security interest by any available judicial procedure' or take possession. These two remedies are cumulative. There exists today no 'available judicial procedure' in Pennsylvania to foreclose an interest asserted against personal property. We so find even though we are confronted with the argument that by doing so the words 'foreclose the security interest by any available judicial procedure' are meaningless, for it must be remembered that this code was written with the view of adoption in all the states and there may be in some states procedures to 'foreclose'. Therefore, the remedy of foreclosing the security interest was not available to the secured party here.
Finally, the code in addition to giving to a secured party the right to foreclose the security interest gives the right to take possession of the goods. The reclamation petitioner accordingly asserts that right to take possession, on the ground that under the code the rights of a secured party in case of a default are cumulative.
The Trustee concedes that the rights are cumulative but contends, and we agree, that they must be consistent. Thus, upon default, the petitioner could have demanded and assumed possession of the chattels with or without the aid of judicial process. After acquiring possession, and had a sale of the chattels resulted in a deficiency, he could have proceeded by execution and levy against any other property owned by the then debtor for the recovery therefore. However, the petitioner elected to issue execution and to levy on the assets, and is now barred from asserting a security interest to retake the goods on the ground that the execution is inconsistent with the right to take possession. In re Fitzpatrick, D.C., 1 F.2d 445 and In re Elkins, D.C., 38 F.Supp. 250. The former case involved a bailment lease and was decided by Judge Gibson in the Western District of Pennsylvania. The latter case involved a conditional sales contract and was decided by Judge Kalodner in the Eastern District of Pennsylvania. In both these cases the security interest was not questioned but, prior to bankruptcy, the secured creditor obtained judgment, issued execution and the sale was stayed upon the intervention of bankruptcy. The opinion of Judge Gibson states: 'As we view the matter, the claimant herein, by its action in entering judgment for the full amount of its claim, issuing execution thereon, and causing levy to be made upon the automobile bus in question and other personal property of the present bankrupt, adopted one of the two remedies open to it, to the exclusion of the other. In other words, by its action it affirmed ownership in John Fitzpatrick and is precluded from now claiming ownership in itself.'
The law of the Fitzpatrick and Elkins cases, which was the law prior to the adoption of the Code, is clear; the law under the Code is, we think, likewise clear and the same as before the Code. We must still determine, however, whether or not there is a distinction between the facts of those cases and the facts of the instant case. In each of those cases the asserted right of the creditor to retake the chattels, after judgment, execution and levy had failed, was by virtue of title. In this case the right is by virtue of the lien which was created by the security agreement and duly recorded. These facts, in the opinion of the Trustee, are not distinguishable. We concur.
We conclude, therefore, that petitioner, having elected to issue execution and to make a levy, is now barred from recovering the goods or chattels under a duly recorded security agreement or lien on the ground that the remedies of execution and possession are inconsistent.
The proposed changes in Article 9, Section 9-501, relating to rights and procedure on default (1957 Official Text of the Code published jointly by the American Law Institute and the National Conference of Commissioners on Uniform State Laws) constitute a recognition of the problem present in the instant case and an attempt to remedy same by amendment, we think, and not by clarification.
For reasons expressed herein, the question presented is answered in the negative. The Order of the Referee will be Affirmed.
An appropriate order will be prepared and submitted.
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