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Ohio Certificate of Title Law - MCO & MSO

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  • lawfulzone
    It appears that the confusion over MCO s (Manufacturer Certificate of Origin) comes from the fact that (and I am speaking for Ohio) the common law of property
    Message 1 of 1 , Mar 12, 2013
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      It appears that the confusion over MCO's (Manufacturer Certificate of Origin) comes from the fact that (and I am speaking for Ohio) the common law of property rights has been abrogated by the certificate of title law.  § 4505.04. Evidence of ownership

      Although the law is deemed constitutional, because of its mission statement in preventing fraud and theft, the result is such that you can purchase and pay for your car, however the courts and the state will not recognize your car as "your" property. The only way that your property rights are recognized in the vehicle is by registering the vehicle with the state and receiving a certificate of title. The certificate of title is your only "legal" proof that you own the vehicle.

      I have issues with this process, but I can accept it as a process for a civilized and lawful society. As I've stated before, the reason the rule of law works is because of the expectations of property rights.

      Following are a few ORC 4504.04 annotations regarding the certificate of title laws for Ohio. 

      I suspect that other states are similar. Following the annotations is a case discussing the abrogation of the common law re: car titles.

      The "certificate of title law" relating to motor vehicles and embracing GC §§ 6290 to 6290-17 (R.C. 4501.01, 4501.02, 4503.01, 4503.20, 4505.01 et seq), constitutes an authorized exercise of police power on the part of the general assembly and does not violate any of the provisions of the state or federal constitution: State ex rel. City Loan & Savings Co. v. Taggart, 134 Ohio St. 374, 17 N.E.2d 758 (1938).

      Under the Ohio certificate of title act, a change in ownership of an automobile is not consummated until a certificate of title is issued in the name of the purchaser: Brewer v. De Cant, 167 Ohio St. 411, 149 N.E.2d 166 (1958).

      Since the enactment of this section the mere possession of an automobile no longer carries with it any right or interest in that automobile which a court can recognize: Veltri v. Cleveland, 167 Ohio St. 90, 146 N.E.2d 442 (1957).

      Under the provisions of this section, proof of ownership of a motor vehicle must be made by a certificate of title: Peters Motors, Inc. v. Rodgers, 161 Ohio St. 480, 120 N.E.2d 80 (1954).

      Under the provisions of this section an Ohio court cannot recognize the right, title, claim or interest of any person in or to any motor vehicle sold or disposed of or mortgaged or encumbered in Ohio after the effective date of this section of the code unless such right, title, claim or interest is evidenced by a certificate of title or manufacturer's or importer's certificate duly issued in accordance with the provisions of the Certificate of Title Act: Graves & Son, Inc. v. Cooper & Son Motor Sales, Inc., 67 Ohio L. Ab. 255, 119 N.E.2d 447 (App 1951).

      The Ohio certificate of title law for the registration of titles to motor vehicles, GC §§ 6290-2 to 6290-20 (R.C. 4505.01 et seq), is exclusive, and the only way a buyer can acquire a good title to such a vehicle from a dealer is by procuring a certificate of title from the proper clerk of courts. GC §§ 6290-4 and 6290-5 (R.C. 4505.04 and 4505.06): Crawford Finance Co. v. Derby, 63 Ohio App. 50, 25 N.E.2d 306 (1939).

      The provisions of this section, abrogate the common law of resulting trusts in Ohio with respect to motor vehicles: In re Case, 161 Ohio St. 288, 118 N.E.2d 836 (1954).

       

      IN RE ESTATE OF CASE: BUTLER, APPELLEE, v. CASE, ADMR., ET AL., APPELLANTS

      No. 33573

      Supreme Court of Ohio

      161 Ohio St. 288; 118 N.E.2d 836; 1954 Ohio LEXIS 548; 53 Ohio Op. 172

      April 7, 1954, Decided

      PRIOR HISTORY:  [***1]  APPEAL from the Court of Appeals for Franklin county.

