Central Nat. Bank of Richmond, Va. v. Rich, 667
| Decision Date | 02 February 1962 |
| Docket Number | No. 667,667 |
| Citation | 123 S.E.2d 811,256 N.C. 324 |
| Court | North Carolina Supreme Court |
| Parties | CENTRAL NATIONAL BANK OF RICHMOND, VIRGINIA, and R. M. Smithers, Trustee, v. William Madison RICH. |
Bryant, Lipton, Strayhorn & Bryant by Victor S. Bryant and F. Gordon Battle, Durham, for defendant appellant.
Spears & Spears by Marshall T. Spears, Jr., and Alexander H. Barnes, Durham, for plaintiff appellee.
Defendant assigns as error the court's charge as given and the failure of the judge to apply the law to the facts. The record does not disclose any real conflict with respect to the facts. The disagreement arises with respect to the law applicable to the facts.
The factual situation to which it was the duty of the court to declare the law may be summarized thus: C & B Buick Company (hereafter C & B) was, in 1957, a licensed automobile dealer at Louisburg, N. C., selling Buick automobiles. On 27 August 1957 C & B sold the automobile in question to Samuel R. Hubbard, Jr. His brother, Walter Hubbard, was present when the purchase was made. The purchase price was $3319.83. It was paid by check drawn on a bank in Richmond, where the Hubbards lived. Samuel was there engaged in selling used cars. Walter was a partner or employee of Samuel.
C & B executed a North Carolina 'DEALER'S APPLICATION FOR CERTIFICATE OF TITLE FOR NEW MOTOR VEHICLE' showing sale of the vehicle to Samuel, free of liens. The Hubbards took the automobile and the forms executed by C & B to Richmond where Samuel applied to the Virginia Division of Motor Vehicles for a certificate of title. That department, on 28 August 1957, issued a certificate showing Samuel Raleigh Hubbard, Jr. owned the vehicle free of encumbrances.
On 27 August 1957 Walter Hubbard applied to plaintiff bank (hereafter designated as plaintiff) for a loan to be secured by deed of trust on the Buick purchased by Samuel from C & B. Plaintiff agreed to make the loan when title had been issued to Walter showing that he was the owner, free of encumbrances. On 28 August 1957 Samuel Hubbard assigned his certificate of title to his brother Walter, who on that date signed an application for a new certificate. This application stated the vehicle was subject to the lien of a deed of trust to plaintiff Smithers dated 27 August 1957 securing the sum of $3000 owing plaintiff. The certificate issued to Samuel with the assignment to Walter and his application for a new certificate were left with the bank with the note and deed of trust executed by Walter. This was done in order that the bank might secure a new certificate of title showing Walter the owner subject to lien of its deed of trust. On 11 September 1957 the Division of Motor Vehicles issued a certificate of title to Walter. This certificate stated the vehicle was subject to the lien of the deed of trust securing plaintiff bank in the sum of $3000. The certificate disclosed no other lien or claim against the vehicle.
Samuel Hubbard's check to C & B for the purchase price of the automobile was taken to Richmond and presented for payment on 28 August at the bank on which it was drawn. The bank declined to honor it. The holder then returned to Louisburg and deposited the check with a bank in Louisburg for collection. In due course the check was presented and again dishonored. C & B then communicated with the Hubbards, demanding the return of the motor vehicle, asserting that no title passed because of nonpayment of check given for the purchase price. On 4 or 5 September the Hubbards agreed that they would return the motor vehicle to C & B who would thereupon surrender the worthless check which Samuel had given for the purchase price. Pursuant to the agreement the parties, Samuel and Walter Hubbard, and a representative of C & B, met at South Hill, Va., where the motor vehicle was delivered to C & B, and Samuel's check for $3,319.83 for the purchase price was surrendered. The car was immediately returned to Louisburg.
On 10 September 1957 defendant Rich purchased the automobile from C & B for the sum of $4,444. Rich paid $2300 cash and was allowed $2144 for a 1953 Buick which he then owned. C & B on that date executed a North Carolina dealer's application for certificate of title for a new motor vehicle showing the sale to defendant Rich of the motor vehicle which it had purchased and received from Buick Motor Division on 25 June 1957. This application showed that the vehicle was subject to a lien in the sum of $2530 owing to Mechanics & Farmers Bank, executed by defendant Rich. On 8 October 1957 the North Carolina Department of Motor Vehicles issued a certificate of title to defendant Rich showing that he owned the vehicle in question subject to the lien of his mortgage to Mechanics & Farmers Bank in the sum of $2530. That lien was paid and discharged in September 1959.
Statutes of Virginia which must be considered are quoted or summarized as follows: Va.Code § 46-84 directs one transferring title to an automobile registered under its laws to 'endorse an assignment and warranty of title upon the reverse side of the certificate of title of the motor vehicle, trailer or semi-trailer to the purchaser thereof, with a statement of all liens or encumbrances thereon * * *.'
The Supreme Court of Appeals of Virginia, called upon to interpret this statute, said: Nationwide Insurance Company v. Storm, 200 Va. 526, 106 S.E.2d 588.
The Division of Motor Vehicles is required, when it receives an application for a certificate of title, to Va.Code § 46-69. Liens created subsequent to the issuance of the certificate must be shown on the certificate. It is the duty of the holder to notify the Division of such liens. Va.Code § 46-70.
'Such certificate of title, when issued by the Division, showing a lien or encumbrance, shall be deemed adequate notice to the Commonwealth, creditors and purchasers that a lien against the motor vehicle exists and the recording of such reservation of title, lien or encumbrance in the county or city wherein the purchaser or debtor resides or elsewhere is not necessary and shall not be required.' Va. Code § 46-71.
'If application for the registration or recordation of a lien or encumbrance to be placed upon a motor vehicle, trailer or semi-trailer be filed in the office of the Division in the city of Richmond, Virginia, within ten days from the date of such applicant's purchase of such motor vehicle, trailer, or semi-trailer, it shall be as valid as to all persons, whomsoever, including the Commonwealth, as if such registration had been done on the day such lien or encumbrance was acquired.' Va.Code § 46-72. The person who has the first lien on the vehicle is required to hold the certificate of title. Va.Code § 46-74. A levy made by virtue of an execution on a motor vehicle for which a certificate of title has been issued constitutes a lien subsequent to liens theretofore recorded by the Division. Va.Code § 46-77.
Plaintiff contends that since a certificate of title had issued showing its lien on the motor vehicle registered in the name of Walter Hubbard, no sale or other act by him or Samuel Hubbard could defeat its lien. Nationwide Insurance Co. v. Storm, supra.
The evidence does not necessarily lead to the conclusion that the parties contemplated a sale to C & B at South Hill. The evidence is fairly susceptible of the interpretation that the parties, recognizing that Samuel Hubbard acquired no title when he gave his worthless check at Louisburg and since Walter Hubbard knew Samuel had no title, they surrendered the car to C & B without requiring C & B, the owner, to reclaim its property by judicial process.
It is settled law in this State that a purchaser who gives a worthless check for purchase of merchandise does not acquire title thereto even though the purchased article is then delivered. The seller may retake his property. Carrow v. Weston, 247 N.C. 735, 102 S.E.2d 134; Wilson v. Finance Co., 239 N.C. 349, 79 S.E.2d 908; Handley Motor Co. v. Wood, 237 N.C. 318, 75 S.E.2d 312; Weddington v. Boshamer, 237 N.C. 556, 75 S.E.2d 530. The law as declared in our decisions is not peculiar to North Carolina....
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