Maxwell Co. v. So. Ore. Gas Corp.

• Decision Date: 21 December 1937
• Citation: 114 A.L.R. 697,75 P.2d 9,74 P.2d 594,158 Or. 168
• Parties: W.S. MAXWELL CO. <I>v.</I> SOUTHERN OREGON GAS CORPORATION
• Court: Oregon Supreme Court

158 Or. 168

74 P.2d 594

75 P.2d 9

114 A.L.R. 697

W.S. MAXWELL CO.v.

SOUTHERN OREGON GAS CORPORATION

Supreme Court of Oregon.

Argued November 10, 1937.

Reversed December 21, 1937.

Rehearing denied January 18, 1938.

Automobiles — Warranty of title — Evidence

1. Where, in action for breach of warranty of title in sale of automobile, issue existed as to whether plaintiff purchased automobile from defendant or merely acted as defendant's agent in finding buyer, failure to comply with statutory method of transferring title was evidence against but was not conclusive against plaintiff's theory that plaintiff purchased the automobile.

Automobiles — Title

2. The statutory method of transferring title to motor vehicles is not exclusive.

Automobiles — Transfer of title

3. A person makes himself subject to a penalty by failing to comply with statutory method of transferring title to motor vehicles, and where rights of third parties, who rely on the record title, intervene, an attempted sale may be voided.

Automobiles — Warranty of title

4. In action for breach of warranty of title in sale of automobile, whether plaintiff purchased automobile from defendant or merely acted as agent in finding buyer for defendant was for jury, notwithstanding statutory method of transferring title was not complied with.

Sales — Breach of warranty

5. The statutory requirement of notice which must be given by buyer charging breach of warranty is imposed as a condition precedent to the right to recover, and the giving of notice must be pleaded and proved by party seeking to recover for such breach.

Sales — Breach of warranty

6. Statute requiring buyer to give notice to seller of breach of warranty within reasonable time after buyer knows or ought to know of such breach does not apply to case of breach of warranty of title.

Sales — Title

7. Failure of buyer to give seller notice of breach of warranty of title did not preclude recovery for such breach.

Sales — Warranty

8. Statutory provision that an express warranty or condition does not negative a warranty or condition implied under Sales Act unless inconsistent therewith has no application where question is one of warranty of title.

Sales — Warranty of title

9. Where automobile dealer brought action for breach of warranty of title on theory that dealer purchased automobile from defendant, resold automobile, and had been compelled to refund purchase price to buyer, whether there was an implied warranty of title on part of dealer notwithstanding indorsement and transfer of paper title by defendant to buyer was for jury.

Sales — Warranty of title

10. Where automobile dealer brought action for breach of warranty of title on theory that dealer purchased automobile from defendant, resold automobile and was compelled to refund purchase price to buyer because of breach of warranty of title, evidence as to whether buyer's possession of automobile was interfered with by true owner was sufficient for jury.

Automobiles — Certificate of title

11. Secretary of state has authority to issue certificate of title to an automobile from another state, based on evidence contained in certificate of title issued by such other state.

Automobiles — Title — Evidence

12. On question of title to an automobile, court could attach evidentiary value to certificate of title to automobile issued by another state.

ON PETITION FOR REHEARING

Sales — Breach of warranty

13. Statute requiring buyer to give notice to seller of breach of warranty as a condition precedent to recovery therefor does not apply to a buyer's suit for breach of warranty of title.

Sales — Title

14. A buyer who is satisfied that his vendor's title is invalid and that the true owner may recover the property need not await legal action against him before surrendering the property, but may surrender it and recover his damages in an action against his vendor by affirmatively establishing that his vendor was without title.

                  Civil rights and liabilities as affected by failure to comply
                with regulations as to registration of automobile or motorcycle
                note, 87 A.L.R. 1469
                  See 24 R.C.L. 230 (7 Perm. Supp., 5432)
                  42 C.J. Motor Vehicles, § 305
                  55 C.J. Sales, § 757.
                

Department 2.

Appeal from Circuit Court, Josephine County.

H.D. NORTON, Judge.

Suit by the W.S. Maxwell Company against the Southern Oregon Gas Corporation. From an adverse judgment, plaintiff appeals.

REVERSED. REHEARING DENIED.

W.W. Balderree, of Grants Pass, for appellant.

Chas. W. Reames, of Medford, for respondent.

LUSK, J.

