Central Finance Co. of Peru v. Garber, 18106

• Docket Nº: No. 18106
• Citation: 121 Ind.App. 27, 97 N.E.2d 503
• Case Date: March 19, 1951
• Court: Court of Appeals of Indiana

Page 503

97 N.E.2d 503 121 Ind.App. 27 CENTRAL FINANCE CO. OF PERU, Inc.
v.
GARBER. No. 18106. Appellate Court of Indiana, in Banc. March 19, 1951.

[121 Ind.App. 28]

Page 504

Frank J. Treckelo, Elkhart, for appellant.

Mehl & Mehl, Goshen, for appellee.

ACHOR, Judge.

The court having examined appellant's petition for rehearing and considered the metters therein contained, grants said petition and substitutes the following opinion for that previously issued herein on December 21, 1950. 95 N.E.2d 635.

The facts in the case may be summarized as follows:

On August 15, 1949, one Martin Francis purchased an automobile from Canter Auto Sales in Peru, Indiana. The transaction was evidenced by a conditional sales contract showing part payment in cash, and providing that title to the vehicle was to remain in the seller until the full purchase price was paid.

A partner in Canter Auto Sales then went to appellant's office in Peru, accompanied by Francis. He took with him the contract and the dealer's certificate of title to the vehicle. The appellant's agent completed the assignment of the certificate of title. The dealer assigned the contract to appellant. The certificate of title, bearing the assignment to the purchaser, and showing appellant's lien in the sum of $696 was delivered to Francis along with the automobile.

On August 16, Francis acquired from the Bureau of Motor Vehicles of the State of Indiana a certificate of title, called an 'emergency title' by the bureau, for the same automobile. It was issued in his name and showed no liens outstanding. To obtain the 'emergency title' Francis presented a written application therefor, accompanied by the certificate previously issued, duly [121 Ind.App. 29] assigned. Francis, or someone on his behalf, had erased the notation of appellant's lien from the original certificate of title which had been assigned to him. When he made application for a new certificate of title, he made false affidavit in his application that the automobile was free of liens. Thus, no lien or encumbrance appeared in the original certificate of title and none was shown in the new certificate which was issued in his name.

On August 18 Francis sold the automobile to the appellee, a dealer in Elkhart, Indiana, for $650 cash and assigned to appellee said 'emergency title' showing no liens. Appellee did not know of the lien and relied on the certificate of title. No payments were ever made on the contract. Francis died on September 14, 1949. Appellant located the automobile in Elkhart in possession of appellee and made a demand therefor, which was refused.

The appellant brought this action to replevy the automobile and appeals from an adverse judgment.

The facts in this case are not in dispute and in the absence of conflict therein, consideration by this court is limited to the legal consequence of the uncontradicted evidence herein.

The following is a synopsis of the Indiana statutes pertaining to the issuance of certificates of title for motor vehicles and the indorsement of liens thereon as pertinent to this case:

The purchaser of an automobile must apply to the Bureau of Motor Vehicles for and be granted a certificate of title for the vehicle before he can obtain registration (license) plates therefor or operate the vehicle on the public highways. The application for certificate of title shall show, among other things, any liens or encumbrances. If (as in this case), a certificate of title has been previously issued for such vehicle in [121 Ind.App. 30] this state, the application shall be accompanied by such certificate of title duly assigned. The certificate of title shall be delivered to the owner in the event no lien or encumbrance appears thereon. Otherwise, the certificate of title shall be delivered to the person named in the application

Page 505

to receive the same. Burns' 1949 Supp. § 47-2501.

When an automobile, for which an original certificate of title has been issued, is sold, the certificate must be assigned and delivered to the purchaser at the time of the sale or delivery of the vehicle to him. Failure so to do is a misdemeanor. Burns' 1949 Supp. § 47-2502. 'Any person who shall make, or cause to be made, any false statement, either in an application for certificate of title, or in any assignment thereof, * * * shall be guilty of a felony. * * * Any person, who shall alter or forge any certificate of title issued by the department pursuant to the provisions of this act, or any assignment thereof, * * * shall be guilty of a felony.' Burns' 1949 Supp. § 47-2506.

Appellee relies on the equitable doctrine that '* * * where one of two innocent persons must suffer by the acts of a third, he whose conduct, act, or omission enabled such third person to occasion the loss must sustain it if the other party acted in good faith, without knowledge of the facts, and altered his position to his detriment.' 31 C.J.S., Estoppel, § 103, p. 325. See also 19 Am.Jur. 694.

The following cases are cited as authority by appellee for his position: Community State Bank v. Crissinger, 1949, Ind.App., 89 N.E.2d 78, 80; Nichols v. Bogda Motors, 1948, 118 Ind.App. 156, 77 N.E.2d 905; Superior Finance Corp. v. American Security Co. of Indiana, Inc., 1940, 107 [121 Ind.App. 31] Ind.App. 461, 25 N.E.2d 256; Guaranty Discount Corp. v. Bowers, 1932, 94 Ind.App. 373, 158 N.E. 231; LaPorte Discount Corp. v. Bessinger, 1930, 91 Ind.App. 635, 171 N.E. 323.

In order to reach a proper decision in this case, we must first accept the rule of law that certificates of (registration) title to motor vehicles are not in themselves proof of ownership or legal title to such vehicles. Precedent for this rule was established in the case of Meskiman v. Adams, 1925, 83 Ind.App. 447, 449, 149 N.E. 93. The court stated: '* * * Appellant seeks to give the same force and effect to the certificate issued by the secretary of state under the automobile law as are given to patents for lands issued by the national government. We cannot concur in this contention. Such patents convey title. Not so with a certificate of title issued by the secretary of state for an automobile.' (Our italics.) Therefore, we must conclude that appellant, by reason of its conditional sales (title retention) contract was the owner of and held the legal title to the automobile in controversy in this case.

Having accepted this...