Home Indemnity Company v. West Trade Motors, Inc.

129 S.E.2d 248 (1963)

258 N.C. 647

The HOME INDEMNITY COMPANY v. WEST TRADE MOTORS, INC., E. M. Crockett, and Louis Crosby Bradshaw.

No. 454.

Supreme Court of North Carolina.

February 1, 1963.

*250 Carpenter, Webb & Golding by William B. Webb, Charlotte, for plaintiff appellant.

Wilson & Clark by Richard S. Clark, Monroe, for defendant appellee Crockett.

RODMAN, J.

Before Crockett could recover, he would have to establish dealer's liability. This liability exists, Crockett asserted and the court approved, because dealer was the owner of the Mercury coupe used by Bradshaw with dealer's permission on 4 November 1961. The contention is based on the interpretation Crockett places on our decision in Community Credit Co. of Lenoir, Inc. v. Norwood, 257 N.C. 87, 125 S.E.2d 369.

We repeat what Justice Jackson so well said in Armour & Co. v. Wantock, 323 U.S. 126, 65 S. Ct. 165, 89 L.Ed. 118: "It *251 is timely again to remind counsel that words of our opinions are to be read in the light of the facts of the case under discussion. To keep opinions within reasonable bounds precludes writing into them every limitation or variation which might be suggested by the circumstances of cases not before the Court. General expressions transposed to other facts are often misleading." This clearly-stated rule has been applied by this Court on many occasions. Howard v. Boyce, 254 N.C. 255, 118 S.E.2d 897; Lane v. Dorney, 250 N.C. 15, 108 S.E.2d 55; In re Will of Pridgen, 249 N.C. 509, 107 S.E.2d 160, 75 A.L.R.2d 312, are illustrative.

Community Credit Co. of Lenoir, Inc. v. Norwood, supra, called for a determination of the priority between two creditors of Norwood. It did not determine any rights as between vendor and vendee of a motor vehicle. That question was not presented. If the sales and collision referred to in the complaint had occurred prior to 1961, Crockett would, probably, not have asserted any claim against dealer or plaintiff, its insurance carrier. If he had made such assertion, he would have found a clear-cut and positive denial of liability in Godwin v. Harleysville Mutual Casualty Co., 256 N.C. 730, 125 S.E.2d 23. Unless the 1961 amendments to our motor vehicle laws require a different result, the law declared in Godwin v. Harleysville Mutual Casualty Co., supra, is still an effective barrier to Crockett's claim.

C. 835, S.L.1961, is entitled "AN ACT TO STRENGTHEN THE MOTOR VEHICLE CERTIFICATE OF TITLE LAWS BY PROVIDING FOR A MANUFACTURER'S CERTIFICATE OF TRANSFER FOR NEW MOTOR VEHICLES AND FOR THE RECORDATION AND PERFECTION OF SECURITY INTERESTS IN VEHICLES." Unlike most of our statutes this bill contains a preamble stating the reasons which called for a modification of the law. The bill said: "WHEREAS, the present motor vehicle certificate of title law provides for a declaration of all existing liens at the time of application for registration, but does not require that liens given thereafter be declared and entered on the certificate of title; and

"WHEREAS, the certificate of title, often regarded as absolute, is not conclusive as to liens and may not be relied upon to show good title for purpose of sale or encumbrance, except as it relates to lien perfection under Section 213 of the Interstate Commerce Act; that is, liens on equipment of interstate common and contract carriers; and

"WHEREAS, the present certificate of title law does not meet the requisites of the Uniform Title Code because the certificate of title is not in and of itself adequate notice to third parties of existing liens; and

"WHEREAS, a certificate of title that can be relied upon as a ready means by which all legal interest in motor vehicles may be determined would be to the public interest: Now, therefore * * *" Then followed the enacting clause.

For the purpose of this decision sales of motor vehicles may be put in two classes: (a) sale by a registered owner to someone other than a dealer, G.S. § 20-72, and (b) sale by a registered owner to a dealer and the subsequent sale by the registered dealer to a nondealer, G.S. § 20-75.

G.S. § 20-72(b) was rewritten by the 1961 Legislature. The concluding sentence of that subsection now reads: "Transfer of ownership in a vehicle by an owner is not effective until the provisions of this subsection have been complied with." That subsection makes it the duty of the vendor of a registered vehicle to endorse his certificate of title to the transferee with a statement of all liens or encumbrances to be verified by the oath of the owner. These papers must be transmitted to the Department of Motor Vehicles. But when a sale is made to a dealer, it is not necessary to transmit the certificate of title to the Department *252 of Motor Vehicles until the dealer resells. G.S. § 20-75. To G.S. § 20-75 the Legislature in 1961 added: "Transfer of ownership in a vehicle by a dealer is not effective until the provisions of this subsection have been complied with." The burden is imposed on the vendee, or as the statute describes him, transferee, to present the certificates and make application for a new certificate of title within twenty days. A wilful failure to do so is expressly declared to be a misdemeanor, G.S. § 20-73, and when the certificate of title is delivered to a lien holder, it is nonetheless the duty of the purchaser to see that the certificate is forwarded to the Department of Motor Vehicles. G.S. § 20-74.

We said in Community Credit of Lenoir, Inc. Co. v. Norwood, supra: "Since 1 July 1961 the purchaser of an automobile does not acquire title until he has complied with the provisions of G.S. 20-72(b) and 75. These sections make it the duty of the purchaser to secure from his vendor the old certificate duly endorsed or assigned and to apply for a new certificate. They do not relate to the duty of the Department to issue a new certificate. What the amendments of 1961 say is: The vesting of title is deferred until the purchaser has the old certificate endorsed to him and makes application for a new certificate.

"If, as appellee argues, the Legislature intended the quoted amendment to mean purchaser acquired no title until the Department issued him a certificate, it would doubtless have said: `Title shall not pass to purchaser until the Department has issued him a new certificate' or some other plain and positive language to that effect. The intent, declared in the preamble, to prevent vendor from using the old certificate to entrap the unwary was effectively accomplished by the language selected by the Legislature." (Emphasis added.)

The facts here admitted by the demurrer not only fail to suggest any attempt on the part of dealer to entrap Crockett or any other person injured by the negligence of its vendee but affirmatively show dealer had, as required by the statute, given the duly endorsed certificate of title and Bradshaw's application for a new certificate to his agent, Smart Finance Company. Dealer had put it beyond its power to use the certificate for any purpose.

There is nothing in the statute which suggests dealer, a vendor, should be penalized and held liable because of the failure of Bradshaw, a purchaser, to perform his statutory duty.

Prior to 1961 a creditor claiming a lien on a motor vehicle was required to register his lien in the office of the register of deeds to protect himself against claims of other creditors of the owner. Now he protects himself by having his claim noted on the certificate of title issued by the Department of Motor Vehicles.

One who claims an interest in a motor vehicle and defers or delays giving notice of his right by applying to the Department of Motor Vehicles for a new certificate or the notation of his claim on the outstanding certificate must suffer the consequences of his delay. As to him the transfer of ownership is not effective until he has requested the Department to act.

Nothing here said is intended to indicate nonliability of a registered dealer's insurance carrier where the dealer permits purchaser to use dealer's registration plates within the twenty-day period allowed purchaser to obtain insurance and have the vehicle registered in his own name. G.S. § 20-79.1.

Reversed.