Opinion
47121.
ARGUED APRIL 6, 1972.
DECIDED MAY 25, 1972. REHEARING DENIED JUNE 14, 1972.
Action for damages. Fulton Civil Court. Before Judge Bradford.
Levine, D'Alessio Cohn, Morton P. Levine, Smith, Cohen, Ringel, Kohler, Martin Lowe, Sam F. Lowe, Jr., for appellants.
Scheer Elsner, Robert A. Elsner, Gary I. Wittick, for appellee.
1. The trial court did not err in denying defendants' motions for summary judgment as to Counts 1 through 3 of the complaint.
2. The trial court erred in denying defendants' motions for summary judgment as to Count 4 of the complaint.
3. In view of the changed posture of the case as a result of this appeal, the order of the trial court denying a motion for separate trial is not ruled upon but is remanded for further consideration.
ARGUED APRIL 6, 1972 — DECIDED MAY 25, 1972 — REHEARING DENIED JUNE 14, 1972 — CERT. APPLIED FOR.
Betty J. Barnes filed her complaint in four counts against Chrysler Credit Corporation, H. L. Speeks, Ronnie Armento, Wagstaff Motor Company, Inc., and Dave Morres. Common to the first three counts, with some embellishment and additions in Counts 2 and 3, is the allegation of a wrongful and illegal repossession of a Dodge automobile which was purchased by plaintiff from Wagstaff and financed by Chrysler by way of assignment of the "Retail Instalment Contract" from Wagstaff to Chrysler. Count 4 alleges a failure to comply with the Consumer Credit Protection Act. From the denial of their motions for summary judgment, Chrysler, Speeks, and Armento appeal with certificates of review.
It appears from the record that plaintiff entered into the "Retail Instalment Contract" for the purchase of the automobile from Wagstaff, agreeing to pay to Wagstaff or its assignee 36 equal monthly instalments of $129.99 commencing November 9, 1969. The contract, which is on Chrysler's standard pre-printed form and was assigned to it, provides in paragraph 2: "If buyer defaults in any payment, or fails to comply with any of the terms or conditions of this contract, or fails to procure or maintain the vehicle insurance required hereunder, or a proceeding in bankruptcy, receivership or insolvency shall be instituted by or against buyer or his property, or if seller deems the property in danger of misuse or confiscation, or seller otherwise reasonably deems the indebtedness or the property insecure, seller shall have the right, at its election, to declare the unpaid portion of the total of payments under this contract to be immediately due and payable, together with any other amount for which buyer shall have become obligated hereunder. In any such event, seller, its agents or representatives, may enter the premises where the property may be and take immediate possession of the property including any equipment or accessories, and seller may take possession of any other items in the property at the time of repossession, and hold them without liability until demanded by buyer. Waiver by seller of any default shall not be deemed a waiver of any other default." It is further provided that time is of the essence of the contract.
In the wake of Sniadach v. Family Finance Corp., 395 U.S. 337 ( 89 SC 1820, 23 L.Ed.2d 349), and under UCC § 2-302 ( Code Ann. § 109A-2-302), granting courts authority to pass directly on the unconscionability of contract clauses, UCC §§ 9-503 and 9-504 ( Code Ann. §§ 109A-9-503, 109A-9-504), provisions for repossession without notice or hearing, and self-executing acceleration clauses may be headed for serious difficulty. Adams v. Egley (D.C. Calif.) and Hosches v. Nichols, both reported in 10 UCC Reporting Service (2 star looseleaf volume (Cases, commentary, finding aids)), the former at p. 1 and the latter at p. 147. See also Blocker v. Blackburn, 228 Ga. 285 ( 185 S.E.2d 56) and Hall v. Stone, 229 Ga. 96. However, these points are not raised or argued in this appeal, and see the dissents to White v. Turbidy, 227 Ga. 825, 828 ( 183 S.E.2d 363).
