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BENEFICIAL CONSUMER DISCOUNT CO. v. JULIA SAVOY (03/09/81)

submitted: March 9, 1981.

BENEFICIAL CONSUMER DISCOUNT CO.
v.
JULIA SAVOY, APPELLANT



No. 2012 Philadelphia, 1980, Appeal from the Order of the Court of Common Pleas, Civil Division, of Delaware County, No. 75-11599.

COUNSEL

Michael Donahue, Darby, for appellant.

Alan B. Liss, Philadelphia, for appellee.

Hester, DiSalle and Montgomery, JJ.

Author: Montgomery

[ 291 Pa. Super. Page 651]

The instant appeal is from the award of a deficiency judgment to Beneficial Consumer Discount Company, following the repossession and resale of Appellant's 1964 Cadillac in which Beneficial held a security interest.

Beneficial loaned Appellant Julia Savoy the sum of $4,752.00 to be repaid in monthly installments. To secure repayment, Beneficial retained a security interest in the 1964 Cadillac. Savoy defaulted on the loan. Beneficial then repossessed the Cadillac. Beneficial sent Savoy two notices by registered mail, which stated the reason for repossession, the time limit for redemption, the balance due on the loan, and the time and place of the proposed resale. The return receipts were signed by an adult living at Savoy's residence over fifteen (15) days before the scheduled resale. The Cadillac was sold at a private sale for $250.00. Beneficial credited the sales price, less expenses, to Savoy's account, then brought this action to recover the deficiency.

At trial, the lower court found that Beneficial's notice to Savoy did comply with the notice provisions of 13 Pa.C.S.A. § 9504(c). The trial judge also determined, however, that the resale of the car for the price of $250.00 was commercially unreasonable and would not permit Beneficial to assess its deficiency using that figure as the value of the car. Instead, the lower court took judicial notice of the Redbook value of the car and reduced Beneficial's deficiency by that amount.*fn1 Because we agree that the lower court erred in taking judicial notice of the Redbook value of the car, we reverse.

Appellant urges us to hold that when a sale is found to be commercially unreasonable under 13 Pa.C.S.A. § 9504(c), the creditor is barred from obtaining a deficiency

[ 291 Pa. Super. Page 652]

    judgment against the debtor. No Pennsylvania court has yet held that a commercially unreasonable resale bars entirely any deficiency judgment. See Mercantile Financial Corporation v. Miller, 292 F.Supp. 797 (E.D.Pa.1968); Atlas Construction Company v. Dravo-Doyle, 114 P.L.J. 34 (C.P. -- Allegheny County 1966); Family Finance Corporation v. Scott, 109 P.L.J. 119 (C.P. -- Allegheny County 1961).*fn2 Although other jurisdictions have adopted this position, see Camden National Bank v. St. Clair, 309 A.2d 329 (Me.1973), we believe such an approach to be inequitable, especially in light of the additional remedy offered a debtor by 13 Pa.C.S.A. § 9507(a).

Alternatively, Appellant argues that failure to comply with 13 Pa.C.S.A. § 9504(c) raises a presumption that the value of the collateral equals the indebtedness secured unless the creditor rebuts the presumption.*fn3 United States v. Willis, 593 F.2d 247 (6th Cir. 1979). Thus, the issue becomes whether Beneficial sustained this burden.

Since Beneficial presented no evidence, other than the sale price, the only way the trial ...


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