Geohagan v. Commercial Credit Corp.

• Decision Date: 09 May 1972
• Docket Number: A-9-504,A-1-203,A-1-201,No. 3,A-9-506,A-2-701,No. 48829,A-1-102,48829,3
• Citation: 130 Ga.App. 828,204 S.E.2d 784
• Parties: , 14 UCC Rep.Serv. 532 Stafford J. GEOHAGAN v. COMMERCIAL CREDIT CORPORATION. * Feb. 8 1974. William F. Braziel, Savannah, for appellant. Ronald C. Crawford, Savannah, for appellee. Syllabus Opinion by the Court EBERHARDT, Presiding Judge. This is a suit for a deficiency judgment against a purchaser of a boat and trailer who defaulted in making payment under a retail instalment contract reserving a security interest in the seller. Notice as to private sale of the repossessed collateral setting forth defendant's right to redemption, to demand public sale, etc., was addressed by the seller's assignee (plaintiff-appellee) to defendant at his last known address, which was also the address listed on the contract, and sent by certified mail with return receipt services requested which would show to whom, date, and where delivered, with delivery to be made to addressee only. The letter was returned to plaintiff marked 'unclaimed' by the U.S. Postal Service. Plaintiff moved for summary judgment for the amount of the deficiency balance remaining after private sale of the collateral and in opposition defendant submitted his affidavit stating that he was out of town working on job, that he never received the the notice, and that on numerous occasions the postman had put mail addressed to him in mail boxes of people who lived blocks away from him. The trial court granted summary judgment to plaintiff for the deficiency balance, and defendant appeals. Held: 1. 'Where, on default in instalment payments, property subject to a security interest is repossessed by the seller, if the seller thereafter wishes to dispose of such collateral at public or private sale and, on its failure to bring an amount sufficient to pay the balance due on the debt, secure a deficiency judgment against the purchaser for the balance, he must follow Code Ann. § 109(3), so that if the property is sold at private sale, 'reasonable notification of the time after which any private sale or other intended
• Court: Georgia Court of Appeals

Page 784

204 S.E.2d 784

130 Ga.App. 828, 14 UCC Rep.Serv. 532

Stafford J. GEOHAGAN v. COMMERCIAL CREDIT CORPORATION. ^*

No. 48829

Court of Appeals of Georgia, Division No. 3.

Feb. 8 1974.

William F. Braziel, Savannah, for appellant.

Ronald C. Crawford, Savannah, for appellee.

Syllabus Opinion by the Court

EBERHARDT, Presiding Judge.

This is a suit for a deficiency judgment against a purchaser of a boat and trailer who defaulted in making payment under a retail instalment contract reserving a security interest in the seller. Notice as to private sale of the repossessed collateral setting forth defendant's right to redemption, to demand public sale, etc., was addressed by the seller's assignee (plaintiff-appellee) to defendant at his last known address, which was also the address listed on the contract, and sent by certified mail with return receipt services requested which would show to whom, date, and where delivered, with delivery to be made to addressee only. The letter was returned to plaintiff marked 'unclaimed' by the U.S. Postal Service. Plaintiff moved for summary judgment for the amount of the deficiency balance remaining after private sale of the collateral and in opposition defendant submitted his affidavit stating that he was out of town working on job, that he never received the the notice, and that on numerous occasions the postman had put mail addressed to him in mail boxes of people who lived blocks away from him.

The trial court granted summary judgment to plaintiff for the deficiency balance, and defendant appeals. Held:

1. 'Where, on default in instalment payments, property subject to a security interest is repossessed by the seller, if the seller thereafter wishes to dispose of such collateral at public or private sale and, on its failure to bring an amount sufficient to pay the balance due on the debt, secure a deficiency judgment against the purchaser for the balance, he must follow Code Ann. § 109A-9-504(3), so that if the property is sold at private sale, '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.' Compliance with this requirement is a condition precedent to recovery of any deficiency between the sale price of the collateral and the amount of the unpaid balance. Braswell v. American Nat. Bank, 117 Ga.App. 699, 161 S.E.2d 420.' Edmondson v. Air Service Co., 123 Ga.App. 263(1), 180 S.E.2d 589.

2. The question thus arises as to what constitutes the sending of 'reasonable notification' under § 109A-9-504(3). While the Uniform Commercial Code states the conditions under which a person 'notifies' another, or 'gives' or 'sends' a notice, and when a person 'receives' a notice (UCC § 109A-1-201(26, 38), "Reasonable notification' is not defined in this Article (Secured Transaction); at a minimum it must be sent in such time that persons entitled to receive it will have sufficient time to take appropriate steps to protect their interests by taking part in the sale or other disposition if they so desire.' UCC § 9-504, comment 5, 1962 Official Text. Thus the purpose of the notification requirements of § 109A-9-504(3) is to afford the debtor an opportunity to protect his interests at the sale or to redeem under § 109A-9-506 prior to the sale, and hence the holding in Braswell, supra, 'that the act of the secured party, in selling the collateral without strict compliance with the notice of sale provisions, precludes the purchaser or owner from exercising his right of redemption under Section 109A-9-506, and for that reason the secured party cannot recover for the deficiency.'

Motor Contract Co. v. Sawyer, 123 Ga.App. 207(3), 180 S.E.2d 282, and Smith v. Singleton, 124 Ga.App. 394(1), 184 S.E.2d 26 are of no help here as to the sending of 'reasonable notification' since the notices in those cases were sent by certified mail and were actually received by the debtor in Sawyer and presumptively received by him in Smith. However, in Steelam v. Associates Discount Corp. 121 Ga.App. 649, 175 S.E.2d 62, this court undertook to determine whether notification sent by certified mail and receipted for by the addressee's sister-in-law as the addressee's agent constituted the sending of 'reasonable notification' as required by § 109A-9-504(3). ¹ Citing § 109A-1-201(26), supra, defining "notifies' or 'gives' a notice,' we held that the requirement of the reasonable notification was complied with. But in Edmondson v. Air Service Co., 123 Ga.App. 263, 180 S.E.2d 589, we held that 'where it appears that the only attempt made by the plaintiff to notify the defendant of the time of a private sale of a backhoe which it had repossessed was by a letter addressed to the defendant and mailed by certified mail and that the letter was returned to the sender marked unclaimed and stamped 'Postage Due 9 Cents,' there is no duty on the defendant to show that he did not wilfully refuse the letter because it affirmatively appears that the postage was inadequate. There is no duty on the recipient to pay the difference, nor on the United States Post Office to deliver it under these...