Massachusetts Bonding & Ins. Co. v. Central Finance Corp.
| Decision Date | 15 October 1951 |
| Docket Number | No. 16558,16558 |
| Citation | 124 Colo. 379,237 P.2d 1079 |
| Parties | MASSACHUSETTS BONDING & INS. CO. v. CENTRAL FINANCE CORP. |
| Court | Colorado Supreme Court |
Isaac Mellman, Denver, for plaintiff in error.
Shuteran, Robinson & Harrington, Denver, for defendant in error.
Plaintiff in error, which was one of the defendants below, will be referred to as the bonding company and defendant in error as finance company.
One Robert Caldwell, a dealer in used motor vehicles, in compliance with the following sections of Colorado statutes, obtained a surety bond from the bonding company.
The sections of the Motor Vehicle Act here involved are:
'Before any Motor Vehicle Dealer's license or Used Motor Vehicle Dealer's license shall be issued by the Administrator to any applicant therefor, the said applicant shall procure and file with the Administrator a good and sufficient bond in the amount of Two Thousand Five Hundred Dollars ($2,500.00) with corporate surety thereon, duly licensed to do business within the State of Colorado, approved as to form by the Attorney General of the State of Colorado, and conditioned that said applicant shall conduct his business as a dealer without fraud or fraudulent representation, and without the violation of any of the provisions of this act.' Section 9, chapter 78, S.L. '45.
'If any person shall suffer any loss or damage by reason of fraud, fraudulent representation or violation of any of the provisions of this act by a licensed dealer or one of his salesmen, then acting for the dealer on his behalf, or within the scope of the employment of such salesman, such person shall have a right of action against such dealer, the automobile salesman guilty of the fraud, fraudulent representation or violation of any of the provisions of this act, and the sureties upon their respective bonds.' Section 11, chapter 78, S.L. '45.
'It shall be unlawful and a violation of this [article] for the holder of any license issued under the terms and provisions hereof: * * *
'(D) To violate any law of the State of Colorado now existing or hereafter enacted respecting commerce in motor vehicles or any lawful rule or regulation respecting commerce in motor vehicles promulgated by any licensing or regulating authority now existing or hereafter created by the laws of the State of Colorado. * * *.' Section 8, chapter 121, S.L. '47.
On July 21, 1948, Caldwell, the dealer, sold an automobile to Albert Roberts and his wife, who executed a note and chattel mortgage thereon for $1,725.60 representing the balance of the purchase price. The note and mortgage were assigned to the finance company.
To recover the loss or damage it claimed to have sustained by this transaction, the finance company filed its complaint against Caldwell and the bonding company, alleging false and fraudulent acts of the defendant Caldwell in representing that the title to said mortgaged car was free and clear of all encumbrance, when in fact, and well known to Caldwell, the title to said automobile was not clear, but subject to a first and valid lien to the Federal Credit Union of Long Beach, California, and with intent to deceive plaintiff, represented that the title to said automobile was free of liens and thereby induced plaintiff to loan to Roberts and his wife the sum of $1,725.66, which money was had and received by the defendant Caldwell; that Caldwell at the time of making the sale did not have the original bill of sale or certificate of ownership, but on the contrary, delivered a false and fictitious bill of sale showing said car to be free and clear of all liens; that by reason of the false and fraudulent acts of Caldwell, the plaintiff was damaged in the sum of $726.02; that the bonding company had executed a bond to indemnify all who dealt with Caldwell against loss by his wrongful or fraudulent acts and in violation of the statutes of the State of Colorado; that the acts were attended by circumstances of fraud or wanton and reckless disregard of plaintiff's rights to the further...
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