This section is part of the general scheme outlined in the notes to section 16. Where the buyer has paid less than 50 per cent of the price at the time of the retaking, the resale will not ordinarily be advantageous to him. Depreciation in the goods due to wear and tear and the cost of retaking, storage, and resale will ordinarily eat up the entire resale price. Under such circumstances a resale will usually be a profitless formality. But the buyer should have a right to demand a resale if he thinks he has an equity which will be thus protected. And also the seller should be allowed to resell the goods, if he deems it desirable, even though the buyer does not demand such resale.

SECTION 18. (Rights of Parties Where There is no Resale.) If the buyer has not paid at least fifty per cent. of the purchase price at the time of the retaking, and there is no resale of the goods according to the provisions of Section 17, the seller may retain the goods as his own property without obligation to account to the buyer, and the buyer also shall be discharged of all obligation.

This section is to be read in connection with sections 16 and 17. If no resale has occurred, due to the fact that none was compulsory and none was demanded by either party, the retaking of the goods by the seller ought to put an end to the transaction. If the buyer considers that he has any equity in the goods and any chance to realize anything by reason of the resale, he has an opportunity to protect himself by such resale. If he does not exercise this right, it is to be deemed a confession that the goods as retaken by the seller are worth less than the amount due under the contract.

SECTION 19. (Proceeds of Resale.) The proceeds of the resale shall be applied, first, to the payment of the expenses thereof, secondly to the payment of the expenses of retaking, keeping and storing the goods, and thirdly, to the satisfaction of the balance due on the purchase price. Any sum remaining, after the satisfaction of such claims, shall be paid to the buyer.

The provisions of this section are self-explanatory and it would seem are obviously just.

SECTION 20. (Deficiency on Resale.) If the proceeds of the resale are not sufficient to defray the expenses thereof, and also the expenses of retaking, keeping and storing the goods and the balance due upon

the purchase price, the seller may recover the deficiency from the buyer, or from anyone who has succeeded to the obligations of the buyer.

This section is a necessary complement to the foregoing sections relating to retaking, redemption and resale. Just as the chattel mortgagee who forecloses his mortgage and has a deficiency judgment should be entitled to recover the amount of it from the chattel mortgagor, so the conditional seller who resells for the purpose of estimating the value of the goods as retaken should be allowed to recover any deficiency from the buyer. He has lost his goods. He should get the price agreed upon.

Several commissioners in the conference have objected to this section on the ground that it is not in accord with the present American authorities and that the weight of opinion is that, after retaking the goods, the seller is not entitled to sue the buyer for the whole or any part of the price.

It is submitted that the objection to this section from the point of view of authority is based on a misconception. Many cases, it is true, have held that the conditional seller cannot, after retaking the goods, recover any part of the price from the buyer. But these cases were decided under a theory of conditional sales entirely different from that proposed in the act. The theory under which these cases were decided was that the retaking was a rescission of the contract, that all obligations under the contract were discharged by such act of retaking, that the consideration for the buyer's promise to pay the purchase price had failed. The seller, under this theory, kept the goods as his He had no duty to resell the goods for the benefit of the buyer. On the other hand, under the proposed act the theory of retaking is wholly different. It is not a theory of rescinding the contract, but of foreclosing a mortgage. The right to retake is a right to enforce a security which the seller reserved to compel the performance of the promise to pay the purchase price. The result of the retaking is not, as it was at common law or under the old statutes, to leave the seller in possession and ownership of the goods. The seller must, under the act, after retaking the goods resell them, as a chattel mortgagee would foreclose a mortgage. The ultimate result of retaking under the act is that the seller loses the goods, and is left with the resale price and the part payments of the original buyer in his hands. It is elementary justice that the seller who has parted with his goods should have the contract price of them. If the resale price plus the part payments previously made does not equal the contract price, the buyer should pay the deficiency.

The fallacy in arguing that by the weight of common law authority there is no right to recover a deficiency judgment, and that there ought, therefore, to be no right to a deficiency judgment under the act, is that at common law the seller ended up after the retaking with the goods in his possession and absolutely his property. Of course, he cannot have both the goods and the price. But under the proposed act the seller loses the goods by a compulsory resale and has in his possession only the resale price and the previously made part payments.

The only decisions under the common law and the old statutes which ought to be of weight on this subject are those where the chattel mortgage theory of a conditional sale was applied. These decisions all sustain the provisions of the proposed act. So also do the provisions of the two statutes which now provide for a compulsory resale after retaking, namely, the statutes of New York and Tennessee. N. Y. Pers. Prop. Law, sec. 67; Code of Tenn., sec. 3668.

The holding in the cases relied upon by the opponents of this section can properly be summarized as follows: "A conditional seller who retakes the goods and retains them as his own may not thereafter recover the purchase price from the buyer". The proposed provision of the act is not, as some opponents of this section would have suggested, the opposite of this holding. It is, on the other hand, properly condensed as follows: "A conditional seller who retakes the goods and resells them and applies the resale price on the purchase price may recover from the buyer any balance still due."

No attempt is being made in section 20 to work a revolution in the existing law or to go against the great weight of authority in the United States. On the other hand, section 20 states the existing law as it has been adjudicated in all cases where the exact question involved has arisen. Where the chattel mortgage theory of the conditional sale has been adopted, the deficiency judgment has followed as a matter of course. And the chattel mortgage theory of the conditional sale is increasingly receiving the approval of the courts, of legislature and of legal writers.

