Pacific Finance Corp. v. Hendley

California Court of Appeal Jan 22, 1930 No. Docket No. 3792.Published

Before: Finch

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Holding. The court reversed the judgment because the evidence was insufficient to establish the elements of estoppel against the plaintiff, specifically failing to prove that the defendant partnership lacked notice of the plaintiff's reserved title.

Issues

Whether a conditional seller is estopped from asserting title against a mortgagee who took possession of the property from a retail dealer.
Whether the burden of proving all elements of estoppel, including lack of notice, rests upon the party asserting it.
Whether a mortgagee qualifies as a 'buyer' under Civil Code section 1142.

Disposition. reversed

Quotations verified verbatim against the opinion

“The burden rests upon the party asserting an estoppel to prove all the elements constituting it.”

“A necessary element of the estoppel attempted to be proved is that the defendant, at the time of the transaction with Hendley, was without notice or knowledge of the plaintiff’s title.”

FINCH, P. J.

In this action to recover possession of two automobiles they were delivered to the plaintiff before trial, pursuant to the provisions of sections 509 to 514 of the Code of Civil Procedure. Judgment was entered in favor of the defendant Valley Investment Company for the return of the property or the value thereof, found by the court to be $2,500. The plaintiff has appealed from the judgment.

At the time of the transactions described herein the defendant Hendley was a retail dealer in automobiles at

[337]

Woodland. He ordered a number of automobiles from the Pacific Nash Motor Company, including the two mentioned, and they were shipped by that company, which forwarded the bills of lading, together with sight drafts for the amount of the purchases, to the plaintiff, the motor company reserving title until the drafts were paid by the plaintiff. By these transactions the title to the automobiles was transferred from the Pacific Nash Motor Company to the plaintiff. (Civ. Code, sec. 2129b;

Mohr

First Nat. Bank,

69 Cal. App. 756 [232 Pac. 748] ;

Lawshe

Norfolk Southern R. Co.,

191 N. C. 473 [132 S. E. 160].) The plaintiff then sold the automobiles to Hendley on conditional sale contracts, reserving title until payment of the agreed prices. By the terms of these contracts Hendley agreed “not to sell, . . . lease, mortgage, hypothecate, or otherwise dispose of said personal property . . . during the life” of the contracts. The plaintiff knew, however, that Hendley “was in the business of retailing automobiles”; that those sold to him by the plaintiff were placed “on his floor and in his show room”; and that he purchased the automobiles for resale. After the automobiles had been kept on display for a few months by Hendley, he borrowed $3,000 from the Valley Investment Company, giving his promissory note therefor, and as security for the payment thereof he gave that company a bill of sale of three automobiles, including the two involved in this action, and also a trust receipt acknowledging that company’s ownership of the property, but there was no change of possession thereof. The bill of sale and trust receipt constituted a mortgage only.

Pacific Finance Corp. v. Hendley

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FINCH, P. J.

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THE COURT.

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