Christopher v. Sockwell

WAYNE WRAY, )
)
Plaintiff/Appellant, )
) Appeal No.
) 01-A-01-9509-PB-00392
VS. )
) Lawrence Probate
) No. 9820
ESTATE OF JAMES FRANKLIN )
WRAY, LEIGH ANN WRAY,
ADMINISTRATRIX,
)
) FILED
)
Defendant/Appellee. ) May 22, 1996
Cecil W. Crowson
Appellate Court Clerk
COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
APPEALED FROM THE PROBATE COURT OF LAWRENCE COUNTY
AT LAWRENCEBURG, TENNESSEE
THE HONORABLE LEE A. ENGLAND, JUDGE
RANDY HILLHOUSE
FREEMON AND HILLHOUSE
327 W. Gaines Street
P. O. Box 787
Lawrenceburg, Tennessee 38464
Attorney for Plaintiff/Appellant
BEN BOSTON
CHRISTOPHER V. SOCKWELL
BOSTON, BATES & HOLT
235 Waterloo Street
P. O. Box 357
Lawrenceburg, Tennessee 38464
Attorneys for Defendant/Appellee
REVERSED AND REMANDED
BEN H. CANTRELL, JUDGE
CONCUR:
LEWIS, J.
KOCH, J.
OPINION
The issue in this case is whether the documents signed when the
appellant loaned his son the money to buy an automobile gave the appellant an
enforceable security interest in the car. The trial judge held that the appellant did not
have a security interest. We reverse.
I.
In January of 1992 the appellant, Wayne Wray, attended an automobile
auction with his son, James Franklin Wray. Wayne Wray furnished the money, and
his son bought a 1986 Chevrolet Camaro. The bill of sale, on a printed form and
signed by James Wray, included a handwritten note as follows: (Wayne Wray first
lienholder $4500 payable on demand)(no interest).” The application for a certificate
of title, also signed by James Wray, indicated that Wayne Wray was the first
lienholder. The certificate of title issued by the state of Alabama designated Wayne
Wray as the holder of a first lien. All three documents included a description of the
car.
James Wray died intestate in 1993. Wayne Wray filed a claim against
his son’s estate and sought to repossess the car, claiming a perfected security interest
in it. The probate judge allowed a $4500 claim but denied possession to Mr. Wray.
The court’s final judgment contains a conclusion that the documents signed by the
deceased do not give Mr. Wray a security interest in the Camaro.
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II.
A security interest is defined in Tenn. Code Ann. § 47-1-201(37) as “an
interest in personal property or fixtures which secures payment or performance of an
obligation.” In order to create a security interest in property that is not in the
possession of the secured party, Tenn. Code Ann. § 47-9-203(1)(a) requires that the
debtor sign a “security agreement” containing a description of the collateral. A
“security agreement” is defined in Tenn. Code Ann. § 47-9-105(1)(l) as “an agreement
which creates or provides for a security interest.”
None of the documents signed by James Wray is a formal security
agreement. But the Code does not require such formality. Other less formal
documents, standing alone or in various combinations, have been held to satisfy the
requirements of § 47-9-203. See James J. White and Robert S. Summers Uniform
Commercial Code § 23-3. A note together with a financing statement successfully
created a security interest in growing crops. Evans v. Everett, 279 N.C. 352, 183
S.E.2d 109 (1971). A financing statement alone may suffice if it contains a description
of the collateral and is signed by the debtor. Cookeville Production Credit Association
v. Frazier, 16 Bankr. 674 (M.D. Tenn. 1981). And, in a case similar to this one, the
Illinois Court of Appeals held that an application for a certificate of title, signed by the
debtor and containing a description of the collateral, created a security interest in the
house trailer described in the application. Peterson v. Ziegler, 350 N.E.2d 356, 39 Ill.
App. 3d 379 (1976).
In this case James Wray signed the application for the certificate of title
and the bill of sale, each containing a description of the car. Either document
standing alone might suffice to create a security interest, but we think that together
they show an unequivocal intent to give Wayne Wray a security interest in the 1986
Camaro. The security interest was duly perfected by noting it on the title. See
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Associates Capital Corp. V. Cookeville P.C.A., 569 S.W.2d 474 (Tenn. App. 1978);
Tenn. Code Ann. § 55-3-137.
The judgment of the court below is reversed and the cause is remanded
to the Probate Court of Lawrence County for further proceedings in accordance with
this opinion. Tax the costs on appeal to the appellee.
_______________________________
BEN H. CANTRELL, JUDGE
CONCUR:
______________________________
SAMUEL L. LEWIS, JUDGE
______________________________
WILLIAM C. KOCH, JR., JUDGE
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