Draughon v. General Finance Credit Corp.

Citation362 So.2d 880
Parties25 UCC Rep.Serv. 349 Blanchard L. DRAUGHON v. GENERAL FINANCE CREDIT CORPORATION et al. SC 2592.
Decision Date29 September 1978
CourtSupreme Court of Alabama

Arthur B. Briskman and Donald M. Briskman, Mobile, for appellant.

William L. Howell, Mobile, for appellees.

ALMON, Justice.

The plaintiff, Blanchard L. Draughon, appeals from a judgment in his favor in the sum of one hundred and twenty dollars. He assigns as error the trial court's granting of the defendant's motion for directed verdict with respect to counts three, four and five, and a portion of counts one and two of the plaintiff's complaint. We affirm in part and reverse in part.

On June 9, 1973, the plaintiff purchased a 1973 Ford pickup truck from Treadwell Ford, Inc., in Mobile, Alabama, and executed a security agreement in the amount of $3,573.50. Contemporaneous with its execution, the contract was assigned to defendant-appellee, G.F.C. Credit Corporation (hereinafter referred to as G.F.C.). The sum of $500.00 was payable on July 5, 1973, and thirty monthly payments of $102.45 were due on the fifteenth day of each month.

Under the terms of the contract, plaintiff agreed to keep the truck in his possession at the address listed on the contract and to pay a delinquency charge of five percent on each installment in default for more than ten days. The contract granted the seller a security interest in the truck and upon default, the seller had the right to take immediate possession.

The contract further provided that the buyer, upon repossession, would waive any claim or demand against the seller for trespass or damage resulting therefrom. The contract contained a nonmodification clause stating, in effect, that no statement or representation would be binding unless expressly contained in the contract. The contract also contained a clause stating, that a waiver by the seller of any default would not be deemed a waiver of any subsequent default.

The plaintiff was disabled and his primary source of income was his disability check which he received on or about the third of each month from the Social Security Administration. The plaintiff testified that prior to July 5, 1973, the date on which the $500.00 down payment was due, he called defendant G.F.C. and told them he could not pay the $500.00 on time. According to the plaintiff, the person he talked to at G.F.C. said they would "set it up a few days." The $500.00 payment was eventually paid on July 16, 1973.

The plaintiff further testified that upon receipt of the payment book from G.F.C., he contacted G.F.C. by phone. He advised them that he could not make the payments in accordance with the contract since his major source of income did not arrive until the third of each month following the due dates set out in the payment schedule. The plaintiff stated that he asked G.F.C. to change the due dates, but the person at G.F.C. stated that it was not necessary to change the contract or payment schedule, but that the plaintiff would be responsible for late charges.

The July 15, 1973 payment was paid on July 30, 1973, and for the following twelve months, each payment was late. Some payments were paid more than a month after the due date. G.F.C., however, accepted each of these thirteen payments even though they were not made in accordance with the contract.

Employees of G.F.C. testified that beginning in late July, 1973 until August, 1974, numerous attempts were made to collect payments from the plaintiff. These persons testified that numerous letters were sent to the plaintiff notifying him that his payment was due. In answers to interrogatories, the plaintiff stated that he received these past due notices, but at trial he did not recall receiving them. Representatives from G.F.C. went to the plaintiff's residence on numerous occasions to collect these past due payments.

In January or February, 1974, the plaintiff moved approximately one or two miles from the address specified on the contract without notifying G.F.C. The plaintiff testified that he sold his house and moved into a house owned by some friends, and that he did not want to change his mailing address until he became permanently settled. At least one letter was sent to the plaintiff at the address listed on the contract and was returned to G.F.C. marked "unclaimed," and another certified letter from G.F.C. addressed to the plaintiff was not received by the plaintiff, notwithstanding the fact that the plaintiff's son signed for it. The employees of G.F.C. eventually located the plaintiff at his new residence. Two employees of G.F.C. testified that the plaintiff's wife told a representative of G.F.C. that she and her husband did not tell G.F.C. their phone number because they did not want to be harassed by creditor calls. G.F.C. learned of the phone number only after the truck was repossessed.

