Kutner Buick, Inc. v. Strelecki

• Citation: 111 N.J.Super. 89,267 A.2d 549
• Parties: KUTNER BUICK, INC., Plaintiff, v. June STRELECKI, Commissioner of Motor Vehicles of the State of New Jersey, Defendant.
• Decision Date: 29 June 1970
• Court: Superior Court of New Jersey

Page 89

111 N.J.Super. 89

267 A.2d 549

KUTNER BUICK, INC., Plaintiff, v. June STRELECKI, Commissioner of Motor Vehicles of the State of New Jersey, Defendant.

Superior Court of New Jersey,

Chancery Division.

June 29, 1970.

Abraham Greenberg, Camden, for plaintiff (Greenberg, Shmerelson & Greenberg, Camden, attorneys).

George F. Kugler, Jr., Atty. Gen., for defendant (Remo M. Croce, Deputy Atty. Gen., of counsel).

WICK, J.S.C.

This case involves the construction and validity of N.J.S.A. 39:5--47.

The statute reads as follows:

39:5--47. Seizure and sale of stolen motor vehicles

The commissioner may authorize the seizure of a motor vehicle operated over the highways of this state when he has reason to believe that the motor vehicle has been stolen or is otherwise being operated under suspicious circumstances and may retain it in the name of the department until such time as the identity of ownership is established, whereupon he shall order the release of the motor vehicle to its owner.

After the expiration of ninety days from the date the motor vehicle came into the possession of the commissioner by seizure or otherwise, he shall sell it at public sale, upon notice of the sale being first published for the space of two weeks in one or more newspapers published and circulating in this state, and also by posting the notice in five public places in this state. The newspapers and places of posting shall be designated by the commissioner. Upon the sale of the motor vehicle all claims for interest therein shall be forever barred and the proceeds realized therefrom shall become the sole property of the state, to be used as other moneys received under chapter 3 of this title (§ 39:3--1 et seq.).

Pursuant to this statute, the Department of Motor Vehicles seized two 1967 Cadillacs bearing serial numbers B7140840 and J7220527. Plaintiff brought this action initially to enjoin the sale of the vehicles, but since they had already been sold, the action is now one for damages.

The facts are not contested and are as follows. Sometime prior to November 15, 1967 a 1967 Cadillac two-door hardtop coupe-de-ville, with vehicle identification number J7220527, was involved in an accident. The owner was paid the full value of the vehicle by his insurance company and assigned his interest to it. Sometime prior to this, on November 15, 1967, the automobile was inspected by Camden Appraisal Board who determined that the cost to repair would be $6,343.14. The value of the car before the accident was between $4,675 and $5,550. The opinion of the expert who appraised the vehicle was that it could not be repaired.

The insurer put the vehicle up for sale at the car auction in Bordentown, New Jersey. On November 22, 1967 Nolan Truck Sales, Inc. bought it for $1,135 and received the ownership documents. On January 10, 1968 the New Jersey Division of Motor Vehicles issued a certificate of ownership to Nolan for the car in question. Nolan sold the vehicle on February 12, 1968 to Joseph Taylor for $1,500. Taylor ran a body shop in Philadelphia and purchased wrecks. The chain of title is broken at this point until March 11, 1968, when a certificate of ownership was issued by the Commonwealth of Pennsylvania to Raymond Chalmers, a licensed used car dealer in Philadelphia, for a 1967 Cadillac sedan, serial number J7220527. Chalmers subsequently sold Kutner Buick, Inc. a 1967 used Cadillac in good condition with serial number J7220527 for $4,250. This vehicle was purchased by Gordon Whitehill, an employee of plaintiff with 12 to 14 years experience in buying automobiles. He testified that he examined the Pennsylvania certificate of ownership and determined it to be valid, and this is not disputed. He checked the serial numbers on the vehicle and even took a tracing of the vehicle identification number on the frame. Satisfied with his inspection, he paid the price which the court finds was the fair market price.

Plaintiff sold the vehicle to Crest Fine Cars, who sold it to Calvin Patterson. On November 27, 1968 Joseph M. Carroll of the National Auto Theft Bureau and Sgt. Donald Kessler of the New Jersey State Police inspected the vehicle at the request of Mr. Ryan of the FBI. Both men are experienced experts in identifying stolen vehicles. Their testimony was that the serial numbers on the left door lock post and the engine were original plates bearing number J7220527 attached to the vehicle by sheet metal screws. However, to an expert eye the numbers stamped on the frame showed signs of tampering. The experts testified that the original serial number appeared to be ground off. They reached this conclusion by observing marks such as are left by a grind wheel on the frame where the number should have been. The experts then concluded that new numbers had been stamped where the old numbers had been ground off. They reached this conclusion by observing that some numbers were struck twice and some numbers were imprinted with less force than others. An original number stamped at the factory is struck by machine so that there can be no strike-overs or variations between digits.

