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Brandon v. General Motors Acceptance Corp.
Citations: 223 Ark. 850; 268 S.W.2d 898; 1954 Ark. LEXIS 763Docket: 5-441
Court: Supreme Court of Arkansas; June 14, 1954; Arkansas; State Supreme Court
The key issue in the appeal is determining the conditions under which the holder of a Conditional Sales Contract can repossess merchandise, thereby barring the pursuit of an action for the unpaid balance. Emerald Brandon purchased a car from Griffith Motor Company, financing it through a Conditional Sales Contract assigned to General Motors Acceptance Corporation (GMAC). Brandon was to pay a total of $835.38 in 18 installments, beginning June 1, 1952. He also insured the vehicle against fire with Motors Insurance Corporation, which included a clause protecting GMAC's interest. The car was destroyed by fire on February 27, 1953, after Brandon had made all payments due as of March 1, 1953. Motors Insurance refused to pay Brandon, citing an investigation into the cause of the fire. Following the incident, Brandon sued the insurance company and secured a judgment of $575. Meanwhile, GMAC demanded that Brandon continue his payments, which he refused. In April 1953, a GMAC representative saw the burned car and had it moved to storage. On July 27, 1953, GMAC sued Brandon for the unpaid balance of $417.69 and included the clerk of the Benton Circuit Court as a garnishee, claiming he held funds from Brandon's insurance judgment. Brandon contended that GMAC's claim was null due to their repossession of the vehicle. The trial court ruled in favor of GMAC, awarding them $342.69 after deducting $75 for the salvage value of the wrecked car. The court affirmed the judgment, reiterating that under Arkansas law, a holder of a Conditional Sales Contract may either treat a breach as a cancellation and repossess the property or pursue the unpaid balance. This legal principle is also applicable in Missouri. In Keystone Press v. Bovard, 236 Mo. App. 156, 153 S.W. 2d 130, the Supreme Court of Missouri clarified the options available to a vendor under a conditional sales contract upon the buyer's default: (1) retake the property, (2) sue for the purchase price, or (3) foreclose on an equitable lien. The election of one remedy excludes the others. The appellant argued that General Motors Acceptance Corporation (GMAC) opted to repossess a burned automobile when it was moved to Anderson, Missouri, thus forfeiting the right to sue for the outstanding balance. However, the court found that this movement did not constitute repossession as defined by legal precedent. The trial court determined that the relocation was intended to preserve the salvage value of the vehicle, which was deemed abandoned by the appellant, who had made no efforts to reclaim it after the fire. The appellant's lack of action and his departure to Kansas further supported the finding of abandonment. The court also noted that GMAC's request for permission to sell the salvaged vehicle did not indicate repossession but rather an attempt to mitigate the appellant's liability. Ultimately, the trial court's ruling that the appellant abandoned the vehicle and that GMAC's actions were justified was upheld, affirming the judgment.