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Associates Discount Corp. v. Palmer

Decided: May 23, 1966.

ASSOCIATES DISCOUNT CORPORATION, A CORPORATION, PLAINTIFF-RESPONDENT,
v.
CLARENCE PALMER, DEFENDANT-APPELLANT



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

Proctor

The sole question on this appeal is whether plaintiff's suit is barred by the statute of limitations. Defendant appealed from an adverse judgment in the Mercer County District Court, and we certified the cause on our own motion prior to argument in the Appellate Division.

On April 18, 1957, defendant purchased an automobile from Reedman Motors Corporation in Langhorne, Pennsylvania. The sale was financed by a "Bailment Lease Security Agreement" which recited that defendant was a resident of Trenton, New Jersey. The instrument also stated: "This agreement is subject to the provisions of the Pennsylvania Motor Sales Finance Act and the Uniform Commercial Code." Next to defendant's signature appears the printed term "(Seal)." On the day after the sale Reedman Motors assigned the agreement to the plaintiff corporation.

On July 10, 1957, defendant made his first and only installment payment, and in August 1957 he voluntarily permitted plaintiff to repossess the automobile. It was sold at auction on August 16, 1957, for $393.70 less than defendant's outstanding debt to plaintiff.

No further steps were taken by plaintiff to enforce its claim until July 20, 1964, almost seven years after the auction sale, when it brought this action to recover the $393.70 deficiency, accrued interest and attorney's fees, a total of $642.91. The trial court, sitting without a jury, found that the agreement "was a legal contract under seal properly executed by the defendant" and held for the plaintiff. However, there is nothing in the trial court's written opinion dealing with the statute of limitations defense which had been raised by the defendant.

We think the trial court erred and that plaintiff's action is barred by the statute of limitations. Plaintiff's assignor and defendant specifically agreed that the sale of the automobile would be governed by the provisions of the Uniform Commercial Code which had become effective in Pennsylvania

in 1954. Pa. Stat. Ann. tit. 12A, § 1-101 et seq.*fn1 The Sales Article of the Code provides at Pa. Stat. Ann. tit. 12A, § 2-725(1):

"An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it."

Admittedly, plaintiff here did not commence its action until long after the four year period had elapsed. There is no suggestion that defendant at any time attempted to evade service of process. Plaintiff's assignor knew from the inception of the transaction that defendant was a New Jersey resident and that any legal action against him would probably have to be taken in the courts of this State.

Plaintiff contends that the Uniform Commercial Code cannot apply to any transaction to which the Pennsylvania Motor Vehicle Sales Financing Act, Pa. Stat. Ann. tit. 69, § 601-637, is applicable. We disagree. The Pennsylvania courts have applied the provisions of both laws together when deciding cases involving motor vehicle sales, Commonwealth Bank and Trust Co. v. Keech, 201 Pa. Super. 285, 192 A. 2 d 133 (Super. Ct. 1963); Frank v. McCafferty Ford Co., 192 Pa. Super. 435, 161 A. 2 d 896 (Super. Ct. 1960); Commonwealth v. Two Ford Trucks, 185 Pa. Super. 292, 137 A. 2 d 847 (Super. Ct. 1958); and the Pennsylvania Motor Vehicle Sales Financing Act contains no statute of limitations which might conflict with the four year limitation in Pa. Stat. Ann. tit. 12A, § 2-725. See also Pa. Stat. Ann. tit. 12A, § 9-203 (2).

Plaintiff argues that a longer statute of limitations should apply because the agreement is a sealed instrument. We find no merit in this contention. Pa. Stat. Ann. tit. 12A § 2-725 makes no distinction between sealed and unsealed

instruments and provides a four-year statute of limitations for "any contract for sale." Moreover, the Code specifically states at Pa. Stat. Ann. tit. 12A, § 2-203:

"The affixing of a seal to a writing evidencing a contract for sale or an offer to buy or sell goods does not constitute the writing a sealed instrument and the law with respect to sealed ...


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