McMillen v. Pippin

California Court of Appeal Jan 10, 1963 No. Civ. 20446Published

Before: Salsman

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Holding. The court held that a conditional seller's exercise of dominion over equipment with the buyer's consent constitutes a constructive repossession, and that a resale is valid if conducted with reasonable care and judgment to obtain the best price.

Issues

Whether the seller's actions constituted a valid repossession of the equipment under the conditional sales contract.
Whether the resale of the repossessed equipment complied with the law to support a deficiency judgment.

Disposition. affirmed

Quotations verified verbatim against the opinion

“plaintiff’s exercise of dominion over the subject matter of the contract, accompanied by defendant’s knowledge and consent, amounts to a constructive repossession of the Skagit for all purposes required under the contract”

“Upon resale after repossession the conditional seller is not required as a matter of law to follow the cited statutory provisions relating to the sale of pledged property.”

“he must deal fairly and justly with the original buyer and exercise reasonable care and judgment in making the resale.”

SALSMAN, J.

Plaintiff obtained a deficiency judgment against the defendant arising out of the sale of a BU 135 Skagit, a large piece of logging equipment. The conditional sales contract of the parties was entered into in April of 1957. Defendant was unable to make any substantial use of the Skagit and in 1958 he parked it in the woods, built a cover for it, and removed the starting motor. Defendant paid only $850 of the $8,000 purchase price. From time to time after 1958 plaintiff and defendant discussed the resale of the machine, and both parties tried to find a buyer. In 1959 defendant informed plaintiff that one Philbrick was interested in the Skagit, and defendant told plaintiff to

“go

ahead with the sale,” but it turned out that Philbrick’s interest was only tentative, and no sale resulted. Plaintiff advertised the Skagit for sale in various newspapers and in 1960 plaintiff found one Rasmussen as a buyer, and sold the Skagit to him for the sum of $2,750, which was the highest price plaintiff was able to obtain. Rasmussen’s agent called for the Skagit and defendant delivered the starting motor and cooperated in the removal of the machine. At the time of sale plaintiff told defendant he w-ould be held for any deficiency arising out of the repossession "and sale, and when defendant refused to sign notes for the amount of the deficiency claimed by plaintiff, this action was begun.

The conditional sales contract contained this paragraph: ‘‘In the event of the failure by the purchaser to pay any installment of the purchase price as the same shall become due hereunder . . . the seller may take possession of said property, with or without legal process, and, at his option, sell the same according to law, in which case it is expressly understood and agreed that the seller may retain all installments previously paid hereunder as and for compensation for the use of said property by the purchaser and the purchaser will pay any deficiency arising on account thereof. ...”

On this appeal defendant first contends there was no repossession of the Skagit. The trial court found there was a repossession, and this finding is sufficiently supported by the evidence. It is true that plaintiff did not take physical possession of the machine, and that defendant retained the start

[676]

McMillen v. Pippin

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SALSMAN, J.

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