Opinion
Page __
__ Cal.App.2d __337 P.2d 855Mary STODDART and Mark Stoddart, a Minor, by his Guardian, Charles Stoddart, Plaintiffs and Respondents,v.James William MAINES et al., Defendants, William G. Pierce (sued as Doe I), Nance Chevrolet Company (sued as Doe II), Defendants and Appellants.Civ. 23402.California Court of Appeals, Second District, Second DivisionApril 10, 1959Hearing Granted June 3, 1959.
[337 P.2d 856] Fitzgerald, Cozy, Gyger & Nelson, W. Walter Livingston, Jr., Los Angeles, for appellant William G. Pierce.
Smith & Wilson, Andrew V. Smith, Beverly Hills, for appellant Nance Chevrolet Co.
Pray & Price, William C. Price, Long Beach, for respondents.
ASHBURN, Justice.
Defendants William G. Pierce and Nance Chevrolet Company appeal from a judgment for plaintiffs in this personal injury action. Their codefendant James W. Maines defaulted and does not appeal from the judgment against him.
At the time of the accident giving rise to the litigation, Maines was in possession of a certain Chevrolet sedan and was driving the same. The court left to the jury only the question of damages, instructing that as matter of law Maines was negligent, plaintiffs not guilty of contributory negligence, and defendants Pierce and Nance Chevrolet Company were responsible as owners for the negligence of the driver Maines at the time of the accident.
At the beginning of the pertinent series of events Pierce was the owner of a 1952 Chevrolet sedan which was involved in the accident and was registered in his sole name. On January 28, 1956, he traded that car to Nance Chevrolet Company, a dealer, as part payment upon a new Chevrolet which he received at that time. When he turned the trade-in car over to Nance he endorsed the certificate of ownership (pink slip) on the reverse side, but left the date blank; in this condition he delivered it to Nance together with the certificate of registration (white slip) and the car itself. This ended his connection with the vehicle which he had traded in, the one involved in the accident. The court held that his failure to date the pink slip when endorsing it deprived him of the immunity to personal liability which would otherwise have been available to him under § 178(a)(1), Vehicle Code.
On February 7, 1956, Nance Chevrolet Company sold said automobile to Maines upon a conditional sale contract and delivered possession to him. A dealer's notice of sale was received by the Motor Vehicle Department on February 14, 1956. The date of mailing same to the department is not shown in the record but it is clear that it was 'later than the end of the next business day of the dealer,' the time limit prescribed by § 177(b), Vehicle Code. For this reason the court ruled that Nance Chevrolet Company did not gain the immunity of § 178(a)(2) of the code.
Re Liability of Pierce
The basic statutory provision is § 402, Vehicle Code, which imposes upon the owner of an autombile liability for negligence of one who drives it with the express or implied permission of the owner. But the subject of who is owner within the purview of the statute when a transfer has been or is in process of being made is covered by §§ 175, 177, 178 and 186 of the code. Section 176, which provides, 'it is [337 P.2d 857] unlawful for any person to fail or neglect properly to endorse, date and deliver the certificate of ownership * * * to a transferee who is lawfully entitled to a transfer of registration' does not operate upon title or the validity or effect of its transfer, as will appear from the ensuing discussion.
Section 186, general in nature, provides:
'(a) No transfer of the title or any interest in or to a vehicle registered hereunder shall pass and any attempted transfer shall not be effective unless and until the parties thereto have fulfilled either of the following requirements:
'(1) [Endorsement and delivery of certificate, and card, and application for transfer of registration.] The transferor shall have made proper endorsement and delivery of the certificate of ownership and delivery of the registration card to the transferee as provided in this code and the transferee has delivered to the department or has placed in the United States mail addressed to the department such certificate and card when and as required under this code with the proper transfer fee and thereby makes application for a transfer of registration except as otherwise provided in Section 180, or
'(2) [Delivery or mailing of appropriate documents.] The transferor shall have delivered to the department or shall be placed in the United States mail addressed to the department the appropriate documents for the registration or transfer of registration of such vehicle pursuant to such sale or transfer except as provided in Section 178. * * *'
The subject of proper endorsement is covered by § 175, which bears the black letter heading 'Endorsement of Certificate Upon a Transfer.' It provides that upon transfer of the title or an interest of the legal owner (defined in § 67) or the owner (§ 66) in or to a registered vehicle, the transferor 'shall write his signature, and the transferee shall write his signature and address, in the appropriate spaces provided upon the reverse side of the certificate of ownership issued for such vehicle.' If the transfer covers the interest of a registered owner (§ 68) only, he shall write his signature and address, and the transferee shall write his signature and address on the reverse side and the legal owner shall write his signature in the appropriate place. No reference to dating of signatures or transfer appears in this section.
