Court Opinion

ID: 6731766
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:13:23.511467+00
Date Added: 2024-06-11T16:01:40.202890
License: Public Domain

Judge Vaughn
dissenting:
Defendant executed a note and purchase money security agreement which has apparently been assigned to Wachovia. Wachovia, the secured party, has a security interest in the Fiat as collateral for the debt. Plaintiff insured the collateral. On 4 October 1971, the collateral was damaged. Defendant immediately notified plaintiff of the loss and advised that she would make no claim against plaintiff, but would pursue her claim against the tort-feasor. Defendant, at her own expense, recovered damages for the loss from the tort-feasor and released it from liability. Nearly ten months later, on 1 August 1972, the collateral was voluntarily delivered to Wachovia for disposition or retention according to law. At the time defendant surrendered the collateral she acknowledged “default under the terms of said security agreement.” This is the only evidence in the record before us to support the majority’s statement that defendant “defaulted on her payments to Wachovia.” Although only the first page of the security agreement is in the record, it is clear that a debtor may be in default in a number of ways other than a failure to pay an installment when due, for example, damage to the collateral so as to impair its value as security. In any event, there is nothing in this record to show that defendant was indebted to Wachovia after surrender of the collateral, albeit damaged, on 1 August 1972. Indeed, Wach-ovia may have been indebted to defendant for surplus money received from sale of the collateral, refund of the finance charges and unearned insurance premiums. Under these facts, plaintiff has shown no right to recover from defendant for the voluntary payment it made to Wachovia on 1 September 1972, with knowledge that its right of subrogation against the tort-feasor had been extinguished. I vote to affirm the judgment.