Case Title: Chaney v. Fields Chevrolet Co.

Citation: 503 P.2d 1239

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1972-12-07T00:00:00Z

Document:
503 P.2d 1239 (1972)
Robert E. CHANEY, Appellant,
v.
FIELDS CHEVROLET CO., an Oregon Corporation, Respondent.

Supreme Court of Oregon.
Argued and Submitted September 12, 1972.
Decided December 7, 1972.
Garry L. Kahn, Portland, argued the cause for appellant. With him on the brief were Pozzi, Wilson & Atchison, Portland.
R. Alan Wight, Portland, argued the cause for respondent. With him on the brief were Miller, Anderson, Nash, Yerke & Wiener, Portland.
Before O'CONNELL, C.J., and McALLISTER, DENECKE, HOLMAN, TONGUE and HOWELL, JJ.
HOLMAN, Justice.
This is an appeal from the dismissal of plaintiff's complaint pursuant to his refusal to plead over when a demurrer was sustained to the complaint on the basis that the action had not been brought within the period allowed by the statute of limitations.
In his complain plaintiff alleges that in December of 1963, pursuant to a contract of sale, he purchased a motor vehicle from defendant. He subsequently returned the vehicle to defendant, under a provision of the contract of sale, for the purpose of having it resold and the proceeds used to defray the balance thereunder with any surplus being returned to plaintiff. Defendant resold the vehicle in 1964 for more than the amount owing on the contract, but concealed the fact from plaintiff. It was not until after October 25, 1965, that plaintiff first discovered that the vehicle had *1240 been sold for more than the balance owing on it.
Plaintiff further alleges that he previously brought an action against defendant based on the same transaction, which was treated by the trial court as one for fraud and deceit. That action was terminated May 12, 1971, by a decision of this court holding that he had failed to prove such an action. Chaney v. Fields Chevrolet Co., 258 Or. 606, 484 P.2d 824 (1971). Within six months thereafter, on June 28, 1971, plaintiff commenced the present proceeding.
The first matter for determination is the applicable statute of limitations. Defendant contends ORS 72.7250 (Uniform Commercial Code § 2-725) is applicable because this is an action for the breach of a contract of sale. Defendant argues that under this section, plaintiff had four years from the time the vehicle was resold in which to bring his action and that such period expired in 1968. The section provides as follows:
On the other hand, plaintiff contends that ORS 72.7250 is not applicable because the present action arose out of a secured transaction and that it therefore comes under Article 9 of the Uniform Commercial Code which concerns secured transactions, rather than under Article 2 which concerns sales. He then argues that Article 9 has no statute of limitations and, therefore, that the general contract statute of limitations of six years applies (ORS 12.080(1)).
ORS 79.5040(2) (Uniform Commercial Code § 9-504(2)) provides that when the secured party has sold the collateral after repossession from the debtor, he must account to the debtor for any surplus. Upon repossession and resale by the seller, the subsection provides:
It is apparent from the statute that plaintiff was entitled to the surplus even though the contract had been silent concerning the matter and that the statute is the real source of plaintiff's right rather than the contract of sale.
Defendant cites Associates Disct. Corp. v. Palmer, 47 N.J. 183, 219 A.2d 858 (1966), as authority for its contention that the statute of limitations in Article 2 of the Uniform Commercial Code applies (ORS 72.7250). Palmer was a case involving an action for a deficiency by a seller after an automobile had been repossessed and sold for an amount less than that owing on the contract. The court held that the deficiency action was simply an action for that part of the sales price which remained outstanding after the seller had exhausted his security by selling the collateral and that his right to the full price was an obligation which is an essential element of all sales and which exists whether or not the sale is accompanied by a security arrangement. The court stated as follows:
Although an action for part of the purchase price is more closely related to the sale portion of the contract than it is to the security portion, it is obvious that an action to recover a surplus from the resale of the article upon an agreed foreclosure is more closely related to the security aspects of the contract than it is to that part which concerns the original sale. The right is created by ORS 79.5040, a part of Article 9 of the Uniform Commercial Code, which relates to secured transactions, and not by ORS 72.7250, a part of Article 2, which relates to sales.
We have been unable to determine why the secured transaction portion of the Uniform Commercial Code has no statute of limitations governing actions created by its provisions. However, the only statute of limitations which appears in the Code concerns the sales of goods, although the Code covers many aspects of business transactions other than the sales of goods. As a result, we have come to the conclusion that the limitation in ORS 72.7250 was not intended to cover the present situation and that the applicable provision is either ORS 12.080(1) or 12.080(2), both of which allow six years within which to bring an action. The statute reads:
Because the limitation is the same, it is unnecessary to decide which of these two provisions of ORS 12.080 is the applicable one. ORS 79.5040(2) may be treated as creating a right in the defendant as an incident of the parties' contractual relationship and thus it is contractual insofar as the statute of limitations is concerned and is within the purview of subsection (1). On the other hand, it may be treated solely as a statutory right and within the province of subsection (2).
The vehicle was resold in 1964; this case was filed June 28, 1971. Therefore, the six-year statute would have run prior to the filing of the present case unless the statute was tolled for a period of time. Plaintiff contends the statute was tolled during the time defendant concealed the fact that the vehicle was resold for more than its unpaid balance. We have found no Oregon cases directly in point nor have any been cited to us. However, there is little doubt of the consensus of other authority. Such authority is concisely summed up in an annotation, "What constitutes concealment which will prevent running of statute of limitations," 173 A.L.R. 576 at 578 (1948):
It is our conclusion that plaintiff's complaint alleges sufficient facts which, if true, would toll the statute for the length of time required to permit the bringing of the present action. Plaintiff has alleged that defendant concealed the fact that the resale was for more than the unpaid balance upon the contract and that he first discovered such fact after October 25, 1965. If such is the case, the six-year limitation would not have run by June 28, 1971, when this case was filed.
It should be understood that this court is not passing upon the propriety of all the requests for relief that are made in plaintiff's complaint. As long as plaintiff has stated a cause of action entitling him to any relief, his complaint cannot be successfully attacked by demurrer. Plaintiff has stated a cause of action for the surplus over the unpaid balance which the vehicle brought upon resale.
The judgment of the trial court is reversed and the case is remanded for trial.