Latham Motors, Inc. v. Phillips
| Decision Date | 23 October 1992 |
| Docket Number | No. 18882,18882 |
| Citation | 123 Idaho 689,851 P.2d 985 |
| Parties | LATHAM MOTORS, INC., an Idaho corporation, Plaintiff-Counterdefendant-Respondent, v. Gaylord PHILLIPS and Sherry Delgado aka Sherry Phillips, Defendants-Counterclaimants-Appellants. |
| Court | Idaho Court of Appeals |
Goodman & Duff, Rupert, for appellants. Alan C. Goodman, argued.
Benoit, Alexander, Sinclair, Doerr, Harwood & High, Twin Falls, for respondent. J. Walter Sinclair, argued.
This case involves a dispute over the title to a car. The car's certificate of title was issued in the name of "Phillips, Gaylord or Sherry." Latham Motors, an automobile dealer, claims it should receive title to the car on the grounds that it purchased and took possession of the car pursuant to a contract it entered into with Sherry Phillips. The defendant, Gaylord Phillips, claims title to the car by virtue of the fact that Sherry Phillips sold the car without his consent and Latham Motors never received the car's certificate of title, which remained at all times in Gaylord Phillips' possession. The district court entered judgment in favor of Latham Motors, concluding that: (1) because Sherry Phillips was listed as an alternate owner on the certificate of title she had actual and apparent authority to transfer ownership of the car to Latham Motors, and (2) Idaho's Motor Vehicle Code does not require actual physical delivery of the certificate of title at the time of the sale of a motor vehicle in order to transfer ownership of the vehicle. We reverse.
The underlying facts are as follows. In January, 1988, Gaylord Phillips bought a 1985 Ford Tempo automobile for $4,995. Phillips' unrebutted testimony establishes that his daughter, Sherry Delgado aka Phillips, completed and submitted the application for the certificate of title with the Idaho Transportation Department, and that she had her own name put on the title as the second owner. Title to the Tempo was issued jointly to "Phillips, Gaylord or Sherry." The certificate of title was sent to Phillips who, after receiving it, took no action to alter the title's language designating both him and his daughter, Delgado, as owners of the vehicle. From the time the title was issued until the present, Phillips has kept the title in his exclusive possession in a safety box at his house.
Phillips' unrebutted testimony establishes that he paid for and insured the Tempo with his own money. His unrebutted testimony further establishes that after he purchased The record contains conflicting evidence regarding the conversation between Delgado and the salesman. Delgado testified that she told the salesman that she could not "completely" trade the Tempo without her father's permission, because he owned the car. Delgado further testified that after continuing to look at automobiles, she decided she wanted to use the Tempo as a trade-in to purchase a 1989 Dodge Daytona. She also testified, however, that she repeatedly told the salesman that her father owned the Tempo and that she would have to get permission and the title from him before the deal could be finalized. She further testified that it was her understanding that if she could not persuade her father to go along with the deal and give her the title, she would be allowed to return the Daytona and get the Tempo back.
[123 Idaho 691] the car, the car was given to Delgado, not as a gift, but for her use. Delgado used the car to commute from her home in Twin Falls to her place of employment in Jackpot, Nevada. On December 13, 1988, Delgado shopped for a car at Latham Motors, an automobile dealership in Twin Falls. While looking at an American sports car, Delgado was approached by a salesman. The salesman showed Delgado several cars and asked her if she would like to use the Tempo as a trade-in to purchase a newer vehicle.
Latham Motors' salesman testified that, initially, Delgado said she needed to talk it over with her father before purchasing a car, but that she did not say her father owned the Tempo and would necessarily have to approve any deal involving the car. The salesman testified that later Delgado simply changed her mind and decided to purchase a new car without talking to her father first. He further testified that Delgado informed him that title to the Tempo was in both her and her father's names and that the certificate of title was in her father's possession, but that she would get the title from her father and deliver it to Latham Motors within a few days.
