Richton Overland Co. v. McCormick Motor Car Co.

• Court: United States State Supreme Court of Mississippi
• Citation: 114 So. 387,148 Miss. 616
• Decision Date: 07 November 1927
• Docket Number: 26612
• Parties: RICHTON OVERLAND CO. v. MCCORMICK MOTOR CAR CO. [*]

114 So. 387

148 Miss. 616

RICHTON OVERLAND CO.
v.
MCCORMICK MOTOR CAR CO. ^[*]

No. 26612

Supreme Court of Mississippi

November 7, 1927

(Division A.)

SALES. Bona-fide purchaser from buyer on conditional sale, though parting with possession before notice, held liable to account to original seller for value of interest.

A bona-fide purchaser of a car from a buyer on conditional sale, though parting with possession thereof before receiving notice of [148 Miss. 617] the original seller's claim, is liable for the value of its interest in the machine.

Division A

APPEAL from circuit court of Perry county.

HON. R. S. HALL, Judge.

Action by the McCormick Motor Car Company against the Richton Overland Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Affirmed.

C. C. Smith, for appellant.

There is a question in this case that does not seem to have ever been decided by this court, which is vital to automobile dealers; namely, is a person liable for conversion who trade for an automobile, or any other property, in good faith, and without notice of a retained title note, and the property then is destroyed or gets beyond the reach of the holder of the note?

It is our contention that one cannot be liable. A retained title note is only a lien, the same as a chattel mortgage. This was so held in J. A. Broom & Sons v. S. S. Dale & Sons, 109 Miss. 52, 67 So. 659; and Bankston v. Hill, 98 So. 689, and is the law now in this state.

I will concede that if appellant had had notice of the retained title note and had gone ahead and traded for the car, then it would have been liable, but there was no notice and there was nothing in the transaction that would tend to put the appellant on notice. Gordon who had been put in possession of the car by the appellee denied that there was anything against the car when he was asked at the very time the car was traded for by appellant. Malone Motor Co. v. Green, 105 So. 897 (Ala.), seems to hold that notice is necessary.

A. R. Shoemaker, for appellee.

It is immaterial whether or not the Richton Overland Company knew that the McCormick Motor Car Company [148 Miss. 618] held and retained title to the car in question. Suffice it to say that the agreed statement of facts shows that the appellee at the time of the sale by Gordon to appellant not only held title under its conditional sales contract to the car, but it may be noted in addition that as the due date of the first note had then passed, appellee had also the right of immediate possession of the car.

Moreover, it may be reasonably asked if after all, appellant did or did not have at least constructive notice of appellee's lien and title, for according to the agreed statement of facts, the McCormick Motor Car Company and the Richton Overland Company were not only in the same town but situated only one block apart, and the McCormick Motor Car Company was a Ford dealer and the only Ford dealer in the town. And, aside from the record, the reasonable inference is that appellant must have known that the McCormick Motor Car Company was not only in the business of selling Ford cars, but of selling them on credit and retaining title thereto, as in the instant case. It is held in the Alabama case cited by appellant, Malone Motor Company v. Green, 105 So. 897, on this very point, that "the means of knowledge is the equivalent of knowledge, and whatever is sufficient to...