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Milledgeville Community Credit Union v. Corn

September 02, 1999


Appeal from the Circuit Court of Winnebago County. No. 97--LM--1783 Honorable Ronald L. Pirrello, Judge, Presiding.

The opinion of the court was delivered by: Justice Galasso


JUSTICE GALASSO delivered the opinion of the court:

On December 12, l997, plaintiff, Milledgeville Community Credit Union, filed a verified complaint for replevin against defendant, Robert Corn, seeking a judgment for possession of a 1993 Chevrolet Z-28 Camaro (Camaro) "currently being wrongfully detained and held" by defendant. After a bench trial, the trial court entered an order of replevin on January 29, l998. Subsequently, plaintiff filed an amended complaint against defendant, seeking money damages for alleged damage to the Camaro. Defendant then filed an answer to the complaint and a counterclaim, which sought reimbursement for upkeep and maintenance payments he made regarding the Camaro and the trade-in value of the car he traded in when purchasing the Camaro. After a hearing, the trial court entered an order, which awarded plaintiff damages in the amount of $3,465.74. This timely appeal of both orders followed.

On appeal, defendant argues that the trial court erred in granting the subject order of replevin and that the order should be vacated by this court. Defendant further contends that, once the order of replevin is vacated, the order for damages to the Camaro is without effect. In response, plaintiff asserts that the order of replevin was properly entered.

The record reveals the following facts. Plaintiff is a banking and financial institution. On June 28, l995, plaintiff loaned Darren Miller $15,472 for the purchase of the Camaro. The note was cosigned by Darren's mother, Ellen Miller, and was secured by the Camaro. Pursuant to section 3--202 of the Illinois Vehicle Code (625 ILCS 5/3--202 (West 1996)), plaintiff perfected its security interest in the Camaro by delivering to the Illinois Secretary of State a certificate of title for the Camaro, which contained the name and address of the lienholder along with the required filing fee.

In June 1996, the Millers, in an attempt to sell the Camaro, placed it with Rick Johnson, owner of Johnson's Car World in Rockford. Early in July, defendant was in the market for an automobile and saw the ad for the Camaro placed by Johnson in the Rockford Register Star newspaper. Defendant went to Johnson's Car World to examine the Camaro. He asked Johnson where he had gotten the Camaro, and Johnson told him that he had acquired the vehicle at an auction. Defendant test-drove the Camaro and then talked with Johnson about purchasing it and trading in the vehicle he presently owned. (It is unclear from the record whether the trade-in vehicle was a 1968 or 1988 Chevrolet Camaro.) Defendant did not have insurance for the vehicle, and the license plate stickers had expired, so Johnson had to come to defendant's home to view the trade-in vehicle.

The contract for the purchase of the Camaro was signed by Johnson and defendant on July 5, l996. The total purchase price including sales tax was $14,616, reduced to $9,616 by the trade-in amount of $5,000. For the balance of the purchase price, defendant obtained a loan from Sycamore National Bank & Trust Company (Sycamore Bank), signing a note and security agreement on July 8, l998. The check tendered by Sycamore Bank to Johnson's Car World contained the language, "[E]ndorsement of the check guarantees the endorser will secure title to the vehicle from the Illinois Secretary of State and forward the title to the bank."

Defendant testified that, two months after he purchased the Camaro, he learned from the Secretary of State's office that the Millers were the previous owners of the vehicle. He also discovered at that time that plaintiff had a lien on the Camaro.

After the Camaro's purchase, Johnson's Car World did not pay off the note in favor of plaintiff to obtain clear title. Further, the Millers defaulted on their loan and failed to keep the vehicle properly insured. At the time of the hearing on the complaint for replevin in January 1998, the Millers were approximately $1,200 in arrears on their note with plaintiff and owed about $9,000 on the balance of the note.

Shortly after defendant's purchase of the Camaro in July 1996, plaintiff became aware that defendant had possession of it. When the Millers defaulted on their loan with plaintiff, the latter filed its verified complaint for replevin against defendant in December l997. As noted above, after a hearing on January 23, l998, the trial court entered an order of replevin.

The trial court's accompanying memorandum of decision read in pertinent part:

"I found [the case] extremely difficult and, like [plaintiff's counsel] found the decision a difficult one particularly because there is the appearance of an inJustice being done no matter which way I decide.

First, I will find that [defendant] was [a] buyer in the ordinary course of business. He took without knowledge and appears to be a totally innocent victim of these circumstances. However, that does not appear to end the analysis. Under 810 ILCS 5/9--307, it is not Paragraph 1 which appears to control. In the comments under Paragraph 3 there is a heading 'as to security interests which can be perfected only by filing under Section 9--302.' This category includes all interests in motor vehicles. It goes on to state that where motor vehicles are concerned in states having a certificate of title law, perfection will be under that law. It is stipulated in Paragraph 3 of the Verified Complaint for Replevin, that the Plaintiff has perfected its security interest pursuant to that law. I have researched the statute and that appears to be correct. Thus it would seem that the filing of the title with the Secretary ...

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