Commercial Credit Corp. v. Blau, 50963
| Decision Date | 12 July 1965 |
| Docket Number | No. 50963,No. 2,50963,2 |
| Citation | 393 S.W.2d 558 |
| Parties | COMMERCIAL CREDIT CORPORATION, Appellant, v. A. BLAU, d/b/a Brush Creek Motors, Respondent |
| Court | Missouri Supreme Court |
Charles F. Lamkin, Jr., James B. Lowe, Kansas City, Kuraner, Oberlander, Lamkin, Dingman & O'Laughlin, Kansas City, of counsel, for plaintiff.
Thomas J. Conway, Jr., E. E. Thompson, Kansas City, Popham, Thompson, Popham, Trusty & Conway, Kansas City, of counsel, for respondent.
PRITCHARD, Commissioner.
This is a replevin action by which plaintiff sought the possession of six automobiles upon which it had automobile dealer's 'floor plan' mortgages which had been filed for record. Defendant denied that plaintiff had any right or title in the automobiles and counterclaimed for actual and punitive damages for their alleged wrongful seizure by plaintiff under its writ of replevin.
The trial was to a jury. The trial court directed a verdict of possession for plaintiff as to one automobile, a 1957 Oldsmobile, sold to plaintiff's dealer (R. C. Woddy of Clinton, Missouri) by Albert J. Yonke. Defendant cross-appeals upon the judgment against him on the directed verdict. The trial court also directed a verdict for defendant for $2,195.00 in damages for the taking by plaintiff of a 1957 Ford Country Sedan sold by Ted and Ruth Roush of Warsaw, Missouri, to R. C. Woody. Upon the remaining portions of defendant's counterclaim the jury returned a verdict for defendant of actual damages in the amount of $16,500.00 and punitive damages of $40,000.00. We have appellate jurisdiction by reason of the amount in dispute exceeding $15,000.00. Const.Mo.1945, Art. V, Sec. 3, V.A.M.S.
The principal questions before us are whether (1) the mortgagor, Woody, had legal title to five of the automobiles so as to be able to grant plaintiff a mortgage lien thereon which gave it a superior right of possession to that of defendant by reason of his purchase, and (2) whether plaintiffs 'floor plan' mortgage which was filed for record was valid and gave it a superior right of possession to defendant, a used car dealer, who purchased them from car dealer R. C. Woody, who was allowed to retain possession of all automobiles and sell them 'at retail' in its regular course of business for not less than the amount of respective mortgages thereon.
The business of plaintiff was and is the purchase of automobile, appliance, automotive equipment installment financing paper from dealers; the making of direct public loans through a separate subsidiary corporation; and the financing of automobiles for dealers' floor plan stocks.
Defendant, Al Blau, operated a used car business as 5900 Troost, Kansas City, Missouri, under the registered fictitious name, 'Brush Creek Motors.'
Prior to July 17, 1959, when plaintiff's petition was filed and the writ of replevin thereon was issued and executed against six automobiles in Blau's possession, plaintiff had done financing and floor plan mortgages for Woody for about two years. Woody was the Oldsmobile-Cadillac automobile dealer in Clinton, Missouri. The transactions with Woody were made by plaintiff's District Representative, Wayne Hughes. His procedure was to ascertain what automobiles Woody desired to floor plan, check them for physical condition and to compare the serial and motor numbers of automobiles with those upon titles thereto in Woody's possession. He would then complete the floor plan mortgage papers and promissory notes for the amount agreed to be loaned, the papers would be executed by Woody and a sight draft upon plaintiff through its bank would be delivered to Woody in the amount of the loan. Hughes would also check the titles to ascertain ownership and to see that there were no liens thereon.
