East v. Landmark Central Bank & Trust Co.

• Decision Date: 17 July 1979
• Docket Number: No. 40406,40406
• Citation: East v. Landmark Central Bank & Trust Co., 585 S.W.2d 222 (Mo. App. 1979)
• Court: Missouri Court of Appeals
• Parties: James C. EAST and Jessie M. East, Plaintiffs-Respondents, v. LANDMARK CENTRAL BANK & TRUST COMPANY, Defendant-Appellant.

Page 222

585 S.W.2d 222

James C. EAST and Jessie M. East, Plaintiffs-Respondents, v. LANDMARK CENTRAL BANK & TRUST COMPANY, Defendant-Appellant.

No. 40406.

Missouri Court of Appeals, Eastern District, Division One.

July 17, 1979.

Frederick J. Dana, St. Louis, for defendant-appellant.

Raymond Howard, Kenneth Singer, St. Louis, for plaintiffs-respondents.

PUDLOWSKI, Judge.

Plaintiffs sued for conversion of their automobile. The jury returned a verdict awarding plaintiffs $5,000 actual damages and $5,000 punitive damages. Defendant appeals.

On November 31, 1970, plaintiffs James and Jessie East borrowed $4,277 from defendant Landmark Central Bank and Trust, then known as State Bank and Trust Company of Wellston, and executed an installment contract in order to purchase a 1969 Pontiac Catalina. The loan was secured by said automobile. The installment contract required plaintiffs' automobile to be insured at all times. The contract further provided that if plaintiffs failed to insure the automobile defendant could obtain the insurance and add the cost to plaintiffs' monthly payments. Initially the installment contract and note signed by plaintiffs called for 36 monthly payments of $117.42, due on the third of each month. Subsequently the payments increased to $131.00, then to $159.00 and finally to $202.51 because defendant bank obtained insurance and added the cost to the installment payments pursuant to the terms of the contract.

On April 20, 1971, plaintiffs received a new installment book specifying the new monthly payments to be $202.51, due on the twenty-fifth day of the month. Upon receiving the book Mrs. East telephoned the bank and informed the manager of the installment loan division that she could not afford to pay $202.51 per month and that she desired to obtain the insurance elsewhere. At trial Mrs. East testified that the bank's representative responded that it was very difficult for city residents to obtain insurance and that she might as well pay the $202.51. Further, Mrs. East testified that the bank officer informed her that he could not allow her to obtain insurance from another source and that if she attempted to do so he would have the car repossessed. Later the same day, after speaking with his wife, Mr. East called the bank and spoke with David L. Freund, a bank officer. Mr. Freund testified that he made the following notation concerning his conversation with Mr. East:

4/20 He phoned, advised not going to make new payments, refused to come in to discuss. Refused to discuss by phone. Said not going to pay and we should come get the car and hung up.

After his conversation with Mr. East, Mr. Freund instructed the Bi-State Repossession Agency to repossess plaintiffs' automobile because he felt insecure about the loan. Mr. Freund justified his actions by relying on a clause of the contract which provides in pertinent part that:

. . . if buyer fails to make any of the monthly installment payments as provided for in the note secured hereby as and when the same shall become due, or fails to perform any agreement hereof, or if secured party for reasonable cause shall deem itself insecure, all remaining installments, shall, at secured party's option become forthwith due and payable, with or without notice, and secured party shall have and may exercise all rights on account of buyer's default as are permitted by law, and to the extent not contrary to law secured party may without notice or demand and without legal process enter onto any premises and take possession of said collateral. . . .

Notwithstanding defendant's threats the repossession of the car came as a surprise to plaintiffs. The automobile was taken during the late night of April 20, 1971, or early the following morning while it was parked in front of the Easts' residence. Mr. East discovered that the car was missing on the morning of April 21, 1971, shortly after he arose for work. At the time the car was taken plaintiffs were current in the payment of the debt, having timely made 27 of the 36 payments, and the next installment was not due until April 25, 1971. The debt remaining on the note amounted to $1,540.85.

After sending plaintiffs notice of sale the defendant bank obtained a repossession title from the State of Missouri and subsequently sold the car to Thomas Pontiac, the dealership from which the Easts purchased the car, for the amount of the debt remaining plus costs.

Defendant's first point on appeal is that the trial court erred in not granting its motion for a directed verdict because the plaintiffs failed to make a submissible case. The bank argues: (1) conversion is defined as the unauthorized assumption and exercise of the right of ownership over the personal property of another to the exclusion of the owner's right. Carson Union May Stern Co. v. Pennsylvania R. Co., 421 S.W.2d 540, 543 (Mo.App.1967). (2) The parties had a binding and enforceable installment contract. (3) As the bank acted under the installment contract there was no unauthorized assumption of ownership. (4) Therefore, plaintiffs failed to make a submissible case of conversion and the trial court erred in not granting defendant's motion for a directed verdict. Further, defendant argues that it acted in accordance with the insecurity clause of the contract because it reasonably felt insecure and was therefore justified in repossessing the car when plaintiffs indicated that they could not afford the new monthly installments of $202.51. We do not agree. The reasonableness of defendant's actions was a question for the jury. Sackett v. Hall, 478 S.W.2d 381, 384 (Mo.1972).

In determining whether plaintiffs made a submissible case, the evidence must be viewed in the light most favorable to plaintiffs and all evidence unfavorable to plaintiffs will be disregarded. Schneider v. Finley, 553 S.W.2d 727, 729 (Mo.App.1977). The evidence shows: Plaintiffs were not delinquent in their monthly payments and the repossession occurred four days before the next payment date. Plaintiffs made and defendant accepted 27 such payments prior to the repossession. When plaintiffs asked if they could secure insurance from another source, an alternative not prohibited by the contract, defendant's loan manager responded that such insurance was unacceptable. Notwithstanding the bank's reply, plaintiffs attempted, before and after the repossession, to obtain insurance. Further, plaintiffs' car was insured at the time of repossession under a policy previously obtained through the bank. Viewing the above and all the evidence in the light most favorable to plaintiffs this was not a case where "all reasonable men, in the honest exercise of a fair, impartial judgment, would draw the same conclusion . . ." Walton v. United States Steel Corporation, 362 S.W.2d 617, 621 (Mo.1962). Therefore it was not error to submit the case to the jury.

Defendant's second contention is that the trial court erred by failing to grant its motion for a directed verdict because plaintiffs did not present competent evidence of actual damages. This issue was not preserved for review. Plaintiffs amended their petition to allege actual damages of $3,900.00 for the conversion of their automobile, $1,566.00 for loss of earnings and $1,340.00 for transportation expenses. Defense counsel did not object to the admission of evidence bearing upon the lost earnings and...