Toyota Motor Credit v. C.L. Hyman Auto Wholesale, Inc.
Virginia Supreme Court
506 S.E.2d 14, 256 Va. 243 (1998)
- Written by Heather Whittemore, JD
Facts
In February 1996, Traci Bowden purchased a vehicle through financing from Toyota Motor Credit Corporation (Toyota) (plaintiff). Toyota retained a security interest in the vehicle in the form of a lien, which was perfected and noted on the certificate of title issued by the department of motor vehicles (DMV). In July 1996, Bowden submitted a forged letter to the DMV claiming that Toyota had released its lien on the vehicle. The DMV issued a new certificate of title to Bowden, which indicated that the vehicle was not encumbered by any liens. Bowden sold the vehicle to C. L. Hyman Auto Wholesale, Inc. (Hyman) (defendant). When Toyota learned that Bowden had sold the vehicle to Hyman, it asked Hyman to return the vehicle. Hyman refused. Toyota filed a lawsuit against Hyman in Virginia court, seeking a return of the vehicle. The trial court held that Hyman was not subject to Toyota’s lien, because Hyman was a bona fide purchaser of the vehicle with no knowledge of Bowden’s fraud. The trial court explained that Hyman was entitled to rely on the vehicle’s clean certificate of title issued by the DMV. Toyota appealed.
Rule of Law
Issue
Holding and Reasoning (Lacy, J.)
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