## Facts

- On August 10, 1979, Metalworking Machinery Company (Metalworking) purchased a Wheelabrator machine from East Coast Steel Company (East Coast) in South Carolina for $15,000 (F.O.B. South Carolina).
- No certificate of title or bill of sale was involved in the transaction.
- Metalworking left the machine in East Coast’s possession and did not pick it up.
- On April 4, 1980, while the machine was still at East Coast, Yoder Machinery Company (Yoder) purchased the same Wheelabrator from East Coast for $15,000.
- Yoder then sold the machine, in the ordinary course of its business, to Fabco, Inc. (Fabco) for $31,500.
- Fabco spent a substantial sum rehabilitating the machine and put it into service.
- Metalworking filed an action (originating as replevin) and ultimately sought recovery of $15,000 against Fabco and Yoder based on Metalworking’s prior purchase and East Coast’s later resale.
- Fabco filed a third-party claim against Yoder, alleging that if Metalworking was the owner, Yoder was liable to Fabco for selling property without good title.
- The parties proceeded on stipulated facts and filed cross-motions for summary judgment.

## Issues

1. Whether Metalworking was estopped from asserting ownership because it left the Wheelabrator in East Coast’s possession for approximately eight months, creating an appearance that East Coast could sell it.
2. Whether East Coast’s continued possession allowed Yoder (and then Fabco) to obtain rights superior to Metalworking’s earlier-acquired ownership.
3. Whether summary judgment for Metalworking against Fabco, and for Fabco against Yoder, was proper on the stipulated record.

## Decision

- The court of appeals affirmed summary judgment for Metalworking against Fabco in the amount of $15,000.
- The court of appeals affirmed summary judgment for Fabco against Yoder in the amount of $15,000 on Fabco’s third-party claim.
- Metalworking was not estopped from asserting ownership merely because it left the machine with East Coast after buying it.
- Because the material facts were stipulated, the ownership and estoppel questions were resolved as matters of law, making summary judgment appropriate.

## Legal Principles

- A buyer may acquire ownership of goods by contract of sale; continued physical possession by the seller after the sale does not by itself transfer ownership back to the seller or give the seller authority to convey title again.
- A party generally cannot transfer better title than it has; once East Coast sold the machine to Metalworking, East Coast lacked title to pass to Yoder, and Yoder could not pass valid title to Fabco on that record.
- Equitable estoppel against the true owner requires misleading conduct attributable to the owner that induces another to change position; mere inaction or leaving purchased goods with the seller, without more, is not enough to bar the owner’s claim.
- A downstream purchaser’s good faith and expenditures on the goods do not, standing alone, defeat the earlier buyer’s ownership when the seller lacked power to transfer title.
- Summary judgment is proper when the facts are not disputed and the remaining questions are legal, including whether an estoppel defense can be established from the admitted record.
- A seller who transfers goods may be liable over to its buyer when the buyer is held responsible to the true owner due to a failure of title in the seller’s transfer.

## Conclusion

The appellate court held that Metalworking’s earlier purchase gave it ownership of the Wheelabrator, and Metalworking did not lose that ownership merely by leaving the machine with East Coast; without affirmative, misleading conduct by Metalworking, estoppel did not apply, so Fabco was liable to Metalworking for $15,000 and Yoder was liable to Fabco for the same amount based on Yoder’s wrongful transfer of the machine.


Metalworking Machinery Co., Inc. v. Fabco, Inc., 477 N.E.2d 634, 17 Ohio App. 3d 91 (1984)