Contois Motor Co. v. Saltz, 40891

• Decision Date: 11 May 1977
• Docket Number: No. 40891,40891
• Citation: 198 Neb. 455,253 N.W.2d 290
• Parties: , 21 UCC Rep.Serv. 1213 CONTOIS MOTOR COMPANY, Appellee, v. Duane SALTZ, Appellant.
• Court: Nebraska Supreme Court

Page 290

253 N.W.2d 290

198 Neb. 455, 21 UCC Rep.Serv. 1213

CONTOIS MOTOR COMPANY, Appellee, v. Duane SALTZ, Appellant.

No. 40891.

Supreme Court of Nebraska.

May 11, 1977.

Syllabus by the Court

1. A demurrer ore tenus is recognized by this court as a permissible practice, and if the pleading to which it is addressed is totally defective, it is error to admit any evidence under such pleading.

2. Failure of a petition to state a cause of action may be challenged at any time during the pendency of the litigation, and an objection to the introduction of any evidence on the ground that the petition fails to state a cause of action is proper, and if the petition is totally defective, the objection should be sustained.

3. Questions relating to the sufficiency of the petition should be determined before the cause comes on for trial, and where an objection that a petition does not state a cause of action is interposed for the first time during the trial of a cause or after verdict, the pleading must be liberally construed in light of the entire record, and, if possible, sustained; and any error or defect in the pleadings which does not affect the substantial rights of the adverse party must be disregarded.

4. Where a secured party conducts a private sale of repossessed collateral security, the only notice required by section 9-504(3), Uniform Commercial Code, is reasonable notification of the time and place after which any private sale is to be made.

Richard L. Spittler of Mueting, DeLay & Spittler, Norfolk, for appellant.

James J. McNally, Neligh, for appellee.

Heard before WHITE, C. J., and SPENCER, BOSLAUGH, McCOWN, CLINTON, BRODKEY and WHITE, JJ.

BRODKEY, Justice.

In February 1972, Contois Motor Company, plaintiff and appellee herein, filed a petition in the District Court for Holt County alleging that it was entitled to a deficiency judgment from Duane Saltz, the defendant and appellant herein, after repossession and resale of an automobile which was collateral security on a promissory note executed by the defendant in favor of the plaintiff. Although a default judgment was initially entered in favor of the plaintiff, it was subsequently set aside, and the case proceeded to trial before the District Judge, sitting without a jury. The trial court found in favor of the plaintiff, and awarded it a deficiency judgment with interest thereon. The defendant's motion for a new trial was overruled, and he has now appealed to this court. We affirm the judgment of the District Court.

The relevant facts pertinent to this appeal are as follows. In its petition plaintiff alleged that the defendant executed an installment note and security agreement in favor of the plaintiff on July 27, 1971, to secure payment of the purchase price of a new automobile sold by the plaintiff to the defendant; that the defendant failed to make payments on the note and that the automobile was repossessed in October 1971; that the vehicle had been resold by plaintiff for an amount less than the balance due on defendant's contract; that repairs had been required to place the automobile in saleable condition; and that plaintiff made repeated demands upon defendant for payment on the note, but that the defendant had refused to make payment thereon. The plaintiff prayed for a deficiency judgment against the defendant, setting forth specific amounts allegedly owed by the defendant for the balance due on the note, the repair work, and interest.

In his amended answer, the defendant denied the allegations of the petition. In the part of the answer relevant to this appeal, the defendant alleged that "on or about December, 1971, plaintiff, without defendant's knowledge, permission or consent, sold defendant's said automobile to a third party. That defendant had no knowledge of plaintiff's intent or action of repossession prior to the time said automobile was sold to a third party; that defendant had no notice or knowledge of the sale of said automobile and never consented thereto; that no accounting of said sale was ever made by plaintiff to defendant, all in violation of Section 9-504(2) and (3), U.C.C." In its reply to the answer, plaintiff denied all allegations other than those which stated that an installment note and security agreement had been executed by the defendant in favor of the plaintiff.

