Northern Ins. Co. of New York v. Miller

• Decision Date: 09 June 1964
• Docket Number: No. 51333,51333
• Parties: NORTHERN INSURANCE COMPANY OF NEW YORK, Appellee, v. Richard MILLER and Dorothy Miller, Appellants.
• Court: Iowa Supreme Court

Page 28

129 N.W.2d 28

256 Iowa 764

NORTHERN INSURANCE COMPANY OF NEW YORK, Appellee, v. Richard MILLER and Dorothy Miller, Appellants.

No. 51333.

Supreme Court of Iowa.

June 9, 1964.

William T. Evans, Davenport, for appellants.

McDonald, McDonald & Carlin, Davenport, for appellee.

PETERSON, Justice.

This is a replevin action. Plaintiff sued for possession of one 1962 Buick automobile on the basis of an Illinois title certificate issued to plaintiff's assignor. Defendants alleged ownership and right of possession through an Iowa title certificate, after they had purchased the car for cash from a thief at Clinton, Iowa. The case was tried to the court on an agreed stipulation of facts. Trial court decided for plaintiff. Defendants appeal.

I. The 1962 Buick automobile involved in this case was assembled at the Buick plant in Flint, Michigan, and on November 24, 1961, was shipped to Northwest Buick Company at Chicago. On December 8, 1961, the automobile was sold to Donald Gaertner of Chicago. Gaertner was issued an Illinois motor vehicle certificate of title.

Sometime prior to December 19, 1961, the car was stolen. It was stolen by a member of a cer theft ring in Chicago. By use of the serial number and other identifying information, the car was registered at the auto license department at Birmingham, Alabama. It was registered under the fictitious name of Walter R. Jackson of Birmingham.

On March 5, 1962, the car was registered on the basis of the Alabama registration at the office of the Douglas County Treasurer, Omaha, Nebraska, under the name of William Allen. A Nebraska certificate of title was issued to him.

On June 9, 1962, the Nebraska title certificate was presented to the County Treasurer at Clinton, and the treasurer's office issued an Iowa title certificate to the automobile in the name of William Allen. The name William Allen was fictitious, the real name of the man having possession of the car and securing the certificate at Clinton, was John James Eddy. He is now serving a sentence in the Illinois State Penitentiary at Joliet, Illinois. He was convicted on a burglary charge which, however, was unrelated to the present case.

After Allen secured the Iowa title certificate he inserted a classified advertisement in a Davenport, Iowa, newspaper, offering the automobile for sale and inviting replies by letter to a box number. Defendants were among those who replied by letter. It was displayed to defendants by the so-called William Allen who gave his address at that time as Clinton, Iowa.

On June 23, 1962, defendants purchased the automobile from Allen for $2,500 cash and received an assignment of the Iowa title certificate previously issued by the Clinton County Treasurer. On the same date defendants were issued an Iowa title to said automobile at Davenport by the Scott County Treasurer.

The Iowa title assigned to defendants was in all respects regular on its face and defendants relied on its validity in purchasing said automobile. Defendants had no notice that said automobile had been stolen and were innocent purchasers. The serial number of said automobile had not been altered. Defendants had possession of the automobile when this action was commenced.

At the time of the theft of the car plaintiff had insured same against theft. In May, 1962, plaintiff paid Gaertner $3,572.16 in settlement of his claim for theft of the automobile, and on May 23, 1962, received Gaertner's assignment of his Illinois title certificate.

October 4, 1962, plaintiff filed its replevin action in the Scott County District Court basing its claim as to right of possession on its assignment of the Illinois title certificate from Gaertner. In their answer defendants asserted their right of possession on the basis of their Iowa title certificate.

II. Appellants alleged the court committed two errors in connection with its decision. 1. In holding that Section 321.45 (2), Code of Iowa 1960, I.C.A., does not by its terms have any application to the case at bar. 2. In finding that the certificate of title issued by the treasurer of Scott County, Iowa, to defendants had no value and effect.

In other words there are two legal questions to be considered by this court. a. Does Section 321.45(2) have any application to the case at bar? b. Can defendants acquire any right of ownership or possession through purchase of the Buick automobile from a thief?