SECTION 21. (Action for Price.) The seller may sue for the whole or any installment of the purchase price as the same shall become due under the conditional sale.

This section needs no explanation. It is inserted for the sake of the complete enumeration of the rights of the seller against the buyer. The question has been raised whether this section should not contain some provision for the case where notes given for the purchase

price have been discounted by the seller. In such case the owner of the notes undoubtedly ought to be allowed to sue the buyer for the price and the retention of title by the original seller should be considered to be for the benefit of the owner of the notes. The ownership of the notes should draw the security with it as an incident.

SECTION 22. (Election of Remedies.) The retaking of possession, as provided in Section 13, shall be deemed an election by the seller to rescind the conditional sale, and the buyer shall not be liable thereafter for the price except as provided in Section 20. Neither the bringing of an action by the seller for the recovery of the whole or any part of the price, nor the recovery of judgment in such action, nor the collection of a portion of the price, shall be deemed inconsistent with a later retaking of the goods as provided in Section 13. But such right of retaking shall not be exercised by the seller after he has collected the entire price, or after he has claimed a lien upon the goods, or attached them, or levied upon them as the goods of the buyer.

This section is inserted for the purpose of settling a long standing conflict of authority. What act or acts upon the part of the seller show an election on his part to rescind the conditional sale and prevent him from retaking the goods is a much debated question. The prevailing view is that the commencement of an action for the entire price prevents a retaking of the goods at a later time. Butler v. Dodson & Son, 78 Ark. 569; Waltz v. Silveira, 25 Cal. App. 717; North Robinson Dean Co. v. Strong, 25 Idaho 721; Smith v. Barber, 153 Ind. 322; Richards v. Schreiber, 98 Iowa 422; Bailey v. Hervey, 135 Mass. 172; Alden v. Dyer, 92 Minn. 134; Frederickson v. Schmittroth, 112 N. W. (Neb.) 564; Orcutt v. Rickenbrodt, 42 App. Div. (N. Y.) 238; Dowagiac Mfg. Co. v. Mahon, 13 N. D. 516; Sioux Falls Adjustment Co. v. Aikens, 142 N. W. (S. D.) 651; Winton Motor Carriage Co. v. Broadway Automobile Co., 118 Pac. (Wash.) 817. The contrary view has been maintained in E. E. Forbes Piano Co. v. Wilson, 144 Ala. 586; Jones v. Snider, 99 Ga. 276; Foster v. Briggs Co., 98 S. W. (Ind. Terr.) 120; Westinghouse Co. v. Auburn Co., 76 Atl. (Me.) 897; Campbell Mfg. Co. v. Rockaway Pub. Co., 56 N. J. L. 676. The latter view is adopted in the proposed uniform act. In support of the former view it may be said that the only theory on which the seller can demand the full price is that the buyer has become the owner of the goods. That is the express stipulation of the contract, that passage of property and payment of the price are to be concurrent. When the seller, by bringing an action for the price,

affirms that the price is due, he must accept the logical consequent, namely, that the goods belong to the buyer.

But the minority view and the one adopted in section 22 seems more reasonable and in accord with the chattel mortgage theory of a conditional sale. If an action for the price bars a later retaking of the goods, the seller will never dare to sue for the price and run the risk of getting a worthless judgment and losing his claim upon the goods. Just as an action for the chattel mortgage debt does not bar the foreclosure of the chattel mortgage at a later time, so an action for the purchase price under a conditional sale should not bar a later reliance on the reservation of the property in the goods as security.

SECTION 23. (Recovery of Part Payments.) If the seller fails to comply with the provisions of Sections 15, 16, 17, 18 and 19 after retaking the goods, the buyer may recover from the seller all payments which have been made under the contract, with interest.

This section imposes a penalty on the seller if he fails to carry out the provisions of the statute regarding retaking, redemption and resale. Some sellers have objected to it as harsh, but the conference has deemed it necessary to insert a serious penalty in order to enforce strict compliance with the statute.

SECTION 24. (Waiver of Statutory Protection.) No act or agreement of the buyer at the time of the making of the contract, nor any agreement or statement by the buyer in such contract, shall constitute a valid waiver of the provisions of Sections 15, 16, 17, 18 and 19.

This section is supported by decisions in three of the states having resale and redemption provisions for the benefit of the buyer. Desseau v. Holmes, 187 Mass. 486; Drake v. Metropolitan Mfg. Co., 218 Mass. 112; Crowe v. Liquid Carbonic Co., 208 N. Y. 396; Massillon Engine & Thresher Co. v. Wilkes, 82 S. W. (Tenn.) 316. In the absence of such a provision unscrupulous sellers would do away with the effect of the statute by waivers printed in small type in the contract. No act should constitute a waiver unless performed after the contract of conditional sale is complete. It seems desirable to provide against waivers outside the contract, but made at the time of the making of the contract. Such a waiver, by means of a separate receipt, was attempted in Desseau v. Holmes, supra.

It does not seem desirable to go so far as to forbid a waiver by the buyer of the provisions of the act after the making of the contract. No duress can be exercised upon him then. He has the goods and