AC Rent-A-Car, Inc. v. AMERICAN NAT. B. & T. CO. OF MOBILE

• Decision Date: 29 February 1972
• Docket Number: 4185-66.,Civ. A. No. 4180-66
• Court: U.S. District Court — Southern District of Alabama
• Parties: A. C. RENT-A-CAR, INC., Plaintiff, v. The AMERICAN NATIONAL BANK & TRUST CO. OF MOBILE et al., Defendants. The CURRY CORPORATION, Plaintiff, v. The AMERICAN NATIONAL BANK & TRUST CO. OF MOBILE et al., Defendants.

339 F. Supp. 506

A. C. RENT-A-CAR, INC., Plaintiff, v. The AMERICAN NATIONAL BANK & TRUST CO. OF MOBILE et al., Defendants.

The CURRY CORPORATION, Plaintiff, v. The AMERICAN NATIONAL BANK & TRUST CO. OF MOBILE et al., Defendants.

Civ. A. Nos. 4180-66, 4185-66.

United States District Court, S. D. Alabama, S. D.

February 29, 1972.

COPYRIGHT MATERIAL OMITTED

Willis C. Darby, Jr., Mobile, Ala., for plaintiffs.

Mayer W. Perloff, Oliver J. Latour, Jr., Mobile, Ala., for defendants.

Harry S. Haginas, pro se.

PITTMAN, Chief Judge.

FINDINGS OF FACT

1. These consolidated matters arise out of the alleged conversion by The American National Bank & Trust Company of Mobile, (Bank), Charles B. Nervine (Nervine), and Harry H. Haginas (Haginas) of numerous automobiles, specifically described in the complaints, alleged to be the property of Plaintiff corporations. In the A. C. Rent-A-Car, Inc. (A.C.) matter, Civil Action No. 4180-66, Plaintiff seeks to recover from the three Defendants on its Sixth Cause of Action for the alleged conversion of twenty-one (21) separately described automobiles. In the Seventh Cause of Action, Plaintiff seeks to recover from only Harry Haginas for the alleged conversion of ten (10) different automobiles, none of which is mentioned in the Sixth Cause of Action. In The Curry Corporation (Curry) matter, Civil Action No. 4185-66, Plaintiff seeks to recover from the three Defendants for the alleged conversion of six (6) specific additional automobiles.

2. The alleged conversions took place between July, 1963 and February, 1964. These suits were instituted in July of 1966.

3. The Bank is a National Banking Association, a corporation organized and existing under the laws of the State of Alabama, with its principal place of business in the City and County of Mobile. During the time in question the Bank financed automobiles for VIP Motors, Inc. (VIP) on a wholesale and a retail basis. The wholesale financing was done on a two party trust receipt basis through Bank's Installment Loan Department.

4. VIP is a corporation organized and existing under the laws of the State of Alabama with its principal place of business in the City and County of Mobile and engaged in the used car business. Haginas, its President and Manager, was a citizen of the State of Alabama.

5. Nervine was an employee of the Bank holding the position of Assistant Vice President and at all times material hereto prior to November 13, 1963, he was the officer in charge of Bank's Installment Loan Department. Nervine's employment terminated in February, 1964. He was a citizen of the State of Alabama.

6. A.C. and Curry are two non-resident corporations with their principal places of business in the State of Florida and doing business at 2830 N.E. Second Avenue, Miami, Florida. Lew Adler (Adler) was the operations manager and the man second in command under Mr. B. F. Curry, the President of said corporations. Mr. Curry, although now permanently residing in Miami, Florida, spent only six months of the year in Florida and has very little knowledge of the facts in this case. All of the dealings which VIP had through Defendant Haginas with Plaintiff corporations were done almost exclusively with Adler. (Haginas had met Mr. Curry on several occasions, but there had been no dealing between them material to the issues in this case.)

7. During the latter part of 1961 or early 1962 VIP operated a used car lot in Mobile, Alabama. Through Haginas it obtained many automobiles it placed in its inventory from sources in the State of Florida; most were obtained through Adler.

In the normal course of events, Adler would give possession of an automobile selected by VIP to VIP in Miami and VIP would bring the automobile back to Mobile. Later A.C. would draw a draft on VIP for the agreed price of the automobile and forward the draft to the collecting bank in Mobile, Alabama. In the case of all automobiles involved in this lawsuit, and many others, the drafts were forwarded through a Miami bank to the American Bank in Mobile, Alabama. Inside of the drafts, A.C. would enclose the original invoice and the Florida certificate of title. When the draft was paid by VIP at the American Bank, the bank would then surrender the draft along with the invoice and certificate of title to VIP.

