Case ID: ad_144/html/0300-01.html
Source: Caselaw Access Project
Author: {"author": "Carr, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John P. Hurley, as Trustee, etc., Respondent, v. The Allman Gas Engine and Machine Company, Appellant.
    Second Department,
    April 21, 1911.
    
    Sale —- conditional sale — default — permitting vendor to retake property —no voluntary surrender!—waiver — public policy — executory agreement to waive rights — section 65, Personal Property Law..
    Where the trustee in bankruptcy of a vendee of machines bought under a contract of conditional sale, who is in default in his payments, permits the conditional vendor toj remove the machines, there ig no waiver or voluntary surrender of the trustee’s legal interest therein-, for iti.was his duty to permit the vendor to retake them.While the law recognizes a| free right to contract, it will not enforce all contracts. j . -
    An agreement to waive rights made in advance- will not be enforced if against public .policy. j .
    
      A vendee under a contract of conditional sale does not waive his rights to a sale of the property upon a retaking by the vendor as provided in sections 65-67 of the Personal Property Law by a clause in the contract providing that “Incase of default, in any one of such deferred .payments * * ” you [the vendor] shall have the right to immediately resume possession of said property wherever it may be found, and remove the same * * *, and you may declare the agreement terminated and may retain all moneys paid hereunder as liquidated damages and rental.”
    Where the vendor under such a contract retakes the goods on default in the payments and neglects within thirty days to sell the same at public auction it is hable for the amount paid under the contract.
    
      It seems, that an executory agreement to waive one’s rights under section 65 of the Personal Property Law is against public policy. Ho waiver of the provisions of said section will be implied by the courts.
    Appeal by the defendant, The Allman Gas Engine and Machine Company, from a judgment of the Municipal Court of the city of Mew York, borough of Brooklyn, in favor of the plaintiff, rendered on the 3d day of February, 1910.
    
      John H. Taylor, for the appellant.
    
      Horace London, for the respondent.
   Carr, J.:

The defendant, on March 1, 1910, sold to a corporation •known as the Star Ice Cream Company two machines for making ice cream, under a written contract which provided that title to the machines should remain in the vendor until the full amount of the purchase price was paid, to wit, the sum of $550.. The purchase price was made payable in installments. The vendee was subsequently forced into bankruptcy and adjudicated a bankrupt, and the plaintiff was appointed the trustee of the bankrupt’s property. The trustee proceeded to sell'at public auction at the premises of the bankrupt corporation its "various machinery and other property. The ice cream machines in question were offered for sale subject to the terms, of the contract of conditional sale, but no bids were made. At that time the amount remaining unpaid on the contract was the sum of $226.64, of which installments amounting to $112.78 had matured under the terms of said contract. The defendant on the day following the auction sale removed the machines in question and has ever since retained them. The plaintiff sued to recover from the defendant the sum of $301 as the amount actually paid to the defendant by the' conditional vendee, under the contract of conditional sale aforesaid. The cause of action is based ¡upon section 65 of the Personal Property Law (Consol. Laws, chap. 41; Laws of 1909, chap. 45), which provides as follows: “Whenever articles are sold upon the condition that the title .thereto shall remain in the vendor, or in some other p'erson than the vendee, until the payment of the purchase price, or until the occurrence of a future event or contingency, and the same are retaken by the vendor or his successor in interest, they shall be retained for a period of thirty days from the time of such retaking, and during such period the vendee or his successor in interest may comply with the terms of such contract and thereupon receive such property. After the expiration of such • period, if such terms are hot complied with, the vendor, or his "successor in interest, may cause such articles to be ¡sold at public auction. Unless such articles are so sold within thirty days after the expiration of such period, the vendee or his successor in interest may recover of the vendor the amount paid on such articles by such vendee or his successor in interest under the contract for the conditional sale thereof.” ' ' -

It is admitted by thei defendant that it has not, since it resumed possession of these machines, sold them at public auction as provided in the statute. It resists on two grounds the liability therein imposed. First, it contends that the section in -question does not ¡apply to a case where the vendee voluntarily returns the property and there is a mutual rescission of the contract. - Second,, it claims that by the express terms of the contract of sale, the conditional vendee had waived the provisions of the statute:

As to the first ground, ¡the evidence taken at the trial shows . that after the unsuccessful attempt of the trustee in bankruptcy to sell the bankrupt’s interest in the machines, the defendant’s representative, Weiner, asked leave from the trustee to remove the machines in question, and the trustee gave him permission to do so, leaving to the landlord of the premises, who was standing by, the fixing of the ¡ time in which the machinery was to be removed. As, under the express terms of the contract of conditional sale, the defendant had a legal right to resume possession of the machines, as the vendee was in default, the acquiescence of the trustee in the defendant’s request to be allowed to remove them cannot be held to constitute a waiver or voluntary surrender of the trustee’s legal interest therein, for it was the legal duty of the trustee under such circumstances to permit the defendant to retake the machines.

