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(239 N. Y. 427, 147 N. E. 15.) Sale, $ 141 effect of offer to sub- alent certificates for those included in
stitute equivalent property after re- the transaction does not establish the sale.
fact that the resale was not to enforce
the vendor's lien, but was an asser4. That a vendor of whisky who re
tion of authority over the property insells it pending an action for the pur- consistent with the right to collect the chase price offers to substitute equiv- purchase price.
(Lehman and Crane, JJ., dissent.)
APPEAL by defendant from a judgment of the Appellate Division of the Supreme Court, Fourth Department, reversing a judgment of a Trial Term for Livingston County in its favor in an action brought for alleged conversion of plaintiff's property. Reversed.
The facts are stated in the opinion of the court.
Mr. Robert Averill, of Messrs. . case was in the courts. This fact Averill & Tompkins, for appellant: came out upon the trial, and the
The opinion of the appellate division seller consented to an amendment holding there was an actionable con
of the answer by which the first buyversion of the whisky in suit is based
er would have been given a credit upon an erroneous assumption of botn
for the proceeds. The buyer refused law and fact, unsupported by the cases cited, and is violative of an ele
to take advantage of the offer, very mentary rule of the law of sales as likely in the belief that the acceptlaid down in this court and the sale ance of the credit would shatter his of goods act.
defense. This, indeed, would have Stokes v. Mackay, 147 N. Y. 223, 41 been its effect, for the price upon N. E. 496; Austin, N. & Co. v. Heer- resale was only a small fraction of mance Storage & Refrigerating Co. 199
the price under the contract. At all App. Div. 626, 192 N. Y. Supp. 71;
events, the seller had judgment for Smith v. Savin, 141 N. Y. 315, 36 N. E. 338; Mullen v. J. J. Quinlan & Co.
the sum claimed, without deduction. 195 N. Y. 109, 24 L.R.A. (N.S.) 511, 87
No part of that judgment has ever N. E. 1078; Kavanaugh v. McIntyre,
been collected. 210 N. Y. 175, 104 N. E. 135; Griggs v.
The buyer, worsted in the action Day, 136 N. Y. 152, 18 L.R.A. 120, 32 for the recovery of the price, has reAm. St. Rep. 704, 32 N. E. 612; Wilson taliated with this action for the conv. Little, 2 N. Y. 443, 51 Am. Dec. 307.
version of the subject of the sale. Messrs. Charles D. Newton and Ed.
He was unsuccessful at the trial ward P. Ward for respondent.
term, but the appellate division reCardozo, J., delivered the opinion versed and gave judgment in his faof the court:
vor. The theory of the judgment is The action is in tort for the con- that an action for the price is inversion of the plaintiff's property. consistent with a resale for the enA sale of 10 barrels of whisky was forcement of a lien. The choice of made by the defendant to the plain- the one remedy was held to bar the tiff in May, 1918. The seller seller thereafter from the adoption brought action for the price, and the of the other. We buyer resisted on the ground that read the statute oth- Election of rem
ediesaction for title had not passed. The courts erwise. Though the price of chattels
-enforcement of held to the contrary (Turner-Look- property the er Co. v. Aprile, 234 N. Y. 517, 138 goods may
have N. E. 429), and judgment for the passed to the buyer, the unpaid selprice was entered. In the mean- ler has a lien for the price (Persontime, however, the whisky had been al Property Law [Consol. Laws,
The bonded warehouse re- chap. 41], § 135), which he may enceipts, retained by the seller when force by resale if default in paythe action was begun, were de- ment has continued an unreasonable livered to a new buyer while the time ($ 141; Van Brocklen v. Smeal
lie, 140 N. Y. 70, 76, 35 N. E. 415). Personal Property Law, § 141. Ex-
edie effect of $ 545. The lienor's position "is very the lien a resump- statutory right nearly that of a pledgee, with pow
tion of the title or a ceeds of resale.
