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Westlake Finance Co. v. Oak Park Motors

FEBRUARY 27, 1959.

WESTLAKE FINANCE COMPANY, AN ILLINOIS CORPORATION, APPELLEE,

v.

OAK PARK MOTORS, INC., AN ILLINOIS CORPORATION, ET AL., DEFENDANTS. APPEAL OF OAK PARK MOTORS, INC., APPELLANT.



Appeal from the Superior Court of Cook county; the Hon. JOHN A. SBARBARO, Judge, presiding. Judgment reversed and cause remanded with directions.

JUSTICE BURKE DELIVERED THE OPINION OF THE COURT.

In a complaint in chancery Westlake Finance Company sought damages against Oak Park Motors, Inc., Evelyn Grunst, also known as Evelyn Slaughter, and Donald Slaughter because of wrongful, "fraudulent and improper" acts and asked that the rights of the parties to a Ford Mainline Tudor automobile be adjudicated and that plaintiff be declared to have an equitable lien on the automobile. A trial resulted in judgment in favor of the plaintiff and against Oak Park Motors, Inc., and the two individual defendants for $2234.04. Oak Park Motors, Inc., hereinafter called the defendant, appeals.

Plaintiff is a finance company with offices in Maywood, engaged in purchasing conditional sales contracts and notes from automobile dealers in connection with the sale of automobiles to the general public. The defendant is an automobile dealer engaged in business in Oak Park. Evelyn Grunst, who lives in Maywood, married Donald Slaughter on June 25, 1955. She was the owner of a 1950 Plymouth Convertible automobile. On September 10, 1955, the Slaughters came to the premises of the defendant and selected a new Ford Mainline automobile. The purchase price was $2283.05. Credits of $372.50 on a trade-in of the 1950 Plymouth car and a cash down payment of $10.55 were given, leaving a balance of $1900 to be financed by the purchasers. The balance of $1900 was financed by the plaintiff at the request of the Slaughters and the defendant, which accepted a check from the plaintiff for $1995. The $95 was a "commission" paid by the plaintiff to the defendant for the sale of the contract and note. On September 12, 1955, the date of the sale of the automobile, Chester R. Smith, defendant's salesman, had Evelyn Slaughter sign an application for certificate of title in blank in the name of Evelyn Grunst. She wanted to keep the 1955 License plates issued in her maiden name. On August 30, 1955, the Slaughters had submitted to plaintiff, through Maywood Motors Co., an application for credit.

Defendant's salesman, Smith, and the Slaughters went to the office of plaintiff on September 12, 1955, and in response to Mr. Smith's inquiry whether plaintiff would purchase the contract of Evelyn Slaughter he was told the plaintiff had a credit application on her, and if the conditions were the same would buy the conditional sales contract. Smith was told by plaintiff's agent to submit the deal on the conditional sales contract form used by plaintiff. Plaintiff's employees helped fill out the conditional sales contract and promissory note which was then signed by the Slaughters and given to Mr. Smith. No instructions as to what was to be done with the Illinois certificate of title were given to the defendant by the plaintiff. Delivery of the Ford automobile was made on September 12, 1955, by the defendant to the Slaughters. On September 13, 1955, plaintiff's agent gave its check for $1990, payable to the defendant and received the conditional sales contract and promissory note covering the Ford automobile, with assignment and endorsement "without recourse" executed by the defendant to the plaintiff.

On October 3, 1955, the defendant executed First Assignment of Manufacturer's Statement of Origin to a Motor Vehicle to Evelyn Grunst and also prepared the application for certificate of title in the name of Evelyn Grunst. The First Assignment and application for certificate of title was mailed by the defendant to the Secretary of State who, on October 13, 1955, mailed a certificate of title to the Ford automobile to defendant who, on October 15, 1955, affixed its "paid" stamp showing the lien of defendant in the amount of $1530.48 as paid. This certificate of title was delivered to Mrs. Slaughter. On November 17, 1955 she made a payment to plaintiff on the conditional sales contract and note of $157.86. On November 16, 1955, Mrs. Slaughter sold the Ford automobile to C. Herman Auto Sales, Inc., for $900 and executed the assignment of title to the latter showing no lien and signed "Evelyn Grunst." The automobile was subsequently sold by C. Herman Auto Sales, Inc., to Herman Lohndorf. On inquiry when the account became delinquent, Mrs. Slaughter informed the plaintiff's agent that she had sold the automobile. On January 19, 1956, plaintiff discovered that the lien represented by the conditional sales contract was not on the certificate of title. The plaintiff has received no further money on the conditional sales contract or the promissory note. In January, 1956, Mrs. Slaughter told a representative of plaintiff that the reason she sold the car was because her husband was in trouble and the money was needed to keep him "out of jail." At the time of the trial Mrs. Slaughter was divorced.

