Bolen v. Mid-Continent Refrigerator Co.

• Decision Date: 22 October 1980
• Docket Number: MID-CONTINENT,No. 3-1179A306,3-1179A306
• Citation: 411 N.E.2d 1255
• Parties: Manis BOLEN, Appellant (Defendant Below), v.REFRIGERATOR CO., Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 1255

411 N.E.2d 1255

Manis BOLEN, Appellant (Defendant Below), v. MID-CONTINENT REFRIGERATOR CO., Appellee (Plaintiff Below).

No. 3-1179A306.

Court of Appeals of Indiana, Fourth District.

Oct. 22, 1980.

Wilson E. Shoup, Angola, for appellant.

William B. Bryan, Bryan & Hornbacher, Angola, for appellee.

YOUNG, Presiding Judge.

Plaintiff-appellee Mid-Continent Refrigerator Co. recovered a $1972.88 deficiency judgment from defendant-appellant Manis Bolen after repossession and public sale of a display freezer sold to Bolen. Bolen appeals alleging the evidence was insufficient in several aspects to support the judgment, that the trial court erred when it refused to grant summary judgment for Bolen, that the trial court erred when it failed to order Mid-Continent to answer several interrogatories, and that the trial court erred when it did not order facts to be taken as established. We affirm.

Where sufficiency of evidence is raised as an issue on appeal, our function is to determine if there is substantial evidence of probative value to support the judgment below. We examine the evidence supporting the judgment of the trial court together with all reasonable inferences therefrom, neither weighing evidence nor resolving credibility. Sandock v. F. D. Borkholder Co., (1979) Ind.App., 396 N.E.2d 955; Grad v. Cross, (1979) Ind.App., 395 N.E.2d 870.

Bolen's first allegation of insufficient evidence is that Mid-Continent, as a foreign corporation, presented no evidence of compliance with the requirement of obtaining a certificate of admission before bringing this action in a state court of Indiana. Any foreign corporation must procure a certificate of admission before transacting business in Indiana. Ind.Code 23-1-11-1. A foreign corporation transacting business in Indiana without procuring such a certificate may not maintain any action arising out of contract or tort in the courts of this state. Ind.Code 23-1-11-14. However, the person asserting such lack of capacity to maintain an action has the burden of proof. Ind.Rules of Procedure, Trial Rule 9(A). Domain Industries, Inc. v. Universal Pool Supply, Inc., (1980) Ind.App., 403 N.E.2d 889; Clark Advertising Agency, Inc. v. Avco Broadcasting Corp., (1978) Ind.App., 383 N.E.2d 353. An allegation by a party having the burden of proof on an issue that the finding of the trial court is not supported by sufficient evidence raises nothing for review. Dagley v. Incorporated Town of Fairview Park, (1978) Ind.App., 371 N.E.2d 1338. As Bolen argues there was insufficient evidence of capacity to bring suit, he has presented nothing for review.

Bolen's second allegation of insufficient evidence charges there is no proof of entry into the lease by the parties. We note first that Mid-Continent included with its complaint the instrument upon which this suit is based. TR. 9.2(A). When this is done, execution of such instrument is deemed established and shall be deemed admitted into evidence in the action without proving its execution, unless execution is denied under oath in the responsive pleading or affidavit filed therewith. TR. 9.2(B). The Civil Code Study Commission Comments to Trial Rule 9.2(B) state that "there should be no need for the pleader claiming rights upon the instrument to formally offer the instrument into evidence unless its execution is denied." 1 W. Harvey, Indiana Practice 569 (West 1969). The Commission further comments that if the execution is denied under oath, only after evidence is introduced reasonably establishing lack of execution must the pleader offer the instrument into evidence. See also TR. 9.2(D). Bolen does not argue and the record does not show that a denial of execution under oath was in the responsive pleading or that an affidavit denying execution was filed therewith. No evidence of lack of execution was offered by Bolen. In light of this, the trial court could properly have presumed execution. TR. 9.2(D). See Moehlenkamp v. Shatz, (1979) Ind.App., 396 N.E.2d 433. Therefore, there was sufficient evidence of execution of the lease and pursuant to TR. 9.2 the instrument was in evidence.

