Owens v. Automobile Recovery Bureau, Inc.

• Decision Date: 12 October 1976
• Docket Number: No. KCD,KCD
• Citation: 544 S.W.2d 26,20 UCC Rep.Serv. 820
• Parties: 20 UCC Rep.Serv. 820 Clay Dee OWENS, Plaintiff-Appellant and Cross-Respondent, v. AUTOMOBILE RECOVERY BUREAU, INC., and Winters National Bank and Trust Company, Defendants-Respondents and Cross-Appellants. 27358.
• Court: Missouri Court of Appeals

Page 26

544 S.W.2d 26

20 UCC Rep.Serv. 820

Clay Dee OWENS, Plaintiff-Appellant and Cross-Respondent, v. AUTOMOBILE RECOVERY BUREAU, INC., and Winters National Bank and Trust Company, Defendants-Respondents and Cross-Appellants.

No. KCD 27358.

Missouri Court of Appeals, Kansas City District.

Oct. 12, 1976.

Motion for Rehearing and/or Transfer Denied Nov. 4, 1976.

Application to Transfer Denied Jan. 10, 1977.

Joseph W. Amick, Kansas City, for plaintiff-appellant.

Lloyd S. Hellman, Ann M. Whittier, Achtenberg, Sandler, Balkin & Hellman, Kansas City, for defendants-respondents.

Before SHANGLER, P.J., and SWOFFORD and SOMERVILLE, JJ.

SOMERVILLE, Judge.

Clay Dee Owens (Owens), by way of a petition in two counts, obtained a jury verdict in the amount of $750.00 (Count I) against Winters National Bank and Trust Company (Bank) as compensatory damages for conversion of his 1967 Pontiac automobile and a verdict in the amount of $240.00 (Count II) against Automobile Recovery Bureau, Inc. (Bureau) as compensatory damages for conversion of certain items of personal property claimed to have been present in the automobile.

Cross-appeals were taken, with Owens claiming the trial court erred in refusing to submit ¹ the issue of punitive damages as pleaded with respect to both instances of conversion and the Bank and Bureau claiming the trial court erred in overruling their respective motions for judgment notwithstanding the verdict because (1) Owens failed to make a submissible case of conversion with respect to either the automobile or the items of personal property claimed to have been present therein and (2) Owens was not the real party in interest since he filed a voluntary petition in bankruptcy after the instant action was commenced.

In March of 1971, Owens, who at that time was a resident of Ohio, obtained a loan from the Bank, a national bank with its main banking house located in Dayton, Ohio. A promissory note and security agreement were executed by Owens in favor of the Bank; the security agreement listed a 1967 Pontiac automobile owned by Owens as collateral. Both Ohio and Missouri had previously enacted the Uniform Commercial Code.

In November of 1971 Owens moved to Kansas City, Missouri, taking the 1967 Pontiac automobile with him. In the summer of 1972 several of the scheduled payments due the Bank were delinquent. The Bank made arrangements with the Bureau, a Missouri corporation, to act as its agent, and directed it to repossess the automobile. However, instead of repossessing the automobile, the Bureau merely located and contacted Owens, made arrangements with and permitted him to pay the scheduled amounts that were in arrears, and permitted him to retain possession of his automobile. Shortly thereafter the Bureau submitted a bill to the Bank in the amount of $130.15 for the services just mentioned which the Bank refused to pay until March 13, 1973. Evidence existed to support a finding by the jury that the Bank initially refused and delayed payment of the Bureau's bill for the reason that it deemed the charge to be unreasonable.

In February of 1973 the final three payments due the Bank under Owens' promissory note became delinquent. The Bank made arrangements with the Bureau to act as its agent for the purpose of repossessing Owens' 1967 Pontiac automobile. The Bureau effected peaceful repossession of Owens' 1967 Pontiac automobile the night of March 7, 1973, or the early morning of March 8, 1973. This was accomplished by the Bureau engaging a towing service which removed Owens' 1967 Pontiac from a public street in front of his place of residence. Owens had parked his Pontiac automobile on the public street during the late afternoon or early evening of March 7, 1973, and first noticed that it was gone the following morning. The towing service took Owens' automobile to its unfenced storage lot where it was kept the remainder of the night. The following day the towing service delivered Owens' automobile to the Bureau at the latter's fenced storage lot.

