Stemmons, Inc. v. Universal CIT Credit Corporation

1956 OK 221, 301 P.2d 212, 1956 Okla. LEXIS 549
CourtSupreme Court of Oklahoma
DecidedJuly 10, 1956
Docket36861
StatusPublished
Cited by74 cases

This text of 1956 OK 221 (Stemmons, Inc. v. Universal CIT Credit Corporation) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stemmons, Inc. v. Universal CIT Credit Corporation, 1956 OK 221, 301 P.2d 212, 1956 Okla. LEXIS 549 (Okla. 1956).

Opinion

CORN, Justice.

The question presented for determination by this appeal evolved from the factual matters hereafter related, and as to which there is no dispute.

On December 15, 1953, F. A. McBee, doing business as McBee Motor Company, was an authorized Dodge-Plymouth automobile dealer in Greenfield, Missouri. Upon that date, and at all times hereafter referred to, Lester Hollis was a licensed used car dealer in Springfield, Missouri. At this same time Stemmons, Inc., was a licensed used car dealer in Tulsa, Oklahoma, and Cliff Wilson was a licensed used car dealer in Midwest City, Oklahoma. The plaintiff had loaned McBee $1,845.25, secured by a recorded “floor plan” chattel mortgage on a new Plymouth automobile which McBee was offering for sale.

On December 22, 1953, McBee sold this automobile to Hollis, receiving $1,500 cash and a 1949 Plymouth automobile, giving him a bill of sale and a signed, blank application for a Missouri certificate of title which showed the car had been purchased for resale only. Hollis applied for and received a certificate of title under his dealer’s permit. Thereafter Hollis sold this vehicle to Stemmons, Incorporated, which concern negotiated a sale to Cliff Wilson, who had possession when plaintiff brought this action.

Plaintiff sued Wilson to replevin this automobile, alleging the loan of money secured by a chattel mortgage thereon, the mortgagor’s default in the terms of the mortgage, the right of ownership and a special lien, and the right to immediate possession. Writ of replevin issued and *214 Wilson surrendered possession of the automobile.

Stemmons, Incorporated, then moved for leave to intervene and to be substituted as party defendant, claiming ownership and right of possession of this car. Having been granted leave to intervene defendant’s petition alleged purchase of the car from Hollis in the ordinary course of trade, and sale of same to Wilson who, upon replevin thereof, had called upon defendant for reimbursement under the warranty of title; that defendant had purchased this car in the ordinary course of trade from an authorized car dealer (Hollis Motor Co.) and for this reason defendant had taken title free of lien held by plaintiff. Defendant asked for damages for wrongful replevin, return of the vehicle or value thereof. Plaintiff replied to defendant’s answer and plea in intervention by general denial.

At the trial the parties stipulated $2,400 was the fair market value of the car. Certain matters were stipulated to at the trial and the evidence introduced was in the form of depositions of Lester Hollis, and his son who had assisted in the sale to defendant, together with exhibits disclosing the nature of the title transaction. By agreement the car was sold at public auction and the proceeds of the sale deposited with the court clerk, pending determination of this appeal.

After hearing the matter the trial court rendered judgment for plaintiff, upon the theory the ultimate purchaser was not protected from the lien granted the mortgagee by statute because the sale, under which the mortgagor surrendered possession of the mortgaged vehicle, was not a sale in the ordinary course of business.

At this point it should be noted that no questions relating to notice, consideration, or good faith are of concern herein. The trial court recognized this as a case of first impression in this jurisdiction, but stated that in his opinion it was such a case as the statute was designed to prevent. The appeal from the trial court’s judgment is based squarely upon the proposition that the court erred in holding that the sale (by which the mortgagor surrendered possession of the car to Hollis) was not a sale in the ordinary course of trade.

In 1947 the Legislature enacted certain new chattel mortgage statutes, dealing with the mortgage or pledge of stocks of goods, which statutes now appear as 46 O.S.19S1 §§ 91-94, inclusive. Section 91 provides, for the giving of a mortgage upon all, or a portion of a stock of goods. Sections 92 and 93 then provide:

“Sec. 92. Provisions for release— Sales in course of trade. — No such mortgage or pledge shall be deemed to be fraudulent or void as to creditors of the mortgagor or pledgor, because of any agreement between the parties thereto for the release from time to time of any of the goods from the lien thereof upon such terms as may be agreed upon, or permitting the mortgagor to sell the goods in the usual course of trade upon such terms and conditions as to the use and disposition of the proceeds of such sale as may be agreed upon; and the mortgagor in such event in case of any such sale shall promptly account and pay over to the mortgagee for application upon the debt secured all or such part of the proceeds of any such sale as may be required by such agreement to be paid to the mortgagee and shall be deemed and conclusively held to be the trustee of the funds received upon such sale to such extent for the benefit of the mortgagee. Laws 1947, p. 304, § 2.
“Sec. 93. Freedom from lien of goods sold. — All goods, wares, and merchandise sold in the ordinary course of trade shall be free of the lien of such mortgage or pledge in the hands of the purchaser thereof. Laws 1947, p. 304, § 3.”

