Equitable Credit & Discount Co. v. Murray

Court of Appeals of Georgia

Equitable Credit & Discount Co. v. Murray

54 S.E.2d 650, 79 Ga. App. 795, 1949 Ga. App. LEXIS 748

CourtCourt of Appeals of Georgia

DecidedJuly 12, 1949

Docket32382.

StatusPublished

Cited by8 cases

This text of 54 S.E.2d 650 (Equitable Credit & Discount Co. v. Murray) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Equitable Credit & Discount Co. v. Murray, 54 S.E.2d 650, 79 Ga. App. 795, 1949 Ga. App. LEXIS 748 (Ga. Ct. App. 1949).

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MacIntyre, P. J.

The automobile which is the basis of the present suit is owned by the defendants unless their title is affected by the facts alleged in the petition. The theory of the petition is that, even though the original owners (the defendants) lost'possession of the automobile by the criminal or fraudulent acts of a third person (Johnson)—the giving of a forged check or the stopping of payment on the check—yet the defendants are estopped by their own acts and, or, their own negligence from asserting their title against the plaintiff, which is a bona fide purchaser for value and took the automobile without notice of any title or equity in the defendants. Under the allegations of the petition one of two innocent persons must suffer by the acts of the third person, Johnson, and the question at last is, where shall the loss fall? Code § 37-113, provides: “When one of two innocent persons must suffer by the act of a third person, he who put it in the power of the third person to inflict the injury shall bear the loss.” Justice Hines in Patterson Co. v. Peoples Loan &c. Co., 158 Ga. 503 (123 S. E. 704), stated: “In this State we have adopted the . . principle, that the true *799 owner will lose his title in favor of an innocent purchaser for value without notice, only where he ‘has given to another such evidence of the right of selling his goods as, according to the custom of trade or the common understanding of the world, usually accompanies the authority of disposal, or has given the external indicia of the right of disposing of his property.’ Civil Code (1910), § 4119 [Code, § 96-207].” The plaintiff invokes the principle that the defendants may be estopped to assert their title to the automobile against the plaintiff since the defendants clothed Johnson with all of the indicia of authority to sell the automobile. We recognize that this rule of estoppel does not apply where property has been stolen from the true owner in the ordinary theft case, for the true owner in such a case has not voluntarily or negligently parted with the possession of the property nor furnished the thief with all the indicia of disposing of or selling the property. It was not he who put it within the power of the thief (the third person) to inflict the injury upon the innocent purchaser, and he would not come within the rules stated in Code § 37-113 or § 96-207, so as to be estopped to assert his title. Where, however, in this case, the defendants, intending to sell the automobile, gave to Johnson an unconditional written bill of sale, accompanied with unrestricted and unqualified possession of the automobile to deal with and use as his own, a bona fide purchase from Johnson while in such possession divested the defendants of their title. The rights of such a bona fide purchaser do not depend upon the rights or actual authority of the third person with whom he deals, but are derived from the acts of the real owner, which preclude his disputing, as against such bona fide purchaser, the existence of any title or power of sale, which through his own lack of caution, negligence, or mistaken confidence, he caused or allowed to appear to be vested in the third person with whom the innocent purchaser dealt. Capital Automobile Co. v. Ward, 54 Ga. App. 873 (189 S. E. 713). Under the allegations of the petition, the defendants clothed Johnson with apparent full ownership of the automobile and gave to him the external indicia of the right of disposing of it. We do not think that the fact that Johnson gave the defendants a worthless check (forged or on which payment was stopped) would bring the present case within the qualification *800 of the rule of estoppel invoked, which would apply in the ordinary theft case. Here the defendants had voluntarily relinquished possession of the automobile to Johnson and had given him an unconditional bill of sale in writing covering the automobile. If the plaintiff relied upon these indicia of ownership when it made the purchase, it may properly invoke the rule of estoppel against the defendants notwithstanding whatever technical criminality or moral turpitude Johnson may have been guilty of in inducing the defendants to part with the automobile. See, in this connection, National Safe Deposit &c. Co. v. Hibbs, 229 U. S. 391 (33 Sup. Ct. 818, 57 L. ed. 1241). In such a case, we think that the principles which underlie an equitable estoppel should place the loss upon the defendants, who put it in the power of Johnson to inflict the injury, and should bar the defendants from contesting the ownership with the plaintiff, nothing more appearing.

Subdivisions b and c of headnote 1 require no further discussion than to say that the pleader here stated a cause of action in trover (White v. Dalton, 55 Ga. App. 768, 191 S. E. 386), and pleaded with particularity the facts relied upon and alleged every substantive fact which in law was necessary to the maintenance of a trover action and which, if proved, would authorize a recovery for the conversion of the automobile. Southern Railway Co. v. Liley, 75 Ga. App. 489, 493 (43 S. E. 2d, 576), and cit. The pleader was not required to denominate his action one of trover. Ibid.

Headnote 2 is self-explanatory.

