Peper v. American Exchange Nat. Bank in St. Louis
| Decision Date | 16 September 1947 |
| Docket Number | 27199 |
| Citation | 205 S.W.2d 215 |
| Parties | PEPER v. AMERICAN EXCHANGE NAT. BANK IN ST. LOUIS et al |
| Court | Missouri Court of Appeals |
'Not to be reported in State Reports.'
Jesse E. Bishop, of St. Louis, for appellant.
Edward E. Rudolph, of St. Louis, for respondent.
Plaintiff brought this action in equity seeking to cancel a chattel mortgage on a Ford automobile, executed by defendant Duncan and to vest in her title to said automobile. Defendant Duncan made default, and defendant American Exchange National Bank filed an answer denying plaintiff's title to the automobile and a cross bill asking that its mortgage be declared a first lien on said automobile and requiring plaintiff to deliver possession of said automobile to said defendant. From a judgment in favor of the plaintiff, both on her cause of action and on the cross bill, defendant bank has appealed.
The automobile in question originally belonged to Robert Wherry, who, at the time of the transactions giving rise to this lawsuit, was in the armed forces, stationed overseas. He had given his father, Gilbert Wherry, a power of attorney, with authority to sell this automobile. Pursuant to this authority, Gilbert Wherry, on March 11, 1944, sold said car to Albert D. Duncan, a used car dealer. At the time of the sale Gilbert Wherry signed his son's name on the printed form of assignment on the back of the certificate of ownership, Duncan telling him that it was usual to typewrite the name of the purchaser in the assignment and that he would do so. The certificate of ownership and the automobile were then delivered to Duncan, who, in turn, gave Gilbert Wherry a check for the purchase price. This check was later deposited in Robert Wherry's bank account.
On March 14, 1944, plaintiff desiring to purchase an automobile, called at Duncan's place of business, and Duncan showed her the automobile in question. She and her daughter inspected the automobile and took it out on the street to try it out in operation, and being satisfied with it agreed with Duncan to purchase it at the price he asked, towit, $ 1,400, plus $ 28 sales tax. A LaSalle automobile was traded in as part of the purchase price at an allowance of $ 385, and the balance was paid to Duncan in cash. At the time the deal was closed, Duncan handed the certificate of ownership to plaintiff. It was in the same condition it was when received from Wherry by Duncan. At the time Duncan handed the certificate of ownership to plaintiff he said to her, 'Here is where you put your name and address,' and plaintiff replied that she did not have her glasses with her, and thereupon Duncan said to her, 'I will tell you what I will do, I will fix this title all up for you and you won't have to bother, I will send it to Jefferson City and have it transferred.' Plaintiff then handed back to Duncan the certificate of ownership for him to attend to the matter of securing the new certificate, and gave Duncan $ 3.50 to pay for the issuance of the new certificate of ownership and for the transfer of the license plates from the LaSalle automobile to this automobile. Plaintiff then took the Ford automobile into her possession, where it has been ever since said date.
Thereafter (the evidence does not show when), Duncan inserted, as the name of the assignee, in the printed form of assignment on the back of the certificate of ownership, the name 'Duncan Motors, A. D. Duncan, owner, 3800 Watson road, St. Louis, Missouri,' and on or about April 14, 1944, he used the certificate of ownership to obtain a loan from the appellant, giving the appellant possession of the certificate of ownership without any reassignment thereof, and executing a note, together with a chattel mortgage on the Ford automobile he had sold to plaintiff. This chattel mortgage was filed by appellant in the office of the Recorder of Deeds on April 14, 1944. Thereafter that note was paid, but the chattel mortgage has never been released of record.
On September 5, 1944, Duncan again obtained a loan from appellant of $ 863. Prior to this loan Duncan had borrowed money from the Mississippi Valley Trust Company and secured the same by chattel mortgage on the Ford car he had sold to plaintiff, and had deposited with the Trust Company the certificate of title without further reassignment on it. The purpose of this last loan by appellant was to pay five checks aggregating $ 863, the amount of the Trust Company's loan, which checks Duncan had given to the Trust Company and had been sent by it to appellant bank for collection, and such payment having been made the Trust Company delivered to appellant the certificate of ownership, which has never been reassigned to it, and which it still has. Before the Mississippi Valley Trust Company loan Duncan borrowed money from a finance company and secured the loan by chattel mortgage on the automobile he had sold plaintiff, and as further security delivered to it the certificate of ownership without further reassignment on it; however, both that loan and the Trust Company loan having been paid and the record of the chattel mortgages securing those loans having been released, they have no bearing on the issues other than to show the various peculations of Duncan.
