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SOUTHEAST FIRST NATL BANK OF MIAMI v. SECURITY PEO

December 11, 1979

SOUTHEAST FIRST NATL BANK OF MIAMI
v.
SECURITY PEOPLES TRUST CO. et al. v. FORD MOTOR COMPANY.



The opinion of the court was delivered by: KNOX

MEMORANDUM DENYING PLAINTIFF'S MOTION TO ALTER OR AMEND JUDGMENT AND FINDINGS OF FACT AND FOR ADDITIONAL FINDINGS

On August 2, 1979, after more than a week of non-jury trial, this court at the conclusion of plaintiff's case granted defendant's motion for involuntary dismissal under Rule 41(b) and entered judgment in favor of defendant and against plaintiff. Other paragraphs of the order dismissed the remaining claims against other defendants and by defendant Security Peoples Trust Company (Security) against Ford Motor Company. No objections to these other orders were filed.

 On August 8, 1979, plaintiff Southeast First National Bank of Miami (Southeast) filed the motion to amend judgment and for other relief which is presently before the court for disposition. Briefs were filed and oral argument held September 18, 1979.

 At the time of granting Security's motion for involuntary dismissal because of Southeast's failure to make out a case entitling it to relief the court dictated its reasons at length upon the record. These reasons, including adoption of certain of Security's Proposed Findings of fact were immediately transcribed and filed of record. The relevant portion thereof is incorporated herein and copied at length as Appendix A. *fn1"

 The findings as modified by the court appear as Appendix B.

 In the complaint in this case, there were two counts: (1) to replevy certain motor vehicles as to which plaintiff claimed title and right to possession and (2) to establish a constructive trust on the proceeds of sales of vehicles claimed by the plaintiff which had been sold by Security.

 The Uniform Commercial Code is in effect in both the States of Pennsylvania and Florida where there is little if any difference as to the law. This case, however, was tried in a U.S. District Court sitting in Pennsylvania and we would ordinarily apply the law of Pennsylvania including its rules of conflicts except where it is shown that the law of another state is to the contrary. In this case, we find no appreciable difference between the law of Pennsylvania and the law of Florida and as a matter of fact find the Florida decisions cited in the Appendix to be in accord with the law of Pennsylvania.

 Plaintiff, in its motion to amend judgment seems to rely upon the fact that in this motion for involuntary dismissal, the plaintiff having produced Florida titles and security interests covering these motor vehicles would be entitled to recover unless the defendant has produced security interests and titles which override those of plaintiff.

 This is not the law. In Article 9-204 of the Uniform Commercial Code, it is provided that "(a) security interest cannot attach until there is agreement (subsection (3) of section 1-201) that it attach and value is given And the debtor has rights in the collateral." Assume that the first two requirements are satisfied, the holding of this court is that the debtor had no rights in the collateral and that therefore the basis upon which the Florida security interests and titles were based must collapse.

 It is the law in replevin that a plaintiff must recover on the strength of its own title and not the weakness of the defendants. See Blossom Products Corp. v. Natl Underwear Co., 325 Pa. 383, 191 A. 40 (1937); H. L. Braham & Co. v. Surrell, 115 Pa.Super. 365, 176 A. 64 (1935); Sork v. Label, 133 Pa.Super. 169, 2 A.2d 521; Internat'l. Electronics Co. v. NST Metal Products Co., 370 Pa. 213, 88 A.2d 40 (1952).

 In the instant case, we held at the time of granting the motion for involuntary dismissal that plaintiff's titles and security interests were based on void titles issued without jurisdiction in Florida.

 Regardless of this, the record shows that the plaintiff called for cross examination Mr. Manucci, Vice President of Security who testified to various matters including the security interests of Security and the terms of the security agreement held by Security were read into evidence. See NT 77-78, 104-110, 116, 117.

 It further appears that the proceeds of cars sold by Security cannot be traced and therefore plaintiff has not established its basis for showing a constructive trust. See findings 42, 43, 44.

 The record shows that Southeast knew Security had a floor plan interest in these cars and we find it was not a purchaser in the ordinary course as required by section 9-307(1) protecting ordinary consumers. It has been held that this language does not protect a financing institution as a buyer in ordinary course. See Associates Discount Co. v. Old Freeport Bank, 421 Pa. 609, 220 A.2d 621 (1966); Mother Lode Bank v. GMAC, 46 Cal.App.3d 807, 120 Cal.Rptr. 429 (1975).

 Upon reconsideration of the whole matter and consideration of the motion to amend judgment and other motions filed by plaintiff and after considering the briefs and arguments of counsel with respect thereto, the court concludes ...


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