Stella v. Bankers Commercial Corp.

Bijur, J. It appears that the plaintiff on or about November 23, 1916, bought from the Lincoln Motor Company, Inc. (hereinafter called Lincoln Company), an automobile truck for $1,594 paying $50 down, $450 shortly thereafter and giving fifteen notes of approximately $71 each to run over a period of time. An appropriate conditional bill of sale (referring to the notes) was on the same date executed between the parties. A few days later the truck was delivered and proved to be the subject of some dissatisfaction. 'The plaintiff paid three of said notes as they fell due, aggregating some $215, the first payment being made to the Lincoln Company and the other two to the defendant — to whom the notes had been indorsed. Thereafter and on March 19, 1917, plaintiff, unaware [315] of the assignment of the conditional bill of sale to defendant, had a conversation with officers of the Lincoln Company which resulted in a mutual rescission of the contract of sale and the return of the truck by the plaintiff to the motor company. The Lincoln Company shortly thereafter became insolvent. Defendant, on July 23, 1917, took possession of all the property of that company, including the truck involved in the present action, which it found, among others, in the garage of the Lincoln Company. This action is brought to recover from the defendant the amount paid by the plaintiff on account of the purchase price of the truck. The learned judge below was of opinion that the defendant being merely the assignee of the Lincoln Company was not bound, either on the theory of contract, or of quasi contract, to return the payments ‘' which were voluntarily made to it by the plaintiff, though such quasi contract made the Lincoln Motor Company liable for all the payments made whether to it or to the defendant on its account. ’ ’ The facts in this case not being in dispute, it was-tried almost exclusively on stipulation. Defendant’s treasurer, however, in the course of some otherwise-unimportant evidence, testified that he ‘ ‘ had received notice that the plaintiff had turned the truck in to the. Lincoln Motor Company about May or June, 1917,” some two or three months, it will be observed, before possession thereof was taken by the defendant. As I view this transaction plaintiff having undertaken to rescind the sale without exacting the return either of the conditional bill of sale or of the notes given thereunder was, as matter of law, put upon notice that they had been negotiated. Assets Realization Co. v. Clark, 205 N. Y. 105. As to the defendant, [316] therefore, the " ostensible rescission was totally ineffective. "When, however, the fact of the rescission became known to the defendant, and it took possession of the truck which had been surrendered by plaintiff in pursuance thereof, it adopted the transaction to the extent of its interest as its own and became bound by such adoption to return so much of the purchase price as it had received and to surrender the notes still outstanding. See generally Conde v. Lee, 171 N. Y. 662; Town of Ansonia, v. Cooper, 64 Conn. 536, 541; Blood v. La Serena L. & W. Co., 113 Cal. 221; McArthur v. Times Printing Co., 48 Minn. 319; Schreyer v. Turner Flouring Co., 29 Ore. 1. In my opinion, therefore, the judgment should be reversed, with $50 costs, and judgment directed in favor of plaintiff for $214.11, with appropriate costs in the court below.