General Motors Acceptance Corp. v. Keil, 53511

• Decision Date: 05 May 1970
• Docket Number: No. 53511,53511
• Citation: 176 N.W.2d 837
• Parties: 7 UCC Rep.Serv. 835 GENERAL MOTORS ACCEPTANCE CORPORATION, a corporation, Appellant, v. Walter E. KEIL, Pemberton and Keil, Inc., a corporation, Gene Taylor and Taylor-Isenhower, Incorporated, a corporation, Appellees.
• Court: Iowa Supreme Court

Page 837

176 N.W.2d 837

7 UCC Rep.Serv. 835

GENERAL MOTORS ACCEPTANCE CORPORATION, a corporation, Appellant, v. Walter E. KEIL, Pemberton and Keil, Inc., a corporation, Gene Taylor and Taylor-Isenhower, Incorporated, a corporation, Appellees.

No. 53511.

Supreme Court of Iowa.

May 5, 1970.

Fisher, Pickens & Barnes, Cedar Rapids, for appellant.

E. B. Hunter, Reinbeck, and John W. Pieters, Waterloo, for appellee Gene Taylor.

REES, Justice.

Appellant as assignee of a written conditional sale contract or security agreement allegedly encumbering an automobile sought to recover the possession of the vehicle by replevin. Appellee Taylor claimed ownership as an innocent purchaser for value from vendor, and asserted appellant had failed to properly perfect its lien. Trial court quashed writ of replevin and ordered restoration of possession to appellee. We reach the same result for a different reason.

The appellant filed its petition in the District Court of Black Hawk County against Walter E. Keil, Pemberton and Keil, Inc., Gene Taylor and Taylor-Isenhower, Incorporated, asserting it is the assignee of a written conditional sale contract or security agreement dated October 17, 1966, which was assigned to it by the defendant Pemberton and Keil, Inc., and which was noted as a first lien upon Iowa certificate of title number 86--60223, being the certificate of title to be automobile involved in this controversy, a 1967 Bonneville four-door hardtop Pontiac, having manufacturer's serial number 262397 103824. The defendants, Walter E. Keil and Pemberton and Keil, Inc., defaulted and prior to trial the appellant dismissed without prejudice its petition as against the defendant Taylor-Isenhower, Incorporated. An order was entered authorizing the issuance of a writ of replevin and on January 31, 1968, the writ of replevin was served upon the defendant and the appellant took the automobile into its possession thereunder.

Pemberton and Keil, Inc. is or was at all times material a corporation engaged in the automobile business at Traer, Iowa, and was the franchised Pontiac dealer. Walter E. Keil was the president of the corporation and the active officer in the operation of the business. On or about September 22, 1966, the automobile here involved was the subject of a manufacturer's certificate of origin showing that the automobile had been transferred from the manufacturer to Pemberton and Keil, Inc. On October 7, 1966, Pemberton and Keil, Inc., by Walter E. Keil, president, executed the first assignment which appears on the reverse side of the manufacturer's certificate of origin, and transferred the certificate of origin to Pemberton and Keil, Inc., and also executed an application for a certificate of title to the vehicle. On the same date the treasurer of Tama county issued certificate of title number 60233 for the automobile and also issued 1966 Iowa license plates numbered 86--9078. On October 17, 1966, Walter E. Keil, individually and personally, executed a conditional sale contract covering the automobile which was executed by him as the buyer and by Pemberton and Keil, Inc., by Helen Kathleen Keil, vice president, as the seller, which contract provided for payment in 36 monthly installments of $103.49, commencing November 1, 1966. The conditional sale contract was assigned to the appellant by the seller, Pemberton and Keil, Inc., on the date of its execution, and also on the same date Pemberton and Keil, Inc., by Walter E. Keil, president, executed an application for the notation of lien, asking that a lien in favor of the appellant in the amount of $3725.64 be noted on the certificate of title to the automobile. The lien was so noted by the treasurer of Tama county on the certificate of title. The certificate of title was never transferred to show Walter E. Keil personally as the owner when the conditional sale contract was executed or at any time thereafter.