      The question here involved arises in the settlement of an estate and concerns the ownership of two automobiles purchased by the decedent but for which certificates of title were issued to decedent's daughter.

      Earl A. Case died intestate April 26, 1952, leaving a surviving spouse and children by a former marriage, including a daughter, Barbara R. Butler. The administrator, Rodger Case, is a son of the decedent. The inventory included two Cadillac automobiles -- a 1941 four-door sedan and a 1949 convertible coupe. At the time of purchase of the automobiles, the certificates of title were taken in the name of the daughter, Barbara R. Butler, and the title remained in that daughter. The decedent paid for the automobiles, for the insurance thereon, and for the licenses. He paid all bills for repairs and generally retained possession of the two automobiles. The insurance and the licenses were procured in the name of the daughter, Barbara R. Butler. The decedent retained possession of the certificates of title and the automobile keys and stored the cars in his own garage but permitted the daughter to use the cars upon some occasions.

       [***2]  On previous occasions when purchasing automobiles, the decedent had caused the title certificates to be issued to others and particularly to anyone to whom he was indebted by reason of the purchase. To pay for one of the automobiles in question, the sum of $ 2,100 was borrowed from a bank. The note to the bank was signed by both the decedent and the daughter and the automobile was pledged as security. Whether this note was discharged prior to decedent's death is not disclosed.

      It was stated by both the daughter and her husband that, at about the time of the purchase of the second Cadillac, the decedent said to the daughter that the cars were in her name so that when and if he died she would get them free and clear of taxes.

      The daughter filed exceptions to the inventory, claiming to be the owner of the automobiles. Those exemptions were overruled by the Probate Court.

      Upon appeal to the Court of Appeals that court reversed the judgment of the Probate Court and ordered that the exceptions of the daughter be sustained.

      The cause is in this court upon the allowance of a motion to certify the record.

      DISPOSITION: Judgment affirmed.

      CASE SUMMARY

       

      PROCEDURAL POSTURE: Appellant, an administrator of a decedent's estate, sought review of a judgment of the Court of Appeals for Franklin County (Ohio), which reversed a trial court's judgment and ordered that exceptions by appellee, the decedent's daughter, had to be sustained after the inventory included two cars bought by the decedent for which certificates of title were issued to the daughter under Ohio Rev. Code § 4505.04.

       

      OVERVIEW: The daughter claimed in the exceptions to be the owner of the cars. After the trial court overruled the exceptions, the appellate court reversed. The statute provided that no person acquired any right, title, claim, or interest in a car without a certificate of title. Affirming the appellate court, the court concluded that the common law of resulting trusts was completely abrogated so far as motor vehicles were concerned by § 4505.04. The only certificates of title issued were in the name of the daughter. The statute was before the court, and the court could not ignore it. Neither fraud nor theft was involved in the case. However, the court noted that its decision would not control in a situation where the facts could warrant a decision that a certificate of title under the statute was voidable on account of fraud.

       

      OUTCOME: The court affirmed the judgment.

       

      CORE TERMS: certificate, motor vehicle, resulting trusts, daughter, decedent, manufacturer's, importer's, common law, transferred, ownership, evidenced, abrogated, gift, fraudulent, purchaser's, equitable, acquiring, voidable, acquire, drastic, vested, holder, theft


      LexisNexis® Headnotes

      Transportation Law > Private Vehicles > Title
      Transportation Law > Private Vehicles > Vehicle Registration > General Overview

      HN1Go to the description of this Headnote.

      See Ohio Rev. Code § 4505.04.

      Estate, Gift & Trust Law > Trusts > Resulting Trusts
      Governments > Legislation > Interpretation

      HN2Go to the description of this Headnote.

      Where a statute is before a court, the court cannot ignore it.

      Transportation Law > Private Vehicles > Title
      Transportation Law > Private Vehicles > Vehicle Registration > General Overview

      HN3Go to the description of this Headnote.

