Southern Finance Co. v. Mercantile Discount Corp., 11702.
| Decision Date | 27 October 1923 |
| Docket Number | No. 11702.,11702. |
| Citation | 141 N.E. 250,80 Ind.App. 436 |
| Parties | SOUTHERN FINANCE CO. v. MERCANTILE DISCOUNT CORPORATION. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
Appeal from Superior Court, Vanderburg County; Edgar Durre, Judge.
Action by the Mercantile Discount Corporation against the Southern Finance Company. From a judgment for plaintiff, defendant appeals. Reversed, with instructions to grant a new trial.
Mitchell & Reeves, of Evansville, for appellant.
Bingham & Bingham, of Indianapolis, for appellee.
This is an action by appellee against appellant to recover damages by reason of an alleged conversion of an automobile. After issues were joined, the cause was submitted to the court for trial resulting in a judgment in favor of appellee for $757.80. Appellant filed a motion for a new trial, which was overruled, and this action of the court is made the basis of this appeal.
[1] The only reasons for a new trial which we find it necessary to consider are that the decision of the court is not sustained by the evidence and is contrary to law. The material facts, as shown by the undisputed evidence and the disputed evidence most favorable to appellee, are substantially as follows: Appellee is a corporation, engaged in buying and selling automobiles and commercial paper, with its principal office at Indianapolis, Ind. Appellant is a finance corporation, located at Evansville, Ind. On March 18, 1920, one Peter H. Overbay was the owner of a Liberty automobile, of the value of $1,800, which he had purchased a few days before of the Dunbar Motor Car Company. On that date he parked the same in the street in front of appellee's place of business in Indianapolis, and while it was so located he executed a bill of sale therefor to appellee, which recited a consideration of $1,259, and also executed to it a promissory note for $1,259, containing a conditional sale contract for the same automobile, which provided, among other things, that it should remain the property of appellee until the note was fully paid. Both of said instruments were executed at substantially the same time, pursuant to an agreement, then existing between the parties, that appellee would resell the automobile to said Overbay in the manner described. Appellee at the time gave said Overbay its check for $1,200, but did not take physical possession of the automobile at any time. After the transaction stated, Overbay drove the car away. On the date mentioned, Overbay was engaged in the automobile business in Vincennes, Ind., and had previously arranged with appellee to advance his firm 80 per cent. of the wholesale price of cars on their floor. The execution of said instruments was not acknowledged before any officer, and they were not recorded. On June 30, 1921, said Overbay executed his promissory note to the firm of Overbay & Overbay for the sum of $1,282.55, and, to secure the same, executed to said firm a chattel mortgage on said automobile. The execution of said mortgage was properly acknowledged, and the same was duly recorded within 10 days thereafter. On the same day said note and mortgage were duly assigned to appellant. In addition to the foregoing facts, we may assume that appellant has converted the automobile to its own use, as charged in the complaint, since it has not challenged the court's finding in that regard.
[2][3] From a consideration of the facts stated it is obvious that, unless the instrument executed by Peter H. Overbay to appellee on March 18, 1920, purporting to be a conditional sale of contract, covering the automobile in question, is valid as such, the judgment in this action cannot be sustained. We recognize the law to be that, where the owner of personal property sells and delivers it to a purchaser, not for the purpose of consumption or resale, at an agreed price payable at a future day, upon the express condition that the title to such property shall remain in the vendor thereof until the purchase price is fully paid, a conditional contract of sale exists, which prevents the vendee of such property, prior to such payment, from selling or incumbering the property in such manner as to defeat the title of the original owner and vendor. Winchester, etc., Co. v. Carman (1886) 109 Ind. 31, 9 N. E. 707, 58 Am. Rep. 382;Cable Co. v. McElhoe (1914) 58 Ind. App. 637, 108 N. E. 790. But, before there can be a valid conditional sale contract, the one assuming to occupy the relation of owner and vendor must be such in fact, and the one assuming to occupy the relation of vendee of the owner must in truth acquire his title through the latter. Paper transfers of titles are of no consequence, where corresponding facts do not exist, nor will apparent momentary ownership, for the purpose of an instantaneous resale, suffice. Mere forms will not be allowed to overshadow the substance, and hence constructive sales and resales will be disregarded, if in fact only the relation of debtor and creditor exists. 11 C. J. 410 et seq.; 24 R. C. L. 446; Babcock Co. v. Williams, 75 Minn. 147, 77 N. W. 791;Williams v. Chadwick, 74 Conn. 252, 50 Atl. 720;Robinson v. Farrelly, 16 Ala. 472;Desloge & Rozier v. Ranger, 7 Mo. 327;Studebaker Bros. v. Mau, 13 Wyo. 358, 80 Pac. 151, 110 Am. St. Rep. 1001;Palmer v. Howard, 72 Cal. 293, 13 Pac. 858, 1 Am. St. Rep. 60; Schneider v. Daniel (1921; Ind. Sup.) 131 N. E. 816, 17 A. L. R. 1410;Payne v. Parker, 95 Miss. 375, 48 South. 835. As said by the court in the case last cited, involving facts very similar to the instant case, wherein the appellee there occupied the same position as the appellee here:
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