The six automobiles here involved were purchased by Blau from Woody, and by use of the titles furnished him by Woody, transferred by Woody's 'Re-assignment by Registered Dealer only' on the reverse side of the titles, Blau obtained a new title to each running to Brush Creek Motors. Blau's titles were left by him at the Suburban Bank of Kansas City which loaned him funds on a floor plan mortgage for his automobile inventory purchases. With more particularity we list the six automobiles, with pertinent dates of title transfers and filing of plaintiff's mortgages for record in the office of the Recorder of Deeds for Henry County, Missouri, as follows:
Description Transfer to Date of Recording Transfer to Titling in
------------------ ----------- ----------------- ----------- ----------
(and Former Owner) Woody Mortgage Blau Blau
------------------ ----------- ----------------- ----------- ----------
1957 Oldsmobile 5-1-59 5-13-59 6-20-59 6-23-59
(Yonke)
1958 Cadillac 5-14-59 5-27-59 6-24-59 7-1-59
(Harkness)
1958 Oldsmobile 6-8-59 6-19-59 6-20-59 6-23-59
(Grover)
1958 Cadillac 6-20-59 6-23-59 6-24-59 7-1-59
(Walker)
1957 Ford 6-20-59 6-23-59 6-20-59 6-23-59
(Roush)
1957 Oldsmobile 6-9-59 6-19-59 6-24-59 7-3-59
(Miner)
The mortgages taken by plaintiff from Woody on the above automobiles provided for a warranty of clear title, that the dealer was the absolute owner thereof, with full right and power to mortgage same, and that dealer would not remove merchandise from the described premises without mortgagee's consent. Further provisions for care of the mortgaged property were included, and the clause was inserted:
For the purchase of said six automobiles Blau paid Woody by checks (which cleared Blau's bank) a total of $13,450.00, and the titles thereto which had also remained in Woody's possession were executed on the days of sale and delivered to Blau.
In late June, 1959, plaintiff discovered in the course of its practice of checking dealers' mortgaged merchandise that several cars were missing from Woody's lot and he had not accounted to plaintiff for any sales moneys. Checks given by Woody for the amounts of his mortgages were returned by his bank marked 'no account.' Apparently some other creditor of Woody had seized whatever amounts were in his account at the bank. Plaintiff caused Woody to execute a further chattel mortgage on other property for some $42,000.00, and a replevin suit was later filed therefor in United States District Court in Kansas City. Woody's bankruptcy proceedings intervened in that action and nothing was realized by plaintiff.
Fictitious purchaser information was given plaintiff by Woody as to the missing automobiles. Later one of plaintiff's employees discovered at least one of the automobiles was on Blau's used car lot in Kansas City. Upon plaintiff's learning that fact it caused a replevin action for 12 automobiles to be instituted, and upon execution of the writ of replevin, the instant six automobiles were delivered to plaintiff and were by it sold.
The acknowledgments on the certificates of titles of five of the original automobile owners were taken by Jerry Woody, notary public, who is a son of R. C. Woody and who worked for him at the Clinton dealership. Yonke's acknowledgment was taken by a Jackson County notary public on March 1, 1959, and Woody Motor Company's transfer thereof to Blau was on June 20, 1959, being then notarized by Jerry Woody. The evidence was that the dates of acknowledgment on the title transfers were taken sometimes after the sales were made by the owners of the automobiles, except Yonke. Jerry Woody so testified and also that it was his practice to wait until the automobiles were resold by Woody to affix his signature and notarial seal. With the exception of Yonke, on each of the title certificates the dates of acknowledgment of the original owners to Woody are the same as the dates of acknowledgments of Woody to Blau, i. e., Harkness, June 24, 1959; Gover, June 20, 1959; Walker, June 24, 1959; Roush, June 20, 1959; and Miner, June 24, 1959. The testimony of plaintiff's representative, Hughes, is that he did not check the titles as to notarization by owners when he inspected them for floor plan loan purposes. From the testimony of Jerry Woody and the dates of the acknowledgments of prior owners on the titles the jury could find that the notarizations were missing at the time of Hughes' inspection.
The testimony of Dr. and Mrs. Harkness on the trade of their 1958 Cadillac was that Mrs. Harkness handled the transaction, and that Dr. Harkness remained in Warrensburg, Missouri. Mrs. Harkness testified that her husband did not appear before Jerry Woody, the notary public at Clinton, to give his acknowledgment thereon but he signed the title in Warrensburg. The testimony of Mr. Gover was that his wife, Fayta, signed his title at their home, and he then took it to Woody Motor Company where he signed it. Mr. and Mrs. Miner both signed their title, but in the wrong place. Their signatures appear on the title in the place where the dealer is supposed to sign; and in the seller's signature place are two names written in but which the Miners testified were not theirs, but for which Jerry Woody took the acknowledgments.
The evidence here is clear that at the times plaintiff took the mortgages from Woody upon the Harkness, Gover, Walker, Roush and Miner automobiles, its representative, Hughes, inspected...
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