Commercial Banking Corp. v. ONE APPROX. 30-FOOT M. BOAT, 8554.

• Decision Date: 21 September 1949
• Docket Number: No. 8554.,8554.
• Citation: 86 F. Supp. 618
• Parties: COMMERCIAL BANKING CORPORATION v. ONE APPROXIMATELY 30-FOOT MOTOR BOAT, et al.
• Court: U.S. District Court — District of New Jersey

86 F. Supp. 618

COMMERCIAL BANKING CORPORATION v. ONE APPROXIMATELY 30-FOOT MOTOR BOAT, et al.

No. 8554.

United States District Court D. New Jersey, Camden Division.

September 21, 1949.

Louis B. LeDuc, Camden, N. J., James H. Molloy, Philadelphia, Pa., for libellant.

Arthur W. Lewis, Camden, N. J., Conlen, LaBrum & Beechwood, George E. Beechwood, Philadelphia, Pa. (Sundheim, Folz, Kamsler & Goodis, Philadelphia, Pa., of counsel), for respondent Miriam L. Belber.

MADDEN, District Judge.

This was a trial of an admiralty matter wherein the libellant sought both title and possession of a 30-foot motor cruiser known as the "Three Jays" or afterwards known as the "Merlin."

The facts stated briefly as possible, are as follows: That on August 9, 1945, one Alden G. Johnson was the owner and in possession of a 30-foot Owens Cabin Cruiser, having motor number N26249 and bearing Coast Guard Certificate of Operations number 11T105; that on said date, August 9, 1945, said Alden G. Johnson sold the boat to one Howard H. Holt for the sum of $4,286.50 of which $1,300 was paid on account by Holt and the balance secured by a bailment lease executed by Holt and Johnson.

The lease called for monthly payments on account by Holt, referring to these as rentals, and further provided: "Lessor (Johnson) does hereby covenant and agree that Lessee (Holt), on paying the specified installments and performing the aforesaid convenants, shall and may peaceably and quietly have hold, use and enjoy the said boat for the term of this agreement. Lessor further agrees that if, upon the termination of this lease, and the surrender of said boat as aforesaid, said rental has been fully paid in cash, and the other covenants and agreements herein contained have been observed, kept and performed by Lessee as herein provided, Lessee may elect to become and shall thereupon become the owner of the leased property upon the further payment of the sum of one dollar."¹

The form then contains a separate instrument known in Pennsylvania as a judgment note and authorizing judgment to be entered against Holt for the unpaid balance of the purchase price or rent.

The form lastly contains a printed form of assignment and on August 9, 1945 (the same date it was executed by Holt), Johnson assigned all his rights under the bailment lease to the libellant, Commercial Banking Corporation, a corporation of Pennsylvania. All the proceedings between Johnson, Holt and the Commercial took place at the Commercial's office in Philadelphia and under the supervision of George B. Rementer, the Vice President and secretary of Commercial Banking Corporation.

At the same time Johnson executed to Commercial Banking Corporation what is purported to be an absolute bill of sale for said boat. An examination of it is interesting.

"For value received, I Alden Johnson have this day sold, assigned, transferred and delivered unto Commercial Banking Corporation the above described automobile as inducements for the payment of the purchase price, the dealer expressly warrants and represents: that dealer is sole owner of the above described car; that it is at present in possession of Howard H. Holt, 1133 S. 52nd St., Phila., Pa., under bailment lease agreement with dealer, which has this day been assigned to Commercial Banking Corporation; that the said automobile is conditional sales unencumbered and no other person or persons have any right, title or interest therein, except the said lessee, that said automobile has not been used for hire or as a taxicab or as a public conveyance; that the signatures of the lessee on the said agreement are genuine and no representation has been made to said lessee at variance with the lessee's agreement; that no credit has been given to said lessee, except for cash payments, unless otherwise noted on said agreement, and if credit has been given for an old machine delivered to dealer that the amount of the credit represents the fair market value of said traded-in automobile; that application for a Pennsylvania certificate of title on the above described automobile, properly and fully executed, with notation thereon of encumbrance in favor of Commercial Banking Corporation said certificate of title immediately upon receipt; that the acceptance of check to dealer's order for the selling price, shall be a ratification of authority of the person signing this bill of sale as authorized agent for dealer; and that all statements made in `Statement of Transaction' in connection with regulation W and signed by purchaser are true and correct.

"In Witness Whereof, the said dealer has hereto set his hand and seal the day and year first above mentioned.

