Trustmark Nat'l Bank v. Barnard
| Docket Number: | 2004-CA-01342-COA | |
| Court of Appeals: |
Opinion Link Opinion Date: 06-06-2006 Opinion Author: GRIFFIS, J. Holding: Reversed, Rendered, & Remanded |
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| Additional Case Information: |
Topic: Contract - Maker of note - Section 75-3-412 - Extent of impairment - Section 75-3-605(e)-(f) - Partial discharge Judge(s) Concurring: LEE AND MYERS, P.JJ., SOUTHWICK, IRVING, CHANDLER, BARNES, ISHEE AND ROBE RTS, JJ. Concurs in Result Only: KING, C.J. Procedural History: Bench Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 06-03-2004 Appealed from: SIMPSON COUNTY CHANCERY COURT Judge: J. Larry Buffington Disposition: FOUND BOTH PARTIES PARTIALLY NEGLIGENT AND OFFSET A PORTION OF APPELLEE’S OBLIGATION TO APPELLANT. Case Number: 2002-085 |
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| Party Name: | Attorney Name: | |||
| Appellant: | TRUSTMARK NATIONAL BANK |
J. MARK FRANKLIN, III, R. KEITH FOREMAN, LARA E. GILL |
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| Appellee: | LOYD DEAN BARNARD | GRADY L. “MAC” MCCOOL, III, C. VICTOR WELSH, III |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Maker of note - Section 75-3-412 - Extent of impairment - Section 75-3-605(e)-(f) - Partial discharge |
| Summary of the Facts: | Loyd Barnard brought a declaratory judgment action against Trustmark National Bank, alleging that he was damaged as a result of Trustmark’s negligence in the administration of two loans. Trustmark filed a counterclaim for payment on the loans and attorney’s fees. The chancellor found both parties negligent. The chancellor ordered Barnard to pay $4,500 on the May note and to pay the full principal amount on the September note, plus statutory interest. The chancellor ordered Trustmark to clear the notes off Barnard’s credit report, within ninety days of his satisfaction of the judgment. The chancellor ordered both parties to be responsible for their own attorney fees and court costs. Trustmark appeals. |
| Summary of Opinion Analysis: | Trustmark argues that the Uniform Commercial Code dictates that a maker cannot be discharged from a note. Trustmark argues that the chancellor erred in finding that “because of the failure of Trustmark to secure titles on the vehicles that were part of the May 2000 note . . . any damages that occurred, occurred due to [Trustmark’s] negligence.” Trustmark also argues that the chancellor found Barnard responsible for his loss under the September note but discharged him of his obligation to pay interest and attorney’s fees. Barnard’s liability on the Trustmark note was that of a maker. Pursuant to section 75-3-412, the maker has primary liability, and the obligation to pay is unconditional. Barnard argues that the Motor Vehicle Title Law, not the Uniform Commercial Code, is the exclusive means for protecting security interests in automobiles. Because this is an action on the note, the Uniform Commercial Code controls. If this were an action to determine who had priority as to the collateral, Barnard’s argument may have merit. The security agreement required Barnard to use reasonable care to protect and preserve the collateral in his possession. Through his agents, Barnard sold the trucks without remitting the proceeds to Trustmark as required. Barnard was an active participant in the impairment of the collateral. Barnard’s participation bars any equitable relief, and Barnard remains primarily liable for payment on the note. The case is remanded for the chancellor to calculate the proper amount owed and enter a judgment for interest and attorney’s fees due under the notes. Trustmark also argues that there was no evidence that it was negligent, and there was no proof of impaired value. No evidence was presented as to the fair market values of the trucks, when they were respectively sold without Trustmark having perfected its liens or secured the titles. Under section 75-3-605(e)-(f), the party seeking discharge of the obligation has the burden of proving the extent of impairment. Therefore, there was no substantial credible evidence to support the chancellor’s award of partial discharge. The partial discharge granted to Barnard is reversed and rendered. |
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