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GENERAL MOTORS ACCEPTANCE CORPORATION v. MARK STOTSKY ET AL. (07/17/69)
SUPREME COURT OF NEW YORK, SPECIAL TERM, SUFFOLK COUNTY
1969.NY.42636 <http://www.versuslaw.com>; 303 N.Y.S.2d 463; 60 Misc. 2d 451
July 17, 1969
GENERAL MOTORS ACCEPTANCE CORPORATION, PETITIONER,v.MARK STOTSKY ET AL., RESPONDENTS. DAVID SILVA, AN INFANT, BY PETER A. SILVA, HIS FATHER AND NATURAL GUARDIAN, PETITIONER, V. MARK STOTSKY ET AL., RESPONDENTS
Reilly, Like & Schneider for General Motors Acceptance Corporation, petitioner.
David J. Gilmartin for David Silva, petitioner.
George W. Percy, Jr., County Attorney, for Sheriff of Suffolk County, respondent.
Mark Stotsky, respondent in person.
William R. Geiler, J.
General Motors Acceptance Corporation (hereinafter referred to as G.M.A.C.) and David Silva, have each, by separate application, requested this court to determine their rights with reference to a motor vehicle which was sold by the Sheriff of Suffolk County at a public auction. Each application involves the same facts, questions of law and parties, and therefore the court on its own motion hereby consolidates both applications.
Mark Stotsky recovered a judgment against a Fred H. Craggette on October 7, 1968 in the Justice Court of the Town of Riverhead, Suffolk County. On October 14, 1968 a transcript of this judgment was filed in the Suffolk County Clerk's office. Thereafter, on March 5, 1969, an execution on the judgment was issued out of the County Clerk's office directed to the Sheriff of Suffolk County. The Sheriff, pursuant to the execution, levied on a 1968 Chevrolet in possession of Stotsky and the said motor vehicle was sold at a public sale on May 26, 1969 to David Silva for the sum of $1,000 plus $50 for sales tax and $50 for poundage.
Shortly thereafter Silva received a letter from G.M.A.C. informing him that G.M.A.C. had a security interest, which was a matter of public record, in the subject motor vehicle.
The uncontroverted facts indicate that Craggette purchased the subject motor vehicle from an automobile dealer pursuant to a retail installment contract. The contract provided that the dealer, for the purpose of securing payment of the money due thereunder, would reserve title and retain a security interest in the motor vehicle. The contract also provided that the dealer, in the event of any default, had the right to take immediate possession of the motor vehicle without demand.
The said retail installment contract was assigned to G.M.A.C. and on June 19, 1968, a financing statement was filed in the Suffolk County Clerk's office.
Subsequently, Craggette defaulted in making the necessary payments pursuant to the terms of the contract and the balance past due as of April 25, 1969 amounted to $2,491.06.
G.M.A.C. was unaware of the Sheriff's sale before sending the above-mentioned letter. Silva, an infant 19 years of age, after receipt of the letter returned the motor vehicle to the Sheriff and requested his money back. The Sheriff has the motor vehicle, the money paid by Silva, and only asks that his poundage fee be paid. G.M.A.C. requests that the motor vehicle be turned over to it. Stotsky would like to have his judgment satisfied out of the moneys received at the Sheriff's sale.
The court is faced with the following questions:
1. Are the rights of a holder of a perfected security interest superior to those of a lien creditor?
2. Are the rights of a holder of a perfected security interest superior to those of a third-party purchaser?
3. May an infant disaffirm and rescind a purchase made at a Sheriff's sale?
It is clear that G.M.A.C. is the holder of a perfected security interest which was filed prior to the levy made on behalf of Stotsky, a lien creditor. Subdivisions (2) and (3) of section 9-301 of the Uniform Commercial Code deal with the rights of a holder of a secured interest and those of a lien creditor.
Subdivision (2) of section 9-301 provides: "If the secured party files with respect to a purchase money security interest before or within ten days after the collateral comes into possession of the debtor, he takes priority over the rights of a transferee in bulk or of a lien creditor which ...