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Schnitzer v. Fruehauf Trailer Co.

Supreme Court of New York, Appellate Division

February 23, 1954


Page 422

[Copyrighted Material Omitted]

Page 423

APPEAL (1) from an order of the Supreme Court at Special Term (HECHT, J.), entered October 1, 1953, in New York County, which granted a motion by defendant for summary judgment dismissing the complaint under rule 113 of the Rules of Civil Practice; (2) from the judgment entered thereon, and (3) from an order of said court, entered September 24, 1953, in said county, which denied a cross motion by plaintiff for summary judgment on the first cause of action and striking out the answer as sham.


Isidor Unger of counsel (Mr. & Mrs. Everett Frooks, attorneys), for appellant.

Gerald J. Craugh of counsel (Breed, Abbott & Morgan, attorneys), for respondent.


Plaintiff Schnitzer, as chattel mortgagee of a trailer sold by defendant to one Rinaldi, the buyer, under a conditional sales contract and also as the buyer's assignee, appeals from orders dismissing his complaint and granting summary judgment to defendant. The main issue is whether defendant, the conditional vendor, should have accepted full tender of the entire balance due on the trailer concededly made the day before the advertised foreclosure sale of the trailer retaken by the seller for failure to pay said final balance.

On October 18, 1950, defendant sold a Fruehauf trailer, with eight tires, to one Rinaldi, as buyer, for the sum of $13,250.67 on the usual conditional sale terms. By October, 1952, the buyer had paid in required installments $11,532.34 leaving $1,718.33 due on October 10, 1952, as the entire balance of the purchase price. The conditional sales contract provided in the usual form that the vendee keep the trailer 'free of liens and encumbrances'. Nevertheless, on August 29, 1952, Rinaldi, the buyer, executed a chattel mortgage on the trailer (and on other chattels) in plaintiff's favor to secure a loan of $10,000 payable on January 5, 1953. The chattel mortgage was not paid at maturity and thereafter the conditional vendee surrendered his interest and assigned all his equity in the trailer to plaintiff. Plaintiff, therefore, became a mortgagee with an assignment of all the vendee's rights and equity in the conditionally sold goods. In December, 1952, however, defendant under the conditional sales agreement had retaken the trailer from Rinaldi for default in payment of the unpaid balance of $1,718.33, and thereafter defendant gave notice of resale of the trailer at public auction to be held on January 22, 1953.

Page 424

On January 21, 1953, the day prior to the advertised public sale, plaintiff accompanied by Rinaldi, the buyer, went to defendant's office and concededly tendered to defendant as conditional vendor the entire balance of $1,718.33 due and owing on the purchase price, plus all expenses for retaking the trailer. Obviously, the tender was with the full consent and approval of Rinaldi, the buyer, who admittedly was personally present at the tender. Defendant, however, refused to accept the tender, declined to surrender possession of the trailer, appeared the next day at the public auction, outbid plaintiff and acquired the trailer on its own bid of $3,100, a sum almost twice the amount due on the total price previously tendered by plaintiff in Rinaldi's presence. Thereupon defendant applied the proceeds of the sale in satisfaction of the unpaid balance of the price, plus expenses of the sale; and used the surplus in reduction of other indebtedness owing to defendant by Rinaldi.

Defendant moved for summary judgment dismissing the complaint; plaintiff moved for summary judgment on the first cause of action; Special Term denied plaintiff's motion and granted defendant's; plaintiff appeals.

The complaint alleges two causes of action: (1) for defendant's wrongful refusal of the tender of the entire balance due under the conditional sales contract and failure to surrender the trailer; and (2) for defendant's violation of statutory requirements in connection with the resale.

The Uniform Conditional Sales Act, adopted in this State (L. 1922, ch. 642,§ 2), with amendments, has become part of our Personal Property Law (§ § 60-81). The amendments enacted from time to time have generally tended to protect the conditional vendee and all his rights in respect to the conditionally sold goods. The statute, so far as here relevant, provides:

'§ 61. Definitions. * * * 'Buyer' means the person who buys or hires the goods covered by the conditional sale, or any legal successor in interest of such person. * * * ' Purchaser' includes mortgagee'.

'§ 73. Prohibition of removal or sale without notice. Unless the contract otherwise provides, the buyer may, without the consent of the seller * * * sell, mortgage or otherwise dispose of his interest in them [the goods]'; the section then provides for notice in writing to the seller of the name and address of the mortgagee or transferee ten days before the mortgage or other disposal, and if the ...

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