Leitch v. Sanford Motor Truck Co.

• Decision Date: 07 January 1924
• Docket Number: 32
• Citation: 123 A. 658,279 Pa. 160
• Parties: Leitch v. Sanford Motor Truck Co. et al., Appellants
• Court: Pennsylvania Supreme Court

123 A. 658

279 Pa. 160

Leitch v. Sanford Motor Truck Co. et al., Appellants

No. 32

Supreme Court of Pennsylvania

January 7, 1924

Argued October 9, 1923

Appeal, No. 32, Oct. T., 1923, by Westmoreland National Bank intervening claimant, from judgment of C.P. Allegheny Co April T., 1921, No. 2151, on verdict for defendant, in case of Harold King Leitch v. Sanford Motor Truck Co. and Westmoreland National Bank, intervening claimant. Affirmed.

Replevin for motor truck. Before STONE, J.

The opinion of the Supreme Court states the facts.

Judgment on instructed verdict for Sanford Motor Truck Co. Westmoreland National Bank, intervening claimant, appealed.

Error assigned was, inter alia, refusal of judgment n.o.v., for intervening claimant, quoting record.

The judgment of the court below is affirmed.

Richard D. Laird, with him Miller & Nesbitt, for appellant. -- A bailment lease on property, will not be sustained as against a subsequent pledge made by a dealer in possession, when possession accompanies the pledge: Bank of North America v. Motor Car Co., 235 Pa. 194; White v. Gunn, 205 Pa. 229; Stephens v. Gifford, 137 Pa. 219; McMahon v. Sloan, 12 Pa. 229; Westinghouse v. Bank, 196 Pa. 249; Little v. Fearon & Co., 252 Pa. 430; Rapp v. Palmer, 3 Watts 178.

Where one of two parties who are equally innocent of actual fraud must lose, the one whose misplaced confidence in an agent or attorney has been the cause of the loss shall not throw it on the other: P.R.R. Co.'s App., 86 Pa. 80.

Ernest Frey, for appellee. -- As between the Sanford Motor Truck Company and Nicholson, the title to the truck in controversy remained in the former under the bailment lease.

The undisputed testimony, showing the Sanford Co. to be the owner of the truck, No. 1322, and Nicholson merely a bailee, the Westmoreland National Bank can only succeed by proving the elements of an equitable estoppel. This it entirely failed to do: Connor v. Clark, 170 Pa. 318; Hildeburn v. Nathans, 1 Phila. 567; Ryman v. Gerlach, 153 Pa. 197; Bank of North America v. Motor Car Co., 235 Pa. 194; Estey Co. v. Dick, 41 Pa.Super. 610; Miller Piano Co. v. Parker, 155 Pa. 208; Bankers Commercial Security Co. v. Greer, 77 Pa.Super. 458; Quinn v. Davis, 78 Pa. 15.

Before FRAZER, WALLING, SIMPSON, KEPHART, SADLER and SCHAFFER, JJ.

OPINION

MR. JUSTICE KEPHART:

The question in this appeal may be stated thus: Is the delivery of personal property under a bailment lease such conduct as will estop the owner from subsequently asserting title against one who has the property in his possession as collateral for money loaned the bailee?

The Sanford Motor Truck Company, by bailment lease, delivered a number of trucks to W. O. Nicholson, engaged in the business of buying and selling Sanford Motor Trucks in a sales room on Liberty Avenue, Pittsburgh, Pa. Lessee, or bailee, was indebted on a note in the sum of $2,800 to the Westmoreland National Bank, appellant, and gave one of the leased trucks to the bank as collateral. It was transferred to Leitch's garage for storage and possession of the pledgee bank; the receipt for the machine was given to the bank. This was sufficient transfer of possession if the bailee had power to transfer any rights in it under a pledge. Nicholson failed to pay any installments of rent due on the truck. Later he absconded, the Sanford Company took possession of the car, and the owner of the storage garage instituted this action of replevin.

The bank claims the property because it was transferred as collateral for a debt by a bailee without knowledge or notice of bailment. The court below instructed for the truck company; the bank appeals.

It was held early in this Commonwealth that, as a general rule, a sale of personal property, leaving the vendor in possession and without doing anything to indicate a change of ownership, is fraudulent as against creditors: Clow et al. v. Woods, 5 S. & R. 275, 278. Where a vendee or pledgee takes title to personal property without possession of it, he assumes the risk of the integrity and insolvency of his vendor or pledgor when the rights of subsequent bona fide purchasers or levying creditors arise: White v. Gunn, 205 Pa. 229, 232; Bank of North America v. Penn Motor Car Co., 235 Pa. 194, 198. But where the owner loses or is robbed of his property, or one who has a temporary right to its use attempts to sell or pledge it without consent, the owner may follow and reclaim it no matter in whose possession it may be found: King v. Richards, 6 Wharton 418, 422; Easton v. Worthington, 5 S. & R. 130.

It is urged, however, that possession of the property in the bailee for hire so clothes him with an apparent title or authority to dispose of it as to create an estoppel preventing the owner from asserting his title, and the latter is thereby deprived of his property. But possession is one of the incidents of a good bailment: Trunick v. Smith, 63 Pa. 18, 23; McBride v. McNally, 243 Pa. 206, 209. Such possession is not inconsistent with the owner's title, and such "a bailment for hire makes it possible for a dishonest bailee to sell the goods to an innocent purchaser, but such a sale will not pass the title of the bailor, for he has done or omitted nothing that should estop him from asserting his ownership of the goods. The contract of bailment made it necessary to give possession of the thing bailed to the bailee for the special and temporary purposes of the bailment, but the title remained in the owner. The fault in such a case is that of the dishonest bailee": Miller Piano Co. v. Parker, 155 Pa. 208, 210. Possession of a chattel is but prima facie evidence of ownership; it is not conclusive, as it may result from purchase, bailment or trespass, and the claimant, in...