Ford Motor Credit Co. v. Herring

589 S.W.2d 584, 267 Ark. 201, 27 U.C.C. Rep. Serv. (West) 1448, 1979 Ark. LEXIS 1611
CourtSupreme Court of Arkansas
DecidedNovember 26, 1979
Docket79-251
StatusPublished
Cited by54 cases

This text of 589 S.W.2d 584 (Ford Motor Credit Co. v. Herring) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ford Motor Credit Co. v. Herring, 589 S.W.2d 584, 267 Ark. 201, 27 U.C.C. Rep. Serv. (West) 1448, 1979 Ark. LEXIS 1611 (Ark. 1979).

Opinion

Frank Holt, Justice.

The appellees were purchasers of two pickup trucks which were financed under retail installment contracts with the appellant. The contracts authorized repossession of the vehicles upon the buyer’s default. When each appellee became delinquent on his monthly payments, appellant repossessed the trucks in which various items of personal property were stored. Appellant brings this appeal from a judgment awarding appellees $2,000 in actual damages and $17,000 in punitive damages.

Appellant first contends that the trial court erred in submitting the issue of conversion to the jury since no element of force, threats of force, or breach of the peace accompanied repossession. In pre-code cases, we have sustained a finding of conversion only where force, or threats of force, or risk of invoking violence, accompanied the repossession. Manhattan Credit Co., Inc. v. Brewer, 232 Ark. 976, 341 S.W. 2d 765 (1961); Kensinger Acceptance Corp. v. Davis, 223 Ark. 942, 269 S.W. 2d 792 (1954).

Ark. Stat. Ann. § 85-9-503 (Supp. 1977) provides in pertinent part of the code:

Unless otherwise agreed, a secured party has on default the right to take possession of the collateral. In taking possession, a secured party may proceed without judicial process if this can be done without breach of the peace or may proceed by action.

Here the contract recited that upon default by the appellee debtors, appellant creditor could invoke the remedies of the U.C.C. “including the right to repossess the property wherever the same may be found with free right of entry.” Clearly the appellant had the contractual and statutory authority to repossess the vehicles. Teeter Motor Co., Inc. v. First National Bank of Hot Springs, 260 Ark. 764, 543 S.W. 2d 938 (1976). In the case at bar there was no personal confrontation or contract between the repossession contractor and either of the appellees when the vehicles were repossessed. There was open access to the vehicles parked in a private driveway or adjacent to the houses. Both were removed during the evening hours without entry into, or damages to, any structure. Within a few minutes following repossession of Herring’s truck, he, in a telephone conversation with the repossessor, admittedly demanded only the right to retrieve his personal items, stating ‘ ‘they [Ford] can have the truck.” The next day he telephoned appellant Ford asking permission to “pick up” his payments which was refused. Appellee Geisler’s only contact with the appellant was in this same telephone conversation the next day following the repossession. In Teeter, supra, we upheld the right of the seller to repossess the vehicle upon default if it could be done without a breach of the peace as provided in § 85-9-503. Here the evidence is clearly insufficient to establish a fact question that the repossession of the trucks constituted a conversion.

Even though the repossession of the vehicles was proper, the question of whether appellant’s subsequent retention of certain personal property stored in the trucks constituted conversion was properly submitted to the jury. Conversion is the “exercise of dominion over the property in violation of the rights of the owner or person entitled to possession.” Thomas v. Westbrook, 206 Ark. 841, 177 S.W. 2d 931 (1944). We have also defined conversion as the wrongful taking or dominion over one’s property in subversion and denial of his rights irrespective of whether there was a demand and refusal for its return. Barnett Bros. Merc. Co. v. Jarrett, 133 Ark. 173, 202 S.W. 474 (1918); Plunkett-Jarrell Grocery Co., et al v. Terry, 222 Ark. 784, 263 S.W. 2d 229 (1953); Meyers v. Meyers, 214 Ark. 273, 216 S.W. 2d 54 (1948); and Westark Production Credit Association v. Shouse, 227 Ark. 1141, 305 S.W. 2d 127 (1957). Here, however, the contract specifically provided that “any personalty in or attached to the property when repossessed may be held by the seller without liability . . .” The property consisted mostly of various pieces of concrete equipment and tools jointly owned and stored in the trucks at the time of the repossession. The appellees were partners in the concrete business. The trucks and equipment were used in their means of livelihood. Although the appellant was authorized under the contract to hold the personal property, it could do so only as long as it was necessary to secure possession of the trucks. Jones v. General Motors Acceptance Corp. 565 P. 2d 9 (Okla. 1977); General Motors Acceptance Corp. v. Vincent, 183 Okla. 547, 83 P. 2d 539 (1938); and Ford Motor Credit Co. v. Waters, 273 So. 2d 96 (Fla. App. 1973).

As previously indicated, appellee Herring telephoned the repossession contractor shortly following the repossession and advised him that he “needed my [his] personal effects and tools out of my [his] trucks.” Herring requested that the contractor remain a few minutes at the local restaurant where the truck was parked until he, Herring, could arrive to discuss the return of the tools and equipment to him. Herring arrived approximately a minute later, and the truck and tools were gone. The morning after the repossession appellant’s employee, in a telephone conversation, denied any knowledge of the tools. A written report by the repossession contractor, dated two days after the repossession, advised appellant about the existence of the personalty in the repossessed trucks. Appellees filed a lawsuit four days after repossession. Appellant released possession of the property to appellees about two months later through arrangements by their attorney. Appellee Herring testified that he and Geisler had to abandon a project due to appellant’s retention of their jointly owned concrete equipment and tools. There is no evidence that the retention of the personal property, following a demand for its return, was necessary to the repossession of the trucks. In viewing the evidence most favorable to the appellees, as we must do on appeal, we hold that appellant is not absolutely shielded from liability by the contract terms when it can reasonably be inferred, as here, that it intentionally withheld the property after a demand had been made for it.

Appellant next asserts that there was insufficient evidence to support the jury’s award of $2,000 actual damages for the conversion of the trucks and personal property. We agree. As previously indicated, there was a submissible issue only as to conversion of the personalty. Appellant correctly states that the proper measure of damages for the conversion of the personal items was their market value at the time and place of the conversion. U.S. v. Bartholomew, 137 F. Supp. 700(D.C. Ark. 1956); Hardin v. Marshall, 176 Ark. 977, 5 S.W. 2d 325 (1928); American Soda Fountain Co. v. Futrall, 73 Ark. 464, 84 S.W. 505 (1905); and Parks v. Thomas, 138 Ark. 70, 210 S.W. 141 (1919). The fact that the majority of the items were eventually returned to the appellees does not bar recovery of damages for their conversion but may mitigate the damages. Norman v. Roberts, 29 Ark. 365 (1874); and Plummer v. Reeves, 83 Ark. 10, 102 S.W. 376 (1907). Here there was no evidence as to the value of various missing items. As to the items retrieved by appellees, the evidence, as to most items, was primarily based upon the purchase, replacement and rental price. Obviously, the evidence was deficient and did not comport with the recited standard.

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Bluebook (online)
589 S.W.2d 584, 267 Ark. 201, 27 U.C.C. Rep. Serv. (West) 1448, 1979 Ark. LEXIS 1611, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ford-motor-credit-co-v-herring-ark-1979.