Jarrard v. Associates Discount Corp.

• Decision Date: 20 December 1957
• Citation: 99 So.2d 272
• Parties: Wendell JARRARD, William Jarrard and Wayne Jarrard, doing business as Jarrard Motors, Appellants, v. ASSOCIATES DISCOUNT CORPORATION, Appellee.
• Court: Florida Supreme Court

Page 272

99 So.2d 272

Wendell JARRARD, William Jarrard and Wayne Jarrard, doing business as Jarrard Motors, Appellants, v. ASSOCIATES DISCOUNT CORPORATION, Appellee.

Supreme Court of Florida.

Dec. 20, 1957.

Fisher & Hepnr, Pensacola, for appellants.

Jones & Harrell, Pensacola, for appellee.

O'CONNELL, Justice.

Associates Discount Corporation, as plaintiff, brought an action in replevin against Wendell Jarrard, et al., as defendants, seeking return of eight (8) automobiles. Although Jarrard, et al., are the nominal defendants, one Tom Cherry is the real defendant and will be referred to as such in this opinion.

After a trial without jury, a judgment was rendered for the plaintiff. Motion for new trial was denied and this appeal followed.

The able trial judge set forth the facts, as well as his conclusions, in an opinion which he filed with the judgment for plaintiff. There is no dispute between the parties as to the facts which are set forth in the trial judge's opinion. These facts are summarized below.

Tom Cherry, a used car dealer operating in Tennessee, in three separate transactions, sold a total of ten (10) automobiles to Bill Fade Motors, Inc., of Pensacola, Florida, hereinafter referred to as the dealer. Each of these transactions was accomplished by telephone conversations between Cherry in Tennessee and the dealer in Florida. In each case Cherry, at request of the dealer, engaged drivers for the automobiles which drivers at the dealer's expense drove the cars to Pensacola and delivered them to the dealer together with an executed document entitled 'bill of Sale, State of Tennessee.' In each of the three transactions the dealer, on delivery of the cars to it, gave one of the drivers for delivery to Cherry a draft in the amount due Cherry for the cars delivered on that occasion. The trial court found that each transaction was a cash transaction and that under Tennessee law as between Cherry and Bill Fade Motors, Inc., title to each of the automobiles remained in Cherry until such time as Cherry received actual payment of the checks or drafts given to Cherry.

The first of the three transactions involved three automobiles. It began on July 22, 1954 by telephone call from the dealer in Pensacola, Florida to Cherry in Tennessee. After delivery of the automobiles in Pensacola in exchange for the check or draft, as above outlined, the dealer on July 27, 1954 executed a Trust Receipt to Associates Discount Corporation, the plaintiff, covering said three automobiles and on the same day received therefor a check from the plaintiff in amount of the loan. This check was delivered by the plaintiff to the dealer, although the plaintiff had not seen the automobiles or any indicia of title covering them. It is pertinent to note, also, that the bills of sale which Cherry executed covering these automobiles and sent with them to the dealer showed the purchaser to be East Side Motors and not Bill Fade Motors, Inc. and the check given by the dealer in exchange therefor was payable to East Side Motors. The record shows that East Side Motors is a business in Tennessee owned by Cherry.

Although the plaintiff had not examined the indicia of title to these automobiles prior to accepting the Trust Receipt and issuing its check therefor, the trial judge found that the plaintiff, through its Pensacola office manager, did examine the three automobiles and bills of sale at the lot of Bill Fade Motors, Inc. on the following day July 28, 1954.

On August 4, 1954, Cherry first learned that the check given by Bill Fade Motors, Inc. in payment for the first three automobiles had been returned unpaid. Cherry called Bill Fade Motors, Inc. and talked with Bill Fade who assured him that while some small insufficiency must have existed in the account, it would be made sufficient, and asked Cherry to put the check through again.

During this conversation, on August 4th, the dealer entered into a second transaction in which it ordered and Cherry agreed to sell three more automobiles under the same arrangement as followed in the first transaction. Further, on August 5, 1954 a third transaction was had in which Cherry agreed to sell the dealer an additional four automobiles under the same arrangement as followed in the sale of the first three cars. On delivery of the cars involved in the last two transactions Cherry sent bills of sale which were properly executed to Bill Fade Motors, Inc. as purchaser and the checks given by the dealer were made to Cherry.