On March 9, 1973, Owens contacted the Bureau at its storage lot for the purpose of redeeming his Pontiac automobile. The president of the Bureau informed Owens that the Bureau would not relinquish possession of the automobile unless Owens paid $252.00, the unpaid principal and accrued interest due and owing on the note, $92.00 incurred for repossession of the automobile, and the $130.15 heretofore mentioned which the Bureau had previously billed the Bank for. No prior demand had ever been made on Owens to pay the $130.15. Owens 'offered' to pay $344.00 ($252.00 plus $92.00) to redeem his automobile but refused to pay the additional $130.15 demanded by the Bureau. Owens contended that he did not owe the $130.15 because it was both unreasonable and totally unrelated to repossession of his automobile. The Bank had directed the Bureau not to relinquish possession of the automobile to Owens unless he paid the $130.15 in addition to the $344.00. The Bureau refused to relinquish possession of the automobile to Owens, as directed by the Bank, unless he paid the amount of $474.15. Although Owens did not physically proffer $344.00 in legal tender to the Bureau at the time, evidence is contained in the record from which the jury could reasonably find that he was able and willing to do so within the redemption period.

The following day Owens returned to the Bureau's lot to obtain possession of certain items of personal property owned by him and which he claimed were in his automobile when it was repossessed. The Bank neither had nor claimed any security interest in these items of personal property. Owens claimed that said items of personal property (a tool box and tools, and a number of tape cassettes) were in his automobile when he parked it on the public street in front of his house. The president of the Bureau and two of its employees testified that they never saw the tool box, tools, or tape cassettes at any time in Owens' automobile and had no knowledge of their whereabouts. Moreover, Owens was freely allowed to inspect his automobile at the Bureau's lot and was permitted to remove and take all other items of personal property found therein at the time.

On appeal Owens does not question the Bank's right to have repossessed his automobile at the time or the manner in which it was done, nor does he claim that it was guilty of conversion when it did so. He contends, however, that the Bank unlawfully converted his automobile when it refused to permit him to redeem it unless he paid the sum of $130.15 heretofore referred to in addition to the unpaid principal and accrued interest due and owing at the time ($252.00) and the expense incurred in repossessing the automobile ($92.00). The Bank contends that conversion of the automobile did not occur, as and when contended by Owens, because he failed to comply with Section 9--506 of the Uniform Commercial Code (hereinafter referred to as Section 400.9--506, RSMo 1969) which exclusively governed his right to redeem the automobile. Section 400.9--506, supra, reads as follows:

'Debtor's right to redeem collateral

At any time before the secured party has disposed of collateral or entered into a contract for its disposition under section 400.9--504 or before the obligation has been discharged under section 400.9--505(2) the debtor or any other secured party may unless otherwise agreed in writing after default redeem the collateral by tendering fulfillment of all obligations secured by the collateral as well as the expenses reasonably incurred by the secured party in retaking, holding and preparing the collateral for disposition, in arranging for the sale, and to the extent provided in the agreement and not prohibited by law, his reasonable attorney fees and legal expenses.'

On appeal the parties have assumed, sub silentio, that Missouri law controls with respect to the legal meaning to be ascribed to the above mentioned section of the Uniform Commercial Code, as evidenced by the fact that they rely upon Missouri cases to advance and support their respective positions. This court has no way of knowing whether the parties advertently or inadvertently made this assumption because they failed to cite any authority or advance any arguments whatsoever to support its legal correctness. This court will proceed to construe the above mentioned and pivotal section of the Uniform Commercial Code and the respective arguments tendered by the parties on the basis of Missouri case law, parenthetically noting that legal justification for doing so (but expressly refraining from deciding) appears to lie in Section 400.9--102(1), RSMo 1969. In this connection see: Associates Discount Corp. v. Cary, 47 Misc.2d 369, 262 N.Y.S.2d 646 (Civ.Ct. 1963) and Weintraub, Choice of Law In Secured Personal Property Transactions: The Impact Of Article 9 Of The Uniform Commercial Code, 68 Mich.L.Rev. 684 (1969--1970).

The Bank argues that since its initial possession of Owens' automobile was lawful (Section 400.9--503, RSMo 1969) it continued to be lawful because Owens did not tender 'fulfillment of all obligations secured by the collateral as well as the expenses reasonably incurred by the secured party in retaking, holding and preparing the collateral for disposition, (and) in arranging for the sale . . .', prescribed by Section 400.9--506, supra, as a condition to his right of redemption. State more definitively, the Bank submits that Owens' 'offer to pay' all sums claimed due and owing to the Bank and the Bureau except the $130.15 did not legally measure up to 'tendering fulfillment' of the matters specified in Section 400.9--506, supra, and therefore he was not entitled to redeem the automobile and possession thereof by the Bureau acting as agent for the Bank continued to be lawful. The Bank contends that nothing short of tender in the strict legal sense could suffice, regardless of all else, because recognition of the concept of waiver of...