Gen. Motors Acceptance Corp. v. Belmares, 4-92-5

• Decision Date: 23 June 1992
• Docket Number: No. 4-92-5,4-92-5
• Citation: 75 Ohio App.3d 385,599 N.E.2d 436
• Parties: GENERAL MOTORS ACCEPTANCE CORPORATION, Appellant, v. BELMARES et al., Appellees.
• Court: Ohio Court of Appeals

Page 385

75 Ohio App.3d 385

599 N.E.2d 436

GENERAL MOTORS ACCEPTANCE CORPORATION, Appellant, v. BELMARES et al., Appellees.

No. 4-92-5.

Court of Appeals of Ohio, Third District, Defiance County.

Decided June 23, 1992.

Hummer Legal Services Corp., L.P.A., and Donal Hummer, Jr., Toledo, for appellant.

Eleazar Belmares, pro se.

Stephen E. Hubbard, Defiance, for appellee Employees Own Federal Credit Union.

HADLEY, Presiding Judge.

This is an appeal from a January 30, 1992 judgment of the Defiance Municipal Court, releasing the garnishment of plaintiff-appellant, General Motors Acceptance Corp. ("GMAC"), from the account of Eleazar Belmares, judgment debtor, at the Employees Own Federal Credit Union ("Credit Union").

On September 30, 1988, Belmares entered into a "Loanliner Agreement" with the Credit Union whereby Belmares borrowed monies. The terms of the agreement included the following:

"SECURITY INTEREST--You agree that all advances under this Plan will be secured by the shares and deposits in all joint and individual accounts you have with the credit union now and in the future. * * *

"DEFAULT--You will be in default if you do not make a payment of the amount required when it is due. * * *

"When you are in default the credit union can demand immediate payment of the entire amount you owe under this Plan without giving you advance notice. If immediate payment is demanded, you will continue to pay interest at the applicable interest rates in effect under this Plan, until what you owe has been repaid. If a demand for immediate payment has been made, the shares and deposits given as security for this Plan can be applied towards what you owe. The Credit Union can also exercise any other rights given by law when you are in default.

" * * *

"NO WAIVER--The credit union can delay enforcing any of its rights any number of times without losing its rights. * * * " (Emphasis added.)

On March 19, 1987, appellee Belmares executed a retail installment sales contract with appellant GMAC and subsequently defaulted on the vehicle loan obligation. The vehicle was repossessed and sold. GMAC filed suit and obtained a judgment for the deficiency balance of $5,216.54. GMAC filed a statutory garnishment on September 11, 1991. The Credit Union's reply stated that Belmares had a total of $290.18 worth of shares in two accounts and that the Credit Union objected to the distribution of those funds by the court stating that by virtue of the Loanliner credit agreement Belmares' accounts were already secured against loan balances with the Credit Union.

The trial court, after hearing, sustained the objections and would not permit GMAC to garnish monies from Belmares' account. GMAC appeals that decision.

Appellant's brief sets forth a "Proposition Of Law" which is not prescribed by App.R. 16 or Loc.R. 11 of this court. Appellant is cautioned that future briefs not in compliance with these rules will be rejected.

Treating appellant's "Proposition of Law" as an assignment of error, the error states:

"The trial court erred in ruling that a credit union's 'floating lien' which was contingent and inchoate until the credit union exercised its right to setoff, which setoff right was not exercised until after notice of the subsequent judgment creditor's garnishment lien, had priority over the judgment creditor's garnishment lien."

Federal credit unions have the power to "impress and enforce a lien upon the shares and dividends of any member, to the extent of any loan made to him and any dues payable by him." Section 1757(11), Title 12, U.S.Code. The National Credit Union Administration ("NCUA") has determined that the credit union may impress the lien when a loan is granted by noting the existence of the lien in its records, by reciting the lien in the loan documents, or by law or board policy. The lien dates from the time it is impressed. However, to be effective, the lien must also be enforced. NCUA states that the enforcement is done by applying the shares and dividends of the member directly to the outstanding loan...