124 Misc. 2d 732 | N.Y. App. Term. | 1983
OPINION OF THE COURT
Memorandum.
Order unanimously reversed, without costs, defendant’s motion for summary judgment denied and matter remanded to the court below for all further proceedings.
The underlying facts giving rise to this case át bar are set forth in the opinion of the court below.
The court below correctly concluded that defendant had the right to take possession of the collateral pursuant to its perfected security interest regardless of the administrative negligence of the Department of Motor Vehicles. Plaintiff, even though without knowledge of the bank’s interest and relying upon the erroneous certificate of title issued for the vehicle, nevertheless can acquire no greater rights to the vehicle than that possessed by purchaser at the marshal’s auction. A levy by the marshal cannot void a secured party’s right to take possession of collateral on default (Uniform Commercial Code, § 9-503; General Motors Acceptance Corp. v Stotsky, 60 Misc 2d 451; Matter of Iselin & Co. v Burgess & Leigh, 52 Misc 2d 821). A seizure by the marshal is subject to the perfected security interest already existing and therefore the purchaser at a marshal’s sale cannot acquire any greater rights than that had by the marshal (Uniform Commercial Code, § 9-306, subd [2]; Matter of General Motors Acceptance Corp. v Maloney, 46 Misc 2d 251; Matter of Intermediate Credit Corp. v Overseas Nat. Airways, 41 Misc 2d 522).
Furthermore, while the Department of Motor Vehicles’ negligence may be actionable (see Hudleasco v State of New York, 90 Misc 2d 1057, affd 63 AD2d 1042), it does not alter the priority of the parties’ interests on the vehicle (see 15 NYCRR 20.18). A perfected security interest takes priority over a purchaser of the collateral, even though that purchaser is without knowledge of the lien (see Vehicle and Traffic Law, § 2118, subd [a]; Uniform Commercial Code, § 9-307; White Star Distrs. v Kennedy, 66 AD2d 1011). Plaintiff’s reliance upon the clear certificate of title is misplaced inasmuch as it is merely prima facie evidence of its contents, which, of course, may be rebutted (Vehicle and Traffic Law, § 2108, subd [c]).
Likewise, while defendant claims that notice of the sale was sent to plaintiff, defendant does not submit a copy of such notice or even describe the contents of such notice rendering it impossible to ascertain whether the notice itself was reasonable (see Ann., 11 ALR4th 241, 290).
Even were it to be assumed that the letter sent to plaintiff contained notification of the time and place of the sale, such notice cannot be considered reasonable inasmuch as it was mailed on August 25 and the car was sold on August 27. While reasonable notification is not defined in section 9-504 of the Uniform Commercial Code, at a minimum, the notice must be sent so that the persons entitled to receive it have sufficient time to take appropriate action to protect their interests (54 NY Jur, Secured Transactions, § 286; Marine Midland Bank-Rochester v Vaeth, 88 Misc 2d 657). Even assuming that plaintiff received the notice, at best he had only one day’s notice of
It should be noted that where, as here, disposition of the collateral has been completed, the debtor or any other person entitled to notification, such as plaintiff, may recover from the creditor any loss caused by the creditor’s failure to give reasonable notice or to sell in a commercially reasonable manner (Uniform Commercial Code, § 9-507, subd [1]; § 9-112; Security Trust Co. v Thomas, 59 AD2d 242; Stanchi v Kemp, 48 AD2d 973).
It is evident from the foregoing discussion that summary judgment in favor of defendant was not warranted.
Pino, P. J., Buschmann and Kunzeman, JJ., concur.