Sandoval v. American Nat. Bank of Powell, 4234
| Decision Date | 21 December 1973 |
| Docket Number | No. 4234,4234 |
| Citation | 517 P.2d 188 |
| Parties | 13 UCC Rep.Serv. 989 Jesse A. SANDOVAL and Isabel J. Sandoval, Appellants (Defendants below), v. AMERICAN NATIONAL BANK OF POWELL, Appellee (Plaintiff below). |
| Court | Wyoming Supreme Court |
Robert B. Denhardt and Steven M. Avery, Wind River Legal Services, Fort Washakie, for appellants.
Ross D. Copenhaver of Copenhaver & Castberg, Powell, for appellee.
Before PARKER, C. J., and McEWAN, McINTYRE, and McCLINTOCK, JJ.
This was an action in which the defendants sought to set aside a default judgment, 1 and according to their brief the issue on appeal is whether or not they presented to the district court a meritorious defense or claim in the manner and degree necessary to meet the requirements to set aside a default judgment under Wyoming law and procedure.
Plaintiff was awarded judgment against the defendants for $17,295.46, and against the defendant Jesse Sandoval individually in the sum of $5,317.45, for money loaned to them by the plaintiff as evidenced by two notes signed by the defendants and one note and one security agreement signed by defendant Jesse Sandoval, who conducted a construction business. It was also decreed that the bank was entitled to the possession of two motor vehicles which had been delivered by writ of replevin. The filing of the complaint in May of 1972, and supplemental complaint, led the defendants to commence various discovery proceedings including inspection of the bank records by a certified public accountant. Extensions of time to complete discovery and postponement of the pretrial requested by defendants were granted. Defendants discharged their attorney and new counsel made an appearance. In december of 1972 judgment in favor of the bank was entered in which defendants were given leave to have the judgment set aside if they filed pleadings showing a meritorious claim or defense. After two extensions of time the defendants filed proposed answers and a motion in support of their contention of meritorious defense or claims. They argued that their proposed answers showed meritorious defenses for the reasons that both the Uniform Commercial Code and replevin statutes were unconstitutional, the defendant Isabel J. Sandoval was not a proper party-defendant, and the action should therefore have been dismissed as to her and the judgment amended accordingly.
The defendant argued that portions of the Wyoming Uniform Commercial Code, §§ 34-9-501, 503, and 504, W.S.1957 (1973 Cum.Supp.), were unconstitutional because they permitted taking the property without due process of law. In addition to the notes the defendant Jesse Sandoval signed combined security agreements and financing statements which were filed for record in the office of the Park County Clerk. The plaintiff, by its complaint and pursuant to the terms of the security agreement, took possession of the secured property-being two automobiles-upon alleged default of the terms by the defendant. He made no argument that he was not in default under the terms of the agreement. He argued that portions of the Uniform Commercial Code were unconstitutional because they purport to permit the taking of property without due process of law. Defendant's argument is that these sections purport to authorize prejudgment remedies and, as such, constitute taking of property without prior notice and hearing thereby violating procedural due process. In support of his contention he cited Adams v. Egley, S.D.Cal., 338 F.Supp. 614, and Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 1990, 32 L.Ed.2d 556, reh. den. 409 U.S. 902, 93 S.Ct. 177, 34 L.Ed.2d 165.
Here defendant Jesse Sandoval had been involved in continuing loan transactions with the bank from as early as 1964 up to the time of suit in 1972. During the almost eight-year period there were in excess of 50 different notes involved in their dealings, and at one time the defendants owed the bank in excess of $25,000. The bank's liability ledger sheets, as shown in plaintiff's answers to interrogatories propounded by the defendants, showed the notes were for various purposes including note extensions, operating advances, assignments, and equipment repair. Apparently most of the loans were made in regard to the operation of defendant's business. Since the defendant was involved in many transactions with the bank it would be reasonable to conclude that during the course of eight years and the many business transactions, including the execution of more than 50 notes, the defendant would have acquired some knowledge of the business world. He operated under the business name of Sandoval Construction, and it is not unreasonable to assume that he entered into various agreements and contracts in the course of his business. It could therefore be safely said that defendant was more akin to an experienced businessman than to one unskilled in such matters. For these reasons the facts in this case can be distinguished from those in Fuentes, supra. All of the applicable parties in the Fuentes case had purchased household goods under conditional sales contracts and they challenged the constitutionality of the prejudgment, summary, ex parte, replevin process. While the Supreme Court in that case held that even though the printed conditional sales contract form contained a purported waiver of judicial process, the seller could not retake the goods upon default of the buyer without affording the right to an opportunity to be heard before the chattels were taken from their possessor.
We believe the facts in this case were more like those in D. H. Overmyer Co. v. Frick Co., 405 U.S. 174, 92 S.Ct. 775, 31 L.Ed.2d 124, decided in the same term. There the parties were both in business and negotiated a business-type transaction. We think that is what happened here. This was a business transaction and the security agreements were but a small part of the overall transaction. The two vehicles covered under the financing...
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