When the appropriate signatures and addresses have been thus placed upon the pink slip and same has been delivered to the transferee together with the white certificate and possession of the automobile the sale is complete for the purpose of determining who is thenceforth liable for injuries under § 402, for § 178 provides:
'(a) An owner who has made a bona fide sale or transfer of a vehicle and has delivered possession thereof to a purchaser shall not be reason of any of the provisions of this code be deemed the owner of such vehicle so as to be subject to civil liability for the operation of such vehicle thereafter by another when such owner is addition to the foregoing has fulfilled either of the following requirements:
'(1) [Indorsement and delivery of ownership certificate, and delivery of registration certificate.] When such owner has made proper endorsement and delivery of the certificate of ownership and delivered the certificate of registration as provided in this code. * * *'
This section relieves the seller of compliance with the requirements of notice to the Motor Vehicle Department contained in § 186 (quoted supra), and in § 177 which says: '[Notice by owner selling or transferring title or interest and delivering possession: Requisites.] Whenever the owner of a vehicle registered hereunder sells or transfers his title or interest in, and delivers the possession of, said vehicle to [337 P.2d 858] another, said owner shall immediately notify the department of such sale or transfer giving the date thereof, the name and address of such owner and of the transferee and such description of the vehicle as may be required in the appropriate form provided for such purpose by the department. * * *' See Woods v. Eastridge, 99 Cal.App.2d 625, 629, 631, 222 P.2d 296. The vendee forthwith becomes liable for negligent use of the car regardless of the fact that he has not had time to effect its re-registration before occurrence of the accident. Smith v. Western Casualty, etc., Co., 60 Cal.App.2d 508, 512, 141 P.2d 10; Ferroni v. Pacific Finance Corp., 21 Cal.2d 773, 778, 135 P.2d 569.
Throughout the sections defining the methods by which an owner may relieve himself of future liability for negligence there is present the expressed thought that delivery of the automobile, the white slip and a properly endorsed pink slip are of the essence and are all sufficient. Section 175 clearly prescribes the elements of a proper endorsement,--namely, the signature or the signature and address of a participant in the transaction. The ordinary connotation of the word 'endorse' is: 'To write one's own name on the back of an instrument' (Ballentine's Law Dictionary). See, also, 1 Bouvier's Law Dist., Rawle's Third Revision; 42 C.J.S. p. 1367. As to what constitutes proper endorsement Larson v. Barnett, 101 Cal.App.2d 282, 288, 225 P.2d 297, 301, uses this language: 'And when Barnett, Sr., delivered the car and the pink slip, as he did, he could only deliver it 'properly endorsed' by having written thereon his own name and his address.' See, also, Woods v. Eastridge, supra, 99 Cal.App.2d 625, top of page 628, 222 P.2d 296.
Prior to 1951 there could have been no doubt about what constituted proper endorsement; the concept did not include any idea of dating a signature. Before its amendment in that year § 176 read: 'It is unlawful for any person to fail or neglect properly to endorse and deliver the certificate of ownership to a transferee who is lawfully entitled to a transfer of registration.' That section plainly had no effect upon title or liability for negligence for those matters were fully covered by the other sections just discussed. Section 176 merely added a criminal sanction for failure to properly endorse and transfer the certificate to one entitled thereto.
Such a situation is not unique in the area occupied by the Vehicle Code. It contains a large number of penal sections, specific as well as general. Section 760 says: 'It is unlawful and constitutes a misdemeanor for any person to violate any provision f this code unless such violation is under the provisions of this code expressly declared to be a felony or a public offense which is punishable either as a felony or misdemeanor.' It is a misdemeanor to operate an unregistered vehicle upon a highway (§ 140), to drive without a license (§ 250), to violate any other provisions of the registration laws (§ 230), to violate any traffic law (§ 450). But the operation of an unregistered vehicle does not constitute evidence of negligence nor impose civil liability upon any other ground (163 A.L.R. 1375, 1377, Annotation; 29 A.L.R.2d 963, 966, Annotation). The same is true of operation without a driver's license (6 Cal.Jur.2d, § 193, p. 673; 163 A.L.R. 1375, 1380, Annotation; 29 A.L.R.2d 963, 970, Annotation). In Henry v. General Forming, Ltd., 33 Cal.2d 223, 200 P.2d 785, there was a failure to comply with the provisions of § 178; a creditor relying upon the penal provisions of §§ 140 and 230 claimed the transaction was illegal. Rejecting this claim the court said, 33 Cal.2d at pages 226-227, 200 P.2d at page 787: 'The code provisions do not aim at tainting with illegality the sale and purchase of an automobile which is the only contract or transaction involved. The requirements deal solely with registration of ownership to give notice of the transfer after the purchase has been consummated. * * * The legal consequences of violation of provisions for registration are to be resolved by the express provisions of the Vehicle Code.' The consequences of failure to conform to the sections above discussed [337 P.2d 859] are defined in those same sections rather than in 176.
