Opinion
February 18, 1971
Appeal from the Erie Special Term.
Present — Goldman, P.J., Marsh, Witmer, Gabrielli and Moule, JJ.
Order and judgment (one document) unanimously modified by deleting from the final decretal paragraph so much thereof as grants judgment in favor of respondent in the sum of $8,208.50, and as so modified, affirmed, without costs. Memorandum: In this action brought for the recovery of a chattel pursuant to CPLR article 71, and also for wrongful detention thereof, pleadings and motion papers upon the application for summary judgment on the cause of action for wrongful detention reveal distinct factual issues in respect of respondent's claim that it made a demand for return of the chattel. It appears that there were discussions between the parties regarding their possessory rights, but appellant disclaims any demand upon it for the delivery of the chattel and staunchly contends that there was an agreement by which possession could be retained until further notice from respondent. In these circumstances, we find unwarranted the grant of summary judgment upon the cause of action for wrongful detention and the consequent award of monetary damages. With commendable candor respondent concedes that the grant of damages was erroneous. However, in view of the demonstrated validity and superiority of respondent's security interest, we find proper Special Term's denial of summary judgment on the counterclaims for conversion, trespass and abuse of process, as well as its denial of the motion for dismissal of the amended complaint. For similar reasons, Special Term correctly decided that, by reason of respondent's prior security interest, it was entitled to summary judgment declaring that it was entitled to possession of the chattel. There is no dispute as to the existence of respondent's security interest arising out of a transaction whereby, as guarantor and assignee, it succeeded to the ownership of a valid security interest which was perfected on May 16, 1966. Appellant erroneously claims a prior security interest based on an alleged contractual right to use the chattel, given by the original owner. Such a right was purely contractual in nature, not encompassing a security transaction and certainly not one which could ripen into a "security interest" as envisioned by the Uniform Commercial Code. The interest claimed by appellant was not one which, upon any default, would give rise to its right to seize the chattel, sell it and apply the proceeds to any debt. Neither can it be successfully argued that its rights are consonant with the provisions of subdivision (37) of section 1-201 of the Uniform Commercial Code which defines a security interest as "an interest in personal property or fixtures which secures payment or performance of an obligation". (See, also, 53 N.Y. Jur., Secured Transactions, § 3.) Concededly, the original owner was in default as to respondent's security interest and, because of its demonstrated prior right, respondent had an immediate right to possession of the chattel and we must conclude that appellant cannot withstand this right which was perfected pursuant to respondent's undisputed security interest. Furthermore, we find no substance to the claim that Special Term lacked jurisdiction to grant the requested relief. The question of the validity of the original replevin has no effect upon the proper commencement of the action which was instituted by personal service of the summons and complaint in the present action (cf. Sears Roebuck Co. v. Austin, 60 Misc.2d 908) and, in any event, appellant failed to move against the pleadings or otherwise object to any lack of jurisdiction, a claim advanced for the first time upon this appeal.