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PRESTON PRICE, SR. v. FIRST NATIONAL BANK OF THE SOUTH

SEPTEMBER 04, 1985

PRESTON PRICE, SR.
v.
FIRST NATIONAL BANK OF THE SOUTH



BEFORE ROY NOBLE LEE, ROBERTSON and SULLIVAN

ROY NOBLE LEE, PRESIDING JUSTICE, FOR THE COURT:

The Chancery Court of Jackson County, Mississippi, Honorable Glenn Barlow, presiding, entered judgment on the 27th day of October, 1982, in the amount of sixty-eight thousand eight hundred eighty-six dollars eighty-eight cents ($68,886.88) due on a promissory note and thirteen thousand seven hundred seventy-seven dollars and thirty-eight cents ($13,777.38), attorney's fees, against Preston Price, Sr., James H. McIntosh and Mary Jane McIntosh, and in favor of First National Bank of the South. Preston Price, Sr., has appealed to this Court and assigns the following errors in the trial below:

I.

 THE LOWER COURT ERRED IN HOLDING THAT THE APPELLANT, PRICE, WAS NOT AN ACCOMMODATION MAKER.

 II.

 THE LOWER COURT ERRED IN NOT FINDING THAT THE APPELLEE HAD IMPAIRED THE COLLATERAL.

 III.

 THE LOWER COURT ERRED IN FINDING THAT THE APPELLEE HAD DISPOSED OF THE COLLATERAL IN A REASONABLE COMMERCIAL MANNER.

 On December 9, 1980, James H. McIntosh, Mary Jane McIntosh, his wife, and appellant executed a promissory note secured by deed of trust and security agreement in favor of appellee for eighty-four thousand eight hundred seventy-five dollars and thirty cents ($84,875.30) payable at the rate of seventeen percent (17%) interest per annum in thirty-six (36) payments, the first thirty-five (35) payments being in the amount of fourteen hundred fifty-four dollars ($1,454.00) and the last and final payment for the remaining balance. The collateral on said note was Lot 247, Westgate Estate Subdivision (home of McIntosh), with a First deed of trust thereon, 1979 Freightliner truck, 1979 Pontiac Bonneville automobile, a Terry bass boat, and a Johnson outboard motor.

 Previous to execution of the note, appellant owned and operated the Tiki Restaurant on the Mississippi Gulf Coast. McIntosh was a personal friend of appellant and was an employee of the Tiki Restaurant Corporation, working as nightclub manager. Appellant retired from the restaurant business, and it is undisputed that he executed the note along with the McIntoshes in order that McIntosh could raise finances and enter the trucking business. Appellant had no interest in the collateral and he did not expect to receive any benefit from the execution of the note or from the trucking business.

 As stated, the note was executed December 9, 1980, and the payments were in the amount of $1,454.00 each for thirty-five (35) months, beginning January 10, 1981. After April 15, 1981, the loan was never current and only two (2) payments were made, one on August 13, 1981, in the sum of eight hundred dollars ($800.00), and the second on September 15, 1981, in the sum of nine hundred dollars ($900.00). Eventually, the home and lot were sold under a court order, the first deed of trust was paid off and, after payment of expenses, the balance was paid to appellee. The Bonneville automobile was sold and forty-five hundred dollars ($4,500) of the amount received was applied to the note. The other personal property was sold and the proceeds applied to the indebtedness. Suit was filed for the delinquency on

 October 6, 1981, prior to surrender of the collateral, viz, Freightliner, boat, and outboard motor, to appellee. However, appellee bank continued to work with the McIntoshes who were attempting to get the loan current.

 I. - III.

 Appellant contends that (1) he was an accommodation maker, (2) the appellee impaired the collateral which secured the note and (3) appellee did not dispose of the collateral in a reasonable commercial manner and appellant ...


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