Prior to 1951 that section harmonized with the others, using the phrase 'properly to endorse and deliver the certificate of ownership.' In that year the section was amended by inserting the word 'date' after 'endorse',--'properly to endorse, date and deliver.' Though §§ 175 and 177 were amended at that session of the legislature, no change was made in either of them with respect to what constitutes a proper endorsement. The acts necessary thereto as defined in § 175 were not altered. Section 176 was again amended in 1953 by inserting the provision for delivery of the registration card. But § 175 was not then amended; § 186, though amended that year, retained the phrase 'proper endorsement' which had been in it since 1943. In 1955 § 178 was amended but the phrase 'proper endorsement' was retained. In short, the concept of proper endorsement has remained constant throughout the years and the reference to dating is found in § 176 alone. By way of administrative interpretation of the effect of the 1951 amendment to that statute it appears that the Pierce ownership certificate carries this caveat on the reverse side at the place provided for the date: 'It is a misdemeanor to fail to endorse, date and deliver the certificate of ownership to a transferee lawfully entitled to a transfer of registration (Veh.Code sec. 176).' No reference here to anything other than criminal liability for such an omission.
It should be remembered that § 402 is in derogation of the common law and to be construed strictly in favor of one sought to be brought within its operation. 'Since the imputed negligence statute created a new right of action, giving a remedy against a party who would not otherwise be liable, it must be strictly construed. Such was the holding in Cook v. Superior Court of Los Angeles County, 12 Cal.App.2d 608, 611, 55 P.2d 1227, 1228, where the court cited 59 Corpus Juris, page 1129, reading: "A statute creating a new liability, or increasing an existing liability, or even a remedial statutegiving a remedy against a party who would not otherwise be liable, must be strictly construed in favor of the persons sought to be subjected to their operation." Numerous cases were cited in support the text to which was added Leppard v. O'Brien, 225 A.D. 162, 232 N.Y.S. 454, 456, affirmed in 252 N.Y. 563, 170 N.E. 144, a case involving a similar statute and in which the court said: 'If a statute creates a liability where otherwise none would exist, or increases a common-law liability, it will be strictly construed.' In Swing v. Lingo, 129 Cal.App. 518, 526, 19 P.2d 56, a case under section 1714 1/4 the court said: 'Since the statute imposes a new and unusual liability which partakes of the nature of a penalty, it should not, at least, receive a construction favoring the imposition of such liability. Snell v. Bradbury, 139 Cal. 379, 382, 73 P. 150; Merrill v. Los Angeles Cotton Mills, Inc., 120 Cal.App. 149, 7 P.2d 329.'' Weber v. Pinyan, 9 Cal.2d 226, 229, 70 P.2d 183, 185, 112 A.L.R. 407. To the same effect, see Piacun v. Hexem, 18 Cal.App.2d 145, 149-150, 63 P.2d 315; Swing v. Lingo, 129 Cal.App. 518, 526, 19 P.2d 56. The same basic considerations dictate a construction of related statutes in favor of the existence of an exemption from the liability created by § 402.
Endorsement and delivery of all kinds of commercial instruments with the date left blank is of such common occurrence that the ordinary automobile owner (other than a dealer) would give little, if any, thought to the matter. To hold that such an inadvertence would impose upon him continued liability for the negligence of a purchaser or a subsequent purchaser (as at bar) is so harsh that we are unable to go along with that line of reasoning. We hold that violation of § 176, through failure to date the transfer, does not deprive the seller of the exoneration from liability provided by § 178(a)(1), and that the [337 P.2d 860] judgment must be reversed as to defendant Pierce.
Re Liability of Nance Chevrolet Company
This appellant is a dealer in new and used cars. Having acquired the automobile in question from Pierce on January 28, 1956, it sold the same to James W. Maines upon a conditional sale contract on February 7, 1956, and delivered possession to him on that day, but of course the pink slip was retained by the seller. It failed to give notice of sale to the Motor Vehicle Department 'not later than the end of the next business day of the dealer' as required by § 177(b). The document was received by the Motor Vehicle Department on February 14, 1956. We have concluded that this failure to comply with § 177(b) deprived the vendor of exemption from liability and that it remained so liable at the time of the accident on March 6, 1956, the vehicle not having been previously re-registered in Maines' name.
