Opinion
No. 2209.
Argued July 7, 1958.
Decided September 19, 1958.
APPEAL FROM MUNICIPAL COURT FOR THE DISTRICT OF COLUMBIA, CIVIL DIVISION, EDWARD A. BEARD, J.
John A. Beck, Washington, D.C., for appellant.
Edward J. Skeens, Washington, D.C., entered an appearance for appellee, but filed no brief.
Before ROVER, Chief Judge, and HOOD and QUINN, Associate Judges.
Appellee purchased a new 1957 Oldsmobile from appellant in November, 1956, at its place of business in Bethesda, Maryland. The transaction was not a conditional sale but a "cash" sale, with title passing to appellee. The car was delivered on November 23, 1956. Under the terms of the agreement appellee was given an allowance for his traded-in 1956 Chevrolet. On November 26, 1956, appellee procured a loan from a third party to cover a part of the balance and paid the remainder with his personal check. The third party forwarded the amount of the loan to appellant together with instructions to impose a lien in the form of a chattel mortgage on the car in its favor, which was done.
Appellee's check was not honored. On December 3 appellee returned to appellant's office with the Oldsmobile in a damaged condition and was advised of the return of his check. He then drew another check but later placed a stop-payment order against it. Thereafter appellee returned the Oldsmobile still in its damaged condition, and on December 13 he sent a telegram reading as follows: "Please cancel all contracts. Deliver my Chevrolet back to me." The next day appellant mailed appellee a letter notifying him that it refused to recognize his attempt to rescind the contract, and demanding payment in full. Appellant made several more demands on appellee but with no success.
On March 30, 1957, appellant, after repairing the Oldsmobile, resold it to another buyer. Part of the proceeds were used to discharge the chattel mortgage and the remainder was applied to appellee's debt but was not sufficient to cancel it. Appellant then brought this present action for the deficiency. Appellee resisted the suit and counterclaimed for rescission on the ground of misrepresentation. Trial was before a jury. At the conclusion of appellant's evidence, which we have detailed, the trial judge directed a verdict for appellee on appellant's claim and appellee then voluntarily withdrew his counterclaim. In directing a verdict, the trial judge delivered an oral opinion during the course of which he held that appellant's "reacceptance" of the Oldsmobile and subsequent resale of it constituted a rescission by appellant of the original contract of sale, which precluded it from holding appellee for the purchase price.
The case is governed by the law of Maryland. By virtue of Article 83, Section 70(1) (a) and (b) of the Annotated Code of Maryland, 1951, a seller is deemed an unpaid seller if the full price is not paid, or if a negotiable instrument given as conditional payment, is dishonored. Section 71 of the same Article grants an unpaid seller a lien on the goods while the are in his possession, even though the property in the goods has passed to the buyer, and also a right of resale. According to Section 74, however, the lien is lost upon delivery of the goods to the buyer. Section 78 provides as follows:
"(1) Where the goods are of a perishable nature, or where the seller expressly reserves the right of resale in case the buyer should make default, or where the buyer has been in default in the payment of the price an unreasonable time, an unpaid seller, having a right or having stopped the goods in transitu, may resell the goods. He shall not thereafter be liable to the original buyer upon the contract to sell or the sale or for any profit made by such resale, but may recover from the buyer damages for any loss occasioned by the breach of the contract or the sale.
"(2) Where a resale is made, as authorized in this section, the buyer acquires a good title as against the original buyer.
"(3) It is not essential to the validity of a resale that notice of an intention to resell the goods be given by the seller to the original buyer. But where the right to resell is not based on the perishable nature of the goods or upon an express provision of the contract or the sale, the giving or failure to give such notice shall be relevant in any issue involving the question whether the buyer had been in default an unreasonable time before the resale was made.
"(4) It is not essential to the validity of a resale that notice of the time and place of such resale should be given by the seller to the original buyer.
"(5) The seller is bound to exercise reasonable care and judgment in making a resale, and subject to this requirement may make a resale either by public or private sale."
These statutes correspond to Sections 52, 53, 56, and 60 of the Uniform Sales Act which Maryland has adopted. The District of Columbia has identical statutes. See Code 1951, 28-1401, 1402, 1405, 1409.
Applying these rules to the present case, it is clear (1) that appellant was an unpaid seller, and (2) that it had the right to resell the car if it had a lien on it and if there was a default by appellee for an unreasonable length of time. As to appellant's lien, while it was lost upon the original delivery, appellee's return of the car in wrongful repudiation of the contract revived it. Of course, if appellant had acquiesced in the attempted rescission by appellee, the original sale would have been thereby discharged, and the trial judge in this case seems to have felt that this occurred here. However, viewing the evidence in the light most favorable to appellant, as we must on a motion for directed verdict, it is obvious that there was no such assent. Appellant's letter of December 14 clearly stated that it was refusing to permit appellee to rescind. Appellant had a valid lien on the car and never relinquished its rights under the sale contract.
Jones v. Lemay-Lieb Corp., 1938, 301 Mass. 133, 16 N.E.2d 634, 118 A.L.R. 562; Annotation 118 A.L.R. 564; 3 Williston on Sales, § 507b.
3 Williston on Sales, § 507b.
No question was raised below as to whether the period of more than three and one-half months from appellee's default to the resale was a sufficient length of time to give appellee an opportunity to abide by his contract. We think that the jury could have found that appellee's default had continued an unreasonable length of time. In Jones v. Lemay-Lieb Corp., supra, which involved a factual situation identical to the instant one, it was suggested that where, as here, the buyer had completely repudiated the original contract of sale as far as possible, it was doubtful that there was any requirement that the seller wait before resale. The court further held in any event that the delay in that case of twenty-five days was sufficient. The delay here was more than three times as long.
We conclude that appellant has made out a prima facie case for the deficiency which resulted from the resale and thus that it was error to have directed a verdict against its claim.
Reversed with instructions to grant a new trial.