King Homes, Inc. v. Bryson , 273 N.C. 84 ( 1968 )

159 S.E.2d 329 (1968) 273 N.C. 84

KING HOMES, INC.
v.
Jack BRYSON.

No. 30.

Supreme Court of North Carolina.

February 28, 1968.

S. Thomas Walton, Asheville, for plaintiff appellant.

Redden, Redden & Redden by Monroe M. Redden, Jr., Hendersonville, for defendant appellee.

HUSKINS, Justice.

It is axiomatic that on motion to nonsuit the evidence must be taken as true and considered in its light most favorable to the plaintiff. Plaintiff is entitled to the benefit of every reasonable inference which may be drawn therefrom. Safeguard Insurance Co. v. Wilmington Cold Storage Co., 267 N.C. 679, 149 S.E.2d 27; Higdon v. Jaffa, 231 N.C. 242, 56 S.E.2d 661. Contradictions and inconsistencies in plaintiff's evidence are for the jury where the evidence, taken in its most favorable light to the plaintiff, makes out a prima facie case. Watt v. Crews, 261 N.C. 143, 134 S.E.2d 199; Nixon v. Nixon, 260 N.C. 251, 132 S.E.2d 590; Smith v. Corsat, 260 N.C. 92, 131 S.E.2d 894. All conflicts in plaintiff's evidence must be resolved in his favor. Raper v. McCrory-McLellan Corp., 259 N.C. 199, 130 S.E.2d 281.

The judgment of nonsuit cannot stand unless (1) defendant acquired title to the property from Twentieth Century, or (2) plaintiff is estopped to deny defendant's title.

A mobile home is classified by statute as a motor vehicle. G.S. § 20-38(17). When a manufacturer transfers a new motor vehicle to another he is required, at the time of transfer, to supply the transferee with a manufacturer's certificate of origin assigned to the transferee. G.S. § 20-52.1 (a). Any dealer who transfers a new vehicle to a consumer-purchaser is required, at the time of transfer, to give the purchaser the proper manufacturer's certificate assigned to the transferee. G.S. § 20-52.1(c). (A revision of this subsection contained in Chapter 863 of the 1967 Session Laws was effective June 21, 1967 and has no pertinence here.) A mobile home is designed to be operated upon the highways; and an owner who intends to so operate it is required to make application to the Department of Motor Vehicles for, and obtain, the registration thereof and issuance of a certificate of title for such vehicle. G.S. § 20-50; G.S. § 20-52. When the application for registration and certificate of title refers to a new vehicle purchased from a manufacturer or dealer, the application must be accompanied by a manufacturer's certificate of origin that has been properly assigned to the applicant. G.S. § 20-52(b). These statutes are mandatory and not merely directory. Hawkins v. M. & J. Finance Corp., 238 N.C. 174, 77 S.E.2d 669.

In passing on the rights and liabilities of the parties, we must consider the relevant rules of law with respect to cash sales. These rules evolve from many cases in this and other jurisdictions and have been assembled in a scholarly opinion by Ervin, J., in Wilson v. Commercial Finance Co., 239 N.C. 349, 355, 79 S.E.2d 908, 913, and are quoted, except where summarized, as follows:

"1. A cash sale is one in which the title to the property and the purchase price pass simultaneously, and the title remains in the seller until the purchase price is paid, even though possession of the property is delivered to the buyer. [Citations omitted.]

"2. The seller may waive his contractual right to the immediate cash payment of the purchase price in a sale for cash and permit the title to pass to the buyer before the payment of the purchase price is made by language or conduct manifesting an intention on his part to abandon or relinquish his contractual right rather than to insist upon it. [Citations omitted.] But he does not waive his contractual right by taking a check, which subsequently proves to be worthless, in payment for the property sold for cash. [Citations omitted.]

"3. In the absence of an agreement to the contrary, the delivery and acceptance of a check does not constitute payment of the item covered by it until the check itself is paid by the bank on which it is drawn. [Citations omitted.] It necessarily follows that where the seller contracts to sell a chattel to the buyer for cash, and the seller accepts a check from the buyer as a means of payment of the cash and delivers the chattel to the buyer in the belief that the check is good and will be paid on presentation, no title whatever passes from the seller to the buyer until the check is paid; and the seller may reclaim the chattel from the buyer in case the check is not paid on due presentation. [Citations omitted.]