This is an action for a breach of warranty of title in the sale of an automobile. In a trial before a jury the court, at the conclusion of plaintiff's case, entered a judgment of involuntary nonsuit, from which this appeal is taken. The question for our determination is whether the plaintiff produced substantial evidence in support of the material averments of the complaint.

Those averments are, in substance, that on August 15, 1935, the defendant sold to the plaintiff a Chevrolet automobile for the sum of $550; that defendant warranted the title and plaintiff relying upon such warranty sold the automobile to one Clarence V. Bells, to whom, in turn, plaintiff warranted the title; that in fact the defendant never had title, by reason whereof Bells was subsequently compelled to deliver the car to the real owner and plaintiff was compelled to refund the purchase price to Bells.

The defendant denied that it sold the car to plaintiff. It contended on the trial that the sale was made by it to Bells; that plaintiff was a mere agent or intermediary in finding a purchaser, and, hence, that there was no warranty of title by the defendant to the plaintiff. The circuit court sustained this claim and on that ground rested its ruling. We shall first consider that question.

The record discloses that the plaintiff, W.S. Maxwell Company, a corporation, is a duly licensed dealer in automobiles under chapter 1 of title 55, Oregon Code 1930, and the amendments thereof. The defendant being in possession of the Chevrolet sedan in question, and being in the market for a new "Chevrolet pick-up", approached the sales manager of the plaintiff, Harold Prestle, and offered the sedan as a trade-in on a pick-up. Prestle testified: "We at that time found a prospective customer for this 1934 Chevrolet sedan and with the approval of the Southern Oregon Gas Corporation sold it to this prospective customer, Clarence V. Bells, a short time later — ten days or something — we delivered them a new pick-up and gave them credit for this car on this new pick-up." He further testified as follows:

"Q. What if anything was the purchase price paid the defendant, Southern Oregon Gas Corporation, for the car?

"A. $550. * * *

"Q. What was done by the plaintiff with reference to the car after it was purchased from the defendant?

"A. It was sold to Clarence V. Bells."

The witness identified, and there was received in evidence, an invoice dated August 15, 1935, covering a sale of the Chevrolet sedan by W.S. Maxwell Company to Clarence V. Bells for $550, plus the sum of $86.52, which was added to the purchase price for interest and insurance.

The provisions of section 55-203, Oregon Code Supplement 1935, were not complied with. By the terms of that section, upon the sale or transfer of a motor vehicle to a licensed dealer, the transferor is required to indorse the certificate of title to the vehicle, and the dealer is not required to present the registration card and the certificate of title to the secretary of state until such time as the motor vehicle has been sold by the licensed dealer. But it is provided that the dealer immediately shall notify the secretary of state that the motor vehicle has been transferred to him. It is further provided that upon the sale of the motor vehicle by the licensed dealer, the latter shall deliver to the transferee the assigned certificate of title received by him, which certificate of title shall be forwarded to the secretary of state, etc.

The defendant's certificate of title was not produced, but oral evidence was received which indicates that this certificate was held by the Grants Pass and Josephine Bank, which had a mortgage on the car, and that it was indorsed by the defendant and transferred by the bank directly to Bells. It is further inferable from the testimony that Bells paid to the plaintiff $150 of the purchase price by turning in a Durant sedan; that $34 was paid in a manner not explained, and that the balance of $452.52 was represented by a contract of conditional sale which ran to the bank, replacing the latter's mortgage. Thus, assuming the transaction to have been a sale by defendant to plaintiff, and thence by plaintiff to Bells, the provisions of the statute, which required that the certificate of title be transferred to plaintiff and that plaintiff notify the secretary of state and deliver to Bells the assigned certificate of title, were ignored.

1-3. But this failure to obey the law is not conclusive against plaintiff's theory: Thiering v. Gage, 132 Or. 92 (284 P. 832); Henry v. Condit, 152 Or. 348 (53 P. (2d) 722, 103 A.L.R. 131); Fagg v. Massachusetts Bonding and Insurance Company, 142 Or. 358 (19 P. (2d) 413). The result of these decisions is, that the legislature has not provided an exclusive method of transferring title to motor vehicles. A person makes himself subject to a penalty by failing to comply with these provisions, and where the rights of third parties, who rely on the record title, intervene, an attempted sale may be voided. But as Mr. Justice McBRIDE said in Thiering v. Gage, supra, at page 103:

"The purpose of all these provisions, among other objects, is to afford the purchaser clear evidence of his title, as the law provides that the certificate of title and registration receipt shall be prima facie evidence of ownership thereby implying that there may be other evidence either way to show...