Case ID: ad_276/html/0589-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n     \n      Dore, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Terry Genauer et al., Respondents, v. Bac Corporation, Appellant.
    First Department,
    April 11, 1950.
    
      Harold A. Lipton of counsel (Booth, Lipton & Lipton, attorneys), for appellant.
    
      Joseph Schwartzman for respondents.
   Per Curiam.

It was formerly held that, where goods sold under contract of conditional sale have been repossessed by legal process, they are in custodia legis pending determination of the action, and that the period of time within which they are to be retained' or sold by the conditional vendor commences to run upon the entry of judgment (Spitaleri v. Brown, 163 App. Div. 644; Sigal v. Hatch Co., 61 Misc. 332). These decisions were overruled in Montgomery Acceptance Corp. v. Coon (263 N. Y. 561) which held that the time for a plaintiff to sell at public auction, who has requisitioned the goods, was not extended by the pendency of the replevin action. The statute stated (Personal Property Law, § 79): “If the buyer does not redeem the goods within ten days after the seller has retaken possession, and the buyer has paid at least fifty percentum of the purchase price at the time of the retaking the seller shall sell them at public auction in the state where they were at the time of the retaking, such sale to be held not more than thirty days after the retaking. * * * ” Following the decision in Montgomery Acceptance Corp. v. Coon this section was amended by chapter 728 of the Laws of 1934, by adding a sentence immediately after the one above quoted, to wit: “ Provided, however, that when the seller retakes possession of the goods by legal process, and an answer is interposed the seller may hold such retaken goods for a period not to exceed thirty days after the entry of a judgment by a court of competent jurisdiction entitling the seller to possession of such goods before holding such resale.” This amendment means that the conditional seller may resell, if an answer has been interposed in a replevin action, at any time during which it is thus provided that the goods may be held. This does not signify that if not sold within thirty days after the goods are repossessed, they may be sold only within a period of thirty days following the entry of judgment. Necessarily, if the goods may be held until thirty days after judgment, they must be held during the time which intervenes between the expiration of thirty days after repossession and the entry of judgment. If they may be resold at any time during which they can be held, as is clearly the correct inference, it follows that they may be resold, if an answer has been interposed in such an action, at any time prior to the entry of judgment as well as within thirty days thereafter. The conditional vendor may not desire to do so, and may be answerable in damages to the conditional vendee, if he loses the lawsuit, on the ground that he had no right to repossess the goods at all. But that is a different question from whether, assuming that he has the right to repossess, the seller may resell at any time during the pendency of such action in which an answer has been interposed, plus a period of thirty days after judgment has been entered therein. We deem the latter to be the correct construction of this statute.

The determination of the Appellate Term and the judgment of the City Court entered thereon should be reversed, with costs, and the order of the City Court, denying plaintiffs’ motion for judgment on the pleadings reinstated, with leave to the defendant to amend its answer.

Dore, J.

(dissenting). Prior to 1934, section 79 of the Personal Property Law provided that the seller must sell the retaken goods at public auction, such sale to be held not more than thirty days after the retaking. If the seller caused the retaken goods to be sold after the prescribed thirty-day period, the buyer could recover against the seller, under section 80-e of the Personal Property Law the actual damages sustained or in no event less than one quarter of all payments made under the contract.

In 1933, it was held in Montgomery Acceptance Corp. v. Coon (263 N. Y. 561) that when the goods were retaken, by legal process it was incumbent under section 79 for the seller to resell the goods within thirty days after the retaking regardless of the pendency of a replevin action; and consequently, under the facts of that case, the buyer was entitled to damages as allowed by section 80-e. This prompted the Legislature to amend section 79 (L. 1934, ch. 728) by adding: “ Provided, however, that when the seller retakes possession of the goods by legal process, and an answer is interposed the seller may hold such retaken goods for a period not to exceed thirty days after the entry of a judgment by a court of competent jurisdiction entitling the seller to possession of such goods before holding such resale.”

The intention of the Legislature must be determined in the light of its purpose to remedy the result reached in the Montgomery case (supra) as limited by the declared legislative policy to. award damages to the buyer (§ 80-e) for violation of the restrictions imposed on the seller by section 79. The intention was, although not too clearly expressed, to give the seller two alternatives; viz., (1) either to sell the retaken goods within thirty days after the retaking; or (2) where issue has been joined in a replevin action, after retaking by legal process, to hold the goods, without being subject to the liabilities of section 80-e, until judgment has been entered “ entitling the seller to possession of such goods,” and then to hold the resale. In short, the intention was that, if not sold within the thirty days after retaking, the contested issues should be tried before resale.

The Legislature advisedly adopted the word “ may ” rather than “ must ” hold; for if the mandatory form were used, the seller would be deprived of the benefit available under the first alternative to resell within thirty days after the retaking. The conclusion follows that where, as here, the seller permits the thirty-day period to elapse after retaking without reselling, it must respond in damages to the buyer for holding the resale during pendency of the replevin action.

This result is not unfair to the conditional vendor who has already been paid more than half the purchase price of the chattels and in addition has retaken all the chattels and resold them.

Further, this defendant had opportunity to ask leave to correct its pleading before the City Court, but did not do so; and in the light of all the facts disclosed, should not now, in a second appellate court, receive additional opportunity to amend.

Finally, even if defendant had pleaded the facts not pleaded, plaintiffs would, nevertheless, be entitled to judgment on the pleadings; for defendant did not comply with either of the alternative provisions for the resale of the chattels under section 79 of the Personal Property Law.

In my opinion, the determination of the Appellate Term was correct and, accordingly, I dissent and vote to affirm.

Peck, P. J., Cohn and Van Voorhis, JJ., concur in Per Curiam opinion; Dore, J., dissents and votes to affirm, in opinion in which Callahan, J., concurs.

Determination of the Appellate Term and the judgment of the City Court entered thereon reversed, with costs, and the order of the City Court, denying plaintiffs’ motion for judgment on the pleadings reinstated, with leave to the defendant to amend its answer. [See 277 App. Div. 757, 844.]