On August 6, 1954 Bill Fade Motors, Inc. executed a Trust Receipt to plaintiff covering the three automobiles ordered in the August 4th telephone conversation and on August 12th executed a third Trust Receipt to plaintiff covering the four automobiles ordered in the August 5th telephone conversation. Bill Fade Motors, Inc. received checks from the plaintiff for the last two Trust Receipts on delivery thereof to plaintiff. There is no specific evidence that the plaintiff examined the indicia of title to the cars involved in the last two Trust Receipts either prior to or after issuing its checks therefor. The trial judge found, however, that it was the business policy of plaintiff to examine such documents within twenty-four hours after issuance of its check, if it did not do so before issuance of the check, but he stated 'there is no specific evidence that in this particular instance this was done'.

Thereafter, the first check given by Bill Fade Motors, Inc. to Cherry had been returned unpaid a second time, and the second and third checks had also been returned unpaid. Cherry came to Pensacola on August 14th and conferred with Bill Fade, President of Bill Fade Motors, Inc. As a result of this conference Cherry received a cashier's check for two of the automobiles and in addition took back the keys to and bills of sale covering the remaining eight automobiles, it being agreed that the automobiles would be left on Fade's lot until August 16th on which day Fade promised he would wire Cherry the balance due. This was not done and Cherry returned to Pensacola on August 16th or 17th, removed the cars from Fade's lot and sold them to Jarrard Motors, the nominal defendant herein. Immediately thereafter plaintiff replevided the eight (8) automobiles under the three Trust Receipts abovementioned, whereupon Cherry returned Jarrard its check given in payment of the cars and took back the bills of sale given to Jarrard.

The only evidence offered as to Cherry's knowledge of the dealer's financing the cars with plaintiff showed that Cherry did not know that Bill Fade Motors, Inc. had encumbered or intended to encumber the cars in question to the plaintiff, although plaintiff argues that he should have known that such would be done.

The trial judge concluded that although the plaintiff did not, in either of the three Trust Receipt transactions, see the indicia of title to the automobiles prior to acceptance of the Trust Receipts and delivery of its several checks to Bill Fade Motors, Inc., nevertheless, that

'because its agent inspected the first three Bills of Sale forms made out to East Side Motors as purchaser the day following the issuance of the first check, and because it was its business policy within twenty-four hours to inspect the indicia of title in the hands of the Trustee, Bill Fade Motors, Inc., within twenty-four hours following issuance of its check upon acceptance of the following two Trust Receipts, the Court concludes that Associates Discount Corporation relied upon the indicia of title furnished Bill Fade Motors, Inc., by Tom Cherry in not moving earlier to upset the transaction and recover its funds advanced without seeing such indicia of title; and that by reason of the fact that the evidence shows that Tom Cherry was placed on guard following the return of Bill Fade Motors, Inc., first draft for the first automobiles for insufficient funds, Tom Cherry, the real party in interest as defendant, because one of two innocent parties must suffer since Bill Fade Motors, Inc., is out of business and insolvent and Tom Cherry's actions created the situation, and under the doctrine of estoppel he is precluded from relying upon his retention of title to the automobiles in question as against the lien of the Trust Receipts held by plaintiff, Associates Discount Corporation. * * *'

It is clear that the trial judge found that title to the automobiles in question was in Cherry, but that Cherry was estopped to assert his title as against the plaintiff Associates Discount.

We must first determine a question of pleading and procedure.

In a supplemental brief, Cherry contends that inasmuch as plaintiff did not specifically plead the doctrine of estoppel in reply to Cherry's answer, which alleged a superior title and right to possession, the plaintiff cannot enjoy the benefit of that doctrine and the court erred in applying it against him. Cherry cites Dicks v. Colonial Finance Corp., Fla.1956, 85 So.2d 874 as authority for this contention.

In the Dicks case, supra, we held that estoppel is an affirmative defense which is waived if not specifically pleaded. In that case the defendant sought to avail himself of the defense of estoppel, but had failed to plead it in his answer. This factual distinction is material.

In the case now before us the plaintiff filed a complaint alleging it was entitled to possession of the automobiles involved herein by virtue of the trust Receipts above-described. Cherry filed an answer alleging that he had a superior right to possession of the automobiles. There were no further pleadings.

Under 30 F.S.A. Fla.R.Civ.P. 1.7(a) the only pleadings allowed are a complaint and an answer, but if the answer contains a counter-claim or a cross-claim there shall be a reply. The rule then provides that 'no additional pleadings, other than motions provided by these Rules, shall be allowed, except that the court may order a reply to an answer.' Therefore under Rule...