Request By:
Mrs. Jean W. Bailey
Rowan County Clerk Elect
Courthouse
Morehead, Kentucky 40351
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
John Doe [not a dealer] sells his car and assigns the certificate of title and registration on the back and gives it to the new owner.
Suppose, you say, the new owner, without transferring the registration of the vehicle to himself in the clerk's office, has an accident. Who would be legally responsible. In other words, who would be the owner in terms of tort liability for negligent operation of the vehicle?
KRS 138.465 (1976 amendment) removed the bill of sale from the statute as a formal title transfer document. The title document in use now under the statute is a form labeled "Certificate of Title and Registration. " It contains the essential information of title owner, owner's address, license number, identification number of vehicle, make, model number, etc., and any first and second liens on the vehicle. On the back side are appropriate blanks for assignment of title and registration. See KRS 186.200 and 186.020.
We will answer the basic question as to whether or not the failure to comply with Kentucky's registration law [see KRS 186.020, 186.200, and 138.465] invalidates the sale of the vehicle. Assuming that the Certificate of Title and Registration has been properly signed and notarized as required by KRS 186.200, KRS 138.465 requires any person other than a dealer who sells or transfers a vehicle in Kentucky to deliver to the county clerk the Certificate of Title and Registration with the assignment form on the reverse side properly executed. The seller must transfer the vehicle to the new owner within 10 days of the date of sale or transfer of ownership. This means the seller must effect a transfer of registration within the 10 day limit. If he fails to do so, he is subject to a fine of not less than $10 nor more than $2,000, or imprisonment for not more than one year, or both.
The court held in Moore v. Wilson, 230 Ky. 49, 18 S.W.2d 873 (1929) 874, that though liability may be incurred under the penal provisions, our registration statute does not provide that a failure to comply with its provisions will render the sale void. The court said that the vehicle registration law was adopted as a police measure and is regulatory in character, and neither a compliance or noncompliance with its terms can be regarded as always conclusive on the question of ownership or title.
The case of Amburgey v. Potter, Ky., 477 S.W.2d 786 (1972) 787, holds that where the title to a car by way of a bill of sale is executed, but where the transfer of registration was not complied with until nine days after the payment for and delivery of the car to the purchaser, the seller would not be answerable in a tort suit [arising out of an auto accident] for the alleged acts of a stranger to whom the purchaser had entrusted the vehicle. The court reiterated the doctrine that compliance or noncompliance with the registration statute is not conclusive of ownership of the automobile. However, evidence of rcords of title and transfer of registration is competent to be considered by a jury in connection with other evidence bearing on the question in determining an issue as to ownership. Crook v. Blackburn, 254 Ky. 405, 71 S.W.2d 986 (1933) 987.
The basic point as to ownership of a car is that under the law of sales, as now embodied in the Uniform Commercial Code, where the purchase price has been paid and the automobile has been delivered and accepted by the buyer, and the entire transaction takes place in Kentucky, the title passes at the time and place of delivery, notwithstanding that the bill of sale had not been executed or filed with the county clerk. Although KRS 186.200 in 1970 required the execution of a bill of sales, the court, in Hicks v. Kentucky Farm Bureau Mutual Insurance Co., Ky., 455 S.W.2d 52 (1970), held that the law of sales determines ownership of a motor vehicle. Under KRS 355.2-401, title passed at the time and place of delivery of the vehicle to the buyer, though the bill of sale had not been executed and delivered to the buyer. In addition, the court ruled that, as relates to ownership, KRS 186.200 [requiring a bill of sale] has no applicability, since KRS 355.2-201(c) declares that it is not necessary that a contract of sale be in writing in order to be enforceable with respect to goods . . . which have been received and accepted.
The answer to your question is that for purposes of determining ownership of a motor vehicle involved in an accident, title passes when the consideration is paid and the motor vehicle is delivered to and accepted by the buyer. Thus such buyer would be the owner in determining tort liability, even though a transfer of registration in the clerk's office has not been effected.