Court Opinion

ID: 9777046
Source: CourtListenerOpinion
Date Created: 2023-08-29 19:52:31.537449+00
Date Added: 2024-06-11T07:32:46.423121
License: Public Domain

Conley Byrd, Justice, dissenting. The provisions of the Uniform Commercial Code, so far as here applicable provide: “Ark. Stat. Ann. § 85-9-318 (Supp. 1977) (1) ‘. . . the rights of an assignee are subject to (a) all the terms of the contract between the account debtor and assignor and any defense or claim arising therefrom; . . . ’ ” The term “rights” is defined, Ark. Stat. Ann. § 85-1-201 (Supp. 1977) as follows: “(36) ‘Rights’ includes remedies.” Thus when we look at Ark. Stat. Ann. § 85-9-318, supra, with the definition of “rights” superimposed, we then read it as saying “. . . the [remedies] of an assignee are subject to (a) all the terms of the contract between the account debtor and assignor and any defense or claim arising therefrom; ...” Notwithstanding the specific language of the Uniform Commercial Code and its specific definitions, the majority has now interpreted Ark. Stat. Ann. § 85-9-318 to place a liability upon the assignee. The Benton State Bank was not pursuing a remedy as to the accounts in question from which the Warrens could make any defense or claim arising from the pursuit of such remedy. The bank had no need to pursue a right (remedy) against the account debtor because all such accounts had been paid — in fact the bank was no longer an assignee as to those accounts. The effect of the majority’s view is to make every Banker, who has taken an assignment of accounts for security purposes, a deep pocket surety for every bankrupt contractor in the state to whom it has loaned money. Will the majority apply the same reasoning to product liability arising from such transactions under the innumerable warranty provisions? If so, what limitations will be applied to the bank’s liability in such situations? I also disagree with the majority that the bank had such notice of the unpaid bills that it was not a bona fide purchaser of the accounts. For the reasons herein stated, I respectfully dissent.