The American Bank, during 1962 and 1963, floor planned automobiles for VIP Motors. The floor plan arrangement consisted of a trust receipt and note. When VIP would sell the automobile, the trust receipt would then be paid off at the American Bank. The American Bank also financed retail sales for VIP. There seems to be little question, and the court specifically finds, that Adler knew VIP was selling the automobiles it obtained in Florida before they were paid for and in many cases before the automobiles were drafted upon. Defendant Bank has established to the satisfaction of the court that many automobiles were obtained by VIP, sold, and then not paid for in some cases for as much as nine months. From February or March, 1962 until November and December of that year, there existed between VIP and A.C. a float of approximately $17,500.00, i. e., VIP had delivered to it during the months of January, February and March of 1962, cars of this value which were not drafted on until October, 1962, and were not paid for until November and December 1962 and January 1963. Further, it was established to the satisfaction of the court that beginning in November and December, 1962 and continuing on up until June and July 1963, the automobiles which VIP purchased in one month were not paid for until the following month or next following month, with some few exceptions. During this time VIP was purchasing most of its cars from A.C.

8. Plaintiffs have sought to establish that the sale of automobiles by Plaintiffs to VIP were not credit sales. Plaintiffs have also sought to establish that a Florida automobile title certificate was like a deed to real estate which must be delivered before the title can pass.

9. Plaintiffs have relied upon two theories in their attempt to prove conversion. First, that the conversions took place as to certain automobiles when the Bank caused the automobiles to be seized from the possession of VIP in the detinue suit and sold by the Bank. Second, that the conversions took place as to certain other automobiles when the automobiles were placed on trust receipt documents ("floor-planned").

10. The court is unable to agree with Plaintiffs' contentions that these were not credit sales to VIP. From the dealings of the parties the court finds that the sales to VIP were credit sales and title and the right to possession passed to VIP upon delivery of the automobiles by Plaintiffs to VIP or its designee in Miami. Plaintiffs' counsel conceded in opening statement to the court that the risk of loss passed to VIP as soon as delivery was effected in Miami. The automobiles were invoiced F.O.B. Miami and Haginas testified that the risk of loss was on VIP and that VIP had insurance on the automobiles as soon as they were delivered in Miami. Adler knew that VIP was in the used car business and that the automobiles were placed on VIP's retail sales lot as soon as the car reached Mobile and were offered for sale to the general public. Yet the evidence is clear that automobiles were delivered to VIP and not drafted upon for many months, as is shown by the $17,500.00 float and general delay in paying for cars purchased by VIP referred to in paragraph 7 hereof.

11. Further, many of the automobiles which are the basis of these suits show clearly the pattern of dealings between the parties. A.C. #3-1962 Ford Falcon 435¹, and A.C. #5-1962 Ford 071 were last in Plaintiff's possession 4/15/63 but were not drafted upon until four months later, 8/15/63. A.C. #4-1962 Ford 667 was last in Plaintiff's possession 4/13/63 and was not drafted upon for over six and a half months on 10/29/63. A.C. #7-1963 Chevrolet 993 was last in Plaintiff's possession 8/20/63 and drafted upon 10/29/63. A.C. #8-1962 Ford 859 was last in Plaintiff's possession 8/15/63 and not drafted upon for over two and a half months on 10/29/63.

12. Nine of the automobiles in the Sixth Cause of Action in the A.C. matter were never drafted upon by Plaintiff A.C. Rent-A-Car. Plaintiffs' counsel says there was not sufficient time to do so before VIP Motors, Inc. closed its doors to business. The evidence has shown the contrary. Although some of the automobiles were in Plaintiff's possession as late as 11/6/63, viz. A.C. #18-1962 Rambler 614, A.C. #20-1961 Rambler 551 and A.C. #21-1963 Chevrolet 157, there is no reason why these automobiles could not have been drafted upon immediately if these were cash sales. A.C. #1-1961 Cadillac 859, although claimed by Plaintiff to have been in its possession in November, 1963, was in VIP inventory in the early part of 1963 and was placed on a trust receipt in March, 1963. Floor plan checks made by the Bank show that the automobile was in Mobile since 3/27/63. A.C. #9-1962 Chevrolet 053 and A.C. #17-1962 Rambler 744 were last in Plaintiff's possession on 8/15/63 and 9/17/63 respectively, but were never drafted upon. A.C. #10-1957 Lincoln 98L was placed on a trust receipt dated 9/13/63 and was unquestionably on VIP's lot and on the Bank's Floor Plan Check made on 10/30/63 but was never drafted upon. The delay in drafting on these automobiles was consistent with prior dealings between the parties and clearly substantiates the court's finding that the sale of automobiles to VIP were credit sales.

13. The court further finds that on or about November 12 and 13, 1963, Charles B. Nervine and John Feathers, employees of the Bank, and Haginas went to Miami and discussed with Adler the VIP situation in Mobile. Shortly after Nervine's return from Miami, and before the Bank took physical possession and detinued any of the automobiles in this suit, Nervine was relieved of all of his areas of...