|FROM:||The Legal Taxi|
|RE:||Retail finance of vehicle, financer’s claim for recovering down payment & conversion from bank under UCC|
Retail finance of vehicle, financer’s claim for recovering down payment & conversion from bank under UCC
Can client (retail financer) sue the buyer to recover the down payment, and bank for conversion under NY UCC?
Buyer purchased a vehicle with retail financing arranged by Client (retail financer). The money received from the finance contract's sale deposited with a bank. The contract recites that a down payment has already been made but buyer arranged with vehicle dealer to make the payment. However, dealer's business apparently failed, because bank seized and sold all automobiles on dealer's lot, including buyer's vehicle. The client (retail financer) wants to sue the buyer to recover the down payment, and bank for conversion under NY UCC.
- Relevant Statute & Case
- Summaries of Key Cases
New York Personal Property - Article 9 - § 301 Definitions:
4. "Retail installment sale" or "sale" means a sale, other than for a commercial or business use or for the purpose of resale, of a motor vehicle by a retail seller to a retail buyer for a time sale price payable in two or more installments, payment of which is secured by a retail installment contract. The cash sale price of the motor vehicle, the amount, if any, included for insurance, official fees and credit service charge shall together constitute the time sale price.
8. "Credit service charge" means that part of the time sale price by which it exceeds the aggregate of the cash sale price and the amount, if any, included in a retail instalment sale for insurance and official fees.
9. "Financing agency" means a person engaged, in whole or in part, in the business of purchasing retail installment contracts from one or more retail sellers. The term includes but is not limited to a bank, trust company, savings bank, savings and loan association, private banker, or investment company, if so engaged. The term also includes a retail seller engaged, in whole or in part, in the business of holding retail installment contracts acquired from a retail buyer.
UNIFORM COMMERCIAL CODE
ARTICLE 1. GENERAL PROVISIONS
PART 2. GENERAL DEFINITIONS AND PRINCIPLES OF INTERPRETATION
'Buying' may be for cash or by exchange of other property or on secured or unsecured credit and includes receiving goods or documents of title under a pre-existing contract for sale but does not include a transfer in bulk or as security for or total or partial satisfaction of a money debt."
11 U.S.C. § 1325: US Code - Section 1325:
(4) the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date;
(5) with respect to each allowed secured claim provided for by the plan -
(A) the holder of such claim has accepted the plan;
(B)(i) the plan provides that -
(I) the holder of such claim retain the lien securing such claim until the earlier of -
Purchase-money Security Interest, Application of Payments, Burden of Establishing:
§ (2) "purchase-money obligation" means an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used.
(b) Agreement does not prevent transfer. An agreement between the debtor and secured party, which prohibits a transfer of the debtor's rights in collateral or makes the transfer a default does not prevent the transfer from taking effect.
N.Y. UCC. LAW § 2--607 : NY Code - Section 2--607:
Effect of Acceptance; Notice of Breach; Burden of Establishing Breach After Acceptance; Notice of Claim or Litigation to Person Answerable Over
(1) The buyer must pay at the contract rate for any goods accepted.
(2) Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a non-conformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the non-conformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this Article for non-conformity.
§ 6 "Cash sale price" means the cash sale price stated in a retail installment contract for which the seller would sell to the buyer, and the buyer would buy from the seller, the motor vehicle which is the subject matter of the retail installment contract if the sale were a sale for cash instead of a retail installment sale.
Please find the attached document for highlighted copy of key case:
Please find the attached document for summary of key case:
Thank you for allowing us to serve you. If you want further information or research from us on this project, please let us know.
NEITHER MIND MERCHANTS, THE LEGAL TAXI, ANY OTHER SUBSIDIARY OF MIND MERCHANTS, OR ANY AGENTS OR VENDORS OF MIND MERCHANTS (TOGETHER, "MIND MERCHANTS"), NOR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, OR REPRESENTATIVES (TOGETHER, "PERSONNEL"), PROVIDES LEGAL SERVICES OR LEGAL ADVICE IN THE UNITED STATES, UNITED KINGDOM, OR INDIA. MIND MERCHANTS IS NOT A LAW FIRM, AND IT DOES NOT AND CANNOT RENDER LEGAL SERVICES OR LEGAL ADVICE TO THE GENERAL PUBLIC. MIND MERCHANTS IS NOT ENGAGED IN THE PRACTICE OF LAW, NOTWITHSTANDING ANY PERFORMANCE OR DELIVERY OF SERVICES BY LAWYERS WHO ARE OR MAY BE AUTHORIZED TO PRACTICE LAW IN THE UNITED STATES, UNITED KINGDOM, OR INDIA. THE SERVICES AND RELATED WORK PRODUCT PROVIDED BY MIND MERCHANTS AND ITS PERSONNEL ARE PERFORMED AND PROVIDED SOLELY AT THE REQUEST OF LAWYERS AND ARE BEING PROVIDED DIRECTLY TO THOSE LAWYERS, OR THEIR DESIGNEE(S), IN SUPPORT OF THE LEGAL SERVICES THAT THOSE LAWYERS ARE PERFORMING FOR THEIR CLIENTS.