People v. One 1953 Ford Victoria, Texas License No. EY 8613, Motor No. BPV 102617
| Citation | 311 P.2d 480,48 Cal.2d 595 |
| Court | United States State Supreme Court (California) |
| Decision Date | 24 May 1957 |
| Parties | PEOPLE of the State of California, Plaintiff and Appellant, v. ONE 1953 FORD VICTORIA, TEXAS LICENSE NO. EY 8613, MOTOR NO. BPV 102617, Defendant, Dean and Company, Claimant and Respondent. S. F. 19686. |
Edmund G. Brown, Atty. Gen., Clarence A. Linn, Asst. Atty. Gen., and Raymond M. Momboisse, Deputy Atty. Gen., for appellant.
Severson, Davis & Larson, James B. Werson and George Brunn, San Francisco, for respondent.
In this proceeding to forfeit an automobile for an unlawful transportation of narcotics (Health & Safety Code, §§ 11610-11629) the facts are undisputed.
On June 10, 1953, Willie Smith purchased the automobile from a dealer in Bexar County, Texas. Smith executed a note for the unpaid balance of the purchase price and gave the dealer a chattel mortgage on the automobile to secure payment. On the same day, the dealer assigned the note and mortgage to respondent, a Texas corporation engaged in the business of financing the sales of automobiles.
The mortgage prohibited the mortgagor from removing the automobile from Bexar County without the written consent of the mortgagee. In violation of this prohibition and without the knowledge of respondent, Smith brought the automobile to California.
On September 23, 1954, Smith used the automobile in California to transport marihuana, and the automobile was seized. Health & Safety Code, § 11611. On March 1, 1955, the attorney general filed a notice of seizure and intended forfeiture. Health & Safety Code, § 11612. Respondent answered, asserting its mortgage.
The hearing disclosed that Texas has no law providing for the forfeiture of automobiles used in the unlawful transportation of narcotics; that at the time respondent accepted the assignment of the note and mortgage it had no information that would place it on notice that the vehicle was to be used unlawfully; and that respondent made no investigation of Smith's moral responsibility, character, and reputation. See Health & Safety Code, § 11620, infra.
The trial court concluded '(t)hat the validity and effect of the lien of * * * (respondent) * * * is governed by the laws of the State of Texas, which do not require an investigation of the moral responsibility, character and reputation of the purchaser,' and entered judgment providing that the automobile be forfeited to the state of California subject to respondent's lien for the unpaid balance of the purchase price, $722.84. The People appeal from the part of the judgment recognizing respondent's lien. 1
The validity of respondent's mortgage is not in question. Admittedly the mortgage was valid in Texas, and it is valid here. Atha v. Bockius, 39 Cal.2d 635, 639, 248 P.2d 745. The People contend that despite the validity of the mortgage, respondent's interest in the automobile should be forfeited because respondent failed to investigate Smith's moral responsibility, character, and reputation.
Section 11610 of the Health and Safety Code provides: 'A vehicle used to unlawfully transport * * * any narcotic * * * shall be forfeited to the State.' Section 11620 provides: 'The claimant * * * may prove his * * * mortgage * * * to be bona fide and that his * * * interest was created after a reasonable investigation of the moral responsibility, character, and reputation of the purchaser, and without any knowledge that the vehicle was being, or was to be, used for the purpose charged * * *.' Section 11622 provides: 'In the event of such proof, the court shall order the vehicle released to the * * * innocent * * * mortgagee, * * * it being the intention of this section to forfeit only the * * * interest of the purchaser.' The statute makes it clear that it does not contemplate the forfeiture of the interest of an innocent mortgagee. People v. One 1941 Chevrolet Coupe, 37 Cal.2d 283, 302, 231 P.2d 832. To prove his innocence, however, a mortgagee whose interest arises out of a transaction in California must show not only that his mortgage is bona fide and that his interest was created without any knowledge that the vehicle was to be used unlawfully but also that he made the required 'reasonable investigation.' Respondent has proved that its mortgage is bona fide; that it was created in another state without any knowledge that the vehicle was to be used unlawfully or even that it was to be taken to California; and that the automobile was brought here in violation of an express contractual prohibition against removing the vehicle not only from Texas but from a specified county therein. The question is whether under these circumstances the 'reasonable investigation' required of a California mortgagee to avoid forfeiture of his interest applies to respondent.
By requiring a 'reasonable investigation' to avoid forfeiture of their interests in the event of prohibited use of automobiles, section 11620 in effect regulates the conduct of persons financing, and thereby facilitating, the sales thereof. People v. One 1940 Ford V-8 Coupe, 36 Cal.2d 471, 477, 224 P.2d 677; People v. One 1941 Chevrolet Coupe, supra, 37 Cal.2d at page 302, 231 P.2d 832; People v. One 1941 Cadillac Club Coupe, 63 Cal.App.2d 418, 421, 424, 147 P.2d 49. To avoid forfeiture such persons are required to investigate the moral responsibility, character, and reputation of prospective purchasers and mortgagors to diminish the possibility that automobiles will be placed in the hands of persons likely to use them to transport narcotics unlawfully. As applied to persons financing the sales of automobiles in California, a forfeiture for failure to make the required investigation is not unreasonable. Such persons may reasonably be expected to be familiar with California statutes regulating their activities and to make the 'reasonable investigation' necessary to protect their interests...
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