Ballard v. Wetzel ( 1997 )

IN THE COURT OF APPEALS OF TENNESSEE
EASTERN SECTION FILED
October 16, 1997
Cecil Crowson, Jr.
FAITH BALLARD, ) C/A NO. 03A01-9705-CH-00189 Clerk
Appellate C ourt
)
Plaintiff-Appellant, ) ANDERSON CIRCUIT
)
v. ) HON. JAMES B. SCOTT, JR.,
) JUDGE
JOHN WETZEL, )
) AFFIRMED AND
Defendant-Appellee. ) REMANDED
CHRISTOPHER VAN RIPER, STUART & VAN RIPER, Clinton, for Plaintiff-
Appellant.
BILL W. PETTY, O’CONNOR , PETTY, CHILD & BOSW ELL, Knoxville, for
Defendant-Appellee.
OPINION
Franks, J.
In this action to recover a Corvette motor vehicle, the Trial Judge, after
trial, ruled that the defendant was entitled to possession of the vehicle and said:
The Court finds . . . the son . . . was the person who was responsible for
the disappearance of plaintiff’s Corvette automobile.
The vehicle was taken from the garage of the plaintiff, after being stored
in the garage because the Corvette had been substantially damaged due
to a previous accident. After the vehicle had been removed from the
garage, restoration began.
The defendant describes the vehicle at the time of beginning restoration
as being a mere hull. Plaintiff claimed the vehicle was wrecked, but was
whole. Plaintiff claims that she did not immediately report the vehicle
stolen, because her son assured her that he was having the vehicle
restored for her.
This Court resolves all factual issues in favor of the defendant, Johnny
Wetzel. In making this ruling, the Court finds that the defendant was a
“good faith purchaser for value” and the auto hull once restored became
the property of the defendant by “accession”. Any cause the plaintiff
would have should be addressed against her son.
This case was tried by the Judge sitting without a jury, and his findings
are reviewed de novo upon the record, accompanied by a presumption of correctness,
unless the evidence preponderates otherwise. T.R.A.P. Rule 13(d). The evidence
does not preponderate against the Trial Judge’s determinations.
The Trial Judge correctly determined that defendant was a good faith
purchaser for value. A good faith purchaser for value is “one who takes by purchase
getting sufficient consideration to support a simple contract, who is honest in the
transaction or purchase”. 77A C.J.S. Sales §233 (1994). T.C.A. §47-1-201(32)
defines “purchase” as “taking by sale, discount, negotiation, mortgage, pledge, lien,
issue or reissue, gift, or any other voluntary transaction creating an interest in
property.” Defendant qualifies as a purchaser because he acquired the car parts by
sale and paid valuable consideration.
Defendant also acted in good faith. T.C.A. §47-1-201(19) defines
“good faith” as “honesty in fact in the conduct or transaction concerned.” Therefore, a
buyer is not a good faith purchaser if he had notice “of facts that would put a
reasonably prudent person on inquiry.” Liles Bros. & Son v. Wright, 638 S.W.2d 383(Tenn. 1982).
In this case, defendant purchased the “hull” from Lambert Auto Parts,
whose regular business is selling parts. Also, defendant received a receipt from
Lambert’s documenting the purchase of the parts from a George Martin. Defendant
took additional steps to ensure the parts were not stolen, by checking the VIN numbers
through the County Clerk’s Office.
The prior meeting between the parties is not sufficient to establish bad
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faith on the part of defendant. The defendant went to plaintiff’s home on one
occasion to enquire about Corvette parts for sale. Both parties agreed that plaintiff
told him she had no parts for sale. The defendant’s sales receipt from Lambert’s Auto
Parts shows that George Martin purchased the parts from Tyrone Ballard, the
plaintiff’s son, and there is nothing in the record to put defendant on notice that
plaintiff’s son did not have auto parts to sell.
