Honnold v. Pacific Finance Corp. , 105 Cal. App. 152 ( 1930 )

On November 10, 1926, Walter L. Clapham, the legal owner of a Chrysler sedan, sold it to F.W. Stockdale under a conditional sales contract, which reserved the title in the seller, and provided, among other things, that should the buyer fail or neglect to comply with the terms of the contract, or fail to make the deferred payments according to the terms thereof, the seller might exercise his option of declaring the unpaid portion of the purchase price due and payable, and bring suit therefor, or might, without notice, declare the buyer's rights under the contract terminated and immediately repossess the car. The buyer defaulted in his payment falling due on February 10, 1927, and on all payments thereafter, leaving an unpaid balance of the purchase price due respondent in the sum of $1201.60, no part of which was paid by the buyer or his assignees. On November 24, 1926, Walter L. Clapham, for a valuable consideration, assigned the conditional sales contract to respondent, together with the legal title to the car. On March 3, 1927, Stockdale assigned his interest in the automobile to James Hollis. On May 2, 1927, both Stockdale and Hollis assigned their interests in the car to appellants, who were attorneys for Stockdale and who had notice of the conditional sales contract and the default in the payments. Hollis also had the same notice. On April 5, 1927, respondent took possession of the car and retained the same. Appellants did not have either actual or constructive possession of the car and did not receive the certificate of its registration. The other facts brought out at the trial are not necessary to a decision of this appeal.

Title 3 of the California Vehicle Act, in effect at the time of the transaction under consideration (Stats. 1923, p. 517, as amended; Stats. 1925, p. 402), provides for the registration of motor vehicles and the transfer of title thereof. It is therein provided that until the motor vehicle division has registered a change of ownership and issued a certificate of registration and a certificate of ownership to the owner, or legal owner entitled thereto, "the delivery of such vehicle shall be deemed not to have been made and the title thereto shall be deemed not to have been passed and said intended transfer shall be deemed to be incomplete and not to be valid or effective for any purpose."

The facts in the case of Samuels v. Barnet, 79 Cal.App. 529 [250 P. 504], are very similar to the one we are considering except that it arose under the Motor Vehicle Act of the state of California (Stats. 1919, p. 191). However, section 8 of the earlier act contained provisions identical in substance to the California Vehicle Act controlling here (General Motors Acceptance Corp. v. Dallas, 198 Cal. 365 [245 P. 184]). In the case of Samuels v. Barnet, supra, the following was said:

"The purported sale of the automobile to the appellant was effected while he and Bohlen occupied the fiduciary relation of attorney and client. From appellant's testimony in this case it appears that a judgment for over $1,100 had just been rendered against his client, that the car was valued at $2,073.65 and was taken by appellant for a debt of $1,000 claimed to be owing him from Bohlen. It also appears that Bohlen was without any other assets with which to satisfy the judgment against him. The purported sale, not having been accompanied by an `actual and continual change of possession,' was presumably fraudulent as to creditors of Bohlen (sec. 3440, Civ. Code), and the burden was on appellant to overcome this presumption. . . . The case is a simple one. The appellant bases his right of action on a purported transfer of a second-hand automobile wherein he failed to meet the requirements of the statute. The section quoted provides that unless these restrictions are followed the `intended transfer shall be deemed to be incomplete and not to be valid or effective for any purpose.' The legislature could scarcely have used words which would have been more expressive of the intention to declare that such transfers could not be effective for any purpose. Such being the case, the transfer could not be effective for the purpose of conferring upon appellant the right of possession necessary for the maintenance of this action."

The cases of Parke v. Franciscus, 194 Cal. 284 [228 P. 435], and General Motors Acceptance Corp. v. Dallas, supra, are to the same effect.

[1] Appellants brought this action to recover possession of the Chrysler sedan or the value thereof in case possession could not be had. It was incumbent upon them to prove their right of immediate possession of the car. This they failed to do under the provisions of section 3440 of the Civil Code and of the California Vehicle Act which we have cited. Therefore the judgment of the trial court in favor of respondent was correct and is hereby affirmed.

Barnard, Acting P.J., concurred.