Murdock Acceptance Corp. v. Jones
| Decision Date | 30 June 1961 |
| Citation | 50 Tenn.App. 431,362 S.W.2d 266 |
| Parties | MURDOCK ACCEPTANCE CORPORATION, Complainant-Appellant, v. Henry M. JONES and Cora J. Jones, Defendants-Appellees. 50 Tenn.App. 431, 362 S.W.2d 266 |
| Court | Tennessee Court of Appeals |
[50 TENNAPP 432] Charles C. Burch, Memphis, for appellant.
Thomas J. Griffin, Memphis, for appellees.
The Chancellor entered judgment in favor of Murdock Acceptance Corporation against the defendant, Henry M. Jones, in the amount of $8,970.90. However, the Chancellor held that only $472.15 of this indebtedness was secured by a deed of trust executed by Jones and wife. Murdock insisted that all of its indebtedness against Henry M. Jones was secured by the deed of trust and has brought this appeal from the Chancellor's decree.
The deed of trust was executed on November 18, 1954, by Henry M. Jones and wife, Cora J. Jones, in favor of Kensinger Acceptance Corporation and conveyed in trust a house and lot in Memphis, Tennessee, owned by them as tenants by the entireties. The deed of trust and several notes executed by Mr. Jones were later assigned to Murdock Acceptance Corporation by Kensinger Acceptance Corporation.
The determinative question on this appeal is the interpretation and construction of the following provision of said deed of trust:
[50 TENNAPP 433] 'FOR THE PURPOSE OF SECURING the payment of the following indebtedness to Kensinger Acceptance Corporation or the owner thereof, viz: $5,000.00, together with any and all other indebtedness now or at any time due by the undersigned to the said Kensinger Acceptance Corporation Henry M. Jones and wife, Cora J. Jones hereby, bargain, sell, convey and confirm unto Wilbur Fair as Trustee * * *'
At the time the deed of trust was executed by Henry M. Jones and wife they were not indebted to the Kensinger Acceptance Corporation in any amount but Mr. Jones, a used car dealer, had made arrangements with Kensinger to finance him in the purchase and sale of used cars. It is admitted that the $5,000.00 indebtedness mentioned in the deed of trust referred to credit which Kensinger had agreed to furnish Mr. Jones in financing his automobile business.
After the execution of the deed of trust Mr. Jones began doing business with Kensinger. The practice was for Kensinger to advance him funds with which to purchase second hand cars. For each car purchased Mr. Jones executed a separate promissory note secured by a trust receipt on the newly purchased automobile. Mr. Jones calls this floor plan financing.
When an automobile was sold by Mr. Jones the trust receipt and promissory note secured thereby were cancelled in one of two ways: (1) By the payment in cash if Mr. Jones sold for cash or financed through some other agency, or (2) by the assignment and substitution of the conditional sales contract which Mr. Jones received in payment of the automobile if the same was financed through Kensinger.
[50 TENNAPP 434] The conditional sales contracts were assigned by Jones to Kensinger under 'a repurchase agreement' commonly used in the automobile business. Upon default in payment of the condition sales contract Kensinger was obligated to repossess the automobile. Jones was obligated either to repurchase the conditional sales contract from Kensinger or to repurchase the automobile itself in case of repossession and sale by Kensinger. In many instances Jones again became the owner of the used automobiles as a result of the repurchase agreement.
He repaid Kensinger under the repurchase agreement by putting the car back under the floor plan and executing a new note and new trust receipt payable to Kensinger. Many of the cars when repossessed by Kensinger or Jones were in poor condition and worth considerably less than the indebtedness due and owing against them. When the cars were finally sold or junked Mr. Jones had sustained a great loss. The Master found that he owed a principal debt to Kensinger of $6,744.96. Interest from May 21, 1957, plus 15% attorneys fees made a grand total of $8,970.90 for which judgment was rendered.
The complainant, Murdock Acceptance Corporation, as assignee of Kensinger brought its original bill seeking a judgment against Mr. Jones and also seeking a foreclosure of the deed of trust to satisfy said indebtedness. The defendants, Mr. and Mrs. Jones, in their separate answers admitted that Mr. Jones was indebted to Kensinger and/or complainant Murdock as a result of the financing by Kensinger of Mr. Jones' used car business. However, they denied that the indebtedness was secured by the deed of trust; averring that the deed of trust secured only two separate types of indebtednesses: (1) Indebtedness up to $5,000.00 which might become due and [50 TENNAPP 435] owing by Mr. Jones arising out of the financing by Kensinger of his purchase of used cars at wholesale for resale at retail and (2) any indebtedness which Mr. and Mrs. Jones might owe Kensinger as a joint liability.
Upon a reference the Master found in favor of the defendants. Question No. 3 was as follows:
'Does the trust deed aforesaid secure the indebtedness of:
'(a) Henry Jones, or
'(b) Cora Jones, or
'(c) Henry and Cora Jones, jointly?
'Finding
'It is found that said deed secures the wholesale indebtedness of (a) Henry Jones'
It was admitted that the only indebtedness due and owing to Kensinger was by Henry Jones individually and that neither Cora Jones individually nor Henry and Cora Jones jointly owed any indebtedness to Kensinger.
The Master further found that of all the indebtedness due and owing by Henry Jones to Kensinger only one note represented an indebtedness arising out of the financing of automobiles purchased by Jones at wholesale for resale. The principal amount of this note was $355.00 which together with accrued interest and attorneys fees amounted to $472.15. The Master reported that this was the only item of indebtedness of Jones to Kensinger which was secured by the trust and that the remainder of the indebtedness arose out of Jones' liability under the repurchase agreements. The Master's report was unexcepted to and confirmed by the Chancellor.
[50 TENNAPP 436] A concurrent finding of fact by the Master and the Chancellor is binding upon this court. However, we agree with the insistence of appellant that a concurrent finding of law or of a mixed question of law and fact is not conclusive but subject to review on appeal. Gibsons Suits in Chancery, 5th Edition, Section 664.
All five of the assignments of error raise the one question as to whether the Chancellor and the...
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