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Frantz Equipment Co. v. Anderson

Decided: May 21, 1962.


For reversal -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Haneman, J.


Plaintiff, a conditional sales vendor, brought suit to recover an alleged deficiency on a conditional sales contract. Defendants, conditional sales vendees, denied liability, and counterclaimed for damages arising from the alleged failure of plaintiff to comply with the Uniform Conditional Sales Law (R.S. 46:32-1 to 33), in selling the repossessed chattels. Upon motion made at the end of the ease, defendants having offered no proof, the trial court, sitting without a jury, dismissed the complaint and awarded judgment to defendants upon their counterclaim. Plaintiff appealed to the Appellate Division. Prior to argument there, this court certified the appeal on its own motion. R.R. 1:10-1(a).

No dispute exists concerning the factual situation. Plaintiff sold to defendants, who were son and mother, a used tractor and bulldozer. The transaction was evidenced by a conditional sales agreement dated June 15, 1959 which recited a purchase price of $15,000, together with an allowance therefrom of $6,000 for a tractor accepted from defendants as a trade-in. The contract showed a balance of $9,000 due on the purchase price and interest charges in the amount of $810. Payments were to be made in eighteen monthly installments of $545 each.

Only one installment payment was made by defendants. Plaintiff repossessed the equipment and on December 9, 1959 sent notice of a proposed resale thereof to defendants by a single certified letter addressed jointly to "Mr. George Anderson -- Mrs. Josephine Anderson" at the address appearing for both in the conditional sale contract. The letter was returned with the notation "Notice left, no ans. during del. hrs. * * *"

A newspaper advertisement giving public notice of the proposed sale was caused to be published on December 14, 1959. In addition, on the same date auction notices were displayed in four locations. From the testimony it is not clear whether these notices were posted along a public way.

On December 21, 1959 the resale was conducted. Following the sale plaintiff filed a complaint asserting a deficiency of over $5,000 which assertion, at trial, was admitted to have been in error whereupon the correct amount of the deficiency was stated to be $1,319.09.

After plaintiff had concluded its case and defendants had rested without further proof, they made a motion for dismissal of the complaint and for judgment on their counterclaim. Both motions were granted, the former because the court felt bound by Pacific Discount Co., Inc. v. Jackson, 68 N.J. Super. 331 (App. Div. 1961), which held that R.S. 46:32-25 required notice of sale of repossessed goods be sent to the conditional vendee by registered mail and that certified mail was insufficient for that purpose. Having found that plaintiff failed to satisfy this statutory mandate as to notice, the court deemed that defendants were entitled to recover on their counterclaim one-fourth of all payments made under the contract (R.S. 46:32-31). In computing the amount of the counterclaim, the court considered the $6,000 trade-in allowance as a payment under the contract.

Plaintiff urges that notice of resale sent by certified rather than registered mail meets the requirements of R.S. 46:32-25 and therefore, dismissal of its complaint on that

basis was error. The judgment on defendants' counterclaim is contested on the ground that defendants' right to recover damages can arise only from plaintiff's failure to comply with the above statute and that plaintiff having complied therewith, defendants were not entitled to a judgment. Plaintiff argues further that, in any event, defendants' right to recover one-fourth of the payments made under the contract depends upon a showing of actual damages and the defendants, not having introduced any proof of actual damage, are not entitled to any judgment. It is also urged that since the resale here was voluntary, defendants having failed to pay the 50% of the purchase price made a prerequisite for a compulsory resale by R.S. 46:32-25, an award of damages in any amount was improper. The final attack upon the judgment on the counterclaim is directed at the amount thereof. In this connection the plaintiff asserts that the court in awarding defendants one-fourth of the "payments" made under the contract erroneously considered the $6,000 trade-in allowance evidenced by the conditional sale agreement as a payment. It argues that the actual value of the equipment traded in is the true measure of the amount of defendants' payment and that the court therefore erred in entering judgment, defendants not having established that value.

Defendants argue for affirmance of the judgment below on two grounds. First, echoing the trial court's reasoning, they assert that notice by certified mail is insufficient compliance with the "registered mail" mandate of R.S. 46:32-25. Second, a contention is made that the mailed notice, the newspaper notice and the posted notices were all deficient in form and content thereby precluding recovery of any deficiency by plaintiff while at the same time establishing defendants' right to damages. They also assert that the judgment on the counterclaim is in the proper amount.

We come, therefore, to a consideration of the respective arguments.

R.S. 46:32-25 provides:

"* * * The seller shall give to the buyer not less than ten days' written notice of the sale, either personally or by registered mail, directed to the buyer at his last known place of business or residence. The seller shall also give notice of the sale by at least three notices posted in different public places within the filing district where the goods are to be sold, at least five days before the sale. If at the time of the retaking five hundred dollars or more has been paid on the purchase price, the seller shall also give notice of the sale at least five days before the sale by publication in a newspaper published or having a general circulation within the filing district where the goods are to be sold. * * *"


Defendants' objection to the mailing of notice of sale by certified mail rather than registered mail is without merit in the light of our recent decision in Pacific ...

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