The conditional sales contract and promissory note of the Slaughters, executed by them on September 12, 1955, contains the following provision: "That said property (which shall remain personal property) shall remain titled in seller until paid." The contract retained the title to the automobile in the defendant until it was fully paid. The defendant had title to the automobile. On September 13, 1955, the defendant sold all its right, title and interest in and to the automobile by executing the assignment (without recourse) which stated: "For Value Received, the undersigned hereby sells, assigns and transfers all his [her] right, title and interest in and to this instrument and in and to the property described herein, to Westlake Finance, its successors and assigns, without recourse, however, except as may be provided for otherwise below." Examination of the assignment shows that it is without recourse excepting as set forth, and nowhere in these exceptions is the delivery of a certificate of title to the automobile required or mentioned. The defendant did not choose plaintiff to finance the Slaughters' deal. The evidence shows that plaintiff was selected by the Slaughters. The defendant was willing to do business with the plaintiff so long as its liability was restricted. Plaintiff at no time gave the defendant any instructions as to the certificate of title. The assignment was the contract between the plaintiff and the defendant. By the assignment the defendant conveyed its right, title and interest to the Ford automobile to the plaintiff. Section 3 of the Uniform Sales Act (Sec. 3, Ch. 121 1/2, Ill. Rev. Stat. 1957) reads: "Subject to the provisions of this act and of any statute in that behalf, a contract to sell or a sale may be made in writing (either with or without seal), or by word of mouth, or partly in writing and partly by word of mouth, or may be inferred from the conduct of the parties." When the defendant completed the first assignment and application for certificate of title, it was conforming to the wishes of Mrs. Slaughter.

The assignment of the conditional sales contract for the sale of the automobile which contained no provisions concerning delivery of a certificate of title to the assignee was not invalid because of failure to comply with the provisions of Sections 1 to 20 of the Uniform Motor Vehicle Anti-Theft Act (paragraphs 74 to 93, Ch. 95 1/2, Ill. Rev. Stat. 1957). The assignment (without recourse) and the promissory note was the document selected by the plaintiff to transfer the title to the property described in it. Plaintiff had it prepared by its own employees and it was executed by the Slaughters at the office of plaintiff. Examination of the assignment and promissory note shows no requirement that a certificate of title should be obtained. The decisions in this state hold that the provisions of the Uniform Motor Vehicle Anti-Theft Act (Pars. 74-93, Ch. 95 1/2, Ill. Rev. Stat. 1957) do not invalidate the written contract, are not intended as recording statutes, and do not change the effect of the provisions of the Uniform Sales Act. See L.B. Motors, Inc. v. Prichard, 303 Ill. App. 318; Pageanas v. Mixon Motor Co., 344 Ill. App. 446; Mori v. Chicago National Bank, 3 Ill. App.2d 49; Smith v. Rust, 310 Ill. App. 47; Commercial Credit Corp. v. Horan, 325 Ill. App. 625.

The plaintiff urges that the doctrine of estoppel, because of the fraudulent and improper acts of the defendant, precludes both the defendant and plaintiff from prevailing over a bona fide purchaser for value, without notice, and that the defendant as assignor is liable to plaintiff as the assignee. The wrongful act in disposing of the automobile was done solely by Evelyn Slaughter. She testified that she never returned to the place of business of the defendant after the purchase of the automobile on September 12, 1955. There is no evidence to indicate that the defendant had anything to do with the subsequent sale of the automobile by Mrs. Slaughter. Nowhere in the assignment of the contract is there any provision for the defendant to obtain or furnish a certificate of title. Plaintiff had the choice of requesting a certificate of title. It cannot charge its ignorance regarding a certificate of title to the defendant when the choice of obtaining one or not was exclusively under its own control. A certificate of title is not a prerequisite to a valid sale. Mori v. Chicago National Bank, 3 Ill. App.2d 49, 56. There is no evidence of any fraudulent or improper acts committed by the defendant. The doctrine of estoppel cannot be invoked under the factual situation presented by the record. The decree absolved C. Herman Auto Sales, Inc., and Herman Lohndorf and dismissed them as parties defendant. There has been no separate or cross-appeal by the plaintiff from this part of the decree. The discussion of the doctrine of estoppel is based on a hypothetical situation.

All of the terms of the written contract by and between plaintiff and defendant were embodied in the executed assignment of the conditional sales contract and note and the contract could not be altered by parol evidence to show additional terms or provisions than those set forth in the assignment and note. There is no proof of any fraud. The documents received in evidence as exhibits introduced by the plaintiff, executed subsequent to September 13, 1955, were admissible against the Slaughters. These documents however were not competent to alter or add to the written contract entered into between plaintiff and defendant on September 12, 1955.

The defendant treated the transaction as a cash sale. It took positive action to retain title to the automobile until the check from plaintiff was honored. After the assignment of the conditional sales contract and endorsement of the promissory note to the plaintiff and the latter's check had been honored, the defendant no longer had any lien or interest in the automobile, and in the absence of any specific instruction from the plaintiff it stamped its lien "Paid in full." When the defendant stamped the certificate of title "Paid in full" on October 15, 1955, it was stating a fact. The defendant could not give a receipt for any debt due to the plaintiff and any receipt by the defendant would not affect the rights of the plaintiff. There is no evidence that at the time the conditional sales contract was purchased by the plaintiff that the defendant had any knowledge of any fact which might impair the validity of the instrument or render it valueless. The buyers' true names were signed on the "instrument." The "instrument" was a valid lien upon the automobile.

For the reasons stated the judgment of the Superior Court against the defendant is reversed and the cause is remanded with directions to enter judgment in favor of Oak Park Motors, Inc., a corporation, and against Westlake Finance Company, a corporation.

Judgment reversed and cause remanded with directions.

FRIEND, P.J., ...


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