MCOs

During December, 1999, I received some angry e-mail from a female in Colorado who made the argument that those "vile lawyers" had devised a way to steal the title of cars "away from the people" via the Manufacturer's Certificate of Origin ("MCO"). According to her, the MCO had been developed as the way to stealthily obtain ownership of all cars in America by the "State," and this scheme was clear proof of some communist plot. Here is a part of her argument:

"Next, the deceitful lawyers dba 'the State' coerce these 'dealers' into stealing the real bill of sale, called the Manufacturer's Certificate of Origin and unlawfully converting it into a 'Title', which does not convey lawful ownership of the private car. It's just another little fraud/crime they pull.
"Now, lying lawyers, dba 'The State' claim 'ownership' of your car, which is why your 'tags' state, 'for official use only'. That way the lying lawyers, dba 'the State', can now regulate, fine (for their own personal gain) and take 'their car' whenever they want.

"Don't just take my words for it, do your own homework. I did! When we made the final payment on our little Chevy, I called the 'GM loan company' and demanded my Manufacturer's Certificate of Origin. They said, 'Oh, we give you the 'title'. I said, I don't want any stupid 'title', I want the true and lawful 'Bill of Sale'. They referred me to the 'dealer'. I called the 'dealer' and demanded my true and lawful 'Bill of Sale'. I got the same response. I demanded by [sic] MCO and finally the manager of the company admitted to me that 'the State' makes them turn them over when the cars come in.

"I said, 'Madam, don't you know that is grand theft and unlawful conversion?' Her reply was, 'What is scary is that now, the 'federal government' wants them. And you don't think you live in a Communist Gov't and the lying lawyer club is the primary perverters of this country into communism?"

According to this woman, when she bought her Chevy, she did not receive the "real" title to her car, which is the MCO. She contends that the MCO constitutes the title to her car and that her car is really owned by the State. This is a wild and groundless theory which many believe simply because they refuse to perform any research.

A Manufacturer's Certificate of Origin ("MCO") is "a specified document certifying the country of origin of the merchandise required by certain foreign countries for tariff purposes, it sometimes requires the signature of the consul of the country to which it is destined." Our country ships lots of its products internationally and so does the rest of the world. This document was just simply created by international convention, primarily for tax purposes. As you can see, it is not the title of any object, not even for cars.

Federal regulations deal with this matter. For example, in 19 CFR §181.11, entitled "Certificate of Origin," the following is found:

(a) General. A Certificate of Origin shall be employed to certify that a good being exported either from the United States into Canada or Mexico or from Canada or Mexico into the United States qualifies as an originating good for purposes of preferential tariff treatment under the NAFTA.
(b) Preparation of Certificate in the United States. An exporter in the United States who completes and signs a Certificate of Origin for the purpose set forth in paragraph (a) of this section shall use Customs Form 434 or such other medium or format as approved by the Canadian or Mexican customs administration for that purpose. Where the U.S. exporter is not the producer of the good, that exporter may complete and sign a Certificate on the basis of: (1) Its knowledge of whether the good qualifies as an originating good; (2) Its reasonable reliance on the producer's written representation that the good qualifies as an originating good; or (3) A completed and signed Certificate for the good voluntarily provided to the exporter by the producer.

(c) Submission of Certificate to Customs. An exporter in the United States, and a producer in the United States who has voluntarily provided a copy of a Certificate of Origin to that exporter pursuant to paragraph (b)(3) of this section, shall provide a copy of the Certificate to Customs upon request.

(d) Notification of errors in Certificate. An exporter or producer in the United States who has completed and signed a Certificate of Origin, and who has reason to believe that the Certificate contains information that is not correct, shall within 30 calendar days after the date of discovery of the error notify in writing all persons to whom the Certificate was given by the exporter or producer of any change that could affect the accuracy or validity of the Certificate.

Cars are big exports for this country and the manufacturers deal with certificates of origin every day. In fact, NAFTA has provisions regarding such certificates at Art. 501, which may be viewed here.

