Brown & Root, Inc. v. Ring Power Corp.

• Decision Date: 07 June 1984
• Docket Number: No. 83-379,83-379
• Court: Florida District Court of Appeals
• Parties: 38 UCC Rep.Serv. 775 BROWN & ROOT, INC., a foreign corporation, Appellant, v. RING POWER CORPORATION, a corporation authorized to do business in the State of Florida, Appellee.

Page 1245

450 So.2d 1245

38 UCC Rep.Serv. 775

BROWN & ROOT, INC., a foreign corporation, Appellant, v. RING POWER CORPORATION, a corporation authorized to do business in the State of Florida, Appellee.

No. 83-379.

District Court of Appeal of Florida,

Fifth District.

June 7, 1984.

Robert W. Batsel of Ayers, Cluster, Curry, McCall & Briggs, P.A., Ocala, for appellant.

Paul M. Harden, Jacksonville, for appellee.

COBB, Judge.

Brown & Root, Inc. (hereinafter Brown), appeals from a final summary judgment denying it a writ of replevin to recover possession of a Caterpillar loader stolen from it in Houston, Texas. The facts, as ascertained by the trial court, are set forth in the judgment:

1. On March 4, 1979, BROWN & ROOT, INCORPORATED, purchased from Mustang Tractor Equipment Company a 920 wheel loader. Thereafter on March 26, 1982, said 920 wheel loader was stolen from Brown & Root.

2. On April 3, 1982, Southeastern [sic] Equipment Company, Incorporated, a Louisiana corporation, purchased from Stevens Equipment Company, a Texas corporation, the wheel loader stolen from Brown & Root on March 26, 1982. Thereafter, on April 6, 1982, Ring Power Corporation, a Florida corporation, purchased from Southeastern [sic] Equipment Company, Incorporated, the same 920 wheel loader for $29,500.00. Said transaction took place in Kenner, Louisiana.

3. Thereafter, Ring Power Corporation brought the 920 wheel loader to its office in Ocala, Florida.

4. Article 524 of the Civil Code of the state of Louisiana provides in pertinent part as follows:

"the owner of a lost or stolen moveable may recover it from a possessor who bought it in good faith in a public auction or from a merchant customarily selling similar things or [sic] reimbursing the purchase price."

5. That the laws of the state of Louisiana do not require that a purchaser who purchased lost or stolen moveables from a possessor in good faith at a public auction or from a merchant customarily selling similar things to hold the property for three years despite the wording of Article 3506 of the Civil Code of the state of Louisiana (same not having been repealed until January 1, 1983).

6. The laws of the state of Louisiana control the property rights of Ring Power Corporation with regard to the equipment in that the state of Louisiana is the situs of the property at the time of the purchase. Greer vs. Commercial and Exchange Bank, 118 So.2d 566; 6 Fla.Jur. Conflict of Law § 25. ¹

Pursuant to those findings, the trial court denied Brown a writ of replevin, ruled for Ring Power on its counterclaim, and held that Brown could take possession of the loader only upon reimbursement to Ring of the sum of $29,500.00, Ring's purchase price, within thirty days of the judgment. This appeal ensued.

The trial court's factual findings in paragraph 1 omit the undisputed facts that the original purchase of the loader by Brown occurred in Texas, and that the theft from Brown occurred in Texas. Nothing in the record before us suggests Brown has any connection or contact with the State of Louisiana in either a contractual or tortious context. Nevertheless, the applicability of Texas law was not raised as an issue before either the trial court or on appeal. Instead, in the proceedings below, Brown argued Florida law was applicable as the contract between Ring Power and Southeast was made in Florida. Ring contended its right of possession arose out of Louisiana law, as the contract for its purchase was made in that state. The court agreed with Ring and applied Louisiana law, which requires the owner, as a prerequisite to recovery of his property, to reimburse an innocent purchaser in possession.