As to tlie alleged waiver of the statute by the contract of conditional sale, the material provisions of the contract are as follows: “In case of default in any one of such deferred payments above specified, or in case of removal of said goods or any part thereof without your consent, or in the event that I or we shall mortgage or part with the possession, voluntarily or involuntarily, without your consent, of said property or any part thereof, you shall have the right to immediately resume possession of said property wherever it may he found, and remove the same with or without process of law, and you may declare the agreement terminated'and may retain all moneys paid hereunder as liquidated damages and rental for said goods.” This provision, the defendant asserts, constitutes a waiver of the provisions of section 65 of the Personal Property Law, and like- ' wise of the following sections, 66 and 67, which prescribe the conditions of the sale under section -65 and the ^disposition of the proceeds. In Woodman v. Needham Piano Co. (47 Misc. Rep. 683) • the Appellate Term in New York county held that quite similar language in a "contract of conditional sale of a piano resulted in a waiver of the provisions of certain provisions of the Lien Law of 1897, which are now sections 65, 66 and 67 of the Personal Property Law. ■ (See Lien Law [Gen. Laws, chap. 49; Laws of 1897, chap. 418], § 116, as amd. by Laws of 1900, chap. 762; Id. §§ 117, 118.) In Hoffman v. White Sewing Machine Co. (123 App. Div. 166) a sewing machine had been sold under a contract of conditional sale, which, however, by its terms. purported to he a lease, and the installment payments were described as “rent.” On default of the vendee in making payments, the vendor retook the machine and neglected to sell, it at public auction, and the vendee sued under the statute for the amount paid under the contract before default, and it was held that the vendor could not retain such payments, ■ notwithstanding that ¡bhe contract had described them as “rent.” | ( . ■ .

An examination of thg statutes relating to conditional sales shows that there has tjeen much and. continuous legislative effort to regulate the rights of the parties to such bontracts, in view of the great development in extent of such sales and the numerous eivils which sorhetimes attended them. 'The legislative policy declared in the Lijen Law of 1897, and continued in the sections of the Personal Property Law above cited, was that in the event of- a retaking by the vendor there should be a sale at public auction under the provisions of the statute in order that the vendee .might regain any excess' in value of the article over the amount unpaid on the contract.. Whether the - law would, uphold any agreement in the contract of conditional sale which- attempted in 'advance to waive the provisions of the remedial statute has been doubted strongly. (Roach v. Curtis, 115 App. Div. 765; 191 N. Y. 387.) While the law .recognizes a.free right to contract, it will not enforce all contracts through its remedial processes. , Where a contract is against the public policy of the State, it is imenforcible in the courts. (Kneettle v. Newcomb, 22 N. Y. 249; Rathbone v. N .Y. C. & H. R. R. R. Co., 140 id. 48; Sternaman v. Metropolitan Life Ins. Co., 170 id. 13; Matter of Brown v. Order of Foresters, 176 id. 132; Industrial & General Trust, Ltd., v. Tod, 180 id. 215.) It is true that one may waive any right, he possesses, even & constitutional right (People ex rel. McLaughlin v. Police Commissioners, 174 N. Y. 450, and cases cited), but an agreement to waive made in advance in an executory agreement will not be enforced when against the public policy. (Kneettle v.. Newcomb, supra; Litt v. Emery, 80 Hun, 380.) There are some cases in which it has been held that som^ of the' provisions of. the statute in relation to the time or circumstances of a sale directed. by the - statute to be had by a vendor who retook property under a contract- of conditional sale, might be waived, but ■ in none of these cases was there anyj attempt to waive, in advance, a subsequent sale itself, as provided by the statute. (Warner v. Zuechel, 19 App. Div. 494; Adler v. Weis & Fisher Co., 66 Misc. Rep. 20; Montague v. Wanamaker, 67 id. 650.) In Fairbanks v. Nichols (135 App Div. 298) there is oonsiderable discussion as to whether a sale under the statute in question may be waived in advance by the contract of conditional sale, but the court, in sustaining a judgment in. favor of a conditional vendor who had neglected to resell at public auction property retaken on a default under the terms of the contract of conditional sale, distinctly and exclusively rested its decision upon the ground that the conduct of the conditional vendee at the time of the retaking by the vendor constituted an estoppel against a claim that the property was surrendered voluntarily and not retaken in the sense of the statute. Even there, there was a dissent by two members of that court. In any event, the provisions of the statute are to be read into every contract of conditional sale. (Davis v. Bliss, 187 N. Y. 77.) The clause in the contract in the case at bar,- which is claimed to constitute a waiver, is entirely silent as to a subsequent' sale as directed by the statute in question. There is, therefore, no express waiver of the statutory requirements. None should be implied as against the policy of the statute, assuming such a waiver in advance permissible. (Roach v. Curtis, 191 N. Y. 387, 391.)

The judgment of the Municipal Court in favor of the plaintiff should be affirmed, with costs.

' Jerks, P. J., Burr, Thomas and Woodward, Jj., concurred.

Judgment of the Municipal Court affirmed, with costs.