Gross v. Powell
| Decision Date | 06 November 1970 |
| Docket Number | Nos. 42262 and 42409,s. 42262 and 42409 |
| Citation | 288 Minn. 386,181 N.W.2d 113 |
| Parties | , 8 UCC Rep.Serv. 268 Donald J. GROSS, as trustee for the heirs of Michael James Culbert, deceased, Respondent, v. Robert H. POWELL, Appellant, Leo A. Hendrickson, Respondent. Robert H. POWELL, Third-Party Plaintiff, Appellant, v. TRAVELERS INDEMNITY COMPANY, Third-Party Defendant, Respondent. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
Where two parties have agreed in good faith to the purchase and sale of an automobile and the purchaser is given unrestricted and unconditional possession of that automobile, the purchaser is the owner of that automobile within Minn.St. 170.21, subd. 9, for purposes of § 170.54, despite the fact that the purchaser's check given for the price is subsequently dishonored.
Hammer, Weyl, Halverson & Watters and Anthony S. Downs, Duluth, for appellant.
Courtney, Courtney & Gruesen, Duluth, for Gross.
Harper, Eaton & Gustafson, Duluth, for Hendrickson.
Reavill, Neimeyer, Johnson, Fredin & Killen and Thomas R. Thibodeau, Duluth, for Travelers Ind. Co. Heard before KNUTSON, C.J., and NELSON, MURPHY, OTIS, and ROSENGREN, JJ.
*
These are consolidated appeals by Robert H. Powell, defendant and third-party plaintiff, from judgment entered against him and from an order denying his motion for a new trial.
Without attempting to detail all of the facts to which the parties have stipulated, the pertinent ones appear to be as follows:
On April 10, 1968, at about 3:30 p.m. defendant Leo A. Hendrickson arranged to purchase a 1962 four-door Oldsmobile from Proctor Motor, Inc., a Minnesota corporation in St. Louis County (hereinafter referred to as Proctor). At the time of the purchase the bill of sale in the form printed on the reverse side of the 1968 Minnesota motor vehicle registration card covering the Oldsmobile was executed by Hendrickson as buyer and Proctor as seller and acknowledged before a notary public. At the same time (according to the stipulation) Hendrickson delivered to Proctor the agreed purchase price of said automobile in the form of a check for $600 dated April 10, 1968, drawn on the First State Bank of Floodwood, and signed by Veronica Hendrickson, the wife of defendant Hendrickson, as maker. The seller accepted said check in full payment of the purchase price of the automobile. Hendrickson paid Proctor the sales tax in cash in the sum of $18. On the same date, Proctor delivered the keys to the car and the car to Hendrickson with the unrestricted right to use it as his own. Hendrickson thereupon drove the car from the premises of Proctor.
After taking possession of the car, Hendrickson encountered appellant, Robert H. Powell, and arranged to have him drive the 1962 Oldsmobile back to Floodwood, while Hendrickson drove his 1957 Oldsmobile. Powell thereafter drove the 1962 Oldsmobile as driver and sole occupant and while en route to Floodwood was involved in an automobile collision resulting in the death of Michael James Culbert and in personal injuries to Edwin Culbert, Jr.
Hendrickson had arranged with the First State Bank of Floodwood to bring the 1962 Oldsmobile to the bank on April 11, 1968, with the expectation of using said car as security for a loan to cover the $600 check issued to Proctor, but because of the demolition of the 1962 Oldsmobile in the collision, Hendrickson was not able to proceed with obtaining the loan. The delivered check was subsequently dishonored for insufficient funds, and thereafter Proctor commenced an action against Hendrickson and his wife to recover the purchase price of said automobile.
Plaintiff, Donald J. Gross, as trustee for the heirs of Michael Culbert, commenced an action for death by wrongful act against Hendrickson and Powell, as owner and driver, respectively, of the automobile involved in the accident. Appellant Powell instituted a third-party action against The Travelers Indemnity Company, alleging that title to the automobile had never passed to Hendrickson from Proctor and, therefore, Travelers, as Proctor's insurer, was obligated to defend Powell and would have the primary obligation to pay any judgment claims against him resulting from the accident.
The only issue presented in the case is: Who had ownership of the automobile involved in the accident for purposes of the Minnesota Safety Responsibility Act, Minn.St. 170.54? This statute provides:
'Whenever any motor vehicle shall be operated within this state, by any person other than the owner, with the consent of the owner, express or implied, the operator thereof shall in case of accident, be deemed the agent of the owner of such motor vehicle in the operation thereof.'
The parties agree as to the results which follow from our determination of the ownership issue.
The trial court found that Hendrickson had purchased the car involved and had title thereto at the time of the accident and that Powell is not entitled to any benefits under Proctor's insurance coverage provided by Travelers. The court based its decision on the ground that title to the automobile had passed, under Minn.St. 336.2--401, at the time of delivery of the vehicle to the buyer, Hendrickson, as the buyer and seller had contemplated.
On this appeal, appellant contends that in a 'cash sale,' as between the parties only, no title passes to a buyer who pays the purchase price with a check which is subsequently dishonored. He bases his argument on two Minnesota cases, Gustafson v. Equitable Loan Ass'n, 186 Minn. 236, 243 N.W. 106, and Guckeen Farmers Elev. Co. v. Cargill, Inc., 269 Minn. 127, 130 N.W.2d 69, the reasoning of which, though not the result, is claimed to have been continued under the Uniform Commercial Code, Minn.St. 336.2--511(3), which provides in part:
'* * * (P)ayment by check is conditional and is defeated as between the parties by dishonor of the check on due presentment.'
Respondent, Travelers, argues that here there was an agreement that title was to pass on delivery sufficiently explicit to pass title under Minn.St. 336.2--401(1), which provides:
'Each provision of this article with regard to the rights, obligations and remedies of the seller, the buyer, purchasers or other third parties applies irrespective of title to the goods except where the provision refers to such title. Insofar as situations are not covered by the other provisions of this article and matters concerning title become material the following rules apply:
'(1) * * * Subject to these provisions and to the provisions of the article on secured transactions (article 9), title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.'
In the alternative, Travelers contends that title passed on delivery of the car to the buyer in the absence of explicit agreement, citing Minn.St. 336.2--401(2), which provides:
'(2) Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods, despite any reservation of a security interest and even though a document of title is to be delivered at a different time or place; * * *.'
As a third contention, Travelers asserts that title passed to the buyer on delivery because the seller elected to affirm the sale after dishonor of the buyer's check through an election to sue the buyer for payment due pursuant to Minn.St. 336.2--511(3).
This court cannot accept appellant's contention that in a cash sale, where a check given in payment of the purchase price is subsequently dishonored, no title passes as between the parties. The opinions cited by appellant in support of his contention are distinguishable from this case. In those actions each of the sellers respectively sought to rescind the transactions of sale through an action against a third party, in Gustafson for replevin and in Guckeen for conversion. The...
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...with a person other than the certificate holder or the person named in the certificate of title. See generally, Gross v. Powell, 288 Minn. 386, 181 N.W.2d 113 (1970) (title passes upon physical delivery notwithstanding subsequent dishonored check); Frye v. Anderson, 248 Minn. 478, 487, 80 N......
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