Aetna Finance Co. v. Ables, 17909

• Decision Date: 01 December 1977
• Docket Number: No. 17909,17909
• Parties: AETNA FINANCE COMPANY, Appellant, v. Larry B. ABLES, Appellee.
• Court: Texas Court of Appeals

Page 139

559 S.W.2d 139

AETNA FINANCE COMPANY, Appellant,

v. Larry B. ABLES, Appellee.

No. 17909.

Court of Civil Appeals of Texas, Fort Worth.

Dec. 1, 1977.

Durward D. Moore, Dallas, for appellant.

Larry B. Ables, pro se.

OPINION

MASSEY, Chief Justice.

This is another case in which is made obvious the erroneous opinion of the general public that when there has been repossession of retail commodities (which constitute security for indebtedness) because of failure to make the contracted installment payments to the vendor (or his assignee) on the strength of the mortgage, all reciprocal obligations come to an end so that nothing is thereafter owed either by or to the vendor (or his assignee mortgagee).

Here the vendor's assignee, Aetna Finance Company, repossessed a refrigerator, range, and under-counter dishwasher which had been purchased by Larry B. Ables on March 4, 1975 for $1,286.60, with unpaid balance of $1,200.00 financed and assigned to Aetna Finance Company upon security of the appliances. The indebtedness amount of $1,577.88 (including interest of $377.88) was to be paid by Ables at the monthly rate of $43.83 in order to retire his indebtedness in 36 months, with the first payment due April 5, 1975.

Ables made the payments which fell due in April, May, and June of 1975 but defaulted in July of 1975. With his consent Aetna Finance Company repossessed the appliances. Aetna was shown to have sold these. Having properly applied credits on Ables' note, save for "amounts realized from sale of the appliances by commercially reasonable disposition," Aetna brought suit against Ables for deficiency judgment following sale of the collateral. The amount for which Aetna Finance Company sued was an alleged deficiency of $761.53 plus $500.00 as an attorney's fee.

Trial was to the court without a jury, which rendered judgment that Aetna take nothing from Ables by its suit. Aetna appealed.

We affirm.

Having application to the instant case is what was written by this court in Christian v. First Nat. Bank of Weatherford, 531 S.W.2d 832, 842 (Tex.Civ.App. Fort Worth 1975, writ ref'd n.r.e.), as follows:

"The references herein made are to the Texas Business and Commerce Code annotated (Uniform Commercial Code). Part 5 of Article 9 (9.501-7) of the Uniform Commercial Code outlines the proper procedures for a secured party to follow after a debtor's default. Section 9.504 allows the secured party to dispose of the repossessed collateral so long as the disposition is commercially reasonable. Comment 6 to Section 9.504 repeats that the Code's general obligation of good faith (Section 1.203) is imposed upon these parties. Section 9.507(a) states that if the collateral has been disposed of without compliance with the Uniform Commercial Code, the debtor may recover for any losses sustained as a result of this wrongful disposition. Section 9.507(a) does not state that it is an exclusive remedy. Section 1.103 states that the Uniform Commercial Code remedies are cumulative.

"In the case of First National Bank of Bellevue v. Rose, 188 Neb. 362, 196 N.W.2d 507 (1972) the Bank sued for a deficiency judgment after having sold the collateral. The debtor had proper notice of the sale. The trial court directed a verdict for the Bank holding that the alleged inadequacy of price was an affirmative defense which could not be raised by general denial. The Nebraska Supreme Court reversed and held that since the defendant-debtor had filed a general denial and introduced evidence contradicting the secured party's claim that the sale price equaled the fair and reasonable value of the collateral, a question of fact was presented for the jury. The effect of this holding was that the Bank was required to prove that all offsets and credits had been allowed, which necessarily implied an obligation to prove that the sale of collateral was made in a commercially reasonable manner. When defendants contradicted this evidence a jury question was presented.

"As previously indicated above, remedies previously available to a debtor are not eliminated unless the Code specifically deletes them. Prior to the adoption of the Code a debtor could use a secured party's failure to comply with the terms of the chattel mortgage and the applicable resale and repossession law as a defense or a partial defense to an action to obtain a deficiency judgment.

". . .rtg

"In Kolbo v. Blair, 379 S.W.2d 125 (Corpus Christi, Tex.Civ.App., 1964, ref., n.r.e.) that court had before it a suit by a...