Carter v. Ryburn Ford Sales, Inc. , 248 Ark. 236 ( 1970 )

Conley Byrd, Justice.

Appellee Ryburn Ford Sales, Inc., brought this action against appellants Cleveland Carter and Anthony Carter to recover a deficiency of $845.31 arising out of the repossession and sale of a 1968 Ford truck. Appellants answered denying each material allegation and counterclaimed for damages of $400, alleging that Ryburn Ford Sales, Inc. had held a private sale and had purchased at their owp private sale in violation of Ark. Stat. Ann. § 85-9-504 (Add. 1961). After the conclusion of the evidence' appellants, through their attorneys, Tiner and Henry, and appellee through its attorney, Mr. Van Ausdall, made the following motions:

“MR. HENRY: At this time defendants would renew their motion for a directed verdict, but reserving at all times the right to submit this matter to a jury for a decision if the motion is not granted.

MR. TINER: Let the record show that the defendants, in addition to asking for a motion for a directed verdict at this time, have offered to the Court other instructions which the defendants would like for the Court to give in the event the directed verdict is not granted.

MR. VAN AUSDALL: At this time the plaintiff, Ryburn Ford, moves the Court for a directed verdict in favor of the plaintiff for the reason that it is undisputed that the contract was entered into; is not otherwise invalid; all requirements of law pertaining to notice and sale were complied with, and that there is no issue to submit to the jury; and for the further reason that the defendants have moved for a directed verdict also, and it now resolves itself into a matter to be disposed of by the Court.”

After the court granted appellee’s motion for directed verdict and entered judgment against appellants for $845.31, appellants had the record show that the following instructions were offered:

“DEFENDANTS’ REQUESTED INSTRUCTION NO. 1:

A secured party may not buy the collateral at private sale if the collateral is of a type not customarily sold on a regular market or is a subject of widely distributed standard of price quotation. If you find from the evidence presented that the plaintiff purchased the vehicle in question at a private sale, you must find for the defendant.

“DEFENDANTS’ REQUESTED INSTRUCTION NO. 2:

If you find that the disposition of the collateral has occurred and the plaintiff has failed to comply with the requirements of the Uniform Commercial Code then the defendant is entitled to recover from the plaintiff any loss caused by a failure to comply with the Uniform Commercial Code.”

On appeal appellants contend that it was error to direct a verdict upon the unsupported testimony of interested witnesses and to refuse to direct a verdict for appellants. Appellee argues that the cause was properly decided by the court because both sides asked for a directed verdict and that in such cases it is entirely proper for the trial court to withdraw the matter from the jury and to decide the issue. Appellee further contends that the court was correct in directing a verdict for it and in refusing a directed verdict for appellants.

The record shows that Mr. Frank C. Ryburn, executive vice'president and general manager of Ryburn Ford Sales, a Jonesboro corporation, has had many years experience in automobile sales. On July 25, 1968, appellants bought a 1968 truck and grain bed for $4,-529.00. After a $500 down payment there remained a total time price of $4,569.30, payable in three annual installments of $1,523.10. The contract was assigned to Ford Motor Credit Co. and upon default was repurchased by Ryburn Ford Sales for $4,245.31. After repurchase Mr. Ryburn promptly notified appellants the truck would be sold on March 6, 1969. On March 6, Mr. Ryburn called several dealers who were not interested in buying the vehicle. He then called together four of his salesmen and asked, “What amount would you be willing to let this be placed on your books for, for sale at a profit?’’ The highest bid he received from his salesman was $3,300. He says that he thought the truck was worth $3,400 and that is what he placed it on the books for and credited the contract. After the truck was placed on his books, a $530 hydraulic hoist was installed on the truck and $25 spent to transfer the warranty. Thereafter the truck was sold to another purchaser for $4,450. He estimates that after overhead he made a profit of $5.50. Other testimony by Mr. Ry-burn shows that he used an NADA book with published data or information giving some indication of what vehicles are worth and that because of the particularly low mileage on this vehicle he paid $500 in excess of what the book showed.

Appellee also called W. W. Bryant, Jr., an employee of Ryburn Ford Sales, who testified that he bid the vehicle in for $3,300, which he considered the wholesale price. That a fair retail price of the vehicle at that time was $3,995. He testified that in the automobile business the NADA book is used as a guide to the factory average delivered price and loan value of a vehicle. On cross-examination the witness admitted that Mr. Ryburn bought the automobile back in for the company and he understood it was bought back for $3,300.

Appellant Cleveland Carter testified that the value of the vehicle at the time of the sale was $4,400.

