Christopher v. Sockwell

• Court: Court of Appeals of Tennessee
• Decided: May 22, 1996
• Docket: 01A01-9509-PB-00392
• Status: Published

Opinion

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.

-2- 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

-3- 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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