# First State Bank v. Hallett

> Supreme Court of Arkansas · January 20, 1987 · 291 Ark. 37

URL: https://www.frixlaw.com/law-library/cases/9759218

## Case

- **Full name:** FIRST STATE BANK OF MORRILTON, ARKANSAS v. Edith HALLETT
- **Court:** Supreme Court of Arkansas
- **Decided:** January 20, 1987
- **Citations:** 291 Ark. 37; 722 S.W.2d 555; 2 U.C.C. Rep. Serv. 2d (West) 1743; 1987 Ark. LEXIS 1880
- **Precedential status:** Published
- **Opinion:** Dissent by Glaze
- **Judges:** Holt, Hays, Newbern, Glaze
- **Cited by:** 32 later opinions in the Frix Law Library

## Citator (automated)

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- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9759218

## Opinion text

Tom Glaze, Justice, dissenting. The majority court decision overrules Norton v. National Bank of Commerce, 240 Ark. 143 , 398 S.W.2d 538 (1966) and its progeny as those cases have interpreted and applied Arkansas’s Uniform Commercial Code §§ 85-9-504 and 9-507 during the past twenty years. Because I believe the rule established in Norton to be a fair one and the one adopted in this cause to be punitive, I am obliged to dissent.
Unlike the court’s holding here, the Norton court rejected the debtor’s contention that the bank’s failure to give him notice of the intended sale completely discharged his obligation. Instead, that court, Justice George Rose Smith writing, held that, because the bank disposed of the debtor’s car without notice, the just solution is:
to indulge the presumption in the first instance that the collateral was worth at least the amount of the debt, thereby shifting to the creditor the burden of proving the amount that should reasonably have been obtained through a sale conducted according to law.
Id. at 150.
As one can readily see, our court in Norton wrestled with the same situation as presented in the instant case, and it derived a most workable and equitable solution which was designed to treat both debtors and creditors fairly. Frankly, I am unaware of any serious problems or criticisms that have arisen in the application of the Norton rule, especially that would demand or warrant this court’s changing the “rules-of-the-game” at this late date. The rule this court adopts today is a drastic and punitive one, and no public policy argument has been offered to support it.
Finally, I note the majority court seems to premise its holding, in part, on the California case of Atlas Thrift Co. v. Horan, 27 Cal. App. 3d 999 , 104 Cal. Rptr. 315 (1972) which, in turn, quotes from Leasco Data Processing Equip. Corp. v. Atlas Shirt Co., 66 Misc.2d 1089 , 323 N.Y.S.2d 13 (1971). While California may have adopted the same “no notice-no deficiency” rule now embraced by this court, the New York courts have since overruled the Atlas Shirt Co. case, thereby rejecting that punitive rule. The New York courts, I might add, have adopted Arkansas’s rule as set out in Norton. See Leasco Computer v. Sheridan Industries, 82 Misc.2d 897 , 371 N.Y.S.2d 531 (1975) and Security Trust Co. of Rochester v. Thomas, 59 A.D.2d 242 , 399 N.Y.S.2d 511 (1977) (citing Universal C.I.T. Credit Co. v. Rone, 248 Ark. 665 , 453 S.W.2d 37 (1970)).
I would reverse.
Hays and Newbern, JJ., join in this dissent.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9759218. Public record. Not legal advice.