Boatmen's Nat. Bank of Carthage v. Eidson
Decision Date | 10 October 1990 |
Docket Number | No. 16779,16779 |
Citation | 796 S.W.2d 920 |
Parties | 13 UCC Rep.Serv.2d 651 BOATMEN'S NATIONAL BANK OF CARTHAGE, Plaintiff-Respondent, v. Raymond Edward EIDSON and Stephania Mae Eidson, Defendants-Appellants. |
Court | Missouri Court of Appeals |
J. Kevin Checkett, Esterly & Checkett, Carthage, for plaintiff-respondent.
Sylvia K. Byrnes-Ales, Roberts, Fleischaker & Williams, Joplin, for defendants-appellants.
In this action, Boatmen's National Bank of Carthage (Boatmen's) sought recovery against Raymond Edward Eidson and Stephania Mae Eidson (Eidsons) upon three promissory notes. The principal defense of the Eidsons was that Boatmen's sold collateral securing those notes at a public sale after giving the form of notice authorized by § 400.9-504(3) for a private sale. They contend a recovery of deficiency judgments was barred by the doctrine announced in Gateway Aviation, Inc. v. Cessna Aircraft Co., 577 S.W.2d 860 (Mo.App.1978). The trial court entered judgments for Boatmen's totalling $233,101.37. The Eidsons state three points on appeal. The following is an outline of relevant facts.
The three notes payable to Boatmen's were executed on the following dates for the following amounts.
Note One" September 26, 1983" $ 12,011.00 Note Two" October 8, 1983" $105,375.00 Note Three" October 23, 1984" $ 25,004.00
Note One was secured by a Security Agreement covering four specifically described items of farm machinery. Note Two was secured by a Security Agreement covering all livestock and farm machinery, including seven specifically described items of farm machinery. Note Three was secured by a Security Agreement covering all livestock. Each security agreement provided the collateral also secured "all other liabilities of Debtor to Secured Party".
The Eidsons defaulted in the payment of the notes. They disposed of the livestock. Raymond Edward Eidson was convicted in a U.S. District Court of defrauding Boatmen's relating to the subject matter of this action. Boatmen's gained possession of the specifically described items of farm machinery. The machinery was placed on the parking lot of Boatmen's. Thereafter, on April 5, 1985, Boatmen's mailed to the Eidsons a letter describing these items and advising that Boatmen's was in possession thereof. The letter also stated:
On April 16, 19, 23 and 26, 1985, Boatmen's published, in the Carthage Press, an advertisement headed "Notice of Private Sale". This advertisement stated that "the following items of personal property will be sold by sealed bids" and described the items of farm machinery. It gave the address to which bids should be mailed and advised that "Bids will be opened at 2:00 p.m. on Tuesday, April 30, 1985, at the office of Lonnie Heckmaster located in the Boatmen's Bank of Carthage, 231 South Main Street, Carthage, Missouri." Eighty-two bids were received and the items were sold individually for a total of $14,976.68. This amount was credited upon Note Two.
The Eidsons' first point states "[t]he trial court erred in its finding that the bank's sale of collateral was a private sale", and they were prejudiced because "the bank held the public sale after sending notice of a private sale and without complying with statutory notice requirements for a public sale". Their second point is that the trial court erred because "the bank failed to sustain its burden of proof that it had complied with the strict requirements of § 400.9-504(3) that written notice of the time and place of a public sale of collateral be sent to the debtors" and "the bank had no right to the deficiency judgment rendered by the trial court." Each point is a rescript of the other. Each depends upon the validity of both of two propositions. First, that if notice of a private sale was given and a public sale was held, Boatmen's cannot recover a deficiency judgment for any of the remaining balances due upon the three promissory notes. Second, that the collateral in question was sold at a "public sale" as that term is used in § 400.9-504(3).
The doctrine upholding the Eidsons' first proposition has been often restated.
Modern Auto Company, Inc. v. Bell, 678 S.W.2d 443, 444 (Mo.App.1984).
Also see Chrysler Capital Corp. v. Cotlar, 762 S.W.2d 859 (Mo.App.1989); Boatmen's Bank of Nevada v. Dahmer, 716 S.W.2d 876 (Mo.App.1986); Clune Equipment Leasing Corp. v. Spangler, 615 S.W.2d 106 (Mo.App.1981). That doctrine had its inception in this state in Gateway Aviation, Inc. v. Cessna Aircraft Co., supra. In Gateway, the court relied upon and followed Anheuser v. Oswald Refractories Co., Inc., 541 S.W.2d 706 (Mo.App.1976). In Anheuser, the court was considering the right of a seller to recover the unpaid portion of the purchase price against a defaulting buyer following a resale of goods in the seller's possession. However, the statutes governing recovery by an unpaid seller of goods differ in principle from the statutes recognizing the right of recovery upon a negotiable instrument. A fundamental difference is demonstrated in the basic premise for Anheuser.
"We hold that when a seller avails himself of the remedy afforded by [s] 400.2-706 he must comply with all of the terms of that section and the burden of showing compliance is upon the seller...." Anheuser at 711.
(Emphasis added.)
The doctrine announced in Gateway is also based in part upon the following premise: "Since deficiency judgments after repossession of collateral are in derogation of the common law, any right to a deficiency accrues only after strict compliance with the relevant statutes." Gateway at 863. These two premises have resulted in the recognition of the "No Notice--No Deficiency" doctrine in this state.
However, recovery upon the three notes is not afforded or created by § 400.9-504(3). It is based upon § 400.3-301. Moreover, no court in this state has expressly considered the fact that the sections of "Part 5--Default" (emphasis added) include a provision which provides the consequences of the failure of a secured party to follow the directions of Part 5.
§ 400.9-507(1). (Emphasis added.)
Nevertheless, further consideration of the validity of the Eidsons' first proposition is not necessary as their second proposition fails.
As stated, their second proposition is that the sale of the collateral to the highest bidders under sealed bids solicited by newspaper advertisement was a "public sale"...
To continue reading
Request your trial-
Bank of America v. Lallana
...since it did not inform her of the date, time and place of the sale as required by the statute. Relying on Boatmen's Nat. Bank v. Eidson (Mo.App.1990) 796 S.W.2d 920, the Bank ignores the fact that the public-at-large was invited by Faulknor and argues the sale by sealed bid is a private sa......
-
Bank of America v. Lallana
...use of sealed bids at an auction open to the public does not turn an otherwise public sale into a private sale. Boatmen's Nat. Bank v. Eidson (Mo.Ct.App.1990) 796 S.W.2d 920, a decision on which Bank relies, erred in stating that competitive bidding requires "knowledge of the highest bid wi......
-
McKee Const. Co. v. Stanley Plumbing & Heating Co., 17630
...accompanying the code when adopted in this state. Such comments are given great weight in construing a code. Boatmen's Nat. Bank v. Eidson, 796 S.W.2d 920 (Mo.App.1990). The significance of the 1961 report has been "The 1961 Report of the New York Commission on Uniform State Laws, in its se......
-
Harold Gwatney Chevrolet Co. v. Cooper
...does not make the sale a public sale. See Lloyd's Plan, Inc. v. Brown, 268 N.W.2d 192, 196 (Iowa 1978); Boatmen's Nat'l Bank of Carthage v. Eidson, 796 S.W.2d 920, 923 (Mo.Ct.App.1990). And merely because a vehicle is placed on the creditor's car lot for sale does not make the sale a public......