People v. One 1953 Mercury Four Door Sedan

California Court of Appeal Oct 13, 1959 No. Civ. 18634Published

Before: Tobriner

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Holding. The court held that a finance company's failure to conduct a specific investigation into a purchaser's moral responsibility, character, and reputation, as required by statute, precludes the protection of its lien in a vehicle forfeiture proceeding, regardless of the purchaser's actual moral record.

Issues

Whether a credit-only investigation satisfies the statutory requirement for a 'reasonable investigation' of a purchaser's moral responsibility, character, and reputation.

Disposition. reversed

Quotations verified verbatim against the opinion

“The only issue here involves the sufficiency of the evidence to support the finding that respondent, prior to acquiring its lien, conducted a reasonable investigation within the meaning of section 11620 of the Health and Safety Code.”

“A résumé of the cases shows, however, that the statute must be strictly observed, and that this court has no latitude in affording leniency.”

[436]

TOBRINER, J.

The state appeals from a judgment for respondent finance company in an action for forfeiture of an automobile pursuant to section 11610 of the Health and Safety Code. The trial court allowed respondent’s asserted conditional sales lien on the ground that the lien had been "created after a reasonable investigation” of the purchaser within the meaning of section 11620 of the Health and Safety Code. As we shall point out, we do not find that the evidence showed such compliance with the code as its literal provisions or the decisions under it require.

One Harris, the registered owner, purchased the vehicle involved and financed the transaction through respondent. Subsequently, the registered owner utilized the car while in possession of narcotics. As a result the police seized the car. Upon notification of the seizure and intended forfeiture proceedings, the registered owner defaulted, but the legal owner, respondent, answered and asserted its lien for $587.47.

The trial court found that respondent’s interest “was created after a reasonable investigation of the moral responsibility, character, and reputation of the purchaser and registered owner, Ira Lee Harris. ...” The court entered judgment, forfeiting the vehicle to the State, but allowed respondent’s lien. Since the lien exceeded the value of the vehicle, the court vested respondent with all interest in the car and ordered it delivered to the respondent.

The only issue here involves the sufficiency of the evidence to support the finding that respondent, prior to acquiring its lien, conducted a reasonable investigation within the meaning of section 11620 of the Health and Safety Code. This section provides that “ [t]he claimant of any right, title or interest in the vehicle may prove his lien, mortgage, or conditional sales contract to be bona fide and that his right, title, or interest was created after a reasonable investigation of the moral responsibility, character, and reputation of the purchaser. ...”

The evidence reveals that respondent’s sole investigation

[437]

People v. One 1953 Mercury Four Door Sedan

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TOBRINER, J.

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