness of plaintiff's position, therefore, is in the defects in the title of its mortgagor, apparent on the face of such title certificate of the car held by him. The transfer of title, not acknowledged by Vernie Pruitt, was brought to the attention of plaintiff's agent at the time of the preparation of the mortgage and was a defect sufficient to put plaintiff upon inquiry to ascertain the true facts which would show that Moore had nothing to mortgage.
Therefore, the mortgage lien relied upon by the plaintiff in this case was not a valid lien and the court was justified in finding for defendant. Plaintiff must rest upon the strength of its own title and not upon the weakness of the defendant as held in the Pearl case cited herein.
We find there is no merit in defendant's contention that plaintiff released the lien when he wrote in the blanks on the mortgage fully released by paying $800.00. This, in no way, influenced defendant's actions as defendant did not have any knowledge of such acts until after suit was brought. The mistake made in this release was evidenced by the release itself, it being meant only as a partial release.
It is unnecessary for us to decide whether or not the mortgage in question was a "Floor Plan" mortgage and thus releasing plaintiff from the duty of having such mortgage stamped on the certificate of title by the recorder of the instrument. This mortgage, of course, is a written contract between the parties thereto and unless it was ambiguous, would have to be interpreted by the court as a matter of law. We think that as to whether or not it was a "Floor Plan" mortgage, has no bearing in the case because, as held before, said mortgage was not a lien against the property because the mortgagor had no valid title which he could mortgage.
We have examined the authorities cited by plaintiff and find such not to be in point.
Judgment affirmed.
VANDEVENTER, P. J., and BLAIR, J., concur.