to retain proer to sell at private sale in case of rescission of the default." Tuthill v. Skidmore, su- sale. The seller does not act as ownpra, at page 154, 26 N. E. 349. This er, but by virtue of a power, and, power survives till payment of the like an agent or fiduciary, he must price is made. Urbansky v. Kutin- 'act prudently and fairly. In most sky, 86 Conn. 22, 30, 84 Atl. 317; instances, as here, the resale, when Dustan v. McAndrew, 44 N. Y. 72. made, results in a deficiency (Willis
a An action for the price is no more ton, Sales, § 553) which is charged inconsistent with a later enforce against the buyer. The exceptionment of the lien than it is with the al contingency of a surplus and a foreclosure of a mortgage or the sale profit does not change the basis of
a by a pledgee of securities held in the power, and transmute into a pledge. Mason v. Decker, 72 N. Y. plenary title what was a lien in its
v 595, 599, 28 Am. Rep. 190; Jones, inception. If the unpaid seller is Collateral Securities & Pledges, Ŝ willing to resume the ownership, the 590. True, the buyer should be law defines his remedy. By § 142 credited with the proceeds in reduc- he is at liberty to rescind the sale tion of the debt. As we have seen, and reclaim the title for himself. he did not press the credit when he "An unpaid seller having a right of had an opportunity to receive it. lien or having stopped the goods in We have little doubt that, upon transitu, may rescind the transfer proper application, he may get it of title and resume the property in even now by allowance upon the ex- the goods, where he expressly reecution in reduction of the judg- served the right to do so in case the ment. Such considerations, how- buyer should make default, or where ever, are not decisive of the contro- the buyer has been in default in the versy before us. If the buyer, by payment of the price an unreasonsilence or inaction, has thrown the able time."
able time." Section 142. credit away, he has not thus trans- When a sale is thus rescinded, the formed a rightful act into a tort. seller who resells thereafter is actThe seller, in disposing of these cer- ing for his own account.
He may tificates, was in the exercise of a sacrifice the goods or waste them, lawful power. It was turning its for what he does, he does as owner, collateral into money while suing and not as lienor. We see no basis for its debt. Blunders of procedure for a holding that an unpaid seller there may subsequently have been who resells under $ 141 for the enin respect of the time and manner forcement of his lien resumes title
of giving credit for in himself to the same extent as if Troverconver
the proceeds. The he had acted under § 142 and had
sale was rightful in given notice of rescission. The rem-
not become tortious and alternative.
sale as made was not under the lien We are told that a resale is incon- at all, but under an assumed, though sistent with an action for the price, unreal, authority to dispose of the because the surplus, if any, may be certificates at pleasure, and thereretained by the seller as his own. after substitute equivalents. What
(239 N. Y. 427, 147 N. E. 15.) the seller might have done as lienor conversion reached him. On that is said to be more or less irrelevant. basis, the credit due him was $1,
What it did, in the plaintiff's 846.36. By the application of that view, was not as a lienor, in subor- credit, the judgment against him dination to the plaintiff's title, but has been wiped out, and a balance in repudiation of that title, and left in his favor. He may not pay hence as a wrongdoer. The record his debt so easily. does not sustain this interpretation The judgment of the Appellate of its conduct. Neither word nor Division should be reversed, and overt act evinces a repudiation of a that of the Trial Term affirmed, duty to make allowance to the buyer with costs in the Appellate Division for whatever was collected. On the and in this court. contrary, a letter written by the
Pound, McLaughlin, and Andrews, buyer's counsel almost on the eve of the resale has in it a strong sugges
JJ., concur. tion that the object of the transac- Lehman, J., dissenting: tion to the understanding of both The defendant sold personal propparties was to liquidate the loss. erty to the plaintiff. Title to the Against this, there is nothing but goods passed to the buyer. Under the fact that the defendant, charged § 135 of the Personal Property Law, with a conversion of particular cer- the seller had a right, denominated ticates, has stated in its answer that a lien, to retain possession of the it is willing even now to give the goods until payment or tender of the plaintiff others. There was no duty price. It exercised this right, and
to make the offer. while still in possession of the goods Sale-effect of
It has neither helped it brought an action for the price. offer to substitute equivalent nor hindered. The By bringing this action, the seller property after uncalled-for conces
did not lose its lien, for even a judgresale.
