Landrum v. Armbruster , 28 N.C. App. 250 ( 1976 )

220 S.E.2d 842 (1976) 28 N.C. App. 250

Michael A. LANDRUM
v.
Joe M. ARMBRUSTER and Import Motor Parts of Waynesville, Inc.

No. 7530DC605.

Court of Appeals of North Carolina.

January 7, 1976.

Brown, Ward & Haynes, P. A. by Woodrow H. Griffin, Waynesville, for plaintiff-appellant.

Uzzell & DuMont by Larry Leake, Asheville, for defendants-appellees.

PARKER, Judge.

The right of the parties will be determined by application of pertinent provisions of the Uniform Commercial Code. Plaintiff's answers to defendants' interrogatories establish that plaintiff delivered his racing vehicle in Illinois under a transaction of purchase, the consequences of which are governed by G.S. 25-2-403. Insofar as here pertinent, G.S. 25-2-403 provides as follows:

"Power to transfer; good faith purchase of goods; ``entrusting.' — (1) A purchaser of goods acquires all title which his transferor had or had power to transfer. . . . A person with voidable title has power to transfer a good title to a good faith purchaser for value. When goods have been delivered under a transaction of purchase the purchaser has such power even though

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(b) the delivery was in exchange for a check which is later dishonored, or

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(d) the delivery was procured through fraud punishable as larcenous under the criminal law."

Contrary to the law of this State as it may have been prior to enactment of G.S. 25-2-403, that statute now allows a person who has obtained delivery of goods under a transaction of purchase to transfer a good title to a "good faith purchaser for value" even though such person obtained delivery in exchange for a check which is later dishonored or procured the delivery through criminal fraud. Lane v. Honeycutt, 14 N.C. App. 436, 188 S.E.2d 604 (1972). Clearly, however, not every subsequent purchaser from such a person is in a position to terminate the original seller's reclamation rights. "To prevail the subsequent purchaser must prove (1) that he was a purchaser, (2) that he purchased in good faith, and (3) that he gave value." Nordstram, Sales, § 170, p. 515. The burden of proof rests upon the party making the later purchase.

The question presented by this appeal is the narrow one of whether the court was correct in making the crucial determination as to defendant Armbruster's status as a "good faith purchaser for value" by way of a summary judgment. We hold that it was not. As above noted, defendant Armbruster had the burden to prove his status as a "good faith purchaser for value." By statutory definition "good faith" in this context means "honesty in fact" in the transaction involved. G.S. 25-1-201(19). All of the facts and circumstances under which defendant acquired possession of plaintiff's vehicle from Ross Johnson are shown, at this stage of this proceeding, solely by defendant's own answers to interrogatories and by his own affidavit. This court has held, applying the principles of Cutts v. Casey, 278 N.C. 390, 180 S.E.2d 297 (1971), that summary judgment may not be granted in favor of the party having the burden of proof when his right to prevail depends upon the credibility of his witnesses. Shearin v. Indemnity Co., 27 N.C.App. 88, 218 S.E.2d 207 (1975). Because summary judgment was granted here in favor of the defendant on an issue as to which he had the burden of proof and because in so doing the court depended entirely upon defendant's credibility as a witness in his own behalf, we hold that summary judgment was not here proper. Plaintiff is entitled to have the issue determined by the trier of the facts after a trial in which credibility of all witnesses can be properly determined. Accordingly, the summary judgment for defendant is reversed and this case is remanded for trial.

Reversed and remanded.

MORRIS and MARTIN, JJ., concur.