It is undisputed that Delgado decided to trade-in the Tempo and purchase the Daytona. While at Latham Motors, Delgado signed and submitted a credit application, a bill of sale for the Tempo, and a retail installment contract for the purchase of the Daytona. Delgado also signed a blank copy of an application for duplicate title. Delgado testified, however, that she did not really read the papers she signed, and that she was told the papers were mere formalities to facilitate the consummation of the transaction should her father later give his permission. After signing the papers, Delgado removed her things from the Tempo, delivered the Tempo's keys to Latham Motors, and then drove away in the new Daytona.
On December 15, 1988, without having discussed the transaction with her father, Delgado attempted to return the Daytona to Latham Motors, claiming that she could not afford the vehicle and that she knew her father would not give her the title to the car. Latham Motors refused to take the car back and told Delgado that the Tempo had already been sold to someone else. That same day, Latham Motors called the Idaho Transportation Department and, for the first time, verified the names and the wording on the Tempo's certificate of title. Latham Motors was informed by the Department that the title to the Tempo was issued to "Phillips, Gaylord or Sherry." Latham Motors subsequently filled out the application for duplicate title previously signed by Delgado, checking the box on the application which indicated that the original certificate of title had been lost, and submitted the application to the Transportation Department. Along with this application for duplicate title, Latham Motors filled out a transfer of title request, also previously signed by Delgado, requesting in Delgado's name that the Transportation Department issue title to the Tempo in the name of the person who had subsequently purchased the car from Latham Motors.
Phillips learned about the transaction between Delgado and Latham Motors when he was contacted by Chrysler Credit Corporation several days after the transaction occurred. Chrysler Credit Corporation called Phillips in an effort to verify the information on the credit application Delgado It is undisputed that: (1) before the bill of sale on the Tempo was signed and delivered by Delgado to Latham Motors, Delgado informed Latham Motors that title to the car was in both her and her father's names; (2) Delgado informed Latham Motors that the certificate of title was in her father's possession; (3) Latham Motors never attempted to contact Phillips about his interest in the Tempo; (4) Latham Motors relied solely on the word of Delgado regarding the ownership and title of the Tempo-Latham Motors never called the Transportation Department to verify the status of the title until after Delgado attempted to return the Tempo claiming that her father would not give her the car's certificate of title; and (5) Latham Motors knew that the Tempo's certificate of title was not lost, but in the possession of Phillips, when Latham Motors submitted the application for duplicate title to the Transportation Department. 1
[123 Idaho 692] submitted for financing of the Daytona. Phillips informed Chrysler Credit Corporation that Delgado could not afford to make payments on the Daytona, after which he contacted Latham Motors and learned that Delgado had traded-in the Tempo toward the purchase of the Daytona. Phillips informed Latham Motors that he owned the Tempo and that he would not deliver the car's certificate of title to Latham Motors. When he learned that an application for duplicate title had been submitted to the Transportation Department, Phillips contacted the Department and informed them that the certificate of title was not lost, and that he had it in his possession. As a result, the Department refused to issue the requested duplicate title.
After Phillips refused to deliver the certificate of title to Latham Motors, Latham Motors filed a complaint against Phillips and Delgado seeking damages and requesting that Phillips be compelled to turn over the title. The complaint alleged that Phillips was tortiously interfering with Latham Motors' contract with Delgado, and that Delgado was in breach of that contract. Latham Motors later filed an amended complaint alleging fraud on the part of Delgado. Phillips answered Latham Motors' amended complaint and counterclaimed, requesting that Latham Motors either return the car or pay him for the car. 2
The case was originally assigned to the magistrate division. The magistrate held a trial in June, 1989, and entered judgment in favor of Phillips requiring Latham Motors either to return the Tempo to Phillips or pay him $4,995. The magistrate also awarded costs and attorney fees to Phillips. Latham Motors appealed this judgment to the district court.
In regard to the appeal, the district court initially entered an order under I.R.C.P. 83(b) stating that the appeal would be heard as an appellate proceeding. After the parties filed appellate briefs, the district court heard oral argument in November, 1989. After oral argument, but before issuing a decision, the district court determined to order a trial de novo in the district court.
The district court held the trial de novo in May, 1990, after which the court entered a judgment in favor of...
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