Ludwig v. Steger

THOMPSON (R. L.), J.

This is an appeal from a directed verdict in favor of the defendants, in a suit upon a promissory note given in payment for the purchase price of an automobile. The motor vehicle certificate was not transferred and it was held that the consideration for the note failed.

In March, 1927, W. B. Scott sold and delivered to defendants a used Hudson automobile for the sum of $600, in payment for which the defendants executed and delivered to the vendor their note for $572 and an old Buick automobile. The note was, dated April 2, 1927, and became due ninety days after its date. The note was assigned to plaintiff. The owner’s motor vehicle license was not signed by him or transferred to the defendants. Mr. Scott, however, testified that he had the “pink slip” at his home and forgot to transfer it, but that the defendants said they would stop and get it, but never did so. He said: “It has been an oversight ... I guess, never thought about the pink certificate I had up there at the house until they brought the case in.” After a colloquy between the court and counsel in which it was conceded that the certificate of ownership had never been signed, transferred or delivered to the purchasers, the court instructed the jury to return a verdict for defendants, which it accordingly did.

The appellant contends that a failure to transfer the motor vehicle certificate of ownership cannot be relied upon as a defense to a promissory note given in payment for the purchase of an automobile, and that the defendants were estopped from asserting the failure of consideration for

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the note because they omitted to call for or demand the transfer and delivery of the certificate.

Section 45 of the Motor Vehicle Act of California (Stats. 1925, p. 402), provides that upon the transfer of the title to an automobile, the owner must sign and deliver the certificate of ownership, which must be sent to the motor vehicle department for registration within ten days of the transfer, and that, “(e) Until said division shall have issued said new certificate of registration and certificate of ownership . . . delivery of such vehicle shall be deemed not to have been made and title thereto shall be deemed not to have passed and said intended transfer shall be deemed to be incomplete and not to be valid or effective for any purpose.”