November 9, the due date of the first instalment payment, fell on a Sunday, and defendants acknowledge in their brief that the payment was not due until Monday, November 10. On Wednesday, November 12, at approximately 7:30 or 8:00 in the evening, defendant Armento, Chrysler's collection agent, arrived at plaintiff's home with instructions to collect the first payment of $129.99 in cash. As to this event, plaintiff testified in her deposition that on November 10 she had mailed a check for the payment, together with the coupon from the coupon book supplied to her by Chrysler through the mail, to Chrysler at the address listed on the coupon book; that she explained to Armento she had mailed the check, and he replied they had not received it; that Armento telephoned his supervisor, Speeks, who then talked with plaintiff. She further testified: "Q. What did you [plaintiff] tell Mr. Speeks? A. I told him I had mailed it in. He told me he wanted the cash money or the car. Q. When you explained to Mr. Speeks you had mailed the money in did you tell him the day you mailed it in? A. Yes. Q. Namely Monday? A. Yes. Q. When you talked to Mr. Speeks did he tell you he would try to locate the payment? A. No, he did not. He told me right then and there he wanted me to give Armento the car or the money. So then I asked Armento if I could give him a check, and he said, no — and stop payment on the check that I had already mailed — and he said, no. Q. You asked Mr. Armento if you could give him another check and stop payment on the check? A. The original check I had mailed at first. Q. He said, no, you could not do that? A. Yes. He asked me, then, after I kept on trying to talk to him, I was getting nervouser and nervouser, and my husband [confined to a wheelchair with multiple sclerosis] was getting nervous, and he said, go out to some grocery store and give him the money, and I told him I didn't know any grocery store that would cash a personal check for $129.99, and the particular stores I did business with, they were closed. It was after 8 o'clock. I think the A-Mart was the only thing open, and [to them] you could only write a personal check for the price the groceries came to. I just didn't know any place that would cash personal checks for $129.99. I told him I had sent him the check, and wouldn't he take the check, and he started talking loud, and he told me he wanted the keys to that Dodge or the money... Q. He [Speeks] said what, now? A. He told me he would have to have the money or the car, and I told him I had mailed it in, and he said the only thing I would have to give Mr. Armento the car or the money, and I asked him if I could give him a check, and he said, no. Q. Did Mr. Armento ask to see your coupon book? A. No. Q. Did you show it to him? A. No, I was so upset, demanding the keys or the money, and I was so upset him asking me to go to a grocery store, and asking me to cash a personal check for $129.99, I didn't think of the coupon book... Q. Did you object to [Armento's] taking the keys? A. Yes, I did; I most certainly did. Q. What statement did you make to him about that? A. I kept telling him I would bring him the cash money the first thing in the morning, as soon as the bank opened up. But he still proceeded to take the car keys."
As soon as the banks opened the following morning, plaintiff obtained the cash for the payment and took it to the offices of the Legal Aid Society. Mr. Brent, a Legal Aid lawyer, tendered the payment on November 13 to Chrysler by telephone and by letter, and both were refused. As to these events, Speeks testified: "Q. How many times did you talk to Mrs. Barnes on the night of November 12, 1969? A. I talked to her briefly when Ronnie Armento called me from her house, and she said she had mailed a payment. I talked to her to find out exactly when she mailed it, and where she mailed it, and then I took time, while she stayed on the phone, to go check, double check to make sure that we did not receive the payment. I checked all the records for the 10th, 11th and 12th, the bank deposit. We keep tapes on all the deposits, the exact amount of money. I did not find this amount payment... Q. She told you on the phone that night she mailed a payment? A. Yes; she made the statement she had mailed the payment. Q. I assume you sent Mr. Armento out, did you not? That was your responsibility to sent him out? A. Yes. Q. Did you tell him if he got the money that night, $129.99 in cash that she could keep the car? A. Yes, most definitely. Q. Did you tell him if she wanted to bring it in in the morning, assuming she could not get the $129.99 in cash right then, that she could keep the car? A. No, I didn't make any promise. Q. Did you tell Armento she could do that when you sent him out, or over the phone? A. No. Q. Did you tell Mrs. Barnes she could do that? A. No; I told her we would take her any place she wanted to go to get the money, but we could not wait until the next day. I told her if she could not possibly get the money that we would have to store the automobile, but I made no promise about the following day. Q. So it is your testimony that on behalf of the Chrysler Credit Corporation, if Mrs. Barnes could have gotten up $129.99 in cash after 8 p. m. on the evening of November 12, 1969, she could have kept her car? A. Yes, sir. Q. But if she got it up the next morning she could not? Is that correct? A. I didn't make any commitment as to the following day. Q. Didn't you receive a call the following day from Mr. Brent? A. Right. Q. Didn't he tell you that he had the money there; that she had the money? A. Yes. Q. And that he could send it to you himself? A. Right. Q. And didn't you refuse it? A. Yes."
Thereafter, on November 14, Speeks, on behalf of Chrysler, sent to plaintiff a notice of default, repossession and sale, giving her ten days to pay the balance in full. On November 17 Chrysler's lawyer wrote Mr. Brent returning the check for $129.99 tendered by him by mail on the 13th, stating that Chrysler had declared the full balance due and payable. Wagstaff paid off the contract to Chrysler under the terms of the assignment and apparently disposed of the automobile.
