Holtzlander v. Brownell

• Decision Date: 10 April 1990
• Docket Number: Docket No. 105996
• Citation: Holtzlander v. Brownell, 453 N.W.2d 295, 182 Mich.App. 716 (Mich. App. 1990)
• Parties: Zenith HOLTZLANDER and Mary Holtzlander, Plaintiffs-Counter-Defendants-Appellees, v. John BROWNELL and Doris Brownell, Defendants-Counter-Plaintiffs-Appellants.
• Court: Court of Appeal of Michigan

Page 295

453 N.W.2d 295

182 Mich.App. 716

Zenith HOLTZLANDER and Mary HoltzlanderPlaintiffs-Counter-Defendants-Appellees, v.John BROWNELL and Doris BrownellDefendants-Counter-Plaintiffs-Appellants.

Docket No. 105996.

Court of Appeals of Michigan.

Submitted Jan. 4, 1990.

Decided March 20, 1990.

Released for Publication April 10, 1990.

Alphonse Lewis, Jr., Grand Rapids, for defendants-counter-plaintiffs-appellants.

Before BRENNAN, P.J., and MICHAEL J. KELLY and CYNAR, JJ.

PER CURIAM.

On October 27, 1987, following a bench trial, the Newaygo Circuit Court entered judgment allowing plaintiffs Zenith and Mary Holtzlander to recover a number of motor vehicles which had been included in business property previously sold under contract to defendants John and Doris Brownell.The judgment also awarded $1,500 to defendants on their counter-complaint for overtime wages earned by John Brownell while employed by plaintiffs.Defendants appeal as of right.We affirm.

In June of 1982, the parties contracted for the sale of the business known as Zenith Used Cars and Auto Parts, located in While Cloud, Michigan.When defendants subsequently defaulted on the contract, plaintiffs filed suit in January, 1984, for breach of contract and received a default judgment against defendants.

On November 6, 1984, in settlement of the default judgment, the parties again contracted for the sale of the business.The property conveyed under the contract included seventy-five junk cars used for parts.

In 1985, defendants filed for bankruptcy, and the business property conveyed under the November 6, 1984, contract was abandoned by the bankruptcy trustee.

On October 8, 1986, plaintiffs filed suit to recover the business property, and on May 22, 1987, defendants filed their counter-complaint, dated May 5, 1987.As part of their counter-complaint, defendants claimed that their contract of sale with plaintiffs was void because plaintiffs refused to transfer title to the motor vehicles conveyed under the contract.Further, defendants sought $17,370.54 in regular and overtime wages allegedly earned by defendantJohn Brownell while employed by plaintiffs from 1976 to June of 1982.Defendants' counter-complaint also alleged claims for conversion and breach of contract.

Defendants argue that the trial court erred in finding, as a matter of law, that the title transfer provisions of the Michigan vehicle code,M.C.L. Sec. 257.1 et seq.;M.S.A. Sec. 9.1801 et seq., do not require the signature of the seller and delivery of said title to the buyer at the time of transfer of an inoperable motor vehicle sold for junk and salvage purposes.Defendants contend that the trial court should have rescinded the sale contract and ordered monies paid by defendants under the contract returned to defendants, where plaintiffs failed to properly transfer title in accordance with the code on the seventy-five junk cars used for parts.

M.C.L. Sec. 257.233(4);M.S.A. Sec. 9.1933(4) of the vehicle code requires:

The owner shall indorse on the back of the certificate of title an assignment of the title with warranty of title in the form printed on the certificate with a statement of all security interests in the vehicle or in accessories on the vehicle and deliver or cause the certificate to be mailed or delivered to the purchaser or transferee at the time of the delivery to the purchaser or transferee of the vehicle.The certificate shall show the payment or satisfaction of any security interest as shown on the original title.

Failure to comply with the title transfer provisions of Sec. 233 renders the sale of a motor vehicle void.Bayer v. Jackson City Bank & Trust Co., 335 Mich. 99, 105, 55 N.W.2d 746(1952);Whitcraft v. Wolfe, 148 Mich.App. 40, 50, 384 N.W.2d 400(1985), lv. den.425 Mich. 865(1986).

With respect to an "owner," as defined under M.C.L. Sec. 257.37;M.S.A. Sec. 9.1837, who sells a motor vehicle to a "dealer," as defined under M.C.L. Sec. 257.11;M.S.A. Sec. 9.1811, for junk or salvage, the code provides, as an alternative, a more informal method of title transfer, pursuant to M.C.L. Sec. 257.242;M.S.A. Sec. 9.1942, which provides:

An owner may sell a vehicle to a dealer for salvage by writing on the face of the certificate of title in bold print the word, scrap, along with the signature of the owner or authorized agent, and by then assigning the certificate of title to the dealer purchasing the vehicle.A certificate of title shall not again be issued for the vehicle.

Further, M.C.L. Sec. 257.235a;M.S.A. Sec. 9.1935(1), as amended by1980 P.A. 398, provides:

Notwithstanding any other provision of this act or of ActNo. 94 of the Public Acts of 1937, as amended, being sections 205.91 to 205.111 of the Michigan Compiled Laws, a licensed dealer or junk dealer who purchases a vehicle for the purpose of destroying or junking the vehicle may accept a certificate of title which has been assigned to the transferor by a properly indorsed assignment on the back of the certificate of title.The dealer shall write the word "junk" on the face of the certificate of title above the signature of the dealer or an authorized agent of the dealer and forward the certificate to the secretary of state, together with a fee of $4.00 instead of a fee or tax otherwise applicable.This section shall not apply to a transfer unless the fee and certificate of title are received by the secretary of state within 10 days after the date of the vehicle's purchase by the dealer.A certificate of title shall not again be issued for the vehicle.

The code also provides for subsequent transfers of salvage or junk vehicles between dealers, as in this case, pursuant to M.C.L. Sec. 257.217c(2);M.S.A. Sec. 9.1917(3)(2), which provides in pertinent part:

If a dealer, other than a vehicle scrap metal processor, acquires ownership of a late model vehicle which is a distressed vehicle from an owner and receives an assigned certificate of title, the dealer shall surrender the assigned certificate of title to the secretary of state and apply for a salvage certificate of title within 5 days after the dealer receives the assigned certificate of title.The dealer may sell the vehicle to another dealer by assigning the salvage certificate of title to the buyer.

Given the plain language of the vehicle code, we find no basis for the trial court's conclusion that the code's title transfer provisions are inapplicable to inoperable or salvage vehicles.While the word "may," which is a discretionary word, Macomb Co. Road Comm. v. Fisher, 170 Mich.App. 697, 700, 428 N.W.2d 744(1988), is used in the emphasized sentence of Sec. 217c(2) above, we construe that sentence to read that a dealer may sell to another dealer and, if he or she does, then the salvage certificate of title must be properly assigned to the purchasing dealer.We do not find that a reasonable interpretation of the applicable vehicle code sections would permit a seller of an inoperable motor vehicle to comply or not comply with the code's title transfer provisions at the seller's discretion.Statutes are to be construed so as to avoid absurd or unreasonable consequences.Joy Management Co. v. Detroit, 176 Mich.App. 722, 731, 440 N.W.2d 654(1989), lv. den.433 Mich. 860(1989).

Thus, plaintiffs' failure to properly transfer title in the...