A similar story is behind serial number B7140840. It was purchased initially by Drive It Yourself Co. of New Jersey, a Hertz licensee. On September 26, 1967 it was struck by a train and towed to Cooperson Brothers, Inc. in Camden. An employee of Cooperson with 45 years of experience in estimating the cost of repairs stated that the vehicle was a total loss and not worth repairing. On November 27, 1967 Drive It Yourself sold the wreck to Ace Auto Parts for $550. A certificate of ownership to a 1967 Cadillac bearing serial number B7140840 was issued by the State to it on November 28, 1967. The president of Ace testified that in his opinion the car could not be repaired.

Subsequently Ace sold the vehicle to Joseph Taylor Auto Body in Philadelphia for $800 and delivered the documents of ownership to it. The next appearance of the serial number was on a certificate of ownership issued to Raymond Chalmers on March 5, 1968 by the Commonwealth of Pennsylvania. A used 1967 Cadillac bearing this serial number and this certificate of ownership was purchased by Kutner Buick for $4,100. The court is satisfied from the testimony of Gordon Whitehill that the same procedure was followed as on J7220527 and that the $4,100 was the fair market value.

On March 19, 1968 the vehicle was sold for $4,400 to Stanley Auto Co., who sold it to Wilma Clifton.

This vehicle was also inspected by Mr. Carroll and Sgt. Kessler, who reach the same conclusions as they did on J7220527.

From the testimony, there is no doubt in the court's mind that J7220527 and B7140840 were stolen vehicles. The automobiles originally bearing those numbers were wrecked beyond repair. The inference is too strong to even be questioned that someone took the serial plates off the door posts and engines and placed them on stolen cars. The numbers on the frame were ground off and restamped to match the plates. The certificate of title went with the plates and the stolen cars.

Plaintiff raises the possibility that a new frame was placed on the original cars after they were repaired and that the new frame was restamped to agree with the serial number on the body. No evidence was introduced that this is what in fact happened. N.J.S.A. 39:10--7 makes it illegal to change a vehicle identification number, while N.J.S.A. 39:10--16 permits a new certificate to be issued in case of the hypothetical plaintiff raises. If what plaintiff suggests was done, it follows that the legal rather than the illegal correction would have been used. The testimony also was quite clear that the cars could not be repaired, and there was no rebuttal of this testimony. The only reasonable explanation is that the vehicles plaintiff bought were stolen. The court so finds.

Although no testimony was offered by the State that all the evidence offered at trial was available to the Commissioner of Motor Vehicles, there is a strong inference that this would have been the case. With this last assumption, the requirement of N.J.S.A. 39:5--47 that the Commissioner have reason to believe that the motor vehicle had been stolen is fulfilled.

The court is also satisfied from the testimony of Gordon Whitehill that Kutner Buick, Inc. had no knowledge that the vehicles in question were stolen but that it relied upon the certificates of ownership and an inspection of the various serial numbers on the cars. The State did not introduce any testimony that the tampering with the serial numbers would be noticeable to anyone other than an expert. The court is therefore free to believe that plaintiff not only did not know but could not reasonably have found out that the vehicles in question were stolen. There is also no doubt that the price paid by plaintiff was fair.

When defendant Commissioner repossessed the vehicles and subsequently resold them pursuant to the statute (it being impossible to determine the true owners), each buyer looked to his seller for restitution for breach of the seller's warranty of title. Plaintiff, having repaid its purchasers, brings this suit to recover its loss from the State. Since the requirements of N.J.S.A. 39:5--47 have been satisfied, plaintiff can only be successful by showing that the statute is unconstitutional as applied to the facts in this case.

The issue is whether the State may seize stolen motor vehicles from the possession of an innocent purchaser for value for its own use without just compensation.

The State can advance two theories to uphold the statute. The first is the principle of escheat. By escheat, the State takes title to property having no owner, 30A C.J.S. Escheat § 1a (1965), or an unknown owner. Standard Oil Co. v. New Jersey, 341 U.S. 428, 71 S.Ct. 822, 95 L.Ed. 1078 (1951). The limit of the State's power to escheat is governed by N.J.Const. (1947), Art. 1, par. 20, which provides that 'Private property shall...