1. Defendants contend that they were entitled to summary judgment as to Counts 1, 2 and 3 of the complaint, all of which allege a wrongful and illegal repossession, for the reason that plaintiff was in default because of her failure to make the first payment of $129.99 on November 10, and that under paragraph 2 of the contract defendant had the right to declare the unpaid balance immediately due and payable and to take immediate possession of the automobile. Plaintiff contends, inter alia, that because of defendants' failure on November 12 to grant any extension of time reasonably necessary to procure payment in legal tender, her tender by check on that date was sufficient because made by means current in the ordinary course of business. UCC § 2-511 (2) ( Code Ann. § 109A-2-511 (2)). In response defendant contends that "The essence of the principle involved in subsection (2) is avoidance of commercial surprise at the time of performance" (UCC § 2-511, Comment 3, 1962 Official Text); that the time for performance with regard to the payment had passed on November 12; and that Chrysler had a perfected right to refuse tender except on its own terms and to repossess the automobile on the evening of November 12. In summary it is defendants' position that "Code § 109A-2-511 (2) was drawn to apply only to a situation where a debtor, not previously in default, seeks timely to make a payment by check or other commonly recognized means. Said Code section means that had Mrs. Barnes, by mail or in person, presented a check to Chrysler at a time when she was not in default, Chrysler, before demanding cash, would have had to give her a reasonable time to obtain the cash."
Pretermitting questions relating to plaintiff's position that she mailed a check for the payment on November 10, and Chrysler's position that it did not receive it (see Sullivan Enterprises v. Stockton, 118 Ga. App. 542 ( 164 S.E.2d 336), Watkins Products, Inc. v. England, 123 Ga. App. 179 (1) ( 180 S.E.2d 265)), and further pretermitting the effect of tender on the 13th before written notice of the acceleration of the debt (cf. Lee v. O'Quinn, 184 Ga. 44, and White v. Turbidy, 227 Ga. 825, both infra), the issue with respect to the applicability of UCC § 2-511 (2) to the events of November 12 thus boils down to whether plaintiff had a right to tender the payment on that evening. If so, UCC § 2-511 (2) ( Code Ann. § 109A-2-511 (2)), which provides that "Tender of payment is sufficient when made by any means or in any manner current in the ordinary course of business unless the seller demands payment in legal tender and gives any extension of time reasonably necessary to procure it," is applicable and prevents summary judgment being granted as to the first three counts of the petition.
The Uniform Commercial Code provides, by Code Ann. § 109A-1-208, that "A term providing that one party or his successor in interest may accelerate payment or performance or require collateral or additional collateral 'at will' or 'when he deems himself insecure' or in words of similar import shall be construed to mean that he shall have power to do so only if he in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against whom the power has been exercised."
Whether this statutory provision affords to the holder of a security instrument on personalty a different right in the acceleration of the debt than is afforded under general law to the holder of a security instrument on realty has not confronted this court or the Supreme Court, nor do we deem it necessary to decide that issue in this summary judgment proceeding. We do hold, however, that, as the Supreme Court held in Lee v. O'Quinn, 184 Ga. 44, 45 ( 190 S.E. 564), that the entire indebtedness does not become due ipso facto upon a default in the making of an instalment payment on the due date thereof under the language of this instrument, and "The creditor can not in his own mind effectively exercise the option to declare the whole principal due; he must communicate his decision to the debtor, or manifest it by some outward affirmative act sufficient to constitute notice of his election, such as service of notice of attorney's fees [cit.], the filing of suit for the entire debt [cit.], written notice of his exercise of the option [cit.], or by advertisement under the power of sale, to collect the entire principal [cit.]." This case was followed in White v. Turbidy, 227 Ga. 825, supra, another realty transaction.
Whether by other language the acceleration clause can be made to be self-executing upon such a default we do not decide, but compare White v. Turbidy, 227 Ga. 825, supra.
In the instant case the affidavit of J. V. Morris, Chrysler's regional manager, states that "on November 12, 1969, the defendant, Chrysler Credit Corporation, declared plaintiff's contract in default and demanded the entire balance due, all as provided for in the said contract..." However, if Chrysler declared the contract in default and demanded the entire balance due on November 12 it appears that it did so "in its own mind" without communicating this to plaintiff. It was not until November 14 that Chrysler sent a letter to plaintiff to this effect. On the evening of November 12, Chrysler was demanding the instalment payment of $129.99 — not the entire balance — and, under the authority of Lee v. O'Quinn and White v. Turbidy, supra, plaintiff had a right to tender the payment due. Since she had this right, she could tender payment "by any means or in any manner current in the ordinary course of business unless the seller [or person in the position of a seller (UCC § 2-707; Code Ann. § 109A-2-707)] demands payment in legal tender and gives any extension of time reasonably necessary to procure it." UCC § 2-511 (2) ( Code Ann. § 109A-2-511 (2)). If the evidence does not demand a finding that plaintiff was not given an extension of time reasonably necessary to procure the demanded cash and that her tender by check was a tender in a manner current in the ordinary course of business, factual issues are presented as to these and other matters so that in either event summary judgment was properly denied as to Counts 1 through 3 of the petition.