For the foregoing reasons, the court erred in sustaining the general demurrers to counts 1 and 2 and in dismissing the petition, though it was not error to sustain the special demurrers to count 1, as pointed out in headnote 2.

Judgment reversed.

Gardner and Townsend, JJ., concur.

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MacIntyre, P. J.

The automobile which is the basis of the present suit is owned by the defendants unless their title is affected by the facts alleged in the petition. The theory of the petition is that, even though the original owners (the defendants) lost'possession of the automobile by the criminal or fraudulent acts of a third person (Johnson)—the giving of a forged check or the stopping of payment on the check—yet the defendants are estopped by their own acts and, or, their own negligence from asserting their title against the plaintiff, which is a bona fide purchaser for value and took the automobile without notice of any title or equity in the defendants. Under the allegations of the petition one of two innocent persons must suffer by the acts of the third person, Johnson, and the question at last is, where shall the loss fall? Code § 37-113, provides: “When one of two innocent persons must suffer by the act of a third person, he who put it in the power of the third person to inflict the injury shall bear the loss.” Justice Hines in Patterson Co. v. Peoples Loan &c. Co., 158 Ga. 503 (123 S. E. 704), stated: “In this State we have adopted the . . principle, that the true *799 owner will lose his title in favor of an innocent purchaser for value without notice, only where he ‘has given to another such evidence of the right of selling his goods as, according to the custom of trade or the common understanding of the world, usually accompanies the authority of disposal, or has given the external indicia of the right of disposing of his property.’ Civil Code (1910), § 4119 [Code, § 96-207].” The plaintiff invokes the principle that the defendants may be estopped to assert their title to the automobile against the plaintiff since the defendants clothed Johnson with all of the indicia of authority to sell the automobile. We recognize that this rule of estoppel does not apply where property has been stolen from the true owner in the ordinary theft case, for the true owner in such a case has not voluntarily or negligently parted with the possession of the property nor furnished the thief with all the indicia of disposing of or selling the property. It was not he who put it within the power of the thief (the third person) to inflict the injury upon the innocent purchaser, and he would not come within the rules stated in Code § 37-113 or § 96-207, so as to be estopped to assert his title. Where, however, in this case, the defendants, intending to sell the automobile, gave to Johnson an unconditional written bill of sale, accompanied with unrestricted and unqualified possession of the automobile to deal with and use as his own, a bona fide purchase from Johnson while in such possession divested the defendants of their title. The rights of such a bona fide purchaser do not depend upon the rights or actual authority of the third person with whom he deals, but are derived from the acts of the real owner, which preclude his disputing, as against such bona fide purchaser, the existence of any title or power of sale, which through his own lack of caution, negligence, or mistaken confidence, he caused or allowed to appear to be vested in the third person with whom the innocent purchaser dealt. Capital Automobile Co. v. Ward, 54 Ga. App. 873 (189 S. E. 713). Under the allegations of the petition, the defendants clothed Johnson with apparent full ownership of the automobile and gave to him the external indicia of the right of disposing of it. We do not think that the fact that Johnson gave the defendants a worthless check (forged or on which payment was stopped) would bring the present case within the qualification *800 of the rule of estoppel invoked, which would apply in the ordinary theft case. Here the defendants had voluntarily relinquished possession of the automobile to Johnson and had given him an unconditional bill of sale in writing covering the automobile. If the plaintiff relied upon these indicia of ownership when it made the purchase, it may properly invoke the rule of estoppel against the defendants notwithstanding whatever technical criminality or moral turpitude Johnson may have been guilty of in inducing the defendants to part with the automobile. See, in this connection, National Safe Deposit &c. Co. v. Hibbs, 229 U. S. 391 (33 Sup. Ct. 818, 57 L. ed. 1241). In such a case, we think that the principles which underlie an equitable estoppel should place the loss upon the defendants, who put it in the power of Johnson to inflict the injury, and should bar the defendants from contesting the ownership with the plaintiff, nothing more appearing.

Subdivisions b and c of headnote 1 require no further discussion than to say that the pleader here stated a cause of action in trover (White v. Dalton, 55 Ga. App. 768, 191 S. E. 386), and pleaded with particularity the facts relied upon and alleged every substantive fact which in law was necessary to the maintenance of a trover action and which, if proved, would authorize a recovery for the conversion of the automobile. Southern Railway Co. v. Liley, 75 Ga. App. 489, 493 (43 S. E. 2d, 576), and cit. The pleader was not required to denominate his action one of trover. Ibid.

Headnote 2 is self-explanatory.

For the foregoing reasons, the court erred in sustaining the general demurrers to counts 1 and 2 and in dismissing the petition, though it was not error to sustain the special demurrers to count 1, as pointed out in headnote 2.

Judgment reversed.

Gardner and Townsend, JJ., concur.

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54 S.E.2d 650, 79 Ga. App. 795, 1949 Ga. App. LEXIS 748, Counsel Stack Legal Research, https://law.counselstack.com/opinion/equitable-credit-discount-co-v-murray-gactapp-1949.

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