Plaintiff appealed an order of the Superior Court of Butte County (California) that sustained, without leave to amend, a demurrer to plaintiff’s complaint for recovery of a deficiency arising from the resale of farming equipment sold to and later repossessed from defendants.
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Plaintiff exercised its assigned contractual right to repossess farming equipment that was sold to defendants. After resale of the equipment, plaintiff commenced an action three years later seeking a deficiency judgment of a certain amount. The trial court sustained, without leave to amend, a demurrer to plaintiff’s complaint on the basis that a four-year limitations period applied and was commenced when plaintiff repossessed the equipment from defendants. The court affirmed this decision on appeal, ruling that an action to recover a deficiency arising from resale of goods originally purchased under a conditional sale contract is based upon the contract of sale. Thus, the court concluded by using analogy to real property cases, that a conditional seller’s action to recover a deficiency from a defaulting buyer was barred by California Uniform Commercial Code § 2725 if more than four years had elapsed since the breach of the conditional sale agreement.
Judgment sustaining defendant’s demurrer to plaintiff’s action was affirmed, the court concluding that, as applied to plaintiff, a conditional seller’s action to recover a deficiency from a defaulting buyer was barred by a state Uniform Commercial Code provision, when four years had passed since breach of the conditional sale agreement.