Richardson v. Bouthillier

• Decision Date: 05 December 1951
• Citation: 238 P.2d 212,193 Or. 354
• Parties: RICHARDSON v. BOUTHILLIER.
• Court: Oregon Supreme Court

Page 212

238 P.2d 212

193 Or. 354

RICHARDSON v. BOUTHILLIER.

Supreme Court of Oregon.

Dec. 5, 1951.

William J. Masters, Protland, argued the cause for appellant. On the briefs were Masters & Masters, of Portland.

T. B. Jensen, Portland, argued the cause for respondent. On the brief were Davis, Herbring, Jensen & Martin, of Portland.

Before BRAND, C. J., and LUSK, LATOURETTE, WARNER, and TOOZE, JJ.

WARNER, Justice.

This is an action in replevin brought by the plaintiff, Gordon Richardson, doing business as Richardson Motor Company, against the defendant, Frank Bouthillier, doing business as Bouthillier Motor Company. The plaintiff seeks recovery of a 1947 Chevrolet automobile, or its value, and damages for its detention. The defendant asserts title based on estoppel. After a trial without a jury, the court dismissed defendant's answer and entered judgment in favor of plaintiff. From this judgment the defendant appeals.

At the time of the transactions which gave rise to the present action, the plaintiff and defendant were engaged in the business of buying and selling used cars in Portland, Oregon. On August 3, 1948, Richardson sold the automobile in controversy to a person who falsely represented himself to be one Lloyd W. Wise, Jr., the payee on the bank draft hereinafter referred to. The purchaser's true name is unknown, but we will refer to him as 'Wise,' the name he adopted in all dealings relating to the automobile. Wise at that time negotiated for the purchase of the automobile at a price of $2,350, plus $1 for the certificate of title. He endorsed and gave Richardson a draft on a New York bank in the amount of $2,262.37. Richardson applied $2,000 of that amount as a down payment upon the purchase price of the car and at the same time gave Wise his personal check for $262.37, representing, as it did, the balance of the amount of the draft. Wise then signed a conditional sale contract for the balance due on the purchase price of the car in the amount of $476.88. This latter figure was made up of $350 due on the purchase price, $75 for insurance and $51.88 representing finance charges. Richardson thereupon delivered the car to Wise, together with a dopy of the executed conditional sale contract. The contract was on a form currently used by the Commercial Credit Corporation in its automobile financing. This purchase agreement carried an itemized recital of the several items involved in the transaction, including one reading: 'Cash on or Before Delivery $2000----.'

The following day Richardson, as the seller of the automobile, discounted the sale contract to the Commercial Credit Corporation (hereinafter called the 'Corporation') with his endorsement on the back of the seller's copy wherein he represented and warranted 'That the initial payment shown by the said contract has been actually received by the Undersigned [Richardson] in lawful money of the United States.' On August 16, 1948, the plaintiff delivered to the Corporation a certificate of title for the car endorsed by him in blank as the legal and registered owner. At that juncture, all of Richardson's interest in the sale, including title to the automobile sold to Wise, had passed from the plaintiff to the Corporation.

The very next day Wise drove the car to Bouthillier's place of business and exhibited to him his copy of the conditional sale contract and successfully negotiated with Bouthillier for the sale of the car to Bouthillier for $2,200. Wise, of course, not yet having acquired the legal title to the car, could not pass title thereto until the balance of the purchase price was paid; but being the owner of an ostensible valuable interest in the car which could ripen into title, as was attested by his possession of the chattel and his copy of the conditional sale contract, he was at liberty to deal with Bouthillier for a sale of that interest for a price, contingent, however, upon Bouthillier's advancing to the holder of the legal title an amount sufficient to fully pay the contract balance. This was precisely how the sale to Bouthillier was finally consummated. In so doing, it followed the usual and customary pattern of the automobile trade in deals of that character.

Bouthillier thereupon called the Portland office of the Corporation, confirmed the fact that it held the documents received from Richardson and ascertained the amount necessary to 'pay off' the contract and obtain legal title to the automobile. Finding that record in order and as represented by Wise, he and Wise on the same day went together to the offices of the Corporation where the following transactions were concurrently made: Bouthillier delivered his check for $476.88 to the Corporation and received evidence of full satisfaction of the purchaser's obligations under the contract; he then delivered to Wise his check for $1,723.12 upon receipt from Wise of a bill of sale and possession of the car. The Corporation at the time informed Bouthillier that it had received the certificate of title, that it had been sent to the Secretary of State's office for reissuance and that it would be delivered by the Corporation to him as soon as returned from that office.

Nothing is shown in the record to impugn Bouthillier's good faith in the transaction, nor does it appear that he failed to do anything which could have given him notice of any irregularity on the part of Wise.

It was not until October 7, 1948, that Richardson had his first positive information that he had been defrauded by the so-called Wise. It was then that Richardson's bank account was charged with the amount of the wise draft. That action was predicated upon the advice that the purchaser, whom we have been calling Wise, was not in fact Lloyd W. Wise, Jr., but had impersonated the true party of that name and forged his name as endorser to the draft. Two days later, Richardson made demand upon Bouthillier for the return of the automobile and, upon Bouthillier's refusal to accede, brought this action.

The question here is whether a defendant can successfully claim title by estoppel against a plaintiff who invested a third party with the indicia of valuable ownership in an automobile, when such third person in turn sells his interest in the automobile to an innocent purchaser for value before the plaintiff has discovered that the draft received as a down payment on the purchase price has been dishonored.

This answer, in our opinion, is determined by the doctrine of Plummer v. Kingsley, 190 Or. 378, 226 [193 Or. 359] P.2d 297, a case decided after judgment was entered in the instant case.

The rule in the Plummer case is: When an owner voluntarily clothes a fraudulent or criminal purchaser with indicia of title or ownership of a valuable interest in the thing sold and delivers to him the possession of the chattel, he will be estopped from asserting his title as against one who for value, in good faith and without notice purchases the chattel or the purchaser's valuable interest therein in reliance upon the apparent ownership of the one so entrusted with possession and such indicia. Plummer v. Kingsley, supra, 190 Or. at page 390, 226 P.2d 297; 46 Am.Jur., Sales, 644, § 478. The Plummer case rests upon the sound precept that when one of two innocent persons must suffer...