      Ohio Rev. Code § 4505.04 says two things in clear and unambiguous language: (1) No person acquiring a motor vehicle shall acquire any right, title, claim or interest in it until he shall have had issued to him a certificate of title. (2) No court in any case at law or in equity shall recognize the right, title, claim or interest of any person in or to any motor vehicle, etc., unless evidenced by a certificate of title.

      Estate, Gift & Trust Law > Trusts > Constructive Trusts
      Estate, Gift & Trust Law > Trusts > Resulting Trusts
      Governments > Courts > Common Law

      HN4Go to the description of this Headnote.

      The common law of resulting trusts is completely abrogated, so far as motor vehicles are concerned, by Ohio Rev. Code § 4505.04.

      HEADNOTES

      Motor vehicles -- Certificate  [***3]  of title as evidence of ownership -- Section 6290-4, General Code -- Abrogates common law of resulting trusts -- Resulting trust cannot be created -- Inadmissibility of evidence to dispute title -- Purchaser, paying for automobile and maintenance, retains possession -- Certificate of title in name of daughter -- Daughter owner upon purchaser's death.

      SYLLABUS

      1. The provisions of Section 6290-4, General Code (Section 4505.04, Revised Code), abrogate the common law of resulting trusts in Ohio with respect to motor vehicles.

      2. Section 6290-4, General Code (Section 4505.04, Revised Code), makes evidence inadmissible to dispute the title of one to whom a motor vehicle certificate of title is issued pursuant to the provisions of the Ohio Certificate of Title Act except evidence to establish fraud which would cause such certificate of title to be voidable.

      3. By reason of the provisions of Section 6290-4, General Code (Section 4505.04, Revised Code), a resulting trust with respect to a motor vehicle can not be created in Ohio.

      4. Where one purchases an automobile and pays for it, pays for the license, the insurance and the repairs, and retains possession of the certificate of title and [***4]  the keys, keeps the automobile in his garage and makes general use of the automobile but has the certificate of title and the insurance issued in the name of his daughter and allows the daughter some use of the automobile, and there is no claim that the certificate of title is voidable by reason of fraud in connection with its issuance, then upon his death the daughter must be considered the owner of the automobile with full right of possession thereof. Under such circumstances there is no title in the decedent or his estate upon the theory of resulting trust.


      COUNSEL: Mr. Thomas W. Connor, for appellee.

      Mr. John C. Fontana and Mr. A. Glenn McClelland, for appellants.

      JUDGES: MIDDLETON, J. WEYGANDT, C. J., TAFT, ZIMMERMAN, STEWART and LAMNECK, JJ., concur. HART, J., concurs in paragraphs one, two and four of the syllabus and in the judgment.

      OPINION BY: MIDDLETON

      OPINION

       [*290]   [**838]  The Probate Court found that the evidence did not establish a gift of the automobiles from decedent to the daughter either causa mortis or inter vivos. That finding was based largely upon the  [*291]  fact that the decedent did not completely surrender dominion and control over [***5]  the automobiles. The Probate Court then concluded and held that, notwithstanding the provisions of Section 6290-4, General Code (Section 4505.04, Revised Code), the equitable title was vested in decedent upon the theory of resulting trust.

      The Court of Appeals in its opinion found that the issuance of certificates of title to the daughter raised a presumption of gift which was not overcome by the evidence. That court further found that, even if the resulting trust theory could be applied, the administrator had not made the requisite proof to establish a resulting trust.

