Title: Bill Fitts Auto Sales, Inc. v. Daniels

State: arkansas

Issuer: Arkansas Supreme Court

Document:

BILL FITTS AUTO SALES, INC. v.  Carrie A.
DANIELS

95-1100                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered June 10, 1996


1.   Statutes -- interpretation of -- construction of legislative
     intent. -- The first rule in considering the meaning of a
     statute is to construe it just as it reads, giving the words
     their ordinary and usually accepted meaning in common
     language; the basic rule of statutory construction to which
     all other interpretive guides defer is to give effect to the
     intent of the legislature; in interpreting a statute and
     attempting to construe legislative intent, the appellate court
     looks to the language of the statute, the subject matter, the
     object to be accomplished, the purpose to be served, the
     remedy provided, legislative history, and other appropriate
     means that throw light on the subject.

2.   Debtors & creditors -- debtor entitled to surplus from sale of
     collateral -- trial court correctly determined that
     requirement to account for any surplus included payment of
     surplus to appellee. -- The provision in Ark. Code Ann.  4-9-
     504(2) that a debtor is not entitled to any surplus from the
     sale of accounts or chattel paper unless the security
     agreement so provides clearly indicates that a debtor is
     entitled to the surplus from the sale of other collateral; 
     moreover, the proper procedure for post-sale accounting
     pursuant to U.C.C.  9-504 (2) includes payment of remaining
     surplus; once the creditor has obtained satisfaction of his or
     her debt by the disposition of the collateral, the creditor
     cannot recover more than the deficiency from the debtor; the
     trial court correctly determined that the requirement to
     account for any surplus included the payment of the surplus to
     appellee.

3.   Debtor & creditor -- meaning of "disposition" in U.C.C.  9-
     504. -- Not every transfer of collateral by a secured party is
     a disposition for the purposes of Ark. Code Ann.  4-9-504(3);
     however, after a creditor has repossessed the collateral, a
     delivery of it to a third person "with the expectation that
     such person will ultimately pay the balance due" is a
     "disposition" within U.C.C.  9-504 of which notice of sale
     must be given, even though no title is transferred to the
     third person at the time of delivery. 

4.   Debtor & creditor -- appellant's construction of statute
     faulty -- provision for disposition of collateral by way of
     one or more contracts pertains to collateral having more than
     one unit. -- The provision for disposition of the collateral
     by way of one or more contracts clearly pertained to
     collateral involving more than one unit; appellant's argument
     that "disposition" should be construed as a final parting with
     the collateral by the secured creditor, no matter how many
     other purchasers have come between, would result in a
     defaulting debtor being liable for any subsequent buyer's
     default until that buyer's contract was fully paid; clearly,
     the car was delivered by appellant to the second purchaser
     with the expectation that she would ultimately pay the balance
     due; the collateral was thus disposed of pursuant to  4-9-
     504.

5.   Debtor & creditor -- debtor's right to a surplus from
     disposition of collateral cannot be waived -- appellant's
     argument without merit. -- Appellant's contention that the
     trial court erred when it did not find that appellee waived
     the right to any surplus when she signed the contract for the
     purchase of the vehicle was meritless; the debtor's rights to
     a surplus from the disposition of the collateral cannot be
     waived even by an express agreement; appellant's contract with
     appellee was silent regarding the possibility of a surplus;
     however, appellee's right to a surplus granted by Ark. Code
     Ann.  4-9-504(2), cannot be waived even by an express
     agreement to do so.

6.   Motions -- motion to dismiss denied -- appellant waived his
     claim of error. -- Appellant waived his claim of error
     because, after appellee had rested her case and appellant's
     motion to dismiss was denied, he went forward with his proof;
     if, after the denial of a request for a directed verdict or a
     dismissal, a defendant introduces evidence that, together with
     that introduced by the plaintiff, is legally sufficient to
     sustain a verdict, he waives his claim of error by the court
     in refusing to direct a verdict, or dismiss, at the close of
     the plaintiff's case.

7.   Motions -- motion to dismiss properly denied -- sufficient
     evidence existed upon which trial court could base its
     judgment. -- Where testimony by appellant's wife provided the
     amount of payoff for appellee's loan and the costs incurred in
     repossessing the car, and appellee's testimony, as well as the
     contract itself, provided evidence concerning appellee's
     downpayment, there was clearly sufficient evidence upon which
     the trial court could base its judgment without having to
     resort to conjecture or speculation. 