2. Count 4 of the complaint alleges that Morres, Wagstaff's salesman who handled the sale of the automobile to plaintiff, was acting as agent for both Wagstaff and Chrysler, and that defendants failed to comply with Chapter 2 of Title I (Truth in Lending Act) of the Consumer Credit Protection Act (82 Stat. 146; 15 USCA § 1601 et seq.) in that plaintiff was not given full disclosure of the finance charges and was not given a duplicate of the Retail Instalment Contract. Section 131 of Chapter 2 (82 Stat. 146, 157; 15 USCA § 1641) provides: "Except as provided in section 125 (c) and except in the case of actions brought under section 130 (d) [not applicable here], in any action or proceeding by or against any subsequent assignee of the original creditor without knowledge to the contrary by the assignee when he acquires the obligation, written acknowledgment of receipt by a person to whom a statement is required to be given pursuant to this title shall be conclusive proof of the delivery thereof and, unless the violation is apparent on the face of the statement, of compliance with this chapter."
Plaintiff admits signing the "Retail Instalment Contract," and directly above her signature the following appears: "Buyer acknowledges receipt of a completely filled-in copy of this contract." We are pointed to no violation apparent on the face of the contract, and the evidence is clear that Chrysler had no knowledge of the claimed nondelivery or other noncompliance.
However, plaintiff seeks to escape the application of § 131 by contending that there was an agency relationship between Wagstaff and Chrysler at the time the contract was executed by Wagstaff and plaintiff, so that Chrysler could be considered the original creditor. The affidavits filed by defendants here specifically deny an agency relationship and, on motion for summary judgment, "The bare assertion or denial of the existence of an agency relationship is a statement of fact when made by one of the purported parties to the relationship." Salters v. Pugmire Lincoln-Mercury, Inc., 124 Ga. App. 414 ( 184 S.E.2d 56).
Aside from defendants' affidavits negativing an agency relationship, the only other evidence bearing upon this question is that the contract forms were provided by Chrysler to be filled out by the various dealers at the time of sale; that Wagstaff was an independent dealer and financed some sales through Chrysler and some through others; that Chrysler does not accept the assignment unless the contract is properly filled out and there has been an approval by Chrysler of the buyer's credit; that Chrysler and Wagstaff had a general agreement as to financing of automobiles; and that the automobile was returned to Wagstaff under a "full repurchase" clause of the assignment.
Under general agency principles, we hold the evidence is insufficient to meet defendants' affidavits and create a triable issue of fact as to an agency relationship between Wagstaff and Chrysler at the time of the sale and the execution of the contract, and it was error to deny these defendants' motions for summary judgment as to Count 4 of the complaint. Ennis v. Atlas Finance Co., 120 Ga. App. 849, 851 ( 172 S.E.2d 482); Salters v. Pugmire Lincoln-Mercury, Inc., 124 Ga. App. 414, supra; Crutcher v. Crawford Land Co., 220 Ga. 298 ( 138 S.E.2d 580). Cf. Burkhalter v. Ford Motor Co., 29 Ga. App. 592 ( 116 S.E. 333); Hill v. Whitmer Co., 43 Ga. App. 367 ( 158 S.E. 625); Studebaker Corp. v. Nail, 82 Ga. App. 779 ( 62 S.E.2d 198).
3. Defendants also complain of the trial court's denial of their motion for separate trial. The general rule is that under CPA § 42 (b) ( Code Ann. § 81A-142 (b)) the matter rests within the broad discretion of the trial court which will not be interfered with unless it appears to have been abused. See, e.g., Southern Concrete Co. v. Carter Constr. Co., 121 Ga. App. 573 (3) ( 174 S.E.2d 447); 5 Moore's Federal Practice, p. 42-24, § 42.03 (2d Ed., 1971). The order complained of was entered in conjunction with the denial of defendants' motions for summary judgment, and it appears clear that the trial court felt there was a question of fact as to an agency relationship between Wagstaff and Chrysler, which we do not find, and that there was some nexus between the claims asserted against defendants here and those asserted against Wagstaff and Morres. In view of the ruling made in Division 2, we think the proper disposition is to remand the question to the trial court for further consideration in light of the changed posture of the case.
Judgments affirmed in part; reversed in part. Deen and Clark, JJ., concur.