WPCZ ތC0vǜGjs.6w-2$s:?{KcA.g+[cIx'ɩ6\Yn{qgFL z&+׬fOg:J9r..yXnX7JFWTY:TNES Dbsh .- .zhzXE3Rxiq=M76f1%szKV"&E()ܓ`Й4S*[9oň}2rr'(|Qu++{?|kzZ\4NSP/ൡ\:%K_QS.]qRKC߬@p<|(sj4DdXV}wH2VJqJIQI:+@ԗf_&ϐ RhoD%P=VڼK_XMl"l:1(8=Wb %\^ b 0nU'NwD4H\ zk m 0D UN b (   UNz N  E#bOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO 0WWWW BBB 0_ D3 D-6 0Kcc AS 0 0Dk A-s (`$.8dd8    ("  Z6Times New Roman Regular[-:i+003|x C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wptU(#$  0  (9 Z 6Times New Roman RegularLevel 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5(9 Z6Times New Roman Regular R9$      2    _Apawnbrokerisbydefinitionnotabuyerintheordinarycourseofbusiness.Tenn.CodeAnn.471201(9). R9$      3    _Tenn.CodeAnn.476213governspawntransactionsinvolvingstolenproperty. R9$      1    _NeitherKubotanorMs.Hubbardassertthatthetractorwasfarmequipmentorusedinfarmingoperations.HP LaserJet 4 Plus,,,,,,0- -(|G29$ !.8dd8         0   d(|3%$ !.8dd8     VVVV'dxd)!dxdx( $ Figure  1  ^_X`YE<<CLevel 1Level 2Level 3Level 4Level 5(|3%$ !.8dd8     ($$   1  X[Z&OLE 2.0 Box <=8C HKKKK !.8dd8     _  8+XXdd8  @ OINTHECOURTOFAPPEALSOFTENNESSEE  @%ATJACKSON#O #Ԉ ,   October15,2002Session X X+X #XX+#_KUBOTA_ԀCREDITCORPORATION,USAv.DOUG_TILLMAN_,etal.X+X   ` @@ DirectAppealfromtheCircuitCourtfor_Tipton_ԀCounty  h @@No.5431JosephH.Walker,Judge  X @@*AV) ` dE<` A (  @@TTNo.W200200885_COA_ԄR3CVFiledDecember16,_2002_ '  AV) ` dE<` A       X XXX+Theplaintiffcreditorinthiscasefiledsuittorecoveratractorthatwassubjecttoasecurity  agreementandwaspawnedtothedefendantpawnbroker.Thecourtbelowawardedsummary  judgmenttothecreditor.Thepawnbrokerappeals,claimingthecreditorssecurityagreementwas  notproperlyperfected,andthatthecreditorthereforedoesnothaveasuperiorrighttopossession z ofthetractor.Wefindissuesofmaterialfactexistregardingwhetherthesecurityagreementwas f perfected,whetherthe_pledgor_Ԁhadauthoritytopawnthetractor,andwhetherthepawntransaction R wasenteredintoingoodfaith.Wereversesummaryjudgmentandremand. > #X+XX X +##XX+#X+X Tenn.R.App.P.3AppealasofRight;JudgmentoftheCircuitCourt;Reversedand j Remanded   Z   #X+#X+X.DavidR.Farmer,J.,deliveredtheopinionofthecourt,inwhichAlanE._Highers_andHollyK. : _Lillard_,_J.J._,joined. * RogerA.Stone,Memphis,Tennessee,fortheappellant,Doug_Tillman_Ԁa/k/aBud_Tillman_,d/b/a   _Millington_ԀMotorsd/b/aAAACollateralLoan&JewelryCompany..   WilliamD.Wilson,Jr.,Memphis,Tennessee,fortheappellee,_Kubota_ԀCreditCorporation. "!   OPINION #XX+ #X+X j$# #XX+ #  X+X X XXX+   InAprilof1999,_Wooten_ԀTractorCo.andDeborah_Hubbard_Ԁ(Ms._Hubbard_)enteredintotwo J&!% retailinstallmentcontractsandsecurityagreementsfor_Kubota_Ԁtractorswhichwereassignedto 6'"& _Kubota_ԀCreditCorporation( _Kubota_).Thefirsttransactionwasforthepurchaseofa_Kubota_ "(r#' ModelB7300HSD16hptractorandaboxblade.Thesecondtransactionoccurredapproximately )^$( twoweekslater,andconsistedofanexchangeofthefirsttractorforalargertractor,a_Kubota_ԀModel )J%) L3010HST.ThepartiesalsocompletedaUCC1financingstatementfor$14,979.80coveringthe *6&* largertractor,which_Wooten_ԀTractorfiledintheregistersofficeof_Tipton_ԀCounty.Thedocuments +"'+ nameonlyMs._Hubbard_Ԁasthebuyer/debtor,andlistheraddressas5235SimmonsRoad, ,(, _Drummonds_,TN.Thesecondtractorwaspickedupfrom_Wooten_ԀTractorbyMs._Hubbard_s -(- brother,DonaldLong(Mr.Long),whobroughtittohishome.ThetractorremainedgaragedatMr.  LongshomeuntilJuneof1999,whenhepawnedittoBud_Tillman_,d/b/aCollateralLoan&Jewelry  Co.(Bud_Tillman_ԀandCollateralLoan&JewelryCo.willbereferredtocollectivelyasMr._Tillman_).  ThepawndocumentsincludeanaffidavitbyDonaldLongstatingthathewastheownerofthe t tractorandwarrantingthetractoragainstlawfulclaimsanddemands. `   InAprilof2001,_Kubota_Ԁfiledawarrantthe_Tipton_ԀCountyGeneralSessionscourtagainst 8  Ms._Hubbard_ԀandMr._Tillman_,assertingapurchasemoneysecurityinterestandseekingtorecover $ t thetractorfromMr._Tillman_.Thecourtawarded_Kubota_Ԁpossessionuponthefilingofabond,and  ` _Kubota_Ԁrecoveredthetractor.Mr._Tillman_Ԁappealedthegeneralsessionsordertothecircuitcourt,  L  andcountercomplainedagainst_Kubota_,joiningMs._Hubbard_,DonaldLong,andLongs  8  Constructionasthirdpartydefendants,forconversionintheamountof$13,500.Ms._Hubbard_ $  subsequentlyfiledforbankruptcy._Kubota_Ԁmovedforsummaryjudgment,