Van Hooser v. Banks

• Decision Date: 08 October 1991
• Docket Number: No. WD,WD
• Citation: 816 S.W.2d 25
• Parties: Allen and Sherry VAN HOOSER, Appellants, v. Ricky BANKS, et al, Respondents.
• Court: Missouri Court of Appeals

Page 25

816 S.W.2d 25

Allen and Sherry VAN HOOSER, Appellants, v. Ricky BANKS, et al, Respondents.

No. WD 44383.

Missouri Court of Appeals,

Western District.

Oct. 8, 1991.

James W. Jeans, Kansas City, for appellants.

Nicholas C. Vedros, Kansas City, for respondents.

Before LOWENSTEIN, P.J., and FENNER and HANNA, JJ.

HANNA, Judge.

Appellants/plaintiffs Van Hoosers filed a petition for declaratory judgment and replevin naming the purchaser of their automobile, Ricky Banks and the Department of Revenue, as defendants. The Citizens Bank was allowed to intervene. There was an agreement on the relevant facts and the matter was submitted to the court on cross motions for summary judgment. The appeal is from the court's judgment declaring the vehicle as the rightful property of Ricky Banks and recognizing the lien of the Citizens Bank as valid. Affirm.

The Van Hoosers are husband and wife who were co-owners of a 1985 BMW. Both of their names appear on the certificate of title. They delivered their vehicle to Plaza Auto Consignment (Plaza Auto) after being informed that Mr. Banks agreed to purchase it. Plaza Auto requested that the Van Hoosers sign the certificate of title in exchange for Plaza Auto's check to the Van Hoosers in the amount of $11,000.00. It was not a cashiers check. Only the husband signed the certificate of title before delivering the title to Plaza Auto. Mrs. Sherry Van Hooser did not sign. Plaza Auto was to hold the certificate of title until the $11,000 check was honored. At that time, by agreement with Plaza Auto, Mrs. Van Hooser would sign and the transaction would be complete.

The BMW was sold to Mr. Banks prior to the check clearing and he received the certificate of title with Mrs. Van Hoosers forged signature. The check from Plaza Auto to the Van Hoosers was not paid. Mr. Banks obtained financing to purchase the vehicle through respondent Citizens Bank who took a security interest. After the purchase, Mr. Banks made application to the Department of Revenue for title. All parties agree that Mr. Banks and the Citizens Bank transacted their business in good faith without any notice of the improprieties committed by Plaza Auto.

It is the Van Hoosers' position that § 301.210 RSMo (1986) requires that both title-holders sign the certificate of title and that any sale without the signature of one is void. Mrs. Van Hooser withheld her signature to insure payment. The Van Hoosers call for strict application of the statute. See Horton v. State Farm Fire & Casualty Co., 550 S.W.2d 806 (Mo.App.1977). State v. 1973 Fleetwood Mobile Home, 802 S.W.2d 582, 584 (Mo.App.1991).

On the other hand, respondents Mr. Banks and the Citizens Bank contend they purchased the vehicle and loaned money on it in good faith relying on a certificate of title that appeared proper in every respect. It is their position that the Van Hoosers should be estopped from claiming the benefit of § 301.210 because the Van Hoosers' act of delivering possession of the certificate of title and vehicle enabled the fraud to have been committed. See Pashalian v. Big-4 Chevrolet Co., 348 S.W.2d 628, 634 (Mo.App.1961).

Section 301.210 deals with the transfer of title of motor vehicles for which a certificate of ownership has been issued. Section 301.210.4 makes it unlawful for a person to sell a vehicle in this state without the assignment of the certificate of ownership being delivered to the buyer at the same time as the delivery of the motor vehicle. Failure to comply renders the sale fraudulent and void. ¹

Section 301.210 has been described as "absolute, mandatory and both rigidly and technically enforced." Bordman Invest. Co. v. Peoples Bank of Kansas City, 320 S.W.2d 72, 78 (Mo.App.1958). When the statute has not been complied with, the sale has been held void and both the seller and buyer declared as guilty of a misdemeanor. Id. See also Personal Finance Co. of Missouri v. Lewis Investment Co., 138 S.W.2d 655, 656 (Mo.App.1940).

The issue then becomes whether under these facts the equitable doctrine of estoppel should be invoked to prevent an owner/seller from taking advantage of the statute with the result that the ownership of the vehicle remains with the good faith purchaser.

It is a generally accepted principle of law that when the owner/seller of an automobile clothes another with the apparent ownership or authority to sell the chattel, the seller will be precluded from denying, that he had given such authority as against those who act in good faith on that apparent authority and acquire the property for a consideration. Wills v. Shepherd, 241 Mo.App. 102, 231 S.W.2d 843, 847 (1950); also see 31 C.J.S. Estoppel § 106 (1964); 7A Am.Jur.2d Automobiles and Highway Traffic, §§ 38-43 (1980) and Annotation, Auto-Title-Document-Ownership Indicia, 18 A.L.R. 830-848, §§ 6-11 (1951).

In the case of Seward v. Evrard, 240 Mo.App. 893, 222 S.W.2d 509 (1949) the plaintiff, was a second-hand automobile dealer who took a vehicle to an auction company that he operated and sold it to the highest bidder, a Fred Stokes, d/b/a Stokes Motor Co. of Little Rock, Arkansas. Seward knew that Arkansas was a non-title state which did not require the issuance of a certificate of title. Stokes delivered his draft payable to Seward drawn on Stokes Motor Co. through the People's National Bank of Little Rock, Arkansas. Seward delivered the automobile to Stokes, attached the certificate of title to Stokes' draft and delivered the draft and title to his bank to be forwarded to the Arkansas bank for collection. The Arkansas bank returned the certificate of title and the unpaid draft to Seward's bank and advised that they could not locate Stokes Motor Co. In the meantime, Stokes obtained a certificate of registration from Arkansas and sold the vehicle to Cross Town Motors, Inc. of St. Louis, Missouri and delivered a properly executed Arkansas certificate of registration. Cross Town subsequently sold the automobile to defendant, Evrard. Neither Cross Town nor Evrard had any knowledge of Seward's interest in the automobile. Seward filed an action in replevin against Evrard. The court applied the doctrine of equitable estoppel because Seward knew Stokes operated in a non-title state and knowing that fact he gave Stokes possession of the automobile. Seward did nothing to protect himself against nonpayment of the draft. The court stated:

"... and while he did not intend to pass title until it was paid, he carelessly placed Stokes in a position where he could and did secure an Arkansas title regular upon its face. Upon this state of facts it does not appear that he should now be heard to complain against an honest buyer...." Id. 222 S.W.2d at 513, 514.

The court also stated that Cross Town was under no duty to look beyond the apparently valid title the dealer presented at the time of the sale. Id. at 513. Seward was not entitled to replevin the automobile from Evrard.

The Big-4 Chevrolet Co., a new car dealer, was the party that allowed itself to be deceived in Pashalian, 348 S.W.2d 628 when it delivered a new 1958 Chevrolet Bel Air sedan to one Mr. Lesch who, in turn paid Big-4 from a checking...