sion did not change ment for the price would not have by retroaction the quality of the this effect. Personal Property Law, act. Finally, if inferences are pos- § 137. The seller's lien or right of sible that there was repudiation by possession carries with it a right to the seller of the title of the buyer, resell the goods (Personal Property they are at most inferences of fact. Law, § 141), and a right to rescind The appellate division has made no the sale (Personal Property Law, $ attempt to draw them. It has placed 142). Even before the Sales Act its ruling upon the ground that (Consol. Laws, chap. 41, $S 82–158) there was no power to resell.
was enacted, an unpaid seller under We are reminded of complications such circumstances had the same that may arise if a resale is unfairly remedies. He might sue for the enor improvidently conducted after ac- tire price, or he might sell the prop. tion begun or judgment rendered erty and recover the difference befor the price. The same difficulties tween the contract price and the are possible where there is an un- price obtained on such resale, or he fair or irregular disposition of prop- might keep the property as his own erty held in pledge. The buyer or and recover the difference between the pledgeor may have his action for the market price, at the time and damages for any abuse of power by place of delivery, and the contract seller or pledgee.
price. Dustan v. McAndrew, 44 N. In this case the judgment for the Y. 72; Mason v. Decker, 72 N. Y. price was for $1,799.45. The pro
The pro- 595, 28 Am. Rep. 190. During the ceeds of the
the resale were only pendency of the action for the price, $418.81. The buyer, treating the re
the defendant proceeded to exercise sale as a conversion, has recovered its right to resell. Whatever may damages on the basis of market have been the rule in this state prior values as they stood more than a to the Sales Act (Westfall v. Peayear thereafter, when notice of the cock, 63 Barb. 209), I agree with
the views expressed in the prevail- I recognize that, at the time of the ing opinion that under the Sales trial of the action for the price, the Act the bringing of the action for seller consented to an amendment of the price did not constitute a choice the answer by which the first buyer of one remedy, which would bar the would have been permitted to plead seller from the subsequent adoption the amount received upon the resale of the other remedy afforded by the as an offset, but, as the prevailing statute, through enforcement of his opinion has pointed out, that would lien by resale, for both remedies are have shattered his defense, and I based upon the theory that title to think it would also have constituted the property had become vested in an admission that the resale was the buyer. Mason v. Decker, supra. lawful and properly conducted. The After that sale, however, the seller seller may not compel the buyer to was no longer entitled to recover the plead the resale as an offset or parprice of the goods, but might “re- tial defense, if, after such resale, cover from the buyer damages for the seller is entitled to recover a any loss occasioned by the resale." judgment, not for the price, but only Personal Property Law, § 141. In for damages. The decisive considspite of the resale during the pend- eration in this case, in my opinion, ency of the action for the price, the is whether the judgment for the seller has recovered judgment for price establishes conclusively, not
, the full price. In the case of Ur- only that title to the goods passed bansky v. Kutinsky, 86 Conn. 22, 84 to the buyer, but that such title was Atl. 317, and other cases that might still in the buyer at the time of the be cited, the buyer recovered only judgment. The answer to this questhe balance of the purchase price tion depends upon the nature of the after crediting the amount received seller's right of action for the price, upon the resale. He was entitled as well as upon the nature of his under the statute to that. Here the right to resell. seller has recovered judgment for The price is the consideration the full price. It was not entitled paid for a transfer of title, and, ununder the statute to such judgment der the Sales Act, only under excepafter a resale, but only to damages tional circumstances may there be a for any loss. Conceding, as I do, recovery of the price without transthat at the time the defendant resold fer of title. A judgment for the the goods, it still had the right to price constitutes an adjudication, make such sale by virtue of its lien, not merely that title had passed to it seems to me that the subsequent the buyer, but that the seller had not judgment for the price precludes rescinded such transfer of title. If the defendant from urging that it the resale results in a rescission of resold the goods in the exercise of the original transfer of title and a that right; for such a resale would, resumption of title in the seller, then I think, be inconsistent with a judg- it can hardly be doubted that an acment for the price obtained there- tion for the price, which constitutes after. The question is not whether the consideration for the transfer of the seller had the right under its title to the buyer, will not lie therelien to resell after the bringing of after. It is urged that a resale the action for the price, but whether made under § 141 of the statute it did sell as lienor. If the judg- should not be confused with a rement for the price is based upon im- scission of the transfer of title as plied findings which are inconsistent provided in § 142. I find no essenwith an assertion of previous sale tial difference in the nature of the as lienor, that judgment does not rights accorded by these two secrender unlawful a sale which was tions. The rights accorded under previously lawful; it merely conclu- both sections arise under the same sively adjudicates that there was no circumstances, viz.: lawful sale.