      This court finds no way to answer the question here posed except by construing and applying Section 6290-4, General Code (Section 4505.04, Revised Code), which provides:

      HN1Go to this Headnote in the case."No person acquiring a motor vehicle from the owner thereof, whether such owner be a manufacturer, importer, dealer or otherwise, hereafter shall acquire any right, title, claim, or interest in or to said motor vehicle until he shall have had issued to him a certificate of title to said motor vehicle, or delivered to him a manufacturer's or importer's certificate for the same; nor shall any waiver or estoppel operate in favor of such person against [***6]  a person having possession of such certificate of title or manufacturer's or importer's certificate for said motor vehicle for a valuable consideration. No court in any case at law or in equity shall recognize the right, title, claim, or interest of any person in or to any motor vehicle, hereafter sold or disposed of, or mortgaged or encumbered, unless evidenced by a certificate of title or manufacturer's or importer's certificate duly issued, in accordance with the provisions of this chapter." (Emphasis supplied.)

      The drastic character of this statute and its farreaching  [*292]  effect become more apparent with the passing of time. New and troublesome problems constantly arise under it. This court shares the reluctance of trial and appellate courts to adopt all the changes in long settled law, which the literal construction of this statute requires. Except for the effect of the statute we could agree that the evidence warrants the conclusion that the decedent transferred the automobiles or caused them to be transferred to the daughter under circumstances raising an inference that he intended to have transferred to her a bare legal title and not to give her the beneficial [***7]  interest. Such would be a typical case of resulting trust. However, HN2Go to this Headnote in the case.the statute is before us. We can not ignore it.

      In considering whether there was a gift, we can not find the answer in the evidence regarding the exercise of dominion and  [**839]  control over the automobiles, if the common-law standard of proof has been abrogated by this statute.

      HN3Go to this Headnote in the case.This statute says two things in clear and unambiguous language: (1) No person acquiring a motor vehicle shall acquire any right, title, claim or interest in it until he shall have had issued to him a certificate of title. No certificate of title was issued to the decedent. (2) No court in any case at law or in equity shall recognize the right, title, claim or interest of any person in or to any motor vehicle, etc., unless evidenced by a certificate of title. The only certificates of title issued are in the name of the daughter.

      In view of this statute, how can a court entertain evidence to contradict the certificate of title? How can a court find that the equitable title is in someone other than the holder of the certificate of title? All courts are forbidden, either in law or equity, to recognize [***8]  any right, claim or interest, as well as any title, unless evidenced by a certificate of title.

      It has been urged that the General Assembly did not  [*293]  intend the results which seem inevitable under this statute. This argument is supported by citing the purpose of the Ohio Certificate of Title Act as being "to prevent the importation of stolen motor vehicles and thefts and frauds in the transfer of title to motor vehicles." There is much force to this argument but it does not change the language of the statute. It may also be observed that the accomplishment of the purpose above set forth might necessitate and justify an act so broad and so drastic that it would affect conduct and fields of activity not included within the scope of the primary objective. Furthermore, if the common law of resulting trusts, so far as motor vehicles are concerned, has been abrogated by this statute, such result is not wholly bad. If the title must be considered as vested in the one whose name appears in the certificate (in the absence of fraudulent conduct on the part of the holder such as would cause the certificate to be voidable), then fraudulent concealment of ownership is prevented.  [***9]  To that extent the statute operates to prevent fraud.

      Then, too, the practical result -- which is to require all motor vehicles to be registered in the names of the real owners and to make valid certificates of title conclusive as to ownership and title -- works no real hardship upon anyone.

      Further discussion of the statute will serve no purpose. Borrowing the expression from a recent opinion of a judge of the Court of Appeals, we suggest that the meaning of the statute does not gain in clarity by prolixity of statement.

      Though not entirely in accord with our wishes, the conclusion is inescapable that HN4Go to this Headnote in the case.the common law of resulting trusts is completely abrogated, so far as motor vehicles are concerned, by Section 6290-4, General Code (Section 4505.04, Revised Code), and such is our decision.

       [*294]  It is to be noted that neither fraud nor theft is involved in the instant case. This decision will not control in a situation where the facts may warrant a decision that a certificate of title under the Ohio act is voidable on account of fraud.

      For the reasons hereinabove stated, the judgment of the Court of Appeals is affirmed.

      Judgment affirmed. [***10] 

       

       

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