In view of the trial court’s holding we are required to determine whether, in view of the language used, the Legislature intended to protect the mortgagee’s lien upon *215 the property, possession of which is retained by the mortgagor who offers same for sale, in all instances except where the mortgagor sells at retail.

The trial court’s attention was directed to decisions from other jurisdictions where this question has been considered. And, in their appeal briefs, the parties cite and rely upon what appears to be the latest decided cases upholding each party’s theory. Although not controlling, there are instances when the reasoning upon which a decision from another court is based may be of great assistance and particularly persuasive. To aid in consideration of this matter we deem it advisable at this point to consider the cases principally relied upon by the parties as sustaining their respective positions.

Plaintiff relies upon two decisions from the Ohio Court of Appeals, to-wit: Colonial Finance Co. v. McCrate, 60 Ohio App. 68, 19 N.E.2d 527, 531, and Associates Discount Corp. v. Main Street Motors, Inc., Ohio App., 113 N.E.2d 734. In the McCrate case the Ohio court pointed out that statutes of that state recognized a difference between a sale and purchase between two automobile dealers, and a sale by a dealer to a member of the buying public designated as “ ‘a general purchaser or user.’ ” Such distinction was that in the first instance no statutory new car bill of sale was required, whereas in the latter case there was the requirement that a statutory new car bill of sale be issued. Based upon this statutory distinction, the Ohio court construed the phrase “buying public” to mean members of the general public who were purchasers and users of cars; as distinguished from dealers in cars.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

IN RE THE MARRIAGE OF WALTERS
2025 OK CIV APP 3 (Court of Civil Appeals of Oklahoma, 2024)
SHELLEM v. GRUNEWELD
2023 OK 26 (Supreme Court of Oklahoma, 2023)
CHARLES SANDERS HOMES v. COOK & ASSOCIATES
2020 OK CIV APP 14 (Court of Civil Appeals of Oklahoma, 2020)
JOHNSON v. GEO GROUP, INC.
436 P.3d 759 (Court of Civil Appeals of Oklahoma, 2018)
Dobson Telephone Co. v. State ex rel. Oklahoma Corp. Commission
2017 OK CIV APP 16 (Court of Civil Appeals of Oklahoma, 2016)
CALYX ENERGY, LLC v. HALL
2015 OK CIV APP 1 (Court of Civil Appeals of Oklahoma, 2014)
MURRAY COUNTY v. HOMESALES, INC.
2014 OK 52 (Supreme Court of Oklahoma, 2014)
CARNEY v. DIRECTV GROUP, INC.
2014 OK CIV APP 4 (Court of Civil Appeals of Oklahoma, 2013)
Edmonds v. Karas
2013 OK CIV APP 65 (Court of Civil Appeals of Oklahoma, 2013)
Marriage of Plumlee v. Plumlee
2012 OK CIV APP 10 (Court of Civil Appeals of Oklahoma, 2011)
French v. State ex rel. Oklahoma Department of Corrections
2010 OK CIV APP 68 (Court of Civil Appeals of Oklahoma, 2010)
French v. STATE EX REL. DEPT. OF CORR.
2010 OK CIV APP 68 (Court of Civil Appeals of Oklahoma, 2010)
Wagoner County Rural Water District No. 2 v. Grand River Dam Authority
2010 OK CIV APP 95 (Court of Civil Appeals of Oklahoma, 2010)
Opinion No. (2009)
Oklahoma Attorney General Reports, 2009
Opinion No. (2008)
Oklahoma Attorney General Reports, 2008
Opinion No. (2007)
Oklahoma Attorney General Reports, 2007
Opinion No. (2004)
Oklahoma Attorney General Reports, 2004
Opinion No. (2001)
Oklahoma Attorney General Reports, 2001

Cite This Page — Counsel Stack

Bluebook (online)
1956 OK 221, 301 P.2d 212, 1956 Okla. LEXIS 549, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stemmons-inc-v-universal-cit-credit-corporation-okla-1956.