Shammas v. Boyett

• Decision Date: 12 November 1952
• Citation: 249 P.2d 880,114 Cal.App.2d 139
• Court: California Court of Appeals Court of Appeals
• Parties: SHAMMAS v. BOYETT et al. Civ. 18878.

Page 880

249 P.2d 880

114 Cal.App.2d 139

SHAMMAS v. BOYETT et al.

Civ. 18878.

District Court of Appeal, Second District, Division 1, California.

Nov. 12, 1952.

Frank J. McCarthy, Los Angeles, for appellant.

Daniel W. Gage, Los Angeles, for respondent.

PATROSSO, Justice pro tem.

This is an appeal by plaintiff from a judgment entered in favor of the defendant R. A. Boyett, doing business as R. A. Boyett Automobile Finance, in an action wherein plaintiff sought to recover from the respondent and others the sum of $3,900. The defendants other than the respondent suffered their defaults to be entered and judgment thereon was entered against them, which has since become final.

The facts of the case as disclosed by the evidence with but little, if any, conflict are as follows: Appellant, who is engaged in the business of buying and selling used automobiles in the city of Los Angeles, on February 24, 1949, purchased a 1949 Cadillac automobile from the defendants Van Wyke and Harrison, co-partners, doing business as Auto Clearing House, and paid therefor the sum of $3,250 but with the understanding that upon the sale of the vehicle he would pay a further sum equal to the difference between $3,250 and $3,800 as well as one half of any excess, less expenses, above the latter amount. The parties undertook to evidence their agreement in this respect by the unusual means of having Auto Clearing House execute a 'lien note' in favor of appellant in the sum of $3,250, due March 24, 1949, and which recited that it was given 'as security' for the payment of the automobile here involved. The record is obscure as to whether or not this lien note was executed in duplicate but it is undisputed that either the note itself or a copy thereof bearing an endorsement upon the reverse side placed thereon by an employee of the appellant reading, '2-24-49 Flooring on 49 Cad Bal due on Sale of Car' was delivered by the appellant to Auto Clearing House. The other copy, if ever existent, was not produced by or accounted for by appellant.

The automobile in question bore a Michigan registration and was formerly owned by one Dostinick from whom it had been purchased by Auto Clearing House. Upon the payment of the sum of $3,250 by appellant to the latter, possession of the car was delivered to the appellant together with the registration certificate, certificate of title, verification of vehicle, a bill of sale executed by Dostinick in which the name of the vendee was left blank, and a bill of sale from Auto Clearing House to appellant. Thereafter on or about March 17, 1949, appellant negotiated a sale of the vehicle to defendant Perry, a used car dealer in San Diego, for the sum of $3,900. During the pendency of this transaction appellant was advised that Perry's purchase of the automobile was dependent upon the latter's ability to finance the same through the respondent who was engaged in the automobile financing business in the city of San Diego. Upon telephoning to respondent appellant was advised respondent would do so provided Perry would reduce the amount of financing to ninety per cent of the wholesale Bluebook value of the automobile. Being told by Perry that he could meet this condition, appellant procured from Perry the execution of a purchase order for the car together with a sight draft drawn upon the respondent in favor of appellant in the sum of $3,900 payable through Security Trust & Savings Bank of San Diego upon presentation of title and registration of the automobile, possession of which was thereupon delivered to Perry. The draft bearing the endorsement of appellant and to which were attached the title documents which appellant had obtained from Auto Clearing House with the exception of the bill of sale from the latter to appellant together with a bill of sale from appellant to Perry was deposited by appellant with the Security-First National Bank of Los Angeles, which in turn placed its endorsement thereon and forwarded the same to the Security Trust & Savings Bank of San Diego for payment.

Following the arrival of the documents in San Diego respondent called at the bank for the purpose of taking up the draft but upon examining the title papers accompanying it refused to accept the same, and instructed the San Diego bank to return the same to appellant's bank in Los Angeles in order that the necessary corrections in the documents might be made. The darft together with the accompanying papers were returned to Los Angeles on March 29th and the indicated corrections having been made therein, appellant telephoned to the respondent and asked if the draft would be paid if presented. In reply respondent stated that payment would be made if the papers were in order. Following this conversation appellant delivered the draft endorsed in blank together with the corrected title papers to one Hamilton, an employee of Auto Clearing House, with directions to present the same for payment to the respondent and bring the proceeds of the collection to appellant. Prior to the delivery of the documents to Hamilton, and apparently in contemplation thereof, appellant had a conversation with the defendant Van Wyke in which he requested that he be given 'some evidence of good faith' in permitting the draft and documents to be taken from his possession. Van Wyke thereupon stated to appellant that he would deliver a check to him upon receipt of the papers and that when the draft was paid, appellant could pay Auto Clearing House the difference due them and 'they would pick up their check.' Accordingly when the papers were delivered to Mr. Hamilton as previously stated the latter left with appellant what he took to be a bank check but which was in fact a draft drawn by Auto Clearing House upon itself in favor of the appellant in the sum of $3,315.68, and bearing on the face thereof the notation: 'Repay loan 48 Cad. 61 Sdnt.' While there was apparently no discussion as to who was to take the papers to San Diego, both appellant and Hamilton seemingly assumed that the latter would do so. Hamilton, however, delivered them to his employer, defendant Van Wyke, who in turn delivered them to his co-partner, Harrison, by whom they were taken to San Diego on the following day and presented to the respondent.

Upon examining the papers and finding them satisfactory respondent proceeded to draw a check for the amount of the draft in favor of the appellant and tendered the same to the defendant Harrison who refused to accept the same and requested a check made payable to himself. What transpired upon this occasion may best be made to appear by the testimony of the respondent--'When he (defendant Harrison) saw the check for Nick Shammas Auto Company he said to me, 'I can't use the check, it is necessary I cash this check to my order, I cash this check back to protect the check that we have given to Nick Shammas Auto Company for this automobile. I have to make my check good at the bank,' and he presented it in front of me, this lien note, as evidence that the automobile was their automobile and not Shammas's and further that the draft had been endorsed by Shammas and I was buying a negotiable paper, negotiable instrument, and I issued a check to A. E. Harrison for $3,900.' And again respondent testified with reference to his transaction with Harrison as follows: 'Well, about the substance of what he (Harrison) said exactly, not in the exact words, the effect of it was that the Auto Clearing House had bought the automobile in Fresno and that they didn't have enough money to cover their check and that they had to borrow money from Nick Shammas to cover their check and that they had sold the automobile, had sent Perry out to buy the automobile and that when the papers were so badly messed up they had to buy the papers back and they wanted to get the money in order that they could cover their check that they had given to Shammas.'

Following this respondent tore off his signature to the check which he had previously made payable to appellant and issued a new check payable to Harrison, who appropriated the money received thereon to his own use. It may also be added that upon presentation by appellant of the draft drawn by Auto Clearing House in his favor and which was delivered to him by Hamilton when he received the draft drawn upon respondent as previously related, the same was dishonored.

After finding the facts substantially as set forth above, the trial court concluded that the appellant was negligent in entrusting the draft and title documents to Hamilton;...