The defendant also filed a request for admissions. Defendant requested that plaintiff admit that it sold the repossessed automobile at a private sale on or about December 18, 1971; and that no notice was given by the plaintiff to the defendant of the private sale prior to completion of that sale. In its answer to the request for admissions, plaintiff admitted selling the automobile at a private sale on or about December 18, 1971; but specifically denied that no notice was given by it to the defendant of the private sale prior to the completion of the sale.

Finally, in reference to pretrial proceedings in this case, the defendant filed two motions for summary judgment. In each the defendant prayed that plaintiff's petition be dismissed "for the reason that the Pleadings, Request for Admissions, Answer to Request for Admissions, and the Affidavit attached hereto, * * * show that Defendant is entitled to Judgment as a matter of law." The trial court overruled both motions, finding that there was a dispute and an issue of fact to be resolved as to whether there was notice given to the defendant in reference to the sale of the automobile by the plaintiff.

The evidence adduced at trial showed that the defendant had executed an installment note and security agreement in favor of the defendant on the purchase of a new automobile in July 1971; that he had defaulted on the note; that plaintiff obtained possession of the car in October 1971, after the default; and that one of its salesmen resold the car to an individual on about December 18, 1971. The defendant does not dispute these facts on appeal. An employee of the plaintiff testified that on November 18, 1971, he had sent the defendant, by certified mail, a form notice stating that if the defendant did not pay the amount due on his contract within 10 days, the car would be sold at private sale. The plaintiff did not retain a copy of the notice, but did offer into evidence a postal receipt, dated November 18, 1971, showing that plaintiff had sent a certified letter to defendant on that date. At the time this receipt was offered into evidence, counsel for the defendant objected to any testimony regarding the issue of whether notice had been sent to the defendant, stating: "Then, Your Honor, I would object to any testimony regarding this notice being sent and ask the Court to strike the testimony regarding the same. It is irrelevant, immaterial, and certainly not the best evidence." The trial court overruled the objection and admitted the postal receipt into evidence.

The local postmaster also testified and produced records which showed that a certified letter had been sent to the defendant by the plaintiff on November 18, 1971. The postal records showed that the defendant's wife had picked up the letter from the post office and signed a receipt for it. The defendant's counsel objected to admission of the postal records on the ground they were irrelevant and immaterial, and the trial court overruled this objection. Also admitted into evidence was a copy of a form notice which plaintiff's employee testified was like the one he sent to the defendant.

At the conclusion of plaintiff's case, the defendant addressed the court as follows: "Comes now the defendant, Your Honor, and first off, would demurrer (sic) to plaintiff's petition ore tenus in that no where in the defendant's (sic) petition has he alleged compliance with the Uniform Commercial Code, which provides that a condition precedent to any private sale, notice thereof must be given of the time and place, and that is not alleged anywhere in the plaintiff's petition or amended petition, * * *." In the alternative, the defendant moved for a directed verdict on the ground that there was no evidence that the plaintiff gave the defendant "any notice of the time of this public this private sale." The trial court, stating that it was going to construe the pleadings broadly, overruled the demurrer ore tenus, and also overruled the motion for directed verdict on the ground that plaintiff had adduced some evidence that notice had been sent to the defendant.

In presenting his defense, the defendant testified that he had in fact received a certified letter on November 18, 1971, from the plaintiff. He stated, however, that no notice of the contemplated repossession sale of the car was included in this letter. Defendant stated that the letter included only a notice that there may be a factory defect in his car, and that he should have the relevant part of the car checked to see if it contained the defect. The defendant denied receiving any notice of the repossession sale.

The defendant's wife, however, acknowledged that she had picked up the certified letter from the plaintiff at the post office, and admitted that enclosed in the letter was a form notice like that which plaintiff's employee testified he had sent to the defendant. The defendant's wife also admitted that the form was filled out.

At the conclusion of the evidence, the trial court found in favor of the plaintiff, and awarded it a deficiency judgment, with interest thereon, under a computation not disputed in this appeal. The defendant's motion for new trial on the grounds that the judgment was not sustained by the evidence and contrary to law was overruled.

In his assignments of error, the defendant contends that the trial court erred in allowing evidence of the notice of the repossession sale to be...