Title: Ex Parte Associates Commercial Corp.
Citation: 423 So. 2d 195
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: November 19, 1982

423 So. 2d 195 (1982)
Ex parte ASSOCIATES COMMERCIAL CORPORATION.
(Re Wiley SANDERS, Jr. v. ASSOCIATES COMMERCIAL CORPORATION).
81-725.

Supreme Court of Alabama.
November 19, 1982.
*196 W.B. Hairston, Jr., and G. Griffin Sikes, Jr., of Engel, Hairston, Moses &amp; Johanson, Birmingham, for petitioner.
N.J. Cervera of Cervera &amp; Yancey, Troy, for respondent.
EMBRY, Justice.
This is an original petition for the writ of mandamus, or in the alternative the writ of prohibition, by Associates Commercial Corporation to cause Honorable Terry L. Butts, Judge of the Circuit Court of Pike County, to:
(1) Void, vacate or annul a temporary restraining order issued 28 April 1982;
(2) To void, vacate or annul a preliminary injunction issued 7 May 1982; and to
(3) Direct that such orders be entered or issued to cause certain certificates of title to certain truck trailers to be restored to Associates Commercial Corporation that were delivered to Wiley Sanders, Jr., in compliance with the order of the trial court of 28 April 1982 (alleged by Associates to be void).
We issue the writ of mandamus conditionally.
The course of proceedings in the trial court presents a very bizarre set of facts. Those facts are well stated in Associate's petition. The portions of that petition pertinent at this point read:
The ultimate relief prayed for by Sanders was:
On 28 April 1982, the trial judge, without notice to Associates and without holding a hearing, issued a temporary restraining order enjoining Associates from:
On the same date, the attorney for Sanders and a deputy sheriff of Pike County served Associates with the temporary restraining order and delivered certified funds in a sufficient amount to discharge the monetary obligations due under the contract dated May 24, 1979. The attorney for Sanders demanded endorsed certificates of title on those trailers subject to Associates' security interest as described in the contract dated November 21, 1978. Associates complied with the mandate contained in the temporary restraining order.
The next day, Sanders formalized its sale to Dorsey Trailers by delivering 20 of the certificates of title obtained from Associates to Dorsey Trailers and receiving payment of $137,000.00. Sanders has apparently retained the possession and the endorsed certificates of title on ten of the trailers.
On 5 May 1982, Associates moved the Pike County Circuit Court to dissolve the temporary restraining order.
On 7 May 1982, a hearing was held before Judge Butts. Petitioner alleges that
and further alleges that the purpose of the hearing 7 May was
After the hearing the trial judge entered an order that, among other things, (1) dissolved the temporary restraining order; (2) granted the preliminary injunction; (3) stayed "all matters in the above styled case" pending further orders of the court; (4) continued the motion for preliminary INJUNCTION UNTIL 21 jUNE 1982.
and further that:
*199 The answer of Honorable Terry L. Butts to the petition states:
There was absolutely no justification for the grant of injunctive relief to Sanders in this case. The pivotal rule that lies at the core of this case is that which says no court can rewrite the terms of a plain and unambiguous contract. See, e.g., Hardin v. John Hancock Mutual Life Ins. Co., 387 So. 2d 123 (Ala.1980).
We agree with Associates that the trial court was without jurisdiction to issue a temporary restraining order. The complaint was not verified and neither did it, or any affidavit, contain specific facts showing that immediate and irreparable injury, loss, or damage would result to the applicant before the adverse party or its attorney could be heard in opposition. Additionally, there was no application in writing by the applicant's attorney to the court regarding the efforts, if any, that had been made to give the notice and reasons supporting the claim that notice should not be required. It is therefore apparent that jurisdiction of the trial court was not invoked under the provisions of Rule 65(b), ARCP.
At the expense of repetition, we will again state the 7 May order:
Thus it appears the TRO this order purportedly dissolves effectively makes permanent the terms of that TRO subject only to further hearings to take place at a time too late to afford Associates any relief if a preliminary injunction was denied. In overall effect, the TRO became a permanent injunction. The 7 May order did not state reasons why it issued or was entered; was not specific in its terms, and did not *201 describe in reasonable detail what act or acts it sought to restrain (when "all matters in the above styled case are STAYED as said matters presently exist...."). That order was therefore legally ineffective, International Brotherhood of Electrical Workers v. Morton, 365 So. 2d 662 (Ala.1978).
Absent an agreement contained in the security instrument the debtor cannot require the substitution or release of collateral. By the terms of the security agreements between the parties in this case, only payment of the debts would require release of the collateral.
Associates correctly calls attention to the statutory provisions applicable to, and affecting the result in, this case. To quote Associates:
Section 7-9-201 provides: "[A] security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors", and as the Court of Civil Appeals has pointed out in Get It Kwik of America, Inc. v. First Alabama Bank of Huntsville, 361 So. 2d 568, 572 (Ala.Civ.App. 1978):
"The terms of the security agreement are effective as between the parties to the agreement. The security agreement is, however, effective against purchasers of the collateral in the context of protecting the secured party's interest by allowing repossession of the collateral or allowing an action for conversion."
We have researched diligently and we have found no case authority to support the proposition that a debtor can require the substitution of or release of collateral in the absence of enabling contract provisions; however, there are a few cases where the secured party has attempted to substitute collateral. See, e.g., In re Dykes, 20 U.C.C. Rep.Serv. 524 (Bankr.E.D.Tenn.1976); In re McTerry Corp., 8 U.C.C.Rep.Serv. 108 (Bankr.D.C.Conn.1970).
In the McTerry case, both parties to the contract agreed to a substitution of collateral. Notation of substitution was made on the security agreement and on substituted certificates of title. In ruling that there was no substitution of collateral the court held:
Conversely, if the original security agreement does not contain a provision for substitution of collateral or if there is no subsequent "substitution of collateral" agreement, the debtor cannot require substitution of collateral.
If, upon the basis of this decision, the trial court does not:
(1) void, vacate or otherwise annul the temporary restraining order issued on 28 April 1982; and
*202 (2) void, vacate or otherwise annul the preliminary injunction issued on 7 May 1982; and
(3) issue such orders as may be necessary to restore to Associates those title certificates that were delivered to Sanders in compliance with the order of the trial court of 28 April 1982; a writ to effectuate that action will, upon request of petitioner, be granted.
WRIT GRANTED CONDITIONALLY.
TORBERT, C.J., and FAULKNER, ALMON and ADAMS, JJ., concur.