"(Signed) Alden Johnson (Seal) Dealer "(By) Alden G. Johnson Officer, firm member of owner."

Prior to the proceedings Johnson held what is known as a "Certificate of Award of Number to an Undocumented Vessel," bearing No. 11T105, issued by the U.S. Coast Guard at Philadelphia, Pennsylvania. These certificates, on the face, besides describing the vessel say:

"This is to certify, that the vessel herein described has been awarded the above number in accordance with the provisions of the Act of June 7, 1918, as amended.

"This certificate constitutes a document in lieu of enrollment or license and it must be kept on board at all times, except in the case of vessels of less than 17 feet in length, or vessels whose design or fittings are such that carrying such certificate on board would render it imperfect, illegible, or would otherwise tend to destroy its usefulness as a means of ready identification. Failure to have this certification on board vessel, on which it is required to be carried, will subject the owner to a penalty of ten dollars. In addition, a failure to produce it upon demand of a proper officer will also subject the master or operator to other penalty."

On the reverse side is printed this matter:

"In case of change of ownership the bill of sale below should be executed and the certificate delivered to the purchaser, who must, within 10 days, deposit the same with the District Coast Guard Officer in charge of the district in which the purchaser resides, who will issue a new certificate to the new owner.

"In case of the loss, abandonment, or destruction of the vessel, notice of such loss, abandonment, or destruction must be filed with the District Coast Guard Officer within 10 days. Failure to notify the District Coast Guard Officer of the loss, abandonment, or destruction of a numbered vessel, or change in ownership, subjects the owner to a penalty of ten dollars."

Below this, and also on the back, the certificate contains a form of bill of sale:

"In consideration of the sum of $1.00 (one dollar) lawful money of the United States of America, in hand paid, and other valuable considerations this ____ day of ______, I (we) ______, owner(s) of the vessel described in this certificate, hereby sell and transfer all of my (our) right, title, and interest in the same to ______ of ______."

On the 10th day of August, 1945, (the day after the execution of the bailment lease, the assignment thereof and also the purported bill of sale to Commercial), Alden G. Johnson and Howard H. Holt appeared at the office of the United States Coast Guard where Johnson surrendered his Certificate of Award of Number and executed the form of bill of sale therein contained to Howard H. Holt. Thereupon, Holt made application for the issuance of a certificate in his name, which certificate was issued by the Coast Guard on August 11, 1945, awarding the same number 11T105, to the boat.

Early in September, 1945, respondent, Miriam L. Belber, together with her husband, visited the Quaker City Boat Yard in Philadelphia, Pennsylvania, seeking to purchase a boat. Eventually, they became acquainted with Holt who informed them that he was the owner of the boat in question. After some days of negotiating, during which time Holt exhibited to the Belbers the Certificate of Award in his name and also the previous certificate in Johnson's name with Johnson's signature on the bill of sale portion thereof, dated August 10, 1945, transferring title to Holt, respondent Belber agreed, on September 10, 1945, to purchase the boat from Holt and engaged the services of Allen J. Levin, Esquire, a member of the Bar of Philadelphia, who represented her in that transaction.

Levin went to the office of the Coast Guard in the Custom House at Philadelphia and there made a search of registration for the "Three Jays" and found the records to disclose the registration in the name of Howard H. Holt. In addition, Levin secured from Holt an affidavit on the same date, September 10, 1945, which stated that he was the owner of the boat; that he was transferring it to respondent Belber and that there were no liens or encumbrances against the boat.

Thereupon, Holt executed the bill of sale on the back of his Certificate of Award of Number to Mrs. Belber. She paid Holt in full with a check dated September 10, 1945, in the amount of $4,350 and made application to the Coast Guard for a Certificate in her name, which was issued on the same day. Thereupon, the Belbers took over actual possession of the boat and Holt navigated it to Atlanta City, New Jersey for the Belbers.

Shortly afterward Holt absconded defaulting upon the bailment lease with Commercial after making two payments of $125.00 each to libellant.

On January 19, 1946, libellant Commercial, entered judgment in the Court of Common Pleas of Philadelphia County, Pennsylvania, against Holt in the sum of $3,178.90, representing the principal sum due plus interest and attorneys' collection fees.

On July 9, 1946, Commercial Banking Corporation filed a libel in this court seeking the recovery of possession and title of the boat. Mrs. Belber alone has responded.

Commercial alleges that Johnson, being the true owner, sold the boat to Commercial by the purported bill of sale and assignment of the bailment...