Imperial Thrift & Loan v. Ferguson

[867]

THE COURT.

The plaintiff sought to recover the balance due, under a conditional sale contract for the purchase of an automobile, after it had been repossessed and sold following the purchaser’s default. Recovery was denied the plaintiff on the theory that credit for the time price differential should be allowed. We are reversing the judgment because we have reached the conclusion that this theory was unsound.

These facts were found by the trial court: On January 17, 1956, defendants purchased a car from Worthington Motors and executed a conditional sale contract therefor, in which the total cash price of the car was set forth as $2,466.85. After defendants made a down payment which covered part of the purchase price and paid license fees and the first year’s insurance premium, there remained an unpaid cash balance on the car of $2,168. To this was added a time price differential of $671.80. It was agreed that the resulting balance of $2,839.80 should be discharged in 30 monthly installments of $94.66 each, the first to be paid a month and three days after the execution of the contract. The contract provided that upon default of the purchaser, the seller might repossess the automobile, sell it, and hold the purchaser liable for any deficiency, with interest at the rate of 8 per cent per annum. The contract further provided that the purchaser would be liable for costs and attorney’s fees incurred by the seller in enforcing any rights under the contract.

Immediately upon its execution, the contract was assigned by Worthington Motors to the plaintiff. The defendants made six monthly payments to the plaintiff before defaulting on August 20, 1956. A month later, no further payments having been made, the plaintiff repossessed the car and sold it for a net price of $1,681. After crediting the defendants’ account with $31.38, on cancellation of insurance on the car, a balance of $559.46 remained unpaid under the terms of the conditional sales contract.

This action was commenced to recover the unpaid balance, together with interest, attorney fees and costs. The judgment that the plaintiff take nothing is explained by these conclusions of law, appearing as paragraph 5 of the findings of fact: ‘‘ That the defendants discharged their obligation under said contract before the final maturity thereof and are entitled to a refund credit against the time price differential charges found in said contract, which credit is found to be $559.46.”