Unlike Louisiana, Florida follows the general rule that one who acquires possession of property by theft cannot confer good title by its sale, even to a bona fide purchaser. Avis Rent-A-Car System, Inc. v. Harrison Motor Co., 151 So.2d 855 (Fla. 2d DCA 1963). At best, a purchaser in good faith has the title and right to possession of the property against all except the rightful owner. 67 Am.Jur.2d Sales 256. However, Florida now recognizes that a voidable title may be successfully perfected by the ultimate buyer who purchases for a valid consideration and without notice of the title defect where the rightful owner lost possession through conversion following entrustment. Carlsen v. Rivera, 382 So.2d 825 (Fla. 4th DCA 1980); see § 672.403, Fla.Stat. (1981).

The reasoning that Ring's right of possession arises out of Louisiana law because its contract for purchase was made in that state applies equally to Brown so that Texas law should determine its right of possession, since Brown purchased the loader in Texas and that was the situs of the theft. Cf., State Farm Mutual Automobile Ins. Co. v. Olsen, 406 So.2d 1109 (1981). Texas, unlike Louisiana, follows Florida's position that a thief cannot defeat an owner's title. Saenz Motors v. Big H. Auto Auction, Inc., 653 S.W.2d 521 (Tex.Civ.App. 13th Dist.1983), affirmed, 665 S.W.2d 756 (Texas 1984); Chapman Motors, Inc. v. Taylor, 506 S.W.2d 724 (Tex.Civ.App. 10th Dist.1974); Jamison v. Sockwell, 405 S.W.2d 618 (Tex.Civ.App. 5th Dist.1966); McKinney v. Croan, 144 Tex. 9, 188 S.W.2d 144 (Tex.1945).

Therefore, as between the law of Texas and that of Louisiana, the lower court would have been correct in applying Texas law, which is consistent with Florida's position. However, Brown did not raise below or on appeal the issue of the applicability of Texas law. In fact, it can be said Brown invited the error of applying Louisiana law because it relied on the theory, albeit the wrong theory, that the applicable law was the law of the state in which the contract between Ring and Southeast was made. See: Bould v. Touchette, 349 So.2d 1181 (Fla.1977).

The facts adduced before the trial court adequately support its finding, as a matter of law, that the contract between Ring and Southeast took place in Louisiana rather than in Florida, as Ring contended. The sole viable issue left for appellate review is whether this state should recognize and enforce the Louisiana law cited in the trial court's judgment. We must do so unless that law contravenes a positive policy of the law of Florida, the forum state. See 16 Am.Jur.2d Conflict of Laws § 6. This issue has been preserved by appellant for our consideration.

The appellant contends Louisiana law in this regard is contrary to section 672.403, Florida Statutes (1981), the common law, the Uniform Commercial Code and "the law of the remainder of the states in the United States." In urging the public policy argument for declining to enforce Article 524 of the Civil Code of the State of Louisiana, the appellant states:

Only in Louisiana can a thief defeat the property rights of the true owner. The essence of the Lower Court's ruling is that any item purchased from a merchant customarily selling similar things is then owned by the purchaser free and clear of the original and true owners claim. Basically, the Lower Court interprets the law of Louisiana to allow a person to steal a loader in Florida on Monday night, remove it to Louisiana the same day and sell it to a dealer in Louisiana and this "merchant customarily selling similar things" can then immediately sell the loader to a Florida resident by telephone and the Florida resident purchasing the loader then defeats the ownership rights of the original Florida owner. Under the Louisiana law, as interpreted by the Lower Court, the original Florida owner could recover the loader only if [sic] on the payment of the purchase price.

This is repugnant to common sense, the law of Florida, the other forty-nine states and encourages theft, theft rings, and organized crime. As the depositions reveal in this case, Southeast purchased five pieces of heavy equipment from the same source and all five had been stolen. Regardless of the "title" or lack of "title" the purchaser from a Louisiana business gets good title.

In Florida a purchaser cannot obtain clear title from a thief to defeat the original owner. The most a bona fide purchaser for value in Florida can obtain from a thief is superior title to everyone except the original owner. Section 672.403, Florida Statutes.

The law of Florida is clear that the rules of comity may be departed from when the laws of another state are repugnant to the laws of the State of Florida or when those laws violate the public policy of the State of Florida. Herron v. Passailaigue ,...