Florida East Coast Properties, Inc., and Northwestern Capital Corporation appeal an order determining priority of liens and denying its request for immediate possession of personal property. We reverse.
In 1988 Florida East Coast Properties, Inc., as landlord,
Tenant entered into a contract with appellee Best Contract Furnishings, Inc., for furniture for its restaurant. Tenant made several advance payments to Best. Final payment was due at the time tenant gave notice to Best to ship the furniture to the job site. However, when shipment to the job site was requested, tenant did not make final payment. According to Best, there was an oral modification to the contract so that tenant would pay at the time of delivery. Best delivered the furniture, but tenant did not pay.
Best did not file a U.C.C.-1 financing statement. The tenant later went out of business, still owing Best $17,010 for the restaurant furnishings. Best filed a suit for replevin of the furnishings and alternatively, for damages. The suit was brought nine months after delivery of the furnishings.
Best then sought to execute on the restaurant furnishings. The landlord moved to intervene, contending that its landlord's lien and its rights under the lease agreement were superior to the execution lien and any other lien of Best. The trial court ruled in favor of Best and the landlord has appealed.
Best takes the position that it is entitled to prevail under the Uniform Commercial Code ("U.C.C."). Best relies on subsection 672.507(2), Florida Statutes (1989), which provides, "Where payment is due and demanded on the delivery to the buyer of goods or documents of title, his right as against the seller to retain or dispose of them is conditional upon his making the payment due." Thus, "[a] cash seller has the right to be paid upon delivery of goods and, if not paid, to reclaim the goods. This right is codified by § 2-507(2)." U.C.C. Permanent Editorial Board ("PEB") Commentary No. 1, March 10, 1990.
Best contends that it had a right under the U.C.C. to reclaim the goods in question because Best never received final payment. In Best's view, its statutory right under section 672.507 is superior to all other interests. In addition, Best contends that the text of subsection 672.507(2) prevented the tenant from conveying any lien or other contractual interest to the landlord pursuant to the commercial lease agreement.
As a preliminary matter, we believe that Best's claim under subsection 672.507(2) is barred by res judicata. In the underlying action Best sought replevin of the furnishings. Best's claim of right to immediate possession of the personalty rested on the right of reclamation. The trial court ruled against Best on the replevin count and instead entered a judgment for money damages.
Assuming, however, that the point is properly before us, Best's interpretation of subsection 672.507(2) is incorrect. The
Section 672.403 provides, in pertinent part:
Section 672.403, Fla. Stat. (1989) (emphasis added).
In the present case the landlord is a third party who is entitled to rely on section 672.403. The tenant had by contract conveyed a property interest in the furnishings to the landlord.
We conclude that the landlord's position took precedence over Best's later-in-time execution lien.
The order under review is reversed and the cause remanded with directions to enter judgment for the landlord.
PEB Commentary No. 1, 3A Uniform Laws Annot. (Supp. 1991), at 286.