"4. Even a bona fide purchaser of a chattel acquires no property right in it at common law or in equity as against the true owner, if it is sold by a third person who, although in possession, has no title to it, unless the true owner authorizes or ratifies the sale, or is precluded by his own conduct from denying the third party's authority to make it. [Citations omitted.]

"5. * * * [I]n the absence of an estoppel, one is not entitled to protection as a bona fide purchaser unless he holds the legal title to the property in dispute. [Citations omitted.] As a consequence, an owner who is induced by the fraud of the buyer to part with the possession of his chattel, and no more, can reclaim it from a bona fide purchaser from or under the fraudulent buyer, unless the bona fide purchaser can bring himself within the protection of some principle of estoppel. [Citations omitted.] But an owner who is induced by the fraud of the buyer to part with the legal title to his chattel cannot recover it from a bona fide purchaser from or under the fraudulent buyer." [Citations omitted.]

6. Although there is a conflict of authority, North Carolina adheres to the rule that on a cash sale of personal property the legal title remains in the seller until the purchase price is paid, even though the seller accepts a check from the buyer as a means of payment of the cash and delivers the property to the buyer. Handley Motor Co. v. Wood, 237 N.C. 318, 75 S.E.2d 312.

7. The true owner of a chattel may deny the authority of its possessor to sell or encumber it and is not estopped to do so merely because he entrusts the possessor with its possession. However, if the true owner entrusts the possession of his chattel to another and at the same time clothes him with the indicia of title to it, the true owner is estopped to claim ownership as against an innocent purchaser who pays value to the possessor in reliance on the indicia of title. Hawkins v. M. & J. Finance Corp, supra (238 N.C. 174, 77 S.E.2d 669); Handley Motor Co. v. Wood, supra.

Applying the foregoing principles of law to the evidence, considered in its light most favorable to plaintiff as we are required to do, it is apparent that title to the mobile home in question remained in the plaintiff and never passed to Twentieth Century because its check was dishonored by the bank upon which it was drawn. Since the evidence, when considered most favorably to plaintiff, fails to show that plaintiff invested Twentieth Century with the Manufacturer's Certificate of Origin or any other indicia of title upon which defendant relied, plaintiff is not estopped on this record from asserting its title even against an innocent purchaser. Hawkins v. M. & J. Finance Corp., supra; American Exchange Nat. Bank v. Winder, 198 N.C. 18, 150 S.E. 489; Handley Co. v. Wood, supra; Ellison v. Hunsinger, 237 N.C. 619, 75 S.E.2d 884. In case of a bailment of personal property for purpose of sale, the result is the same. Nothing else appearing, mere possession by bailee of the bailor's goods, with authority as agent to sell them, works no estoppel upon the bailor to deny the title of an innocent purchaser. Hawkins v. M. & J. Finance Corp., supra; 8 Am.Jur.2d, Bailments § 92.

Assuming the truth of plaintiff's evidence, as we must when evaluating a motion for nonsuit, defendant acquired no title to the mobile home from Twentieth Century, and plaintiff is not estopped to assert its title to the property in controversy.

The defendant has not been heard. We have considered only the plaintiff's evidence most favorable to it. As stated by Higgins, J., for the Court, in Poindexter v. First National Bank, 244 N.C. 191, 92 S.E.2d 773, 58 A.L.R. 2d 360, "It is generally the practice of this Court when a judgment of nonsuit is reversed and the case sent back to the Superior Court for trial on the merits, to discuss the evidence only to the extent necessary to give the reason for the decision. This Court does not attempt to pass on the credibility of the witnesses or to reconcile conflicts in the evidence." Our review of the evidence for purposes of this decision is not intended to influence the jury at the trial.

Plaintiff's remaining exception is not discussed in its brief and is deemed abandoned. Rule 28, Rules of Practice in the Supreme Court, 254 N.C. 783, 810; State v. Strickland, 254 N.C. 658, 119 S.E.2d 781; State v. Cole, 270 N.C. 382, 154 S.E.2d 506.

For the reasons stated, we are of the opinion that plaintiff's evidence makes out a case for the twelve whose prerogative it is to pass upon its weight and credibility. State v. Squires, 272 N.C. 402, 158 S.E.2d 345. Judgment of nonsuit was improvidently entered and is

Reversed.