Some time shortly prior to July 28, 1967, the appellee, Taylor, who had on prior occasions purchased automobiles from Pemberton and Keil, Inc., made arrangements for the purchase of the automobile in question, and on July 28, 1967, after some negotiations with Walter E. Keil he traded in his 1963 Bonneville Pontiac automobile and delivered his personal check in the sum of $2053.42, payable to 'Pemberton-Keil', as the entire balance for the transaction, and took possession of the automobile. The automobile at the time of the negotiations for its purchase was situated in the showroom of Pemberton and Keil, Inc., and bore either dealer's plates or paper plates but did not bear 1967 Iowa license plates. In fact, no 1967 license plates had been secured for the automobile until some time after July 28, 1967. The speedometer of the automobile disclosed the fact that it had been driven about 2000 miles. One other 1967 automobile was on display in the shop area of the garage. The appellee was not aware that there was a lien on the automobile and he never was furnished the certificate of title thereto. All, in fact, he did receive was a slip of paper showing the total purchase price for the automobile was $4012.54, that he was allowed $1959.12 for his traded-in-car, and that the balance was the amount represented by his check, $2053.42.

The appellee, by way of answer to the appellant's petition, denied generally all of the allegations of the petition, and affirmatively alleged he had purchased the automobile without knowledge of the appellant's alleged lien or security interest in the same, and under the provisions of section 554.9307, subsection (1), Code, 1966, as amended, he is entitled to priority over any security interest of appellant. Motions to dismiss, to strike, and for more specific statement were filed by the appellant, as was a motion for summary judgment. None of these motions were ruled on or otherwise disposed of until hearing was had to the court. On August 29, 1968, the court entered its findings of fact, conclusions of law and rulings on the motions, and its decision. The trial court found, concluded and determined the appellant's claim to the automobile is not entitled to recognition by the court and that the appellee was entitled to a judgment for the return of the automobile to him. The court did not determine the question of damages sought by the appellee for the claimed unlawful detention of the automobile by the appellant, which damages were sought in a third division of appellee's answer and counterclaim.

We have before us here an appeal and cross-appeal as well as a motion on the part of the appellee-cross-appellant to dismiss the principal appeal. Appellant, General Motors Acceptance Corporation, asserts only one error upon which it relies for reversal, namely, that the trial court erred in holding that the plaintiff, General Motors Acceptance Corporation, who had its purchase money lien noted upon the certificate of title of the 1967 Pontiac automobile in question since October of 1966, was not entitled to possession of said vehicle as against the defendant-appellee, Gene Taylor, who claims to have acquired the vehicle in July, 1967, and had only a cancelled check and an informal type of receipt dated November 20, 1967, to evidence his claim.

The trial court held General Motors Acceptance Corporation failed to properly perfect its lien. We need not pass upon this question as we believe defendant is entitled to prevail upon his cross-appeal whether G.M.A.C.'s lien was valid or invalid.

I. We should first dispose of the contention of the appellee that the appellant's notice of appeal is fatally defective, that it does not sufficiently specify the decree, judgment, order or part thereof appealed from. Notice of appeal is set out in the abstract of the record. It is directed to Walter E. Keil, Pemberton and Keil, Inc., Gene Taylor, B. E. Hunter and John W. Pieters, attorneys for the defendant Gene Taylor, and to the clerk of the district court. It adequately apprises the persons to whom it is directed that the appellant, General Motors Acceptance Corporation, is appealing to this court from the final judgment entered on or about August 29, 1968, all findings of fact, conclusions of law, rulings on motions, and decision, and from all rulings, orders, decisions and adjudications inhering therein. Service of the notice of appeal seems to be as prescribed. We have reviewed the authorities cited by appellee in support of his contention and find no merit.

II. In his cross-appeal the defendant Taylor claims: (1) he is a buyer in the ordinary course of business and under the Uniform Commercial Code takes free of any security interest created by his seller, and (2) that the court erred in sustaining objections lodged by plaintiff-appellant to questions propounded to the defendant, Gene Taylor, on the grounds the same were violative of parol evidence rule, statute of frauds and were irrelevant, incompetent and immaterial.

The appellant contends, and we agree generally, that the creation and perfection of liens on motor vehicles is governed by the provisions of Section 321.50, Code, 1966. The appellant contends the entire transaction here is governed by the provisions of Sections 321.45 to 321.50, both inclusive. This is obviously true except in the perfection of security interests in motor vehicles held by dealers in inventory for resale, in which case the provisions of the Uniform Commercial Code are applicable in determining the priorities of conflicting interests in all goods including motor vehicles. Section 321.50(1) and (5), Code, 1966.

Section 321.45(2) provides, 'No person shall acquire any right, title, claim or interest in or to any vehicle subject to registration under this chapter from the owner thereof except by virtue of a certificate of title issued or assigned to him for such vehicle or by virtue of a manufacturer's or importer's certificate delivered to him for such vehicle; nor shall any waiver or estoppel operate in...