Pacific Finance Corp. v. Foust

SPENCE, J.

Plaintiff sought to quiet its title to 10 used automobiles. The cars had been delivered by defendants to a used car dealer for sale. The basic questions were whether said dealer was a factor in the transaction, and whether anestoppel operated in plaintiff’s favor. The trial court found for plaintiff on both issues. From the judgment accordingly entered, defendants appeal, contending in the main that the evidence does not sustain the findings. However, viewing the record in the light most favorable to plaintiff, and indulging every inference in its favor in determining whether there is substantial evidence in support of the challenged findings (4 Cal.Jur.2d § 606, p.

485; Crawford

v.

Southern Pac. Co.,

3 Cal.2d 427, 429 [45 P.2d 183];

Estate of Bristol,

23 Cal.2d 221, 223 [143 P.2d 689]), defendants cannot prevail.

Defendant Universal Motors, a copartnership composed of defendants Foust, Huffman, and Fulwiler, delivered the 10 used cars to a used car dealer, Lonnie’s Used Cars. The cars were to be placed on Lonnie’s lot and displayed for sale. It was agreed that when the cars were sold, Lonnie’s was to remit to Universal a certain amount for each car, and any sum in excess of that amount was Lonnie’s profit. When Lonnie’s took delivery of each ear, it signed a memorandum identifying the car by number and also providing, in part, as follows: “It is understood and agreed that the title of ownership does not pass to me (Lonnie’s) until the final cash payment is made.” This, however, was not the entire agreement. The trial court found that the agreement, partly oral and partly in writing, also included the understanding that Lonnie’s could sell the automobiles consigned to it in the regular course of business on credit pursuant to condi

[855]

tional sales contracts and could assign the contracts. Universal retained the certificates of ownership (the pink slips) on the 10 cars.

Lonnie’s sold the 10 cars but did not pay Universal for them, and finally became insolvent. Each car had been sold to an individual buyer on a conditional sales contract, naming Lonnie’s as seller. Lonnie’s then assigned the contracts to plaintiff, Pacific Finance Company, and the latter paid to Lonnie’s that part of the purchase price which the buyer had borrowed, less a time-price differential. At the same time, Lonnie’s executed a document called “In Lieu of Pink,” whereby Lonnie’s agreed to furnish the pink slip for each car, showing ownership in plaintiff, when issued by the Department of Motor Vehicles. It appears that this was customary practice in the used car business because it usually took three or three-and-one-half months to get pink slips through the department. Neither the individual buyers nor plaintiff, the finance company, then knew of Universal’s interest in the cars.