The fact that defendant did not obtain a certificate of title at the time of
purchasing the parts is not dispositive. We have held the fact that a seller presents no
indicia of title is not alone sufficient to demonstrate a buyer’s lack of good faith.
Jernigan v. Ham, 691 S.W.2d 553 (Tenn. App. 1984). In Jernigan, the Court noted
that it was not customary to ask for title to a used piece of equipment, since it was
usually unavailable. Id. at 557. Similarly, George Martin testified that he usually
received a title when he bought “whole” vehicles. According to his testimony, Martin
purchased only a “hull”. Moreover, T.C.A. §55-3-201 states that “any owner
dismantling . . . any registered vehicle shall immediately forward to the division, the
certificate of title.” Thus, M artin’s subsequent purchasers had no apparent reason to
believe that a certificate of title would be available. Also, under Tennessee law, a
certificate of title is not required to pass ownership of a motor vehicle. Smith v. Smith,
650 S.W.2d 54 (Tenn. App. 1983).
Plaintiff relies on three cases to support her contention that defendant
was not a good faith purchaser for value. These cases, however, predate Tennessee’s
adoption of the Uniform Commercial Code and the cases cited deal with titles to
slaves or real property and do not apply in this context.
Defendant’s status as a good faith purchaser for value, alone, does not
establish good title to the vehicle. T.C.A. §47-2-403 states that “a purchaser of goods
acquires all title which his transferor had or had power to transfer. . .”. The statute
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also provides that “[a] person with voidable title has power to transfer a good tile to a
good faith purchaser for value.” Although the Trial Court correctly determined that
the defendant was a good faith purchaser for value, the statute requires that the
transferor have at least “voidable” title in order to confer good title.
In this case, the record shows that Tyrone Ballard had no authority to
sell plaintiff’s vehicle. We have held that the selling of a vehicle without authority to
do so constitutes theft. Butler v. Buick Motor Co., 813 S.W.2d 454 (Tenn. App.
1991), cert denied, 502 U.S. 911 (1991). If “goods are stolen or otherwise obtained
against the will of the owner, only void title can result, and the thief only has void title
to the goods.” 77A C.J.S. Sales §232 (1994). Tyrone Ballard and the subsequent
purchasers had a void, not voidable, title. Accordingly, defendant’s good faith
purchase status is not itself sufficient to create good title under T.C.A. §47-2-403.
The defendant, however, as the Court held, acquired good title by accession.
Our courts have held that title may pass, however, to an innocent
purchaser, where there is a great disparity in the value between the original article and
the new product resulting from the purchaser’s labor and/or materials. Eusco, Inc. V.
Huddleston, 835 S.W.2d 576 (Tenn. 1992); Capital Chevrolet Co. V. Earheart, 627
S.W.2d 369 (Tenn. App. 1981).
Defendant acquired title by accession because his labor significantly
increased the value of the vehicle. He acquired the hull of a vehicle for $900.00 and
spent approximately $5,000.00 restoring the vehicle, and invested approximately 100
hours of restoration labor. There is evidence in the record that the restoration has a
market value of $7,950.00. There is ample evidence to support the Trial Court’s
finding that title passed by accession.
Finally, plaintiff argues that accession cannot apply because there is not
adequate disparity between the value of the vehicle when owned by her, and the value
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of defendant’s restore vehicle. The only evidence of the pre-sale value of the vehicle
was plaintiff’s estimate of its value. Assuming for purposes of argument that this
estimate was correct, plaintiff’s argument is founded upon an improper comparison.
In Earheart, the Court did not compare the value of the original Corvette to the value
of the restored Corvette. Rather, the Court compared the value of the hull purchased
by Sartin to the value Sartin created. Thus, the Trial Court made the proper
comparison of value in this case.
We affirm the judgment of the Trial Court and remand at appellant’s
cost.
__________________________
Herschel P. Franks, J.
CONCUR:
___________________________
Houston M. Goddard, P.J.
___________________________
Charles D. Susano, Jr., J.
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