Opinion
December 29, 1961
Appeal from a judgment of a Trial Term, Supreme Court, Albany County. In July, 1955 the defendant bank acquired for a good consideration a conditional sales contract on a trailer on which Donald C. Putnam and his wife were the buyers and Putnam Mobile Homes, a partnership in which Donald C. Putnam was a partner, was the seller. The contract was thereafter promptly filed in the proper public office. The proof is that for almost a year the buyers actually lived with their children in the trailer, which was, however, kept on the sales lot by Putnam Mobile Homes along with other trailers for sale. In May, 1956 the Putnam Mobile Homes sold the same trailer, title to which was then in defendant bank, under a new conditional sales contract, to Merton F. Parslow and his wife. This second conditional sales contract was assigned to the plaintiff, a finance corporation. Although the prior contract was then of record in the proper office, plaintiff as assignee paid a good consideration to the partnership. When, some months later, defaults occurred in the payments due to the bank under the first contract, the bank took possession of the trailer and this action by the finance company is for conversion. The complaint has been dismissed after trial, and we believe this was a correct disposition of the case. It seems clear that by the first contract defendant bank acquired a good title which could not be defeated by any of the subsequent actions of either the seller or the buyer as disclosed by this record; and the proper filing constituted due constructive notice to the plaintiff of the defendant's title. Appellant argues that there was an implied consent by defendant bank that the trailer could be resold (Personal Property Law, § 69). Ordinarily this has application to conditional sales of goods to dealers and it may often be quite clear that there is consent to resale where, as the statute requires, the resale is "in the ordinary course of business". But the resale here in issue does not technically come within the section. The resale was made, not by the buyers under the first contract, but by the seller who had parted with all title. The buyers were the husband, who was a member of the partnership firm, and his wife, who was not a member of the firm. The wife was not a party to the resale, although she had title subject to the first contract; and her husband as an individual did not resell; but rather the partnership of which he was a member made the sale. These are all quite different legal entities. But even if there were full identity between the buyer under the first contract and seller under the second contract, it is perfectly clear that the bank did not expressly consent to a resale. It is reasonably open to find on this record that it did not impliedly consent to the resale. There is proof that from time to time one of the bank officers observed the trailer parked in the partnership lot next to the office and in a line with other trailers which were for sale. But the proof is that during this period of almost a year, the buyers under the first contract and their children actually lived there; and it would be more reasonable for the bank to believe that they were doing what the contract said they had a right to do — using the trailer for personal purposes and for business convenience in living on the lot, than for the purpose of perpetrating a fraud on other persons by reselling. Thus, we think there is no such compelling proof of implicit consent for a resale as to require us to reverse the findings made after the trial of the case. Appellant also argues that section 106 Pers. Prop. of the Personal Property Law gives it a priority in title over defendant bank. This section in effect provides that where the seller does not deliver, but keeps the goods, a later buyer in good faith and for value is protected if he takes title without notice of the previous sale. It is clear that for the reasons discussed, it could well be found factually that the partnership seller did not continue in possession of the trailer, but rather the quite different legal entities, the partner individually and his wife, took possession and actively used it for their own purposes. Judgment affirmed, with costs. Bergan, P.J., Coon, Gibson and Reynolds, JJ., concur.