When appellant made its loans to Duncan it did not see or ask to see the automobile; it did not know or ask who owned or had possession of the automobile, or what condition it was in or what it was worth.
It was not until on or about May 15, 1945, that plaintiff learned that the certificate of ownership had never been sent to the Commissioner of motor vehicles by Duncan for a new certificate in her name, but that defendant appellant had possession of it, and she thereupon caused demand to be made on appellant for the certificate, which demand was refused, and this suit followed.
Plaintiff's cause of action is in equity, and she pleads and relies on equity to sustain her claim of ownership of the automobile in question; and by equity both the lower court and this court on appeal should be guided, so long as we do not conflict with established law.
It is hornbook law that a person cannot mortgage property which he does not own so as to defeat the claim of the original owner, and the fact that the mortgagee acts in good faith will not avail as against the real owner. 10 Am.Jur. p. 734. This rule of law applies where the seller is a mere bailee or obtains possession through theft, robbery, or fraudulent purchase under circumstances involving no element of estoppel. Goddard Grocer Co. v. Freedman, Mo.App., 127 S.W.2d 759. If an owner loses his property, or it is pledged without his consent by one who has only a temporary right to use it, or a qualified possession of it, the owner can follow and reclaim it in possession of any person, however innocent. Metzger v. Columbia Terminals Co., 227 Mo.App. 135, 50 S.W.2d 680; Globe Securities Co. v. Gardner Motor Co., 337 Mo. 177, 85 S.W.2d 561; Schrader v. Westport Ave. Bank, 236 Mo.App. 362, 156 S.W.2d 753. And it is the duty of the mortgagee to see that the mortgagor has a good title to the property which he undertakes to mortgage. Goodman v. Nichols, 238 Mo.App. 802, 188 S.W.2d 666, 671. These cited cases are pronouncements of the fundamental law applying to the ownership of property and have been in vogue in our state from an early day.
The question involved in this case is whether under the facts as hereinabove set forth and in view of section 8382, R.S. Mo.1939, Mo.R.S.A., the fundamental principles so pronounced are to be adhered to.
The applicable parts of section 8352 are as follows:
'(a) Upon the transfer of ownership of any motor vehicle or trailer its certificate of registration and the right to use the number plates shall expire, * * *
'(c) It shall be unlawful for any person to operate in this state a motor vehicle or trailer registered under the provisions of the law unless a certificate of ownership shall have been issued as herein provided. In the event of a sale or transfer of ownership of a motor vehicle or trailer for which a certificate of ownership has been issued the holder of such certificate shall endorse on the same an assignment thereof, with warranty of title in form printed thereon, and prescribed by the commissioner, with a statement of all liens or encumbrances on said motor vehicle or trailer, and deliver the same to the buyer at the time of the delivery to him of said motor vehicle or trailer, * * *. It shall be unlawful for any person to buy or sell in this state any motor vehicle or trailer registered under the laws of this state, unless, at the time of the delivery thereof, there shall pass between the parties such certificate of ownership with an assignment thereof, as herein provided, and the sale of any motor vehicle or trailer registered under the laws of this state, without the assignment of such certificate of ownership, shall be fraudulent and void. In the case of dealers, a separate certificate of ownership, either of such dealer's immediate vendor, or of the dealer himself, shall be required in the case of each motor vehicle in his possession, and the commissioner shall determine the form in which application for such certificates of ownership and assignments shall be made, in case forms differing from those used for individuals are, in his judgment, reasonably required:' * * *
Now considering the facts in this case what do we find? Duncan an automobile dealer, had bought the car from Wherry; he had paid for it and taken possession of it, and at the time received from Wherry the certificate of title belonging to this car and no other car. The assignment on the back of the certificate, -- a form prepared by the commissioner of motor vehicles,...
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