"Where the buyer has been in de
(239 N. Y. $27, 147 N. E. 15.) fault in the payment of the price an that right, if such basis there be, unreasonable time.”
may not assist materially in the deThe result is the same:
termination of the concrete question "The seller shall not thereafter be before us. We are concerned with liable to the buyer upon the contract
the substance of the rights given by to sell or the sale, but may recover the statute. It is said that under $ from the buyer damages for any loss 142 a seller who rescinds the sale occasioned by the breach of the con- may resell thereafter for his own tract or the sale."
account, while the seller who proTrue, $ 141 contains additional ceeds under § 141 “does not act as provisions which could be applicable owner, but by virtue of a power, only to a resale, viz., that the seller and, like an agent or fiduciary, he shall not be liable to the original must act prudently and fairly. If buyer "for any profit made by such such an obligation rests upon the resale," and that the "seller is bound seller he should be accountable, as to exercise reasonable care and other agents or fiduciaries are, for judgment in making a resale, and failure to carry out his obligation. subject to this requirement may Even though the conceded anomaly make a resale either by public or that the "fiduciary” need not acprivate sale.” The meaning of these count to the owner for any profits additional provisions is hardly open made be regarded as without deci. to doubt. By virtue of them the sive significance, the fact that, even seller may on the one hand retain where the seller does not act pruany profit made by a resale, and on dently and fairly in making the rethe other hand may fix the amount sale, he is not guilty of conversion, of any loss through a resale, fairly nor at least before judgment for the and judiciously made. I find noth- price, accountable for any loss sufing in these provisions which is log- fered by his misconduct, should not ically inconsistent with the view be overlooked. The resale, if not that the exercise of the seller's right fairly made, becomes a rescission to resell provided by § 141 is found- under 142 of the act, and the only ed upon a total rescission of the effect of the seller's misconduct is transfer of title. That section that the price realized no longer merely provides an additional right serves to fix the loss, as would be to fix the amount of loss suffered by the case under a resale made in acthe seller. The right of a buyer, cordance with § 141. In both cases with title to the property, to have the seller retains the profits, in both the profit made upon a resale seems cases he may still hold the buyer for clear—"unless the seller has the damages for his loss, and nothing right totally to rescind the sale, re- else, and if he obtains a judgment vest himself with the ownership of for the price after he has disposed the goods, resell them as his own, of the goods, he has obtained more and take the proceeds for his own than he is entitled to. account. That the seller has this While this court has in many early alternative right will be seen from cases referred to resales made by an the following sections, but here it unpaid seller as if made by him as may be said that on whatever rea- an agent of the buyer, in the case soning the doctrine is based, the law of Moore v. Potter, 155 N. Y. 481, seems to recognize the seller's right 487, 63 Am. St. Rep. 692, 50 N. E. to keep any profit from the resale. 271, 272, it has noted the inaccuracy This is expressly so provided in the of such language. Sales Act." Williston, Sales, 2d ed. “The use of the words 'as agent
of the vendee' was not intended as Discussion of the classification in- a determination that the relation beto which the right of an unpaid sell- tween the parties was that which er to resell logically should be ordinarily exists between a principal placed, or the philosophical basis of who owns property, and an agent