Morris Plan Co. v. Pacific Finance Corp.

240 Cal. App. 2d 844, 50 Cal. Rptr. 136, 1966 Cal. App. LEXIS 1852
CourtCalifornia Court of Appeal
DecidedMarch 15, 1966
DocketCiv. No. 526
StatusPublished
Cited by1 cases

This text of 240 Cal. App. 2d 844 (Morris Plan Co. v. Pacific Finance Corp.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morris Plan Co. v. Pacific Finance Corp., 240 Cal. App. 2d 844, 50 Cal. Rptr. 136, 1966 Cal. App. LEXIS 1852 (Cal. Ct. App. 1966).

Opinion

BROWN (R. M.), J.

Plaintiff-respondent brought an action against defendant-appellant for the conversion of a 1960 Buick automobile. The defendant filed a cross-complaint to quiet title in itself to the automobile. Plaintiff had judgment in the sum of $4,109.98 on its complaint and judgment on the cross-complaint. The defendant appeals from the judgment and from an order denying its motion for a new trial. The order is nonappealable and the attempted appeal therefrom must be dismissed. (Singleton v. Perry, 45 Cal.2d 489, 500 [289 P.2d 794]; Ray v. Jackson, 219 Cal.App.2d 445, 457 [33 Cal.Rptr. 339].)

The controversy here involved arose by reason of the fact that both plaintiff and defendant innocently financed an automobile dealer with the same automobile as security.

During 1960 John S. Heaton, as a sole proprietor, operated a new ear dealership in Coalinga, California. The plaintiff, The Morris Plan Company of California, had previously provided financing to Heaton by discounting conditional sales contracts. The defendant, Pacific Finance Corporation, hereinafter referred to a,s Pacific, had floored automobiles for Heaton by trust receipt financing since 1959, and a statement of trust receipt financing had been filed with the Secretary of State on March 9, 1960.

On June 21, 1960, Heaton had in his possession an unregistered 1960 Buick Invicta which he had obtained from the Buick Motor Division without restriction as to its resale. [846]*846On that date he sold the car to his mother, Mary Heaton, on a conditional sales contract. On June 22, 1960, Heaton discounted the conditional sales contract to Morris Plan for $4,000, which company kept the contract. On June 24, 1960, Heaton arranged through John Steele, the Fresno branch manager for Pacific, to have two Buick automobiles (one of which was the 1960 Buick here involved) financed under the trust receipt method of financing. Steele contacted someone at the Buick factory and was under the impression that the Buick Company was holding both cars, although he was not sure whether the official with whom he spoke stated he was actually holding more than one ear at that time. Pursuant to arrangements made by Steele with the Buick factory, Pacific delivered its check to Buick and authorized that the cars be delivered to Heaton, requiring that the invoice be sent to Pacific. The invoice issued by Buick which described the same ear described in the conditional contract of sale, was dated June 22, 1960, and was stamped “paid” June 24, 1960. This invoice is designated a bill of sale and evidences a transfer of title to Heaton Buick-Pontiac Co., Coalinga, California. A dealer’s report of sale and application for registration of vehicle, dated August 1, 1960, was filed with the Department of Motor Vehicles, which issued a certificate of ownership dated August 18, 1960, showing Mary H. Heaton as registered owner and Morris Plan as legal owner. On June 27, 1960, Heaton executed a trust receipt to Pacific. About December 15, 1960, Mr. Steele, Pacific’s manager, called Mr. Arnold, Morris Plan’s manager, and discovered that the two financing entities had each financed the same automobile and Mr. Steele arranged to have the automobile repossessed by Pacific’s own action. Heaton was then in default in his payments to Pacific. After Pacific had repossessed the automobile and about January 12, 1961, the Department of Motor Vehicles issued a certificate of ownership showing Pacific as the registered owner of the automobile, which was subsequently cancelled. Payments had been made to Morris Plan pursuant to the contract prior to the repossession, with a balance of $4,109.98 remaining due. After the repossession Pacific resold the automobile and deposited the proceeds in court subject to a final judgment in this action. The trial judge determined that Morris Plan was entitled to judgment for the balance due on the conditional sales contract in the sum of $4,109.98.

On this appeal, Pacific raises three issues: (1) the trial court erred in determining that the conditional sales contract con[847]*847veyed good title to Morris Plan; (2) Morris Plan failed to perfect its alleged title as required by the provisions of the Vehicle Code; and (3) Morris Plan’s claim is based upon a forged document of title and is therefore void and the trial court’s determination in this respect “is contrary to the weight of the evidence on this point. ’ ’

The defendant first contends that on June 21, 1960, when Heaton sold the automobile to his mother, and on June 22, 1960, when the conditional sales contract was assigned to Morris Plan, neither the seller nor the purchaser had anv title to the automobile; and neither of them obtained any title whatsoever to the same until Pacific paid Buick Motor Company on June 24, 1960. It is argued that the law is clear that a seller or transferor of personal property under a conditional sales contract can pass no greater title than he had at the time of execution thereof (M. P. Hotter, Inc. v. Wilson, 8 Cal.2d 31, 34 [63 P.2d 818]) ; and the rule applies as against a third person who acquires his interest in a bona fide manner without knowledge of any reservation. (Crestline Mobile Homes Mfg. Co. v. Pacific Finance Corp., 54 Cal.2d 773, 777 [8 Cal. Rptr. 448. 356 P.2d 192]; General Hotors Acceptance Corp. v. Gilbert, 196 Cal.App.2d 732, 740 [17 Cal.Rptr. 35].) From this premise the defendant concludes that until the seller actually received title to the 1960 Buick, he could not lawfully transfer title to his mother nor to Morris Plan.

The true rule is that title to goods passes when the parties intend that it shall pass. In Schuch v. Northrup-Jones, Inc., 162 Cal.App.2d 279. 285 [328 P.2d 279], the court said: “In determining when title to goods passes to the buyer the actual intention of the parties must govern where it can be ascertained, and no statutory presumption as to passing of title can arise except in those cases where the parties’ intention is not manifest. (Goldberg v. Southwestern Metals Corp. (1949) 92 Cal.App.2d 819, 821 [208 P.2d 75].)”

Plaintiff points out that the only evidence before the court as to the intention of the parties was the testimony of Mr. Heaton that there were no restrictions on the sale of the Buick when it was delivered into his possession. His testimony is supported by the car invoice which shows that it was executed on June 22, 1960. the day the conditional sales contract was assigned to Morris Plan, and that the invoice was designated as a “bill of sale.” Section 1739 of the California Civil Code is applicable. That section provides : “Unless a different intention appears, the following are rules for ascertaining the [848]*848intention of the parties as to the time at which the property in the goods is to pass to the buyer.

“Rule 1. Where there is an unconditional contract to sell specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment, or the time of delivery, or both, be postponed.”

In Phillips v. Stark, 186 Cal. 369, at page 370 [199 P.

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Bluebook (online)
240 Cal. App. 2d 844, 50 Cal. Rptr. 136, 1966 Cal. App. LEXIS 1852, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morris-plan-co-v-pacific-finance-corp-calctapp-1966.