## Facts

- Vera M. Adams owned an automobile and was the record owner on the Oregon certificate of title.
- Adams’s son-in-law, Richard, took the car to Gateley’s Fairway Motors (Gateley’s), a business that operated as both an auto repair shop and a used-car dealership.
- Richard left the car at Gateley’s for repairs and asked about the car’s estimated value, but he did not authorize Gateley’s to sell the car.
- Gateley’s nevertheless placed the car on its lot and sold it to Debra K. Thorn in a standard retail transaction.
- At the time of the sale, Gateley’s did not provide Thorn with a certificate of title endorsed by Adams.
- After learning of the sale, Richard demanded that Thorn return the car; Thorn refused.
- Thorn sued Adams for conversion and sought an order requiring Adams to transfer the certificate of title and take other steps needed to register the car in Thorn’s name.
- Adams counterclaimed, seeking an order requiring Thorn to return the car or, alternatively, to pay the car’s fair market value.
- Both parties moved for summary judgment; the trial court ruled for Thorn based on the UCC entrustment rule and ordered Adams to transfer the certificate of title and assist with registration.
- Adams appealed, arguing that Thorn was not a buyer in the ordinary course because the certificate of title was not transferred at the time of purchase, making the transaction irregular and not in good faith.

## Issues

1. Whether Adams’s delivery of the car (through Richard) to a car dealer and repair shop constituted an entrustment that gave the dealer power under ORS 72.4030 to transfer Adams’s rights to Thorn.
2. Whether Oregon’s motor-vehicle certificate-of-title statutes make transfer of an endorsed title certificate the exclusive method of transferring ownership, such that the dealer’s failure to deliver endorsed title prevented Thorn from taking good title.
3. Whether the absence of a contemporaneous title-certificate transfer meant Thorn lacked good faith or buyer-in-ordinary-course status.

## Decision

- The Court of Appeals affirmed the summary judgment for Thorn.
- Adams’s conduct in allowing Gateley’s (a merchant dealing in cars) to possess the car for repairs constituted entrustment under ORS 72.4030.
- Gateley’s therefore had statutory power to transfer Adams’s rights in the car to a buyer in the ordinary course of business.
- Thorn qualified as a buyer in the ordinary course, and the lack of an endorsed certificate of title at the moment of sale did not defeat Thorn’s UCC-based ownership as against Adams.
- The trial court properly ordered Adams to deliver the certificate of title and take reasonable steps needed to register the car in Thorn’s name.

## Legal Principles

- Under ORS 72.4030, entrusting goods to a merchant who deals in goods of that kind gives the merchant power to transfer the entruster’s rights to a buyer in the ordinary course of business.
- Entrustment can occur when an owner voluntarily leaves goods with a qualifying merchant, even if the owner’s purpose is repair or service rather than sale.
- A buyer in the ordinary course takes free of the entruster’s ownership claim when the buyer purchases in good faith, for value, and without notice that the sale violates another person’s rights.
- Oregon’s motor-vehicle title-certificate statutes govern titling and registration and do not, by themselves, make a dealer’s failure to deliver an endorsed certificate of title void the transfer of ownership rights under the UCC as between the owner and a good-faith retail buyer.
- The absence of immediate delivery of an endorsed title certificate does not automatically put the buyer on notice that the dealer lacks authority to sell, and does not alone negate good faith.

## Conclusion

Thorn v. Adams holds that when a car owner leaves a vehicle with a dealership that deals in cars, the owner has entrusted the vehicle within the meaning of ORS 72.4030, enabling the dealer to pass the owner’s rights to a buyer in the ordinary course; Oregon’s title-certificate requirements do not prevent the buyer from taking good title under the UCC merely because no endorsed certificate was delivered at the time of sale.


Thorn v. Adams, 865 P.2d 417 (1993)