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Peterman v. Shore Motors, Inc.

Superior Court of Delaware, Kent County

November 16, 1961

Claude PETERMAN, Petitioner,
v.
SHORE MOTORS, INC., a corporation of the State of Delaware, Respondent.

[54 Del. 230] Harrison F. Turner, Dover, for petitioner.

Harvey S. Kronfeld, Wilmington, for respondent.

TERRY, President Judge.

Claude Peterman (hereinafter referred to as conditional buyer) and Shore Motors, Inc., (hereinafter referred to as conditional seller), entered into a conditional sale contract for a 1956 Ford Station Wagon. The purchase price was $1,195.68. The conditional buyer defaulted in payments, having paid only $124.50. On February 7, 1961, the conditional seller repossessed the automobile. On February 17, 1961, the conditional seller had judgment entered on a confession of judgment note signed by the conditional buyer. On March 24, 1961, the conditional seller gave the conditional buyer written notice of its intention to re-sell the automobile at public auction. Such sale was made on April 4, 1961.

The conditional buyer now petitions to open the judgment by confession and present a valid defense. In support of his petition, the conditional buyer contends that the conditional seller failed to have a public sale of the repossessed vehicle within thirty days of the time of repossession, and has estopped itself from any recourse against the conditional buyer on the purchase price as provided by Del.Code Ann. tit. 6, § 923 (1953).

The question presented is whether or not a valid resale was made entitling the conditional seller to a deficiency decree pursuant to the Delaware Conditional Sales Act, where the resale was made more than thirty days after the date of repossession.

Since the conditional buyer did not pay fifty per cent of the purchase price, a resale was not required. Del.Code Ann. tit. 6, §§ 919, 920 (1953). The applicable statute is Del.Code Ann. tit. 6, § 920 (1953), which reads as follows:

[54 Del. 231] 'If the buyer has not paid at least 50 per cent of the purchase price at the time of the retaking, the seller shall not be under a duty to resell the goods as prescribed in section 919 of this title, unless the buyer serves upon the

Page 740

seller, within ten days after the retaking, a written notice demanding a resale, delivered personally or by registered mail. If such notice is served, the resale shall take place within 30 days after the service, in the manner, at the place and upon the notice prescribed in said section. The seller may voluntarily resell the goods for account of the buyer on compliance with the same requirements.'

Since the conditional buyer did not demand a resale pursuant to § 920, the resale made was a voluntary one. Such voluntary resale is governed by the last sentence of § 920:

'The seller may voluntarily resell the goods for account of the buyer on compliance with the same requirements.' (Emphasis added.)

The construction to be placed upon this last sentence determines the issue in this case.

Bowden v. Sussex Studebaker, Inc., 164 A.2d 595 (Del.Super.Ct. 1960) is a case similar to the case at bar. There, the buyer paid less than 50 per cent of the purchase price for an automobile, and executed a judgment note and conditional sales contract for the balance. Upon default by the buyer, the seller repossessed the automobile on March 11, 1958, and sold it on April 8, 1958. The Court commented as follows:

'Section 920 does not require the seller to resell the automobile if the buyer has paid less than 50% of the purchase price, unless the buyer demands it. However, the seller may voluntarily resell the goods for the account of the buyer on compliance with the applicable requirements of Section 919. * * * The purpose of the voluntary resale is to give the [54 Del. 232] seller the right to hold the buyer to the obligation for any deficiency.' Id. at 598. (Emphasis added.)

It should be noted that the resale in Bowden was made within the 30 day time limit set by § 919. Thus, Bowden did not decide the issue in this case, i. e., whether the time limit of § 919 is one of the 'applicable requirements of Section 919' that ...


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