Williams v. Western Sur. Co.
| Decision Date | 05 January 1972 |
| Docket Number | ROBERTS--SPOKANE,No. 353--III,353--III |
| Court | Washington Court of Appeals |
| Parties | , 10 UCC Rep.Serv. 122 Duke F. WILLIAMS and Violet M. Williams, husband and wife, Respondents, v. WESTERN SURETY CO., a South Dakota corporation, Respondent, Power Loan Co., a Washington corporation, Appellant. SHERWOOD &, a corporation, Respondent, v. Duke F. WILLIAMS and Violet M. Williams, husband and wife, Respondents. |
Bernard J. Gallagher, Spokane, for appellant.
William D. Symmes, of Witherspoon, Kelley, Davenport & Toole, Spokane, for respondents.
In 1968 Mr. and Mrs. Duke Williams purchased a Crestline motor home from Ballou-Curtiss Motor Homes. They financed the purchase through a loan extended them by Sherwood & Roberts, Inc., who took a security agreement as collateral for the loan. At the time of purchase physical title to the mobile home was held by Power Loan Company, which had sold the mobile home to Ballou-Curtiss on consignment, pursuant to a flooring agreement between Power Loan and Ballou-Curtiss. When Ballou-Curtiss did not pay Power Loan for the mobile home sold to Mr. and Mrs. Williams, Power Loan refused to deliver title to the Williamses. Later, Power Loan repossessed the mobile home from the Williamses to protect what it claimed to be a security interest in the trailer, whereupon the Williamses refused to make payments on its loan with Sherwood & Roberts.
This state of affairs resulted in the following proceedings: Mr. and Mrs. Williams brought action against Western Surety Company to recover the purchase price of the mobile home. This action was based upon the statutory motor vehicle dealer's license bond furnished by Western Surety Company for Ballou-Curtiss. Thereafter, Western Surety Brought a third-party complaint against Power Loan, alleging Power Loan had wrongfully converted the mobile home. In the meantime, Sherwood & Roberts brought a separate action against the Williamses, seeking to attach any recovery realized by them in their action against Western Surety.
The two cases were consolidated for trial. At the conclusion of trial the court, in the case of Williams v. Western Surety, entered judgment for plaintiff Williams. In the case of Sherwood & Roberts v. Williams the court entered judgment for Sherwood & Roberts. No appeal is taken from these judgments. In the third-party action of Western Surety v. Power Loan the trial court entered judgment for Western Surety, and Power Loan appeals.
The first question presented by the numerous assigned errors is whether the conduct of Power Loan, in repossessing the mobile home, constitutes conversion in violation of the rights of Williams under RCW 62A.2--403(2) and RCW 62A.9--307(1); and if so, did this conduct entitle Western Surety to indemnity from Power Loan for the amount of the judgment the Williamses obtained against Western Surety. We answer in the affirmative.
When Power Loan, through its president, went to the trailer park where the mobile home was situated, displayed to the Williamses the certificate of title and bill of sale, asserted ownership of the mobile home and later repossessed the trailer under color of title and claim of right its actions were contrary to RCW 62A.2--403(2) which provides:
Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entrustor to a buyer in ordinary course of business.
Power Loan 'entrusted' the mobile home to Ballou-Curtiss by delivering it to them and acquiescing in its retention by them within the scope of the definition of the term in RCW 62A.2--403(3). 1 Ballou-Curtiss dealt in the business of selling mobile homes and trailers and held itself out to the public as having skill and knowledge of the mobile home business, and as such was a 'merchant' as defined in RCW 62A.2--104(1). 2 Finally, the Williamses were 'buyers in the ordinary course of business' as that term is defined in RCW 62A.1--201(9). 3 Thus, by virtue of RCW 62A.2--403(2), when Ballou-Curtiss sold and transferred the mobile home to Williamses, they did so free and clear of any security interest of Power Loan. Williamses were entitled to receive the certificate of title to the home from Power Loan, and Power Loan's refusal to deliver title, and later, repossession of the mobile home, constituted conversion. See 'Official Comments on Unifrom Commercial Code' to RCW 62A.2--403(2).
The second question presented by the remaining assigned errors is whether the refusal of Ballou-Curtiss to pay Power Loan for the mobile home following its sale to the Williamses, entitles Power Loan to recover its loss from Western Surety under the statutory motor vehicle dealer license bond furnished by Western Surety. We answer in the negative. RCW 46.70.070 sets forth the terms and conditions of recovery under a motor vehicle dealer license bond. It provides:
Before issuing a dealer license, the director shall require the applicant to file with said director a surety bond in the amount of ten thousand dollars for a motor vehicle dealer running to the state, and executed by a surety company authorized to do business in the state. Such bond shall be approved by the attorney general as to form and conditioned that the dealer shall conduct his business in conformity with the provisions of this chapter. Any retail purchaser who shall have suffered any loss or damage by reason of breach of warranty or by any act by a dealer which constitutes a violation of this chapter shall have the right to institute an action for recovery against such dealer and the surety upon such bond. Successive recoveries against said bond shall be permitted but the aggregate liability of the surety to all persons shall in no event exceed the amount of the bond. Upon exhaustion of the penalty of said bond or cancellation of the bond by the surety the director shall revoke the license of the dealer.
(Italics ours.)
This statute specifically limits recovery on such a bond to 'any retail purchaser.' See Home Indemnity Co. v. McClellan Motors, Inc., 77 Wash.2d 1, 459 P.2d 389 (1969). Since Power Loan was not a retail purchaser of the mobile home it is not entitled to recovery against the bond of Western Surety.
Power Loan contends, however, that its right to recover from...
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