(147 N.E.)

(239 N. Y. 427)
D'APRILE v. TURNER-LOOKER CO.

(Court of Appeals of New York. Feb. 25,
1925.)

had not passed. The courts held to the contrary (Turner-Looker Co. v. Aprile, 234 N. Y. 517, 138 N. E. 429), and judgment for the price was entered. In the meantime, however, the whisky had been sold. The bonded in-warehouse receipts, retained by the seller when the action was begun, were delivered to a new buyer while the case was in the courts. This fact came out upon the trial, and the seller consented to an amendment of the answer by which the first buyer would have been given a credit for the proceeds. The buyer refused to take advantage of the offer, very likely in the belief that the acceptance of the credit would shatter his defense. This, indeed, would have been its effect, for the price upon resale was only a small fraction of the price under the contract. At all events, the seller had judg ment for the sum claimed without deduction. No part of that judgment has ever been collected.

1. Sales 315, 340-Action for price not
consistent with resale to enforce vendor's
lien; resale pending action for purchase price
does not render seller liable for conversion.
Under Personal Property Law, § 135, action
for purchase price of goods sold is not incon-
sistent with resale to enforce vendor's lien,
and resale pending action for price does not
render seller liable for conversion, though first
purchaser may be entitled to credit for amount
of price on resale.
2. Sales

340-That seller reselling under vendor's lien is entitled to retain surplus does not make such remedy inconsistent with action for purchase price.

That seller of personalty making resale to enforce vendor's lien, under Personal Property Law, §§ 141, 142, may be entitled to retain surplus over amount of his claim does not render such remedy inconsistent with successful action for purchase price simultaneously pros

ecuted.

3. Sales 315-Seller of goods, making resale pending action for purchase price, held

not liable for conversion.

Seller of personalty, making resale pending successful action for purchase price, held not liable for conversion of goods so resold on theory that his acts, though authorized as in enforcement of vendor's lien, were in fact done in repudiation of purchaser's title, where no repudiation of duty to account to buyer for profits of resale was shown, and seller in fact offered delivery of goods of like quality. Lehman and Crane, JJ., dissenting.

[1] The buyer, worsted in the action for the recovery of the price, has retaliated with this action for the conversion of the subject of the sale. He was unsuccessful at the Trial Term, but the Appellate Division reversed and gave judgment in his favor. The theory of the judgment is that an action for the price is inconsistent with a resale for the enforcement of a lien. The choice of the one remedy was held to bar the seller thereafter from the adoption of the other. We read the statute otherwise. Though the property in the goods may have passed to the buyer, the unpaid seller has a lien for the price (Personal Property Law [Cons. Laws, ch. 41] § 135), which he may enforce by resale if default in payment has continued an unreasonable time (section 141; Van

Appeal from Supreme Court, Appellate Di- Brocklen v. Smeallie, 140 N. Y. 70, 76, 35 N. vision, Fourth Department.

E. 415). The right, though denominated a lien, is in truth greater than a lien. Tuthill v. Skidmore, 124 N. Y. 148, 153, 26 N. E.

Action by Antonio D'Aprile against the Turner-Looker Company. From a judgment of the Appellate Division in the Fourth Ju-348; Dustan v. McAndrew, 44 N. Y. 72; Van dicial Department (209 App. Div. 223, 204 N. Y. S. 566), reversing a judgment of the Trial Term in favor of defendant and giving judgment for plaintiff, defendant appeals. Judgment of the Appellate Division reversed, and

that of the Trial Term affirmed.

Robert Averill, of Rochester, for appellant. Charles D. Newton and Edward P. Ward, both of Geneseo, for respondent.

CARDOZO, J. The action is in tort for the conversion of the plaintiff's property. A sale of ten barrels of whisky was made by the defendant to the plaintiff in May, 1918. The seller brought action for the price, and the buyer resisted on the ground that title

Brocklen V. Smeallie, supra; Williston, Sales, § 545. The lienor's position "is very nearly that of a pledgee, with power to sell at private sale in case of default." Tuthill This power survives till payment of the price v. Skidmore, supra, at page 154, 26 N. E. 349. is made. Urbansky v. Kutinsky, 86 Conn. 22, 30, 84 A. 317; Dustan v. McAndrew, supra. An action for the price is no more inconsistent with a later enforcement of the lien than it is with the foreclosure of a mortgage or the sale by a pledgee of securities held in pledge. Mason v. Decker, 72 N. Y. 595, 599, 28 Am. Rep. 190; Jones on Collateral Securities and Pledges, § 590. True, the buyer should be credited with the proceeds in reduction of the debt. As we have seen, he did

not press the credit when he had an oppor- | remedies are not one. They are several and tunity to receive it. We have little doubt alternative. that, upon proper application, he may get it [3] We are told, however, that the resale even now by allowance upon the execution in as made was not under the lien at all, but unreduction of the judgment. Such considera- der an assumed, though unreal, authority to tions, however, are not decisive of the contro- dispose of the certificates at pleasure, and versy before us. If the buyer by silence or thereafter substitute equivalents. What the inaction has thrown the credit away, he has seller might have done as lienor is said to be not thus transformed a rightful act into a more or less irrelevant. What it did, in the tort. The seller in disposing of these cer- plaintiff's view, was not as a lienor, in subortificates was in the exercise of a lawful pow- dination to the plaintiff's title, but in repuer. It was turning its collateral into money diation of that title, and hence as a wrongwhile suing for its debt. Blunders of proce- doer. The record does not sustain this indure there may subsequently have been interpretation of its conduct. Neither word respect of the time and manner of giving nor overt act evinces a repudiation of a duty credit for the proceeds. The sale was rightful in the making. It did not become tortious by relation when the debt was turned into a judgment.

We

[2] We are told that a resale is inconsist ent with an action for the price because the surplus, if any, may be retained by the seller as his own. Personal Property Law, § 141. Exemption from the duty to account for the excess is a curious anomaly in the statutory scheme. Cf Williston, Sales, § 553. think it does not serve to make the enforcement of the lien a resumption of the title or a rescission of the sale. The seller does not act as owner, but by virtue of a power, and like an agent or fiduciary, he must act prudently and fairly. In most instances, as here, the resale, when made, results in a deficiency (Williston, Sales, § 553), which is charged against the buyer. The exceptional contingency of a surplus and a profit does not change the basis of the power, and transmute into a plenary title what was a lien in its inception. If the unpaid seller is willing to resume the ownership, the law defines his remedy. By section 142 he is at liberty to rescind the sale and reclaim the title for

himself.

"An unpaid seller having a right of lien or having stopped the goods in transitu, may rescind the transfer of title and resume the property in the goods, where he expressly reserved the right to do so in case the buyer should make default, or where the buyer has been in default in the payment of the price an unreasonable time." Section 142.

When a sale is thus rescinded, the seller who resells thereafter is acting for his own account. He may sacrifice the goods or waste them, for what he does, he does as owner, and not as lienor. We see no basis for a holding that an unpaid seller who resells under section 141 for the enforcement of his lien resumes title in himself to the same extent as if he had acted under section 142 and had given notice of rescission. The

to make allowance to the buyer for whatever was collected. On the contrary, a letter written by the buyer's counsel almost on the eve of the resale has in it a strong suggestion that the object of the transaction to the understanding of both parties was to liquidate the loss. Against this, there is nothing but the fact that the defendant, charged with a conversion of particular certificates, has stated in its answer that it is willing even now to give the plaintiff others. There was no duty to make the offer. It has neither helped nor hindered. The uncalled-for concession did not change by retroaction the. quality of the act. Finally, if inferences are possible that there was repudiation by the seller of the title of the buyer, they are at most inferences of fact. The Appellate Division has made no attempt to draw them. It has placed its ruling upon the ground that there was no power to resell.

We are reminded of complications that may arise if a resale is unfairly or improvidently conducted after action begun or judgment rendered for the price. The same difficulties are possible where there is an unfair or irregular disposition of property held in pledge. The buyer or the pledgor may have his action for damages for any abuse of power by seller or pledgee.

In this case the judgment for the price was for $1,799.45. The proceeds of the resale resale as a conversion, has recovered damwere only $418.81. The buyer, treating the ages on the basis of market values as they stood more than a year thereafter when notice of the conversion reached him. On that basis, the credit due him was $1,846.36. By the application of that credit, the judgment against him has been wiped out, and a balance left in his favor. He may not pay his debt so easily.

The judgment of the Appellate Division should be reversed, and that of the Trial Term affirmed, with costs in the Appellate Division and in this court.

(147 N.E.)

upon implied findings which are inconsistent with an assertion of previous sale as lienor, that judgment does not render unlawful a sale which was previously lawful; it merely conclusively adjudicates that there was no lawful sale.

I recognize that, at the time of the trial of the action for the price, the seller consented to an amendment of the answer by which the first buyer would have been permitted to plead the amount received upon the resale as an offset, but, as the prevailing opinion has pointed out, that would have shattered his defense, and I think it would also have constituted an admission that the resale was lawful and properly conducted. The seller may not compel the buyer to plead the resale as an offset or partial defense, if, after such resale, the seller is entitled to recover a judgment, not for the price, but only for damages. The decisive consideration in this case, in my opinion, is whether the judgment for the price establishes conclusively, not only that title to the goods passed to the buyer, but that such title was still in the buyer at the time of the judgment. The answer to this question depends upon the nature of the seller's right of action for the price, as well as upon the nature of his right to resell.

LEHMAN, J. (dissenting). The defendant sold the goods, it still had the right to make sold personal property to the plaintiff. Title such sale by virtue of its lien, it seems to to the goods passed to the buyer. Under me that the subsequent judgment for the section 135 of the Personal Property Law, price precludes the defendant from urging the seller had a right, denominated a lien, to that it resold the goods in the exercise of that retain possession of the goods until payment right; for such a resale would, I think, be or tender of the price. It exercised this inconsistent with a judgment for the price right, and while still in possession of the obtained thereafter. The question is not goods it brought an action for the price. By whether the seller had the right under its bringing this action, the seller did not lose lien to resell after the bringing of the action its lien, for even a judgment for the price for the price, but whether it did sell as lienwould not have this effect. Personal Prop-or. If the judgment for the price is based erty Law, § 137. The seller's lien or right of possession carries with it a right to resell the goods (Personal Property Law, § 141), and a right to rescind the sale (Personal Property Law, § 142). Even before the Sales Act (Consol. Laws, c. 41, §§ 82-158) was enacted, an unpaid seller under such circumstances had the same remedies. He might sue for the entire price, or he might sell the property and recover the difference between the contract price and the price obtained on such resale, or he might keep the property as his own and recover the difference between the market price, at the time and place of delivery, and the contract price. Dustan v. McAndrew, 44 N. Y. 72; Mason v. Decker, 72 N. Y. 595, 28 Am. Rep. 190. During the pendency of the action for the price, the defendant proceeded to exercise its right to resell. Whatever may have been the rule in this state prior to the Sales Act (Westfall v. Peacock, 63 Barb. 209), I agree with the views expressed in the prevailing opinion that under the Sales Act the bringing of the action for the price did not constitute a choice of one remedy, which would bar the seller from the subsequent adoption of the other remedy afforded by the statute, through enforcement of his lien by resale, for both remedies are based upon the theory that title to the property had become vested in the buyer. Mason v. Decker, supra. After that sale, however, the seller was no longer entitled to recover the price of the goods, but might "recover from the buyer damages for any loss occasioned by the resale." Personal Property Law, § 141. In spite of the resale during the pendency of the action for the price, the seller has recovered judgment for the full price. In the case of Urbansky v. Kutinsky, 86 Conn. 22, 84 A. 317, and other cases that might be cited, the buyer recovered only the balance of the purchase price after crediting the amount received upon the resale. He was entitled under the statute to that. Here the seller has recovered judgment for the full price. It was not entitled under the statute to such judgment after a resale, but only to damages for any loss. Conceding, as I do, that at the time the defendant re147 N.E.-2

The price is the consideration paid for a transfer of title, and, under the Sales Act, only under exceptional circumstances may there be a recovery of the price without transfer of title. A judgment for the price constitutes an adjudication, not merely that title had passed to the buyer, but that the seller had not rescinded such transfer of title. If the resale results in a rescission of the original transfer of title and a resumption of title in the seller, then it can hardly be doubted that an action for the price, which constitutes the consideration for the transfer of title to the buyer, will not lie thereafter. It is urged that a resale made under section 141 of the statute should not be confused with a rescission of the transfer of title as provided in section 142. I find no essential difference in the nature of the rights accorded by these two sections. The

rights accorded under both sections arise [ prudently and fairly." If such an obligation under the same circumstances, viz:

(147 N.E.)