On May 15, 1974, a representative from G.F.C. went to the plaintiff's residence, collected the April 15, 1974, payment, and advised the plaintiff's wife that G.F.C. would no longer carry the account past due and that the plaintiff would have to keep his account up to date or pay off his account. Nevertheless, the June 15, 1974, payment was accepted by G.F.C. on July 15, 1974. On August 8, 1974, G.F.C. sent the plaintiff a letter demanding payment of the July 15, 1974, payment by August 12, 1974. This payment was made on August 12, 1974. On August 21, 1974, G.F.C. sent a letter to the plaintiff. The letter was not introduced into evidence, but according to G.F.C.'s ledger card, it appears that the letter asked the plaintiff to call the office of G.F.C. to negotiate an extension on the August 15, 1974 payment. The plaintiff did not respond.

On August 30, 1974, G.F.C. authorized defendant Gulf Coast Adjusters and Recovery Bureau (hereinafter referred to as Gulf Coast) to repossess the plaintiff's truck. G.F.C. agreed to hold Gulf Coast harmless as long as the repossession was peaceful and in accordance with law. The repossession was peaceful. On September 2, 1974, defendant Gulf Coast took possession of the truck and certain personal property therein from the premises of Ira Clark. The residence of Ira Clark was approximately twenty to twenty-five miles from the plaintiff's home. Clark was a life long friend of the plaintiff and had, prior to repossession, borrowed the pickup truck from the plaintiff in exchange for loaning the plaintiff one of his vehicles.

The plaintiff went to the offices of defendant G.F.C. the day after repossession and offered the office manager the August 15, 1974, payment, and two additional payments to put the plaintiff ahead of schedule. Initially, G.F.C. accepted the plaintiff's offer, but subsequently they requested an additional $150.00 as a repossession fee, which the plaintiff refused to pay. In late September or early October, 1974, the plaintiff went to the offices of Ford Motor Credit Company to discuss the status of his truck. On October 8, 1974, the Consumer Loan Manager of Ford Motor Credit Company called G.F.C. to inquire into the status of the plaintiff's account with G.F.C. He told G.F.C. that he was considering helping the plaintiff redeem his truck. He asked for the payoff on the account and what it would take to redeem the truck. G.F.C. gave him a figure of $1,654.15. On October 9, 1974, the plaintiff presented a check for $1,654.15 to G.F.C., but this check was refused when the plaintiff refused to sign a form releasing G.F.C. from their obligation of selling the vehicle at either a public or private sale. G.F.C. would not allow the plaintiff to take this form to his attorney before he would consider signing it.

In a letter to the plaintiff dated November 1, 1974, G.F.C. told the plaintiff that he could redeem the truck by paying the net balance due under the contract along with the repossession fee of $146.00, or he could redeem by paying the contract balance and executing a form waiving the necessity of G.F.C.'s holding a private sale. The plaintiff never complied with either of these alternatives. G.F.C. contends the balance due owing by the plaintiff was the sum of $1,826.10, which the plaintiff never tendered.

The plaintiff filed suit against G.F.C. The complaint was amended to add Gulf Coast as a defendant. Counts one and two of the plaintiff's complaint alleged a wrongful taking and conversion of the pickup truck and other personal property. Count three alleged a trespass and counts four and five alleged a conversion of the truck and the personal property therein, predicated upon G.F.C.'s refusal to allow the plaintiff to redeem the pickup truck.

Ira W. Clark filed a complaint against G.F.C. and Gulf Coast alleging trespass to land, conversion of personal property and wrongful taking of his personal property allegedly in the truck at the time of repossession. The two actions were consolidated. Gulf Coast filed a third-party complaint against G.F.C. in the consolidated actions, and G.F.C. subsequently filed a cross-claim against Gulf Coast asserting that repossession was not accompanied in a peaceful manner and that Gulf Coast exceeded the authority granted to it by G.F.C.

At the close of the plaintiff's evidence, his motion to amend count four of the complaint was denied and the trial judge granted G.F.C.'s motion for directed verdict to counts four and five of complaint and denied the motion as to counts one, two and three and to all counts of the Clark action. Defendant Gulf Coast's motion for directed verdict was denied.

At the close of all the evidence, G.F.C.'s motions for directed verdict were granted as to all counts in the Clark action; granted as to counts three, four and five of the plaintiff-Draughon action; and granted in part as to the pickup truck in counts one and two. The motion for directed verdict was denied as to the other personal property alleged to have been in the truck specified in counts one and two. The trial judge granted Gulf Coast's motion for...

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