Southeast First Natl Bank v. Security Peoples Trust Co.

480 F. Supp. 1345, 1979 U.S. Dist. LEXIS 8067
CourtDistrict Court, W.D. Pennsylvania
DecidedDecember 11, 1979
DocketCiv. A. No. 76-35 Erie
StatusPublished
Cited by2 cases

This text of 480 F. Supp. 1345 (Southeast First Natl Bank v. Security Peoples Trust Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southeast First Natl Bank v. Security Peoples Trust Co., 480 F. Supp. 1345, 1979 U.S. Dist. LEXIS 8067 (W.D. Pa. 1979).

Opinion

MEMORANDUM DENYING PLAINTIFF’S MOTION TO ALTER OR AMEND JUDGMENT AND FINDINGS OF FACT AND FOR ADDITIONAL FINDINGS

KNOX, District Judge.

On August 2, 1979, after more than a week of non-jury trial, this court at the conclusion of plaintiff’s case granted defendant’s motion for involuntary dismissal under Rule 41(b) and entered judgment in favor of defendant and against plaintiff. Other paragraphs of the order dismissed the remaining claims against other defendants and by defendant Security Peoples Trust Company (Security) against Ford Motor Company. No objections to these other orders were filed.

On August 8, 1979, plaintiff Southeast First National Bank of Miami (Southeast) filed the motion to amend judgment and for other relief which is presently before the court for disposition. Briefs were filed and oral argument held September 18, 1979.

At the time of granting Security’s motion for involuntary dismissal because of Southeast’s failure to make out a case entitling it to relief the court dictated its reasons at length upon the record. These reasons, including adoption of certain of Security’s Proposed Findings of fact were immediately transcribed and filed of record. The relevant portion thereof is incorporated herein and copied at length as Appendix A.1

The findings as modified by the court appear as Appendix B.

In the complaint in this case, there were two counts: (1) to replevy certain motor vehicles as to which plaintiff claimed title and right to possession and (2) to establish a constructive trust on the proceeds of sales of vehicles claimed by the plaintiff which had been sold by Security.

The Uniform Commercial Code is in effect in both the States of Pennsylvania and Florida where there is little if any difference as to the law. This case, however, was tried in a U.S. District Court sitting in Pennsylvania and we would ordinarily apply the law of Pennsylvania including its rules of conflicts except where it is shown that the law of another state is to the contrary. In this case, we find no appreciable difference between the law of Pennsylvania and the law of Florida and as a matter of fact find the Florida decisions cited in the Appendix to be in accord with the law of Pennsylvania.

Plaintiff, in its motion to amend judgment seems to rely upon the fact that in this motion for involuntary dismissal, the plaintiff having produced Florida titles and security interests covering these motor vehicles would be entitled to recover unless the defendant has produced security interests and titles which override those of plaintiff.

This is not the law. In Article 9-204 of the Uniform Commercial Code, it is provided that “[a] security interest cannot attach until there is agreement (subsection (3) of section 1-201) that it attach and value is given and the debtor has rights in the collateral.’’ Assume that the first two requirements are satisfied, the holding of this court is that the debtor had no rights in the collateral and that therefore the basis upon which the Florida security interests and titles were based must collapse.

It is the law in replevin that a plaintiff must recover on the strength of its own title and not the weakness of the defendants. See Blossom Products Corp. v. Natl Underwear Co., 325 Pa. 383, 191 A. 40 (1937); H. L. Braham & Co. v. Surrell, 115 Pa.Super. 365, 176 A. 64 (1935); Sork v. [1347]*1347Label, 133 Pa.Super. 169, 2 A.2d 521; Internat’l. Electronics Co. v. NST Metal Products Co., 370 Pa. 213, 88 A.2d 40 (1952).

In the instant case, we held at the time of granting the motion for involuntary dismissal that plaintiff’s titles and security interests were based on void titles issued without jurisdiction in Florida.

Regardless of this, the record shows that the plaintiff called for cross examination Mr. Manucci, Vice President of Security who testified to various matters including the security interests of Security and the terms of the security agreement held by Security were read into evidence. See NT 77-78, 104-110, 116, 117.

It further appears that the proceeds of cars sold by Security cannot be traced and therefore plaintiff has not established its basis for showing a constructive trust. See findings 42, 43, 44.

The record shows that Southeast knew Security had a floor plan interest in these cars and we find it was not a purchaser in the ordinary course as required by section 9-307(1) protecting ordinary consumers. It has been held that this language does not protect a financing institution as a buyer in ordinary course. See Associates Discount Co. v. Old Freeport Bank, 421 Pa. 609, 220 A.2d 621 (1966); Motherlode Bank v. GMAC, 46 Cal.App.3d 807, 120 Cal.Rptr. 429 (1975).

Upon reconsideration of the whole matter and consideration of the motion to amend judgment and other motions filed by plaintiff and after considering the briefs and arguments of counsel with respect thereto, the court concludes that the order of involuntary dismissal was properly entered.

An appropriate order will be entered.

APPENDIX A

(The following proceedings were held commencing at 1:45 p. m.)

THE COURT: Gentlemen, we have before us a case involving conflicting interests on a large number of motor vehicles which it appears were titled in both Pennsylvania and Florida and we have covered at least part of the evidence introduced so far by conflicting security interests by the plaintiff, the Southeast First National Bank of Miami, and Security-Peoples Trust Company of Erie, Pa. The evidence as produced in this case is a distressing, sordid tale of fraud and chicanery as a result of which certain people are going to have to suffer. It is disturbing to find conduct like this going on in the business world but, nevertheless, when we’re faced with a situation like this, it has to be decided.

The defendant has moved for an involuntary dismissal under Rule 41(b) on the grounds that upon the facts and the law the plaintiff has shown no right to relief and the Court after lengthy consideration of the matter and the authorities cited by counsel has concluded that the motion must be granted.

We start out with the proposition under Pennsylvania law which has been recognized by our Supreme Court for many years starting with the case of Majors v. Majors, 349 Pa. 334, 37 A.2d 528 and followed by the case of Speck Cadillac-Olds v. Goodwin, 373 Pa. 83, 95 A.2d 191 and Rice Street Motors v. Smith, 167 Pa.Super. 159, 74 A.2d 575 that a certificate of title to a motor vehicle is an indicia of title but does not establish ownership of the vehicle. It is not to establish the ownership of the vehicle but to show the name of the person with the right of possession under the law. It was further held in the Speck case that estoppel may be found where the original vendor will not be allowed to claim the vehicle because he has delivered possession and clothed the purchaser with the indicia of title.

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Related

Household Finance Corp. v. McFarland
47 Pa. D. & C.3d 180 (Mercer County Court of Common Pleas, 1987)
Security Peoples Trust Co. v. Ford Motor Co
639 F.2d 775 (Third Circuit, 1980)

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480 F. Supp. 1345, 1979 U.S. Dist. LEXIS 8067, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southeast-first-natl-bank-v-security-peoples-trust-co-pawd-1979.