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Frontier Motors v. Chick Norton Buick Co.

Supreme Court of Arizona

February 21, 1955

FRONTIER MOTORS, Inc., a corporation, Appellant,
CHICK NORTON BUICK COMPANY, a corporation, Appellee.

Rehearing Denied March 22, 1955.

[78 Ariz. 342] Darrow & D'Antonio, Tucson, for appellant.

Hall, Catlin & Molloy, and Russell E. Jones, Tucson, for appellee.

UDALL, Justice.

Frontier Motors, Inc., an Arizona corporation, defendant below, appeals from a judgment in the sum of $2,600 plus interest and costs, rendered against it and in favor of plaintiff-appellee Chick Norton Buick Company, a corporation, in a replevin action to recover possession of an automobile or the reasonable value thereof. The two questions presented are (a) whether the trial court properly construed provisions of the Uniform Conditional Sales Act as adopted in Arizona in the year 1919 and which now appears as chapter 52, article 6, A.C.A.1939, and (b) whether the rule applied in determining the measure of plaintiff's recovery was proper. The case was tried to the court sitting without a jury. We will refer to the parties as they appeared in the court below-plaintiff and defendant.

There is but little controversy as to the material facts and it is not disputed that the written findings of the trial court are supported by competent evidence. These findings may be summarized as follows:

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Plaintiff, an Oklahoma corporation having its principal place of business in Tulsa, on February 5, 1953 delivered possession of a new 1953 Buick Convertible automobile-the subject matter of this litigation-to one J. D. McCall. Title was reserved in plaintiff until the balance of the purchase [78 Ariz. 343] price amounting to $2,296.80, including interest, was paid in monthly installments, as required by a conditional sales contract. This contract provided that McCall was to keep the vehicle free of liens and was not to remove the vehicle from Oklahoma without consent of plaintiff. It was further agreed that in the event of any default in the monthly payments, the balance owed under the contract would become immediately due and payable and plaintiff would be entitled to immediate possession of the vehicle. This contract was duly recorded in Muskogee County as required by Oklahoma law.

McCall made no payments under the contract, and without knowledge of plaintiff surreptitiously removed the vehicle from Oklahoma, first to Texas and then on to California. When the second monthly payment became delinquent in March the plaintiff employed one George F. Turner, who operates an Auto Detective Bureau in Tulsa, as its agent to try and locate the car. With the aid of the F.B.I., state and local officers, the plaintiff, through its agent Turner, on October 8, 1953 first learned the whereabouts of the automobile in question, it then being in Tucson, Arizona, in possession of defendant. The latter had purchased the car on October 7th from one Al Golden, relying upon a California pink registration slip purportedly signed in blank by one Lee Richman. The next day Turner presented himself at defendant's place of business in Tuscon and demanded that defendant surrender possession of the vehicle to plaintiff. As evidence of plaintiff's title Turner exhibited to one Ray Harris, an officer of defendant corporation, an executed copy of the original conditional sales contract. The plaintiff never filed or recorded a copy of its conditional sales contract in the State of Arizona. Upon defendant's refusal to surrender possession of the vehicle, this replevin action was instituted and defendant was served with summons and copy of the complaint on October 13, 1953. Simultaneously a writ of replevin was issued but the sheriff was unable to locate or seize the vehicle nor did defendant ever deliver possession of the vehicle to plaintiff or the sheriff. On the day defendant purchased the vehicle, it was sold to one Joseph Astiazeran for $2,000, but the sale was rescinded shortly after this action was commenced and the vehicle retaken by defendant. It further appears that in March of 1954 defendant sold it to another person.

In support of its judgment the court concluded as a matter of law:

'* * * 5. That although the plaintiff did not file its contract within ten days of the date that plaintiff had knowledge that the automobile was in the State of Arizona, as provided in section 52-611, A.C.A.1939, as amended, this was not necessary as the defendant was given actual notice on October 9, 1953, and filed a replevin action within six days after such knowledge by the plaintiff.'

[78 Ariz. 344] It is with this conclusion defendant takes issue. Section 52-611, A.C.A.1939, article 14 of the Uniform Act, provides:

'When, prior to the performance of the condition, the goods are removed by the buyer * * * from another state into a filing district in this state, where such contract or copy is not filed, the reservation of the property in the seller shall be void as to the purchasers and creditors hereinbefore described, unless the conditional sale contract or a copy thereof shall be filed in the filing district to which the goods are removed, whthin ten (10) days after the seller has received notice of the filing district to which the goods have been removed. * * *'

Defendant contends this statute clearly states that unless the conditional sales contract in question was recorded within the ten-day period, the reservation of title in the contract is void as to bona fide purchasers, and plaintiff having failed to comply with this provision cannot assert its

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title against defendant who claims to be a bona fide purchaser. Plaintiff on the other hand maintains that the purpose of recording is to give notice, and defendant having had actual notice of plaintiff's title within the ten-day period, this meets the requirement of the statute.

Both parties cite, and in part rely upon our decision in the case of Bradshaw v. Kleiber Motor Truck Co.,29 Ariz. 293, 241 P. 305, 307. The facts are essentially identical with those in the instant case. There, a motor truck sold by conditional sales contract in California (at which time there was no law requiring such a contract to be recorded in that state) was, without the knowledge of the seller brought to Arizona where it was subsequently attached by a creditor of the buyer and sold at a judicial sale. Thereafter the seller for the first time learned of the truck's removal to Arizona and within ten days it gave actual notice of its conditional sales contract to purchaser at judicial sale and demanded possession of the vehicle, but ...

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