Benton v. General Mobile Homes, Inc.
| Decision Date | 07 November 1984 |
| Docket Number | No. CA,CA |
| Citation | 13 Ark.App. 8,678 S.W.2d 774 |
| Parties | , 39 UCC Rep.Serv. 1544 Wayne BENTON and Lillian Benton, Appellant, v. GENERAL MOBILE HOMES, INC., Appellee. 83-462. |
| Court | Arkansas Court of Appeals |
Murphy, Post, Thompson & Arnold, Batesville, for appellant.
Highsmith, Gregg, Hart, Farris & Rutledge by Linda Boone, Batesville, for appellee.
The sole issue on this appeal is the commercial reasonableness of the sale of a repossessed mobile home. We find that the trial court erred in finding that appellee disposed of the mobile home in a commercially reasonable manner in accordance with the Uniform Commercial Code, Ark.Stat.Ann. § 85-9-504 (Supp.1983). We reverse and remand.
Appellants entered into a conditional sales contract with appellee on May 8, 1976 for the purchase of a mobile home. Appellants agreed to pay $11,561.25 for the trailer; they later defaulted, owing appellee a balance of $4,341.85. Appellee repossessed the mobile home and on May 19, 1982 gave notice to appellants by certified letter that it would sell the property at "public auction" on June 1, 1982. On that date, at appellee's offices, appellee's manager purchased the mobile home for appellee for $2,500. Appellee sold the trailer in October 1982 to a third party for $7,032 after investing $991.95 for renovation. Appellee then filed a complaint for a deficiency judgment against appellants, and appellee was awarded a deficiency judgment in the sum of $2,608.05.
The Uniform Commercial Code provides that a secured party may, after default, dispose of repossessed collateral and apply the proceeds to the reasonable expenses of retaking and selling the property and to the satisfaction of the secured indebtedness. The secured party is accountable to the debtor for any surplus, while the debtor is liable for any deficiency. Ark.Stat.Ann. § 85-9-504(1), (2) (Supp.1983). Subsection (3) further provides:
Disposition of the collateral may be by public or private proceedings, and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms, but every aspect of the disposition including the method, manner, time, place, and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale. In the case of consumer goods, no other notification need be sent. In other cases, notification shall be sent to any other secured party from whom the secured party has received (before sending his notification to the debtor or before the debtor's renunciation of his rights) written notice of a claim of an interest in the collateral. The secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, he may buy at private sale.
Appellants argue that appellee held a private rather than a public sale, thereby violating the Code requirements regarding proper notice and the secured parties' ability to purchase the collateral. The practical consequence of the different proceedings is indicated in § 85-9-504(3), supra, where limitations not present in a public sale are placed upon the secured party in a private sale; in the latter, the secured party may buy the collateral if it "is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations." In Carter v. Ryburn Ford Sales, Inc., 248 Ark. 236, 451 S.W.2d 199 (1970), the Arkansas Supreme Court held that a secured party was not in compliance with the provisions of § 85-9-504(3) when it purchased a repossessed truck at its own private sale, because a used automobile is not considered "a type customarily sold on a recognized market." See also Norton v. National Bank of Commerce, 240 Ark. 143, 398 S.W.2d 538 (1966).
We are of the opinion that the disposition of a mobile home is, for the purposes of the Uniform Commercial Code, analogous to that of a...
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