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Arsen v. Director of Division of Motor Vehicles

Decided: April 11, 1960.

AL ARSEN, INDIVIDUALLY AND TRADING AS AL'S AUTO SALES, PLAINTIFF,
v.
DIRECTOR OF THE DIVISION OF MOTOR VEHICLES OF THE STATE OF NEW JERSEY; N.Y. AUTO BODY & RADIATOR WORKS INC., A CORPORATION OF NEW JERSEY; AND ELSIE GROTON, DEFENDANTS



Brown, J.d.c. (temporarily assigned).

Brown

The plaintiff, a highway used car dealer in Little Ferry, Bergen County, paid $2,200 to one Anthony Jacene for possession of and title to a current model Ford station wagon. It was a most unfortunate transaction. Jacene's certificate of ownership was issued on an owner assignment which Jacene had forged. The car was impounded by the Director of the Division of Motor Vehicles pending investigation of the owner's stolen car complaint. Custody of the automobile was delivered to New York Auto Body and Radiator Works, Inc. Jacene is a fugitive.

The plaintiff sued the Motor Vehicle Director and the bailee for wrongful detention. By consent of all parties, the owner, Elsie Groton, was made a defendant. She counterclaimed against the plaintiff for possession. Involvement of the Motor Vehicle Director and the bailee has been attended to by stipulation. Nothing remains for adjudication except the controversy between the purchaser and the owner as to which should suffer for Jacene's malefaction.

It is clear from the opinion in Eggerding v. Bicknell , 20 N.J. 106 (1955), that the rules for assignment of automobile ownership are sui generis. Effectual title transfer depends upon compliance with requirements of an artificial character. They were not satisfied here, of course. But according to the pre-trial order, the plaintiff does not depend upon a claim of ownership. Reliance rests upon an estoppel arising from conduct of the defendant, Groton. The contention is that, having clothed Jacene with the indicia of title, the defendant should not be permitted to shift her loss to a bona fide purchaser. Eggerding does not bear upon the issue thus framed for trial.

That issue, as developed by the proof, may be stated as follows:

Where the owner of an automobile has delivered to another possession of the car, its key and the certificate of ownership, is the owner estopped to claim the car from a

bona fide purchaser who relied upon the possessor's evidence of title derived from forgery of the certificate?

If the vendor of a chattel is not the owner or is not authorized by the owner, then no title passes by the sale. This is the consequence of R.S. 46:30-29 (Uniform Sale of Goods Law). The section contains a proviso however -- the conduct of the owner can preclude him from denying the vendor's authority.

The Supreme Court construed this statutory provision in Nelson v. Wolf , 4 N.J. 76 (1950). The opinion states the following proposition of law:

"* * * although possession alone is not enough to create an estoppel, the owner may be estopped from setting up his own title and the lack of title in the vendor as against a bona fide purchaser for value where the owner has clothed the vendor with possession and other indicia of title." (at pages 79-80)

The Nelson case did not involve an automobile transfer. But the applicability of the principle to such a sale is implied from the court's analysis of automobile decisions in other jurisdictions which annotate the comparable section of the Uniform Sales Act.

The New Jersey statutory system for registration of automobile ownership (R.S. 39:10-1 et seq.) has as one purpose the issuance of a "certificate of ownership." The certificate is an indicium of title according to the statute (N.J.S.A. 39:10-2) and its sufficiency as ...


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