Bolen's third allegation of insufficient evidence is there was no evidence presented at trial of the execution of a financing statement. In making this argument, Bolen necessarily argues that the lease was a security agreement. ¹ Where an argeement provides that upon compliance with the terms of the lease the lessee shall have the option to become the owner for nominal consideration, the lease is one intended for security. Ind.Code 26-1-1-201(37). This is to be determined from the facts of a given case. Id. Testimony was given by plaintiff's sales representative that at the end of the lease the purchaser could receive title to the freezer for $1.00 and sales tax. The shipping order attached to the amended complaint also reflects the option to obtain title. The facts of this case clearly indicate that the lease was intended as security. A security agreement is effective according to its terms between the parties. Ind.Code 26-1-9-201. The executed lease-security agreement is binding between the parties regardless of the perfection of a financing statement. Beneficial Finance Co. of Indianapolis v. Nelson, (1958) 129 Ind.App. 23, 153 N.E.2d 613. We held above that the court could presume execution of the lease. Therefore, the asserted lack of proof of an executed financing statement avails Bolen to nothing. This is not a case of competing security interests.

Bolen's next allegation is that there was insufficient evidence that any rights, specifically the right to repossess, accrued to Mid-Continent upon default, or that Mid-Continent was required to purchase insurance because of Bolen's failure to do so. The remedies of Ind.Code 26-1-9-501 et seq. operate only after default. Default must be and is defined by the agreement. As to default, rights upon default and repossession upon default, paragraph 14 of the lease provides that upon the failure of the lessee to pay the rent due within 10 days after it is due Mid-Continent can take possession and pursue any other remedy at law or in equity. Thus the agreement specifically provides that Mid-Continent may repossess. In his answer Bolen admits that he did not pay the January 25, 1977 rental, but denies any rights accrued Mid-Continent. Having found the lease agreement was deemed admitted in evidence, there is sufficient basis in the record for the trial court to determine the events defined as default, the existence of those events and the remedies and rights flowing to Mid-Continent under the agreement and under the U.C.C. Also, the agreement, in paragraph 8, provides that lessee Bolen is required to maintain fire insurance on the freezer. In addition to defining default, paragraph 14 provides that upon failure of the lessee to perform any provision of the lease required to be performed by lessee, the lessor may pursue any remedies at law or equity. Bolen admittedly failed to procure insurance. While it might be reasonable and proper for Mid-Continent to provide insurance on an item in which it has a security interest, we find no evidence of the cost of the insurance in the record. Mid- Continent avers in its amended complaint that the cost of the insurance was $210.00 of which Bolen paid $85.00 leaving a balance due of $125.00. Bolen denied such figures in his answer thereby leaving such amount in issue to be later resolved by the trier of fact. Appellee Mid-Continent does not direct our attention to the location of any such evidence in the record, nor do we discover any in our perusal of the record. Without evidence in the record to support an award for insurance, it would be improper to make such an award. However, the judgment is in a lump sum. We are unable to determine and Bolen has not demonstrated that insurance costs were in fact awarded.

Bolen next argues there is insufficient evidence of whether repossession was authorized by agreement or law. As we have stated above both the agreement in paragraph 14(c) and Ind.Code 26-1-9-503 permit the secured party to take possession upon default. Mid-Continent was authorized to repossess upon default.

Next appellant alleges that there was insufficient evidence of compliance with the statutory requirements for sale by Mid-Continent of the collateral and that there was no evidence of the fact of indebtedness of Bolen to Mid-Continent. Bolen begins this argument by setting out the averments of the amended complaint and the denials thereof in his answer. He then argues there is no evidence "that the property was disposed of at a public sale or that the goods were of a type customarily sold in a recognized market or the subject of widely distributed standard price quotations as required by statute in order to make it lawful for Mid-Continent to buy the property." The requirements are set forth in Ind.Code 26-1-9-504(3):

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, and except in the case of consumer goods to any other person who has a security interest in the collateral and who has duly filed a financing statement indexed in the name of the debtor in this state or who is known by the secured party to have a security interest in the collateral. The secured party may buy at any public sale and if the collateral is...