Charter Oak Lumber Co. v. P. Berry & Sons, Inc.

On July 7th, 1933, Pasquale Scavone purchased from Charles B. Simmons, doing business as Browning-Simmons, certain bar fixtures under a conditional bill of sale which was duly recorded and the fixtures installed in Scavone's tavern. The purchase price of the property was $521.65, of which $300 was paid in cash, and four promissory notes of $55.42, payable one each week, were given in payment of the balance. The last of these notes fell due August 14th, 1933, and remained unpaid. On November 23d 1933, the conditional bill of sale and the unpaid note were assigned by the then owner to the plaintiff, and the assignment was duly recorded. Scavone was then indebted to the plaintiff in the sum of $198 for material furnished in fitting up his tavern. On the following day the plaintiff notified Scavone of the assignment and demanded possession of the property. Shortly thereafter Scavone agreed to surrender the property to the plaintiff, and the latter, in consideration of such surrender, cancelled his indebtedness of $198 and that represented by the unpaid note of $55.42. The plaintiff made arrangements to have the fixtures disconnected and taken away on November 29th. On November 28th a representative of the defendant called at Scavone's tavern and was told by him that the plaintiff had bought the fixtures and was coming to take them away. The defendant attached them that night in an action in which it later obtained judgment against Scavone, and the fixtures were sold at a sheriff's sale to satisfy the judgment. The trial court held that the arrangement made by Scavone and the plaintiff for the surrender of the property to the latter was in violation of the provisions of the law regarding property sold upon a conditional contract of sale, and that the property, remaining in the physical possession of Scavone, was subject to attachment by the defendant.

The only interest that Scavone had at any time in these bar fixtures was that of a conditional vendee. The title remained in the conditional vendor and later vested in the plaintiff as his assignee. By the terms of the conditional bill of sale, upon default in any of the weekly payments, the conditional vendor was entitled to immediate possession of the property which the conditional vendee promised to deliver on demand. There was a default in the payment of the final note, and the plaintiff, as assignee of the conditional vendor, thereupon became entitled to the immediate possession of the property. It made demand upon Scavone for such possession and the latter agreed to surrender it. Before the fixtures were actually disconnected and removed from Scavone's tavern, the defendant attached them. It supports its right to do so under the doctrine that retention of possession by the vendor of personal property after a sale renders the sale constructively fraudulent, and the property subject to attachment by his creditors. That doctrine was not applicable to the situation here present. Scavone was never the owner of this property. He had an equitable interest as conditional vendee. This interest was subject to attachment, General Statutes, 5721, but an attaching creditor would take it subject to the rights of the conditional vendor. Collins v. Lewis, 111 Conn. 299, 302,149 A. 668. Prior to the defendant's attachment, Scavone, being in default under his conditional sale contract, had surrendered his interest in the fixtures to the plaintiff. He no longer had any interest in them which was subject to attachment by his creditors. The plaintiff had an absolute title to them and was entitled to immediate possession. That the actual possession had not been transferred to the plaintiff when defendant attached the property did not validate its attachment of the property as that of Scavone.

This transaction was not a sale of the fixtures by Scavone to the plaintiff. It was merely a surrender of his interest as conditional vendee which the plaintiff had the right to demand in view of his default. The object of the rule requiring a change of possession upon a sale of personal property is the prevention of fraud. Creditors of the vendor are entitled to rely upon his continued possession of the property as indicating his continued ownership. Creditors of Scavone had constructive notice that his interest in the fixtures was only that of a conditional vendee, and it is found that the defendant had actual notice that he had surrendered that interest to the plaintiff as assignee of the conditional vendor. The plaintiff was the absolute owner of this property at the time of the defendant's attachment, and its attachment and subsequent sale to satisfy the defendant's claim against Scavone constituted a conversion of the property. The trial court has found that the value of the property was $350.

There is error, and the case is remanded with direction to enter judgment in favor of the plaintiff for $350 with interest from November 28th, 1933.

In this opinion HINMAN and AVERY, JS., concurred.