First Nat. Bank & Trust Co. of Lincoln v. Ohio Cas. Ins. Co., No. 40598

• Court: Supreme Court of Nebraska
• Writing for the Court: Heard before WHITE; BRODKEY
• Citation: 196 Neb. 595,244 N.W.2d 209
• Docket Number: No. 40598
• Decision Date: 21 July 1976
• Parties: FIRST NATIONAL BANK & TRUST COMPANY OF LINCOLN, Appellee, v. OHIO CASUALTY INSURANCE COMPANY, Appellant.

Page 209

244 N.W.2d 209 196 Neb. 595 FIRST NATIONAL BANK & TRUST COMPANY OF LINCOLN, Appellee,
v.
OHIO CASUALTY INSURANCE COMPANY, Appellant. No. 40598. Supreme Court of Nebraska. July 21, 1976.

Page 211

Syllabus by the Court

1. Under the Nebraska Certificate of Title act, sections 60--102 to 60--117, R.R.S.1943, a certificate of title is the exclusive method provided by statute for the transfer of title to an automobile, but it is not conclusive of ownership.

2. A certificate of title to a motor vehicle conveys no greater interest than the grantor has.

3. A thief can acquire no title to an automobile stolen by him, nor can title to such vehicle be acquired through another's larceny or theft.

4. The Nebraska Certificate of Title Act does not prevent owners of stolen vehicles from reclaiming them; and rights acquired by subsequent bona fide purchasers of the stolen vehicles are subject to those of the true owners.

Con M. Keating, of Marti, Dalton, Bruckner, O'Gara & Keating, Lincoln, for appellant.

Ginsburg, Rosenberg, Ginsburg & Krivosha, James E. Gordon, Lincoln, for appellee.

[196 Neb. 596] Heard before WHITE, C.J., and SPENCER, BOSLAUGH, McCOWN, NEWTON, CLINTON and BRODKEY, JJ.

BRODKEY, Justice.

Ohio Casualty Insurance Company, hereinafter referred to as Ohio Casualty or the Insurance Company, appeals a District Court judgment against it in the amount of $5,500 and costs for the alleged conversion of a 1973 Cadillac automobile. The case was tried on the facts as stipulated by the parties. In its order, the District Court found that First National Bank and Trust Company of Lincoln, hereinafter referred to as First National or the Bank, acquired a lien on the automobile by virtue of an installment sales contract noted on the certificate of title, that was 'paramount to any interest claimed by the defendant.' One of Ohio Casualty's representatives, using self-help, removed the car from Nebraska without First National's consent, and the court found that Ohio Casualty had converted the car. We reverse.

The 1973 Cadillac automobile involved in this case was purchased in Oregon by Joseph J. and E. Joy Fernandez on or about October 26, 1972. On that same date, they applied for an Oregon certificate of title to the car, and received it on November 2, 1972. On or about December 10, 1972, the car was stolen from the Fernandezes in Burbank, California. Ohio Casualty was the Fernandezes' insurance carrier; and on January 9, 1973, it paid $8,400 to the Fernandezes to cover the car's loss, who at that time assigned their title certificate to the car to the insurance company. On July 20, 1973, Ohio Casualty made application to the State of Oregon for a certificate of title in its name, and received it on August 3, 1973.

Meanwhile, the county clerk of Scotts Bluff County, Nebraska, on December 26, 1972, issued a Nebraska certificate of title on the car to one William F. Handy based upon a forged Arizona certificate of title. The [196 Neb. 597] car was subsequently brought to Lincoln, where, on February 28, 1973, a certificate of title from Lancaster County was issued in the name of one Matthew John Brady. Misle Chevrolet Company purchased the Cadillac from a Matthew Brady, and obtained a certificate of title in its name in Lancaster County, on March 1, 1973. Later a Jerry Neva bought the car from Misle Chevrolet and obtained a certificate of title to the car on March 6, 1973.

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First National acquired a lien on the car by virtue of an installment sales agreement covering this sale. The lien was noted on the Nebraska certificate of title as required by law. Some time later, the Federal Bureau of Investigation which had been searching for the car stolen from the Fernandezes, located the car in Lincoln, Nebraska, and notified an agent of Ohio Casualty, who, on January 24, 1974, using only self-help, removed the vehicle from Lincoln to California, where appellant has its west coast office. The Cadillac was sold by the Insurance Company under sealed bids for $5,500.

The sole issue in this case is whether, under the Nebraska Certificate of Title Act, sections 60--102 to 60--117, R.R.S.1943, First National, having noted its lien on the Nebraska certificate of title acquired rights superior to Ohio Casualty, in view of the fact First National's chain of title originated in a thief. The District Court answered this question in the affirmative. We disagree and reverse.

The pertinent statute, section 60--105, R.R.S.1943, provides in part: '(1) No person, except as provided in section 60--110, acquiring a motor vehicle, commercial trailer, semitrailer, or cabin trailer From the owner thereof, whether such owner be a manufacturer, importer, dealer, or otherwise, shall acquire any right, title, claim, or interest in or to such motor vehicle, commercial trailer, semitrailer, or cabin trailer until he shall have had delivered to him physical possession of such motor vehicle, commercial trailer, semitrailer, or [196 Neb. 598] cabin trailer and a certificate of title or a manufacturer's or importer's certificate duly executed in accordance with the provisions of this act, * * *.' (Emphasis supplied.)

First National urges that since Ohio Casualty has not complied with the provisions of section 60--105, it can have no recognizable claim to the automobile in question. This court has stated that the purpose of the Certificate of Title Act is to provide a means of identifying motor vehicles, ascertaining motor vehicle...