Kaplan v. Associates Discount Corp.

217 So. 2d 177, 253 La. 137, 1968 La. LEXIS 2544
Supreme Court of Louisiana·Decided December 16, 1968·No. No. 49131·Published·Cited by 4 cases

Opinion

HAMLIN, Justice:

We directed certiorari to the Court of Appeal, Third Circuit, in order that we might review its judgment which reversed the judgment of the trial court and remanded the matter for a determination of damages. Art. VII, Sec. 11, La.Const. of 1921; 206 So.2d 537; 251 La. 1057, 208 So. 2d 326.

The question presented for our determination is whether plaintiffs, who were [139]*139owners of the herein involved motor' vehicle under an imperfect title, are entitled to damages from defendant which had the said vehicle seized under executory process and sold at Sheriffs Sale to satisfy the unpaid portion of a chattel mortgage. The issue is that of superiority of rights.

The Court of Appeal correctly summarized the facts as follows :

“Edward (Hess) Curry was the owner of a 1962 Cadillac. He mortgaged that Cadillac in favor of Commercial Securities Company [á Certificate of Title from the State of Louisiana Department of Revenue —Motor Vehicle Division — issued March 5, 1964, recites that there was a first mortgage on the vehicle in favor of Commercial Securities Co., dated November 19, 1963, in the amount of $3270.96] in 1963 and received a title certificate in March, 1964, showing that mortgage. On May 28, 1964, Curry executed a second chattel mortgage in favor of defendant, Associates Discount Corporation, to secure a debt in the sum of $2,260.10. [The trial judge found as a fact that there was a bearer note and mortgage in favor of Auto Merchandisers; the note and mortgage were assigned to Associates Discount Corporation.] In March, 1965, Curry satisfied the first mortgage held by Commercial Securities and had that mortgage erased from the title certificate. That same month Curry told defendant he had lost the original title, and so he applied for and received a ‘duplicate’ title certificate from the Motor Vehicle Division in Baton Rouge showing a clear title unencumbered by any mortgages. Later, on July 2, 1966, Curry, acting through the name ‘Auto Merchandizers,’ sold the Cadillac to Mr. Kaplan, a plaintiff here, and the price was paid a short time thereafter. [The record reflects that Kaplan made a down payment of $200.00 on July 6, 1966, and paid the full balance of $1,525.00 on the purchase price of said Cadillac by check to Auto Merchandisers on July 12, 1966.] Curry, however, did not deliver to Mr. Kaplan a title certificate on the Cadillac until sometime in August, and the certificate which was delivered was not transferred according to law.
“ * * * Curry * * * procured a duplicate title certificate, and then negotiated the original title to plaintiffs. Curry endorsed in blank the original title (which showed that the first mortgage was satisfied but did not show the second mortgage) and delivered that to plaintiffs in August, 1966. The endorsement was not complete and was not notarized and witnessed, as required by the Vehicle Certificate of Title Law (R.S. 32:701-32:734). In addition, plaintiffs failed to file an application for a certificate of title in their own name (or at least in Mr. Kaplan’s name) within five days after delivery of the vehicle, as required of him in R.S. 32:707. * * * it is not known on what date Associates Discount did in fact register its mortgage with [141]*141the Motor Vehicle Division. The duplicate title issued Curry in March, 1965, did not show defendant’s chattel mortgage.
“Curry defaulted on his payments to the defendant, and, therefore, on August 18, 1966, the defendant company executed on its chattel mortgage and had the Cadillac seized from the possession of plaintiffs and sold at a sheriff’s sale. Upon seizure of the automobile, the sheriff received from Baton Rouge a certificate, dated September 7, 1966, showing the defendant’s mortgage as the only encumbrance upon the title, and that Curry was the record owner of the car. [The date of the mortgage was recited as May 28, 1964; the amount was $2,660.10.] * * * this mortgage was never noted on the face of any certificate of title as required in R.S. 32:706 and 32 :- 710.”1

[143]*143The record reflects that in Suit No. 67,981 of the Docket of the Ninth Judicial District Court, Parish of Rapides, plaintiff Joseph H. Kaplan filed a petition for writ of sequestration, and an order for issuance of the writ as prayed for was signed on September 6, 1966. The record also reflects that John B. Honeycutt, Sheriff & Tax Collector of Rapides Parish, secured from the Motor Vehicle Division a certificate dated September 7, 1966, showing defendant’s mortgage in the amount of $2,-660.10 granted by Curry on May 28, 1964, for use in the case of Associates Discount Corporation vs. Edward H. Curry, Sr., the proceedings for executory process. On September 14, 1966, the Cadillac was sold by said Sheriff to Associates Discount Corporation for the sum of $900.00. After the filing of pleadings by Associates Discount Corporation, the writ of sequestration was dissolved on October 31, 1966, as having been wrongfully issued; Kaplan was ordered to pay Associates Discount Corporation $200.00 as damages for attorney’s fees. No appeal was taken by Kaplan, and by joint motion filed November 16, 1966, Kaplan and Associates Discount Corporation prayed that the cash bond of $1,000.00 previously posted by Kaplan be withdrawn. The trial judge ordered the Clerk of Court to pay out $1,000.00 — $800.00 to Kaplan, and $200.00 to Associates Discount Corporation as damages for the wrongful issuance of the writ of sequestration, supra.

The present suit for damages was instituted on November 2, 1966. The Kaplans alleged that they had been permanently deprived of the possession of their 1962 Cadillac automobile and had suffered humiliation and embarrassment by the conduct of the defendant. Mr. Kaplan asked for damages in the sum of $5,750.00; Mrs. Kaplan prayed for $2,500.00.

The trial court dismissed plaintiffs’ suit; it found that at the time of the sale of said Cadillac by Curry to Joseph H. Kaplan, the chattel mortgage of Associates Discount Corporation was in full force and effect and legally enforceable by defendant, Associates Discount Corporation.2

[145]*145As stated supra, the Court of Appeal reversed the judgment of the trial court. It felt that plaintiffs’ rights should be protected, and that defendant’s redress must be sought from Curry, who to the Court appeared to be the real wrongdoer.3

Herein, defendant contends that whereas plaintiffs might have obtained ownership of said Cadillac by virtue of the sale to them by Curry, they did not obtain rights as to third parties until they complied with the Certificate of Title Law. It urges that because the object of this case is a motor vehicle, the dispute has to be resolved in the light of the motor vehicle registration laws.

Plaintiffs contend that the judgment of the Court of Appeal is correct and should be affirmed. They urge that this Court determine the amount of damages they allegedly suffered.

We find that the sale of the Cadillac from Curry (or Auto Merchandisers) to Joseph H. Kaplan was a completed sale and as between them was valid. However, the Kaplans did not acquire a perfect or marketable title to said automobile since they did not comply with the Certificate of Title Law, supra. See, Gooch v. Dick Bohn Ford, Inc., La.App., 140 So.2d 903.

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Kaplan v. Associates Discount Corp., 217 So. 2d 177, 253 La. 137, 1968 La. LEXIS 2544 (La. 1968).

217 So. 2d 177 (Kaplan v. Associates Discount Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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