III. The trial court held it was doubtful if Section 321.45(2) applies in this case at all, since that section provides that no title shall be obtained from the owner except in the way set out therein. The pertinent part of paragraph 2 of said section is as follows: '2. Except as provided in section 321.50 and except for the purpose of section 321.493 no person shall acquire any right, title, claim or interest in or to any vehicle subject to registration under this chapter from the owner thereof except by virtue of a certificate of title issued or assigned to him for such vehicle or * * *' (Emphasis ours)

While the trial court expresses doubt as to whether or not said section is applicable, we hold same is not applicable. Defendants received an Iowa certificate from a man who was not the owner of the car. He was a member of a Chicago car thief ring and as a thief no right of ownership lodged in him. We will consider this feature of the case in our next division.

Defendants base their position as to ownership and right of possession of the Buick car upon two recent decisions rendered by this court. Varvaris v. Varvaris, Iowa, 124 N.W.2d 163, 165; Calhoun v. Farm Bureau Mutual Ins. Co., Iowa, 125 N.W.2d 123.

The two decisions do not sustain defendants' ownership of or right to possession of the Buick automobile. In the Varvaris case the estate of Steve Christ Varvaris was the owner of two Buick automobiles. They were registered in Linn County, Iowa, treasurer's office in the name of decedent and the estate held Iowa certificates as to such registration and ownership. Appellant was the widow of decedent and claims the right to the automobiles by virtue of a gift inter vivos. The trial court held in favor of the estate and we affirmed. In the opinion we stated: 'Here the decedent could have transferred his right to and dominion over the two automobiles only by an assignment of the title certificate. The evidence is undisputed that no such assignment was made * * * We hold that under the provisions of Code Section 321.45(2), I.C.A. a gift of the automobiles to the defendant could not be made without an assignment of the title certificates.'

In the Calhoun case, Harry L. Calhoun sued Farm Bureau Mutual Ins. Co., on a collision policy issued by defendant on a 1958 Pontiac automobile. In November 1960 plaintiff and a friend by the name of Rick Hudson traded automobiles. They took possession of each other's automobile, but transfer of the certificate of title was to be postponed until Mr. Hudson completed a loan in January 1961. On December 10, 1960, while Hudson was driving the 1958 Pontiac it was wrecked and became a total loss.

The trial court found there had been a completed sale of the Pontiac prior to the collision, and therefore, plaintiff was not insured by defendant's policy for damages to a car not owned by him. The trial court ruled the statute, Code Section 321.45, I.C.A., requiring a certificate of title to an automobile has no reference to a private transfer of title between buyer and seller. It dismissed plaintiff's petition.

Plaintiff contends the certificate of title to an automobile is conclusive evidence of ownership with exceptions as to damages and liens. He contends but for the exceptions which are stated in the statute, title remains in the registered owner until he assigns the certificate of title. The exceptions had no application as to the case. An article in 1953 issue of Drake Law Review, Professor Hudson stated: 'By action of the 55th General Assembly, Iowa has joined the states with comprehensive motor vehicle certificate of title laws. This has been accomplished by amendments to specific sections of Chapter 321, Code of Iowa (1950). The net result is to give Iowa a certificate of title law substantially like those of Ohio and Nebraska. It is assumed that the purpose of the change from the existing registration system to a certificate of title law system was to prevent theft of motor vehicles. The explanation attached to H.F. 260, 55th General Assembly (a bill identical with S.F. 181), states that the bill is designed to benefit the motor vehicld owner. * * *

'However, the essential feature of the system is that the certificate of title issued for each motor vehicle and other vehicles subject to registration will be part of a chain of title, as certificates are assigned and new certificates issued. It is designed to show ownership interests and incumbrances on the title certificate.'

We reversed the case holding as follows: 'We conclude plaintiff as title holder remained the owner of the 1958 Pontiac and entitled to recover under the 'collision clause' of his policy. To hold otherwise would nullify the statute.'

We cannot reverse the case at bar on defendants' contention as to said statutory section and the two decisions of this court.

IV. As heretofore shown in Division I, Mr. John James Eddy using the fictitious name of William Allen had secured the Buick automobile involved in the instant case by theft.

Under the common law a thief could not become the owner of any article stolen by him. This court in joining with many decisions in other states held this to be true in the early Iowa case (1891) of Baehr v. Clark, 83 Iowa 313, 49 N.W. 840, 13 L.R.A. 717. Plaintiff was the owner of a jewelry store in Omaha, Nebraska. One day a man by the name of J. J. Barker appeared in plaintiff's place of business and said he had a friend who desired to make purchase of a diamond ring and stud. The price of the diamonds was fixed at $450.00. Mr....