Section 402 contains the following exception in subdivision (f): 'If a motor vehicle is sold under a contract of conditional sale whereby the title to such motor vehicle remains in the vendor, such vendor or his assignee shall not be deemed an owner within the provisions of this section, but the vendee, or his assignee shall be deemed the owner notwithstanding the terms of such contract, until the vendor or his assignee retake possession of such motor vehicle. A chattel mortgagee of a motor vehicle out of possession shall not be deemed an owner within the provisions of this section.' But its apparently unconditional exemption is qualified by the terms of § 177(b): '[Notice by dealer: Form.] Every dealer upon transferring by sale, lease or otherwise any vehicle, whether new or used, of a type subject to registration hereunder, shall, not later than the end of the next business day of the dealer, give written notice of such transfer to the department upon an appropriate form provided by it but a dealer need not give such notice when selling or transferring a new unregistered vehicle to another dealer.' Unless its terms are met the exemption from liability under § 402 does not arise.
Or 'appropriate documents for registration of such vehicle' delivered or mailed to the Department pursuant to § 178(a)(2).
'In approaching the problem presented by this appeal it should first be observed that sections 402 and 177 of the Vehicle Code have been construed as providing that the conditional vendor of an automobile is liable within the amounts stated in the former section for the operation of such automobile with his consent by his conditional vendee in a negligent manner, where he delivers possession of the car to the vendee and fails to comply with section 177 with reference to giving notice of the transfer prior to the occurrence of the accident. Guillot v. Hagman, 30 Cal.App.2d 582, 86 P.2d 865; Bunch v. Kin, 2 Cal.App.2d 81, 37 P.2d 744; Helmuth v. Frame, 46 Cal.App.2d 372, 115 P.2d 846. Appellant questions the soundness of those cases, but a hearing by this court was denied in all of them and we are not inclined to disapprove them.' Ferroni v. Pacific Finance Corp., supra, 21 Cal.2d 773, 776, 135 P.2d 569, 571. To the same effect are: Johnson v. Barreiro, 59 Cal.App.2d 213, 216, 138 P.2d 746; Gutknecht v. Johnson, 62 Cal.App.2d 315, 319, 144 P.2d 854; Rosenthal v. Harris Motor Co., 118 Cal.App.2d 403, 406, 257 P.2d 1034; Traders & General Ins. Co. v. Pac. Emp. Ins. Co., 130 Cal.App.2d 158, 162, 278 P.2d 493.
The word 'immediately' which appeared in 177(b) prior to 1955 was replaced in that year by the phrase, 'not later than the end of the next business day of the dealer.' Any flexibility there may have been in the law was thus eliminated and a specific period was prescribed for action by the dealer. He must comply at his peril, failing which he remains liable as owner. Rainey v. Ross, 106 Cal.App.2d 286, 291, 235 P.2d 45; Harbor Ins. Co. v. Paulson, 135 Cal.App.2d [337 P.2d 861] 22, 25, 28, 286 P.2d 870; Pike v. Rhinehart, 112 Cal.App.2d 530, 532, 246 P.2d 963; Singleton v. Perry, 45 Cal.2d 489, 493-494, 289 P.2d 794.
Appellant argues that it was relieved of liability because its notice of sale was received by the Motor Vehicle Department on February 14th, several weeks before the accident of March 6th. There is in certain cases cited by appellant language pointing to the fact that the vendor had not acted until after the accident had occurred. Such cases are: Gutknecht v. Johnson, supra, 62 Cal.App.2d at page 315, 144 P.2d 854; Traders & General Ins. Co. v. Pac. Emp. Ins. Co., supra, 130 Cal.App.2d at page 163, 278 P.2d at page 497; Johnson v. Barreiro, supra, 59 Cal.App.2d at page 216, 138 P.2d at page 748; Rosenthal v. Harris Motor Co., supra, 118 Cal.App.2d at page 406, 257 P.2d at page 1036; Rainey v. Ross, supra, 106 Cal.App.2d at page 288, 235 P.2d at page 47. But those cases make no holding such as that sought by appellant herein. The reference to the relation of time of accident to activity of the vendor seems in each instance to be but an allusion to the facts existing in the particular case. The language of the statute and the principles established by the above-cited authorities do not permit of a holding that action taken by the vendor before the event of an accident is the equivalent of compliance with the specific terms of the statute. Failure of a dealer who makes a conditional sale to give the required notice 'not later than the end of the next business day of the dealer' or to present to the Department appropriate documents for re-registration precludes him from having the advantage of exemption from owner's liability which compliance would have afforded him.
The judgment is affirmed as to defendant Nance Chevrolet Company and is reversed with respect to defendant Pierce with instructions to enter judgment in his favor.
FOX, P. J., and HERNDON, J., concur.