Because car manufacturers provide such certificates for international trade, the States also demand them. In Colorado, the following statute makes a clear distinction between car titles and MCOs:

Upon the sale or transfer by a dealer of a new motor vehicle, such dealer shall, upon the delivery thereof, make, execute, and deliver unto the purchaser or transferee a good and sufficient bill of sale therefor, together with the manufacturer's certificate of origin. Said bill of sale shall be affirmed by a statement signed by such dealer, shall contain or be accompanied by a written declaration that it is made under the penalties of perjury in the second degree, as defined in section 18-8-503, C.R.S., shall be in such form as the director may prescribe, and shall contain, in addition to other information which the director may by rule or regulation from time to time require, the make and model of the motor vehicle so sold or transferred, the identification number placed upon the vehicle by the manufacturer for identification purposes, the manufacturer's suggested retail price, and the date of the sale or transfer thereof, together with a description of any mortgage thereon given to secure the purchase price or any part thereof. Upon presentation of such a bill of sale to the director or one of the director's authorized agents, a new certificate of title for the vehicle therein described shall be issued and disposition thereof made as in other cases. The transfer of a motor vehicle which has been used by a dealer for the purpose of demonstration to prospective customers, if such motor vehicle is a new vehicle as defined in section 42-6-102 (8), shall be made in accordance with the provisions of this section.

Thus under Colorado law, it is plain that a manufacturer's certificate of origin is different from the title to a car as well as a bill of sale for the same.

The MCO argument is another crazy idea promoted by people who refuse to perform any research. When a car manufacturer builds a car, that company owns it and has title to it. "Title" to personal property like a car is not some document; it is that invisible "bundle of rights" which one has when he owns something. That "bundle of rights" excludes all other parties from possession of the property in question. When a car is purchased, the buyer delivers money to the seller and acquires title to the car, and that title means that he can exclude all other persons from possession of that car. A "bill of sale" is nothing but a document which evidences the fact that title has passed from one party to another. This "bundle of rights" can be divided, and this happens when a car is purchased via financing provided by a bank or other financial institution. When this happens, the bank has an interest in the car and that interest is protected via contractual provisions as well as a financing statement (UCC Form 1) which is filed at a designated State office to show to the rest of the world that the bank has an interest as a secured party in that vehicle. If the loan is paid, the bank's interest is extinguished; if not, it can claim possession of the car.

Certificates of title are nothing but the State's "answer" to the problem of car theft. "Certificate" means according to Black's law dictionary "a written assurance, or official representation, that some act has or has not been done, or some event occurred, or some legal formality complied with." States have enacted laws to provide for "certificates of title" for cars which are issued and given to car owners; they are nothing more than further evidence of ownership of a car and this helps reduce the incidence of car theft; but such a certificate is not "title" to a car. And neither is the MCO.

Lots of flaky arguments float around this country, and the MCO argument is just simply another one promoted by people who do not know what they are talking about.

Additional Note: The above Colorado woman continues to promote "off-the-wall" legal arguments. She recently stated as follows:

People need to start asking questions about how AGs can bring suits in the first place!!! First of all, when did we the people ask for 'attorney generals'? * * * How can an 'AG' bring a suit when they are not the damaged party and they do not have a written contract to 'represent' any of the people in the state? See how these unAmerican attorn-eys trick you?
                a. When was that 'AG' sworn in as a 'general'?
                b. In what 'branch of service'?
                c. And what country do they serve?
They certainly are not upholding our liberties or the law which is the Constitutions. Nowhere in the constitutions do I see that 'the state' should have an AG!!! It is just another bureaucracy * * *

Quite obviously, this woman knows nothing about Attorneys General. The reason that she is mad at a couple of AGs is because she was working for a company promoting a pyramid scheme which the Kansas AG shut down. In any event, in response to her blather that "Nowhere in the constitutions do I see that 'the state' should have an AG," I simply went over to the Kansas and Colorado constitutions posted at several web sites and forwarded to her the constitutional provisions which created the offices of Attorney General in these States. This woman likes to argue law, but whenever she does, she inevitably errs.