Hull-Dobbs Motor Co. v. Associates Discount Corp.

• Decision Date: 17 October 1950
• Docket Number: HULL-DOBBS,No. 47689,47689
• Citation: 44 N.W.2d 403,241 Iowa 1365
• Parties: MOTOR CO. v. ASSOCIATES DISCOUNT CORPORATION.
• Court: Iowa Supreme Court

Page 403

44 N.W.2d 403

241 Iowa 1365

HULL-DOBBS MOTOR CO. v. ASSOCIATES DISCOUNT CORPORATION.

No. 47689.

Supreme Court of Iowa.

Oct. 17, 1950.

Rehearing Denied Dec. 18, 1950.

White & White, Harlan, for appellant.

Fred Louis, Jr., Harlan, for appellee.

HAYS, Justice.

Plaintiff, an Illinois corporation with its place of business in Chicago, Illinois, is engaged in the business of sale of new and used automobiles. Defendant, a corporation with a place of business in Omaha, Nebraska, is engaged in the automobile finance business. George E. Mickel, Jr., handles new and used cars at his place of business in Harlan, Iowa, under the trade name of Mickel Motor Company.

In December 1948, plaintiff delivered to Mickel Motor Company, at its place of business in Chicago, five automobiles which were immediately brought to Harlan, Iowa. At the time of the delivery of the cars to Mickel, checks on a Harlan bank were handed to plaintiff. These checks were later protested for lack of funds and no payment has ever been received by plaintiff. Mickel upon receipt of the cars from Chicago, received a loan from defendant giving a chattel mortgage to it on the cars in question. Later, defendant took possession of the cars under the provisions of the mortgage, which possession was given to plaintiff under a writ of replevin. Upon trial to the court, without a jury, the court sustained the writ and adjudged the cars to belong to plaintiff. From this judgment defendant has appealed.

While there were two different transactions on different dates, they were identical so far as material here and we treat them as one. The record shows that in December 1948, one Semrad, as agent for Mickel, went to Chicago and obtained the cars in question from appellee. His instructions from Mickel were to buy cars 'title attached'. The procedure followed was: Semrad gave appellee Mickel's check, drawn on a bank in Harlan, Iowa, for the agreed price of the cars. On the check was written 'title must be attached'. Appellee then gave him an invoice which stated the make of the cars, motor and serial numbers, the price and that was 'for resale only'. It also had typed thereon 'This car is on consignment to Mickel Motors, Harlan, Iowa and remains the property of Hull-Dobbs Inc. 4655 W. Washington Blvd. Chicago 44, Illinois until paid for and released by Hull-Dobbs, Inc.' There also appears in print under the word 'settlement' the following in print 'cash on delivery' opposite which is typed 'Rec. #26136--$1975.00'. At the bottom of the instrument appear the words 'This is your bill of sale'. The cars were immediately delivered to Semrad and taken to Harlan, Iowa. Certificates of title, as required by Illinois law in the transfer of cars, were attached to the check together with a note as follows: 'Shelby County State Bank. Do not release attached papers until checks clear bank. Hull-Dobbs, Inc.' The checks, certificates of title and the note of instructions to the bank, were sent to the bank and in due time were returned with notice of protest on account of no funds. The above facts are without material dispute in the record.

The record further shows, without dispute, that on the date of the arrival of the cars from Chicago, Mickel gave appellant his promissory note, secured by a mortgage on the cars in question for which he received cash. Appellant had had prior similar transactions with Mickel and at the time of the loan in question, no questions were asked concerning Mickel's title to the cars. Appellant took possession of the cars under the mortgage.

Appellant asserts that the trial court erred in holding that the transaction between appellee and Mickel was an agreement to make a contract, and awarding the cars to appellee. It is appellant's contention that said transaction amounts to a conditional sale and under Section 556.4, Code 1946, I.C.A. appellant is entitled thereto.

It is true, as claimed by appellee, that in a law action with jury waived, the court's finding on conflicting facts has the force of a jury verdict, and if there is substantial basis in the record for such finding, it is conclusive on this Court on appeal. Armstrong v. Smith, 227 Iowa 450, 288 N.W. 621. It is equally well established that where the facts are not in material dispute, the interpretation placed thereon by the trial court becomes a question of law which is not conclusive on appeal. Hallagan v. Dowell, 179 Iowa 172, 161 N.W. 177; Jones v. County of Woodbury, 199 Iowa 773, 202 N.W. 884. We deem the issue before us to be one of law.

I. Does the transaction between appellee, Hull-Dobbs Motor Co., and Mickel Motor Company constitute a conditional sale within the purview of Section 556.4, Code 1946, I.C.A.?

Section 556.4, Conditional Sales, provides: 'No sale, contract, or lease, wherein the transfer of title or ownership of personal property is made to depend upon any condition, shall be valid against any creditor or purchaser of the vendee or lessee in actual possession obtained in pursuance thereof, without notice, unless the same * * * is duly recorded * * *.' Under the purview of this statute, any sale where the transfer of title or ownership is dependent on a condition is a conditional sale. As to what would be considered such transfer of title has been before this Court many times.

In Hansen v. Kuhn, 226 Iowa 794, 797, 285 N.W. 249, 252, we quote with approval from Mercier v. Nashua Buick Co., 84 N.H. 59, 146 A. 165, 168, as follows: 'In its structure and contemplation a conditional sale is no different from any other completed sale. The property sold remains security for the debt, but the transaction of...