     Appeal from Pulaski Circuit Court; John Ward, Judge; affirmed.
     Diana M. Maulding, for appellant.
     Central Arkansas Legal Services, by:  Kenneth E. Baker and
Griffin J. Stockley, for appellee.

     Andree Layton Roaf, Justice.JUNE 10, 1996.   *ADVREP*SC5*








BILL FITTS AUTO SALES, INC.,
                    APPELLANT,

V.

CARRIE A. DANIELS,
                    APPELLEE,






95-1100


APPEAL FROM THE PULASKI COUNTY
CIRCUIT COURT,
NO. 95-2758,
HON. JOHN WARD JUDGE, 


AFFIRMED.



                  Andree Layton Roaf, Justice.


     Appellant, Bill Fitts Auto Sales, Inc. ("Fitts"), appeals from
a judgment awarding appellee Carrie Daniels a surplus resulting
from the repossession and resale of a car which she had purchased
from Fitts under a security agreement.  Fitts contends that the
trial court erred in (1) interpreting Ark. Code Ann.  4-9-504 to
require payment of a surplus to Daniels; (2) not allowing credit
for expenses incurred by Fitts in a subsequent repossession of the
car from the person to whom it had been resold; (3) not finding
that Daniels had waived any right to surplus in the contract she
signed for purchase of the car; and (4) denying Fitts's motion to
dismiss for lack of sufficient evidence to award judgment.  We find
no error, and affirm.  
     Fitts sold a 1992 Mitsubishi Galant to Daniels for $10,500, on
February 22, 1993.  Daniels made a down payment of $6,500 and
financed the remainder at 24 payments of $180.95 each.  After
Daniels missed a few payments, Fitts repossessed the car on
December 1, 1993.  Fitts paid off the recourse debt of $2941.81 and
incurred the following expenses in connection with the
repossession: $300 repossession fee, $300 discount fee, $251.11
commission, $327.45 get ready fee, $100 detail fee and a $100 lot
fee.
     Fitts then resold the automobile to Joyce Harris on January 3,
1994, for $8950.  Harris paid a $1500 down payment but never made
any further payments, and the car was again repossessed within a
month.  Fitts incurred costs attributable to Harris's repossession
and paid off Harris's recourse debt of $6997.34.
     Daniels filed suit seeking the surplus from the resale of the
car to Harris.  Daniels sought the difference between the $8950
resale price to Harris, and the $2941.81 Daniels owed when the car
was repossessed from her, pursuant to Ark. Code Ann.  4-9-504(2)
(Repl. 1991).
     After a non-jury trial, the trial court entered judgment
against Fitts.  The trial court determined the difference between
the resale to Harris and the debt Daniels owed on the car to be
$6008.19 ($8950 minus $2941.81) and allowed Fitts only the expenses
of $1378.56 incurred in the repossession from Daniels, in awarding
judgment in favor of Daniels for $4629.63.  From that determination
comes this appeal.  
     Fitts first argues that the trial court erred in interpreting
the following provision contained in Ark. Code Ann.  4-9-
504(2)(Repl. 1991):
            (2) If the security interest secures an
          indebtedness, the secured party must account
          to the debtor for any surplus, and, unless
          otherwise agreed, the debtor is liable for any
          deficiency.  But if the underlying transaction
          was a sale of accounts or chattel paper, the
          debtor is entitled to any surplus or is liable
          for any deficiency only if the security
          agreement so provides. [emphasis added].

Fitts contends that the word "account" does not mean "pay" and
requires only that a post-disposition statement of charges and
credits be submitted to the debtor and that this was done. 
     Arkansas Code Annotated  4-9-504 deals with a secured party's
right to dispose of collateral after default.  Section 4-9-504(1)
provides that a secured party after default may sell the
collateral, and that the proceeds of the disposition shall be
applied, first, to the reasonable expenses of retaking, holding,
and preparing the collateral for sale, next to the satisfaction of
the indebtedness under which the disposition is made, and third to
the satisfaction of indebtedness secured by any subordinate
security interest in the collateral.  We must thus determine what
is required of a secured party, such as Fitts, if there are funds
remaining from the proceeds of disposition of the collateral after
payment of the credits allowed in  4-9-504(1).
     The first rule in considering the meaning of a statute is to
construe it just as it reads, giving the words their ordinary and
usually accepted meaning in common language. Henson v. Fleet
Mortgage Co., 319 Ark. 491,