General Motors Acceptance Corp. v. Brown

California Court of Appeal Dec 6, 1934 No. Civ. 5053Published

Before: Thompson

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Holding. The court held that a vendor under a conditional sale contract may repossess and resell property upon default to satisfy the debt without waiving the right to sue for the remaining deficiency, and that an agent's unauthorized oral waiver of such a debt is unenforceable.

Issues

Whether a vendor under a conditional sale contract waives the right to a deficiency judgment by repossessing and reselling the property.
Whether an agent's unauthorized oral agreement to cancel a debt is binding when it contradicts the express terms of a written contract.
Whether the voluntary surrender of property by a vendee constitutes sufficient consideration to support a waiver of the remaining debt.

Disposition. reversed

Quotations verified verbatim against the opinion

“There is, however, no evidence to support the assumption that the agent had authority to waive the express terms of the written contract”

“It is an uniform rule of law that a consideration for an agreement is not adequate when it is a mere promise to perform that which the promisor is already legally bound to do.”

THOMPSON, J.

The plaintiff has appealed from a judgment which was rendered against it in a suit for a deficiency due on the contract price of an automobile, which unpaid balance remained unsatisfied after the car had been repossessed and sold pursuant to the terms of the agreement and the proceeds thereof credited to the purchase price.

An automobile was sold and delivered to the defendant on a conditional sale contract for $1952. Upon delivery of the car the sum of $500 was paid on the purchase price. The balance was to be paid in monthly installments of $50. The contract contains the following clause:

“Title to said property shall not pass to the purchaser until said amount is fully paid in cash. ... In the event the purchaser defaults on any payment due on this contract . . . the full amount shall, at the election of the seller, be immediately due and payable, and . . . the seller . . . may take immediate possession of said property, without demand. . . . The seller may resell said property, so retaken, at public or private sale, without" demand for performance, with or without notice to the purchaser. . . . From the proceeds of any such sale the seller may deduct all expenses, . . . The balance thereof shall be applied to the amount due; . . . in case of deficiency the purchaser shall pay the same

[648]

with interest. . . . The seller shall have the right to enforce one or more remedies hereunder. . . . The terms hereof shall not operate to release the purchaser until full payment has been made in cash.”

The defendant defaulted in the payment of. several installments. By consent of the defendant the plaintiff took possession of the machine and resold it at private sale for the sum of $325, which sum was credited to the purchase price of the machine, leaving a deficiency on the purchase price of $430. Suit was commenced against the defendant for the last-mentioned sum, together with interest and attorney’s fees, under the terms of the contract. The cause was tried by the court, sitting without a jury. The court found that the defendant had defaulted in his payments as alleged, but that, “the agent of plaintiff had the authority to retake the car and cancel the indebtedness owed by the defendant to the plaintiff”; that upon repossessing the car the “plaintiff’s agent then and there agreed to receive said automobile and cancel the obligation”; and that the defendant was therefore not indebted to the plaintiff. Thereupon judgment was rendered in favor of the defendant. From this judgment the plaintiff has appealed.

General Motors Acceptance Corp. v. Brown

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THOMPSON, J.

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