As we understand the record and the appropriate law, appellants, by moving for a directed verdict while reserving their right to submit the issue to a jury in the event the directed verdict should be overruled, did not waive their right to have any disputed questions of fact submitted to the jury. In Pacific Mutual Life Ins. Co. v. Carter, 92 Ark. 378, 123 S. W. 384, 124 S. W. 764 (1909), we held:

“The appellant did not waive the right to have any disputed questions of fact submitted to the jury. The bill of exceptions show that appellant presented other prayers for instructions after its prayer for peremptory verdict. There is no waiver in such cases. See note to Love v. Scatcherd, 77 C. C. A. 1, where numerous authorities are collated.”

In Gee v. Hatley, 114 Ark. 376, 170 S. W. 72 (1914), we held:

“(1) To authorize the court to withdraw from the consideration and determination of the jury the questions of fact involved in the litigation, it is essential that, at the conclusion of all the evidence in the case, the plaintiff and defendant should each request the court to direct a verdict, and this request must not be accompanied by any request for instructions to the jury which would require the jury to determine any controverted question of fact.”

In Gill v. Burks, 207 Ark. 329, 180 S. W. 2d 578 (1944), it was stated:

“It has been repeatedly held that though both parties request peremptory instructions, yet where one requested another instruction submitting the issue to the jury he will not be deemed to have waived his right to have the issue decided by the jury.”

In 55 Am. Jur. Trial § 544 (1945), the same principle is stated:

“It is generally conceded that the rule that a simultaneous motion by both parties for a directed verdict operates as a waiver of submission of any question of fact to the jury does not apply where a contrary intention is manifest, or where the denial of the motion is followed by an immediate request for submission of the facts to the jury....”

Also see Aetna Ins. Co. Inv. v. Warren Adm’x, 231 Ark. 405, 329 S. W. 2d 536 (1959), and the numerous causes cited in 16A Ark. Digest, Trials, Key No. 177.

As we view the evidence neither party was entitled to a directed verdict as a matter of law. The Uniform Commercial Code, Ark. Stat. Ann. § 85-9-504 (Add. 1961), provides:

“(1) A secured party after default may sell, lease or otherwise dispose of any or all of the collateral in its then condition or following any commercially reasonable preparation or processing. Any sale of goods is subject to the Article on Sales (Article 2 [§§ 85-2-101 — 85-2-725]) ....

(3) Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, and except in the case of consumer goods to any other person who has a security interest in the collateral and who has duly filed a financing statement indexed in the name of the debtor in this state or who is known by the secured party to have a security interest in the collateral. The secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations he may buy at private sale.”

Section 85-9-507 of the Uniform Commercial Code provides that if a secured party is not proceeding in accordance with the Article on Secured Transactions in disposing of the property, the debtor has a right to recover from the secured party any loss caused by a failure to comply with the provisions of the Code.

Appellee readily recognizes our opinion in Norton v. National Bank of Commerce, 240 Ark. 143, 398 S. W. 2d 538 (1966), where we held that a used automobile did not come within the term “a type customarily sold on a recognized market” for purposes of holding a sale without notice. However, appellee suggests that the last sentence of § 85-9-504(3) permits the secured party to purchase at a private sale when the collateral is of a type “which is the subject of widely distributed standard price quotations.” Upon this .basis it contends that the NADA book is a widely distributed standard price quotation. With this we do not agree, for the undisputed proof furnished by appellee’s own witnesses is that the book is merely a guide to the price of a vehicle of that year, make and model in an average condition. Consequently we hold that a secured party is not complying with the Commercial Code when he purchases a used automobile at his own private sale.

Since the disposition of the collateral by appellee was not in accordance with the Article on Secured Transactions (Ark. Stat. Ann. §§ 85-9-501 — 85-9-507), the burden of proof was upon appellee as plaintiff to prove the amount of any alleged deficiency owing as a result of the appellants’ breach of the purchase contract, Norton v. National Bank of Commerce, supra. Under that condition appellee is not in a position to argue that the testimony of its general manager, Mr. Ryburn, and its employee, Mr. Bryant, stands uncontradicted as to the amount of the damage.

We held in the Norton case that a secured party’s failure to comply with the provisions of the Uniform Commercial Code with references to disposition of the collateral did not ipso facto relieve the debtor from his obligation for any deficiency. In view of this holding it also follows that appellants were not entitled to a directed verdict as a matter of law.

Reversed and remanded.

Harris, C. J. and Fogleman, J., dissent.

In Shore v. Coats, 29 S. D. 603, 137 N. W. 402 (1912), it was said that the -request must be reasonable and proper.