## Facts

- Citizens Bank of Roseville extended Richard Taggart two unsecured promissory notes ($15,000 and $5,000); Taggart defaulted and the Bank obtained a judgment exceeding $30,000.
- Braxton Motor Co., Inc., an Oklahoma auto dealer, sold Taggart a 1982 Cadillac for a cash price of $15,864.30, paid by Taggart’s check.
- Braxton delivered the vehicle and a certificate of ownership before the check cleared; the check was later returned for insufficient funds.
- The Bank obtained a writ of execution, and the sheriff levied on the Cadillac as Taggart’s property.
- At the time of levy, Texas registration listed Taggart as registered owner and did not identify any legal owner.
- Braxton filed a third-party claim to the Cadillac, asserting superior title based on nonpayment and dishonor of the check.
- The trial court found Braxton held title at the time of levy and entered judgment for Braxton.

## Issues

1. Whether, under the California Uniform Commercial Code, a cash seller who delivers goods for a check later dishonored retains a right to reclaim the goods (or superior title) against the buyer.
2. Whether a judgment lien creditor who levies on the goods takes priority over the cash seller’s reclamation interest.

## Decision

- The Court of Appeal affirmed the judgment for Braxton.
- The court held the California Uniform Commercial Code controlled the dispute.
- The court recognized a cash seller’s reclamation right in a dishonored-check transaction as inherent in Cal. U. Com. Code §§ 2507(2) and 2511(3).
- Because Taggart’s interest in the Cadillac was subject to Braxton’s reclamation right after dishonor, the Bank’s execution lien could not attach to a greater interest than Taggart possessed.
- The Bank’s reliance on registration showing Taggart as registered owner did not defeat Braxton’s superior UCC-based interest.

## Legal Principles

- In a “cash sale,” a buyer’s right to retain delivered goods is conditional upon payment when payment is due at or before delivery. (Cal. U. Com. Code § 2507(2).)
- Payment by check is conditional; dishonor defeats the condition and supports the seller’s right to reclaim in a cash seller context. (Cal. U. Com. Code § 2511(3).)
- A judgment lien creditor generally takes subject to prior, superior interests; the creditor’s lien cannot exceed the debtor’s defeasible rights in the property at the time of levy.
- Vehicle registration indicating “registered owner” does not, by itself, resolve priority where UCC title and reclamation principles limit the buyer’s ownership interest.

## Conclusion

The court held that when a buyer tenders a check in a cash sale and the check is dishonored, the seller’s UCC-based reclamation/title interest is superior to a later judgment creditor’s execution lien on the goods, even if the goods are registered in the buyer’s name at the time of levy.


Citizens Bank of Roseville v. Taggart, 143 Cal. App. 3d 318, 191 Cal. Rptr. 729 (Ct. App. 1983)