D'Aprile v. Turner-Looker Co.

*430 Cardozo, J. The action is in tort for the conversion of the plaintiffs 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 had not passed. The courts held to the contrary (Turner-Looker Co. v. Aprile, 234 N. Y. 517), and judgment for the price was entered. In the meantime, however, the whisky had been sold. The bonded 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 judgment for the sum claimed without deduction. No part of that judgment has ever been collected. 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 hen. 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 hen for the price (Pers. Prop. Law [Cons. Laws, ch. 41], § 135), which he may enforce by resale if default in payment has continued an unreasonable time (§ 141; Van Brocklen v, Smeallie, 140 N. Y. 70, 76). The right though denominated *431 a lien, is in truth greater than a lien (Tuthill v. Skidmore, 124 N. Y. 148, 153; Dunstan v. McAndrew, 44 N. Y. 72; Van 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 v. Skidmore, supra, at p. 143). This power survives till payment of the price is made (Wibansky v. Krutinsky, 86 Conn. 22, 30; Dunstan 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; Jones on Collateral Securities & 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 opportunity to receive it. We have little doubt that upon proper application, he may get it even now by allowance upon the execution in reduction of the judgment. Such considerations, however, are not decisive of the controversy before us. If the buyer by silence or inaction has thrown the credit away, he has not thus transformed a rightful act into a tort. The seller in disposing of these certificates was in the exercise of a lawful power. It was turning its collateral into money while suing for its debt. Blunders of procedure there may subsequently have been in respect of the time and manner of giving 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 are told that a resale is inconsistent' with an action for the price because the surplus, if any, may be retained by the seller as his own (Pers. Prop. Law, § 141). Exemption from the duty to account for the excess is a curious anomaly in the statutory scheme (cf. Williston, Sales, § .553). We think it does not serve to make the enforcement of the hen a resumption of the title or a rescission *432 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 Hen 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 had been in default in the payment of the price an unreasonable time ” (§ 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 Hen resumes title in himself to the same extent as if he had acted under section 142 and had given notice of rescission. The remedies are not one. They are several and alternative. We are told, however, that the resale as made was not under the lien at all, but under an assumed, though unreal, authority to dispose of the certificates at pleasure and thereafter substitute equivalents. What the seller might have done as lienor is said to be more or less irrelevant. What it did, in the plaintiff’s view, was not as a lienor, in subordination to the plaintiff’s title, but in repudiation of that title, and hence as a wrongdoer. The record does not sustain this interpretation of its conduct. Neither word nor overt act evinces a *433 repudiation of a duty 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 were only $418.81. The buyer, treating the resale as a conversion, has recovered damages on the basis of market" values as they stood more than a year thereafter when noticé 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.