Crowe v. Liquid Carbonic Co.

Kellogg, J.: May 7, 1909, Pappas & Karahall purchased of the defendant, under a contract of conditional sale, a soda fountain and apparatus for $1,885, $400 of which was paid by the delivery of an old fountain, $225 in cash, and the balance was represented by thirty-six promissory notes of $85 each, with interest, dated [374] May 7, 1909, one note payable each month thereafter. On the 21st day of January, 1910, the said firm and its members were declared bankrupts, and thereafter the plaintiff was duly appointed trustee in bankruptcy. The notes which had become due up to that time had been paid; those subsequently maturing were not paid. The fountain was in the store carried on' by said bankrupts. One Beaumann, under a chattel mortgage, acquired title to the goods and fixtures in the store aside from the fountain and continued the business in the same store. The fountain and apparatus were inventoried by the plaintiff in the schedules in bankruptcy as held under a conditional sale contract, but remained in the store: On February 3, 1910, the defendant leased the fountain in the store to Beaumann, the occupant of the store, for the month of February at $15, and like monthly leases were made for March, April and May. The rental was duly paid but was not indorsed by the defendant upon the contract of sale. In June the defendant removed the fountain and apparatus from the store and claimed to have retaken it then and after thirty days caused notice of sale to be given, and the fountain was subsequently sold, apparently according to the .provision of the law relating to conditional sales. There was no note in arrear on the day of the leasing, but one became due a very few days after, and when each subsequent lease was made there were notes in default. Section 65 of the Personal Property Law (Consol. Laws, chap. 41; Laws of 1909, chap. 45) provides that where property is retaken by the vendor under a contract of conditional sale, it shall be retained by him for thirty days from such retaking in order to enable the vendee to comply with the contract, and if the default continues the vendor must within thirty days thereafter sell the articles at public auction, and “ Unless such articles are so sold within thirty days after the expiration of such period, the vendee or his successor in interest may recover of the vendor the amount paid on such articles by such vendee or his successor in interest under the contract for the conditional sale thereof.” The plaintiff seeks to recover the installments paid upon the contract,, but by the judgment appealed from he is denied relief. [375] The defendant had no right to lease the fountain to Beaumann, unless he claimed that right under the contract of conditional sale, and it was proceeding upon the theory that default had been made or was about to be made. After default the plaintiff could not object to the defendant’s retaking or renting the property, as it was its right under the contract. That the defendant considered it was leasing the fountain for its own benefit, and not for the benefit of the plaintiff, is evident by its appropriating the rent and not crediting it on the contract. It took control of the fountain and retained it for four months, and its attempt thereafter to comply with the statute was too late. It had incurred the liability to repay the installments paid upon retaining the property after thirty days without ■ taking any steps for selling it. The contract purported to waive this provision of the statute as to retaining the property for thirty days after retaking it and selling it for the vendee’s benefit, but provided that upon such retaking the vendee’s right to comply with the terms of the contract and thereupon receive said property is expressly waived. This statute was passed pursuant to a wise public policy. It was known that property was frequently sold upon conditional sales, and after the vendee had nearly paid for it, the vendor would seize and resell it, and the vendee would lose the property and the payments as well. The Legislature evidently realized that the persons making this class of contracts were at a disadvantage and were not entirely in a position to adequately take care of themselves by exacting favorable terms for such a contract, and, therefore, the law provided what should be the effect of such a contract and in what manner and- how the vendor might retake and sell the property. If by an executory contract the provisions of the statute may be waived in advance, it practically nullifies the statute because a waiver will always be found. The authorities indicate that such a waiver by executory agreement in advance of default and at the time of making the contract is against public policy and ineffectual, and we so hold. (Roach v. Curtis, 115 App. Div. 765; 191 N. Y. 387; Hurley v. Allman Gas Engine & Machine Co., 144 App. Div. 300.) The defendant did not retake and sell the property in the [376] manner required in the case of a conditional sale, and the attempted waiver' of the provisions of the statute in that respect is without effect. Under section 1317 of the Code of Civil Procedure, as amended in 1912, this court may “render judgment of affirmance, judgment of reversal and final judgment upon the right of any or all of the parties, or judgment of modification thereon, according -to law, except where it may be necessary or proper to grant a new trial or hearing, when it may grant a new trial or hearing.” The evidence shows that this plaintiff is entitled to recover the payments actually made. The 8th and 9th findings of fact show upon undisputed evidence the payments made; there is, therefore, no necessity for a new trial. The judgment should, therefore, be reversed upon the law and the facts. The 14th and 15th findings of fact are disapproved of as without evidence and a final judgment directed for the plaintiff for the payments made on said contract as shown by the 8th and 9th findings of fact, with interest thereon from April 12, 1912, with costs to the plaintiff in the court below and upon this appeal. All concurred, except Houghton and Lyon, JJ., dissenting, the former in opinion.