Apeco Corp. v. Bishop Mobile Homes, Inc., 826
| Decision Date | 28 February 1974 |
| Docket Number | No. 826,826 |
| Citation | 14 UCCRep.Serv. 680,506 S.W.2d 711 |
| Parties | 14 UCC Rep.Serv. 680 APECO CORPORATION, Appellant, v. BISHOP MOBILE HOMES, INC., et al., Appellees. |
| Court | Texas Court of Appeals |
Wm. R. Anderson, Sorrell, Anderson & Sorrell, Corpus Christi, for appellant.
Nelson Sharpe, Glusing & Sharpe, Kingsville, for appellees.
This is primarily a suit for possession of and title to a mobile home. Involved are constructions of Article 1436--1, Vernon's Annotated Penal Code, commonly called the 'Certificate of Title Act', 1 and of certain sections of the Texas Business and Commerce Code. The validity of the sale of a mobile home by a dealer to a purchaser is questioned by the manufacturer.
Apeco Corporation (Apeco) the parent corporation of Craftmade Homes, a corporation that manufactured the mobile home in question, sued Sterling Mohr (Mohr), the purchaser of the mobile home, and Bishop Mobile Homes, Inc. (Bishop), the dealer that sold the mobile home to Mohr, to determine the title and ownership of the mobile home and the right of possession to it, and, alternatively, to recover from the defendants the amount of money for which it sold the same to the dealer. Following a trial before the court, judgment was rendered in favor of Mohr for possession and ownership of and title to the mobile home; Apeco was ordered to issue its manufacturer's certificate to Mohr; and Apeco was given judgment against Bishop for the sum of $7,225.80. Apeco has appealed. We affirm.
In the main, three questions are presented for determination. First, is the purchase of a new, unregistered mobile home from a dealer, where the manufacturer had not executed and delivered a manufacturer's certificate properly filled in on the mobile home at the time of purchase, controlled by the Certificate of Title Act or by the Texas Business and Commerce Code? Second, if the sale is controlled by the Code, is the purchaser a buyer in the ordinary course of business within the purview of Sections 2.401 and 2.403 of the Texas Business and Commerce Code, V.T.C.A.? Third, if the sale is controlled by the Code, is the manufacturer estopped to assert that the dealer was not its authorized agent with power to sell and transfer title to the mobile home under the circumstances?
Findings of fact and conclusions of law were filed. Apeco agrees that the findings of fact are correct. Apeco, through Craftmade Homes, its subsidiary, manufactured a new mobile home, and sold and shipped it to Bishop. The purchase price was $7,225.80 cash, to be paid upon delivery. The mobile home was delivered to Biship on June 28, 1972. Bishop did not pay Apeco ($7,225.80) when the mobile home was delivered to it, but Apeco permitted the same to remain in Bishop's possession. Apeco did not execute and deliver the manufacturer's certificate on the mobile home at the time of such delivery, but retained it in its possession, and refused to thereafter execute and deliver the same to either Mohr or Bishop.
Mohr entered into a purchase and sales contract with Bishop on July 3, 1972, whereby he agreed to purchase the mobile home for $9,299.60, which included registration and certificate of title fees in the amount of $85.20. He paid $4,600.00 in cash to Bishop upon execution of the contract and the balance of the purchase price on July 11, 1972. He did not ask Bishop for a certificate of title when the contract was made, but did make such a request when he made the final payment on the mobile home. Mohr, according to a finding, 'knew under Texas law title to a mobile home was indicated by a certificate of title'.
Bishop was a retail mobile home dealer. It offered mobile homes for sale to the general public in the ordinary course of its business. Those facts were known to Apeco prior to its sale and delivery of the mobile home to Bishop.
The trial court, in its conclusions of law, as the same affect this appeal, concluded that the sale from Bishop to Mohr was not governed by Article 1436--1, V.A.P.C., but was governed by Sections 2 .401 and 2.403 of the Texas Business and Commerce Code; that Mohr was a bona fide purchaser for value; that Apeco by delivering the mobile home to Bishop 'cloaked' Bishop with apparent authority to sell it, and is estopped to assert that Bishop was not its duly authorized agent to sell the same; and that Mohr is entitled to 'ownership, possession and title' to the mobile home.
All of the conclusions of law are attacked by appropriate points of error. The contention is made in the first and second The mobile home was delivered to Bishop that the Certificate of Title Act did not apply but that the above mentioned Sections of the Texas Business and Commerce Code did apply. Apeco argues that the Certificate of Title Act 'solely' applies to this case, and that Mohr 'did none of the things necessary (under the Act) to obtain title', and that the sale was void under Section 53 because of noncompliance with Sections 22, 27 and 28 of the Act.
In order to dispose of the first question presented by this appeal, it is necessary to observe carefully the definition of certain terms as used in the Act, such as 'first sale', 'subsequent sale', 'owner', 'manufacturer's certificate' and 'certificate of title'.
Sales of vehicles are divided into two classes by the Act, the 'first sale', and the 'subsequent sale'. The 'first sale' is defined in Section 7 as being a sale of a vehicle which has not been previously registered in this State or elsewhere. The term 'subsequent sale', under the definition contained in Section 8, means a sale after a vehicle which is required to be registered and licensed has been registered or licensed, or should, in law, have been registered or licensed.
An 'owner', under the definition set out in Section 4, means any person other than a manufacturer, importer, distributor, dealer, or excepted governmental agency, who claims title to a vehicle after the 'first sale', as defined in the Act, has been made.
The term 'manufacturer's certificate' is defined in Section 22 as a certificate which shows the original transfer of a new vehicle from the manufacturer to the original purchaser, 'whether importer, distributor, dealer, or owner'. The term 'certificate of title', as defined in Section 24, means a written instrument that is issued solely by and under the authority of the State Highway Department, which must give certain data relating to the vehicle, license plates, liens, and the purchaser and seller.
Section 27 of the Act requires the Owner of a vehicle, before selling or disposing of any vehicle required to be registered, to make application to the designated agent of the State Highway Department for a certificate of title to the vehicle. Section 28 prohibits the issuance of a receipt by the designated agent of the State Highway Department for an application for a certificate of title to any New vehicle unless the applicant shall furnish a manufacturer's certificate properly assigned by the manufacturer, distributor or dealer shown thereon to be the last transferee to the applicant. Section 33 provides that title to a vehicle shall not pass or vest in the purchaser at a Subsequent sale unless the owner designated in the certificate of title transfers the certificate of title on a form prescribed by the State Highway Department. Section 53 provides that title to a vehicle shall not pass until the provisions of the Act are complied with, and all sales made in violation of the Act shall be void.
Our Supreme Court, in Motor Inv. Co. v. Knox City, 141 Tex. 530, 174 S.W.2d 482, 486 (1943) said:
'. . . Reading the Act as a whole, we think it clear that every transfer of a motor vehicle, regardless of the number thereof, from manufacturer to dealer, dealer to dealer, and from dealer to 'owner,' as defined in the Act, constitutes a 'first sale,' and that it is not necessary that the vehicle be registered and a certificate of title thereto obtained as a condition precedent to the validity of such 'first sale."
Any sale of a vehicle prior to its registration is a 'first sale', and any sale thereafter is a 'subsequent sale'. This distinction is material because of the requirement in the Act that an application for a certificate of title is essential to the validity of a 'subsequent sale'. A sale To an 'owner' is a 'first sale'. A sale By an 'owner' is a 'subsequent' sale. Continental Credit Corporation v. Norman, 303 S.W.2d 449 (Tex.Civ.App.--San Antonio 1957, writ ref'd n.r.e.).
' A sale By an owner without making application for a certificate of title before the sale is governed by the Certificate of Title Act and is void. Sections 27, 33. But a sale To an owner is governed by the rules governing ordinary sales of personal property'. Continental Credit Corporation v. Norman, supra (emphasis supplied). See also Nicewarner v. Alston, 228 S.W.2d 872 (Tex.Civ.App.--Amarillo 1950, writ ref'd n.r.e.).
From the foregoing, we conclude that so long as the vehicle is a new, unregistered vehicle, there may be repeated transfers of the vehicle, such as from the manufacturer to dealer, from dealer to dealer, and from dealer to owner, without the need to register the vehicle or apply for a certificate of title. All such sales are 'first sales'. Under those circumstances, a manufacturer's certificate is the only document that evidences title. The manufacturer's certificate properly filled out is necessary only for the purposes of registering the vehicle and obtaining the initial certificate of title. After the vehicle is registered for the first time and the certificate of title is issued, title to the vehicle is then evidenced solely by the certificate of title, and all sales thereafter are 'subsequent sales', and in order to be valid, must be in compliance with Sections 27, 33 and 51 of the Act.
The mobile home was a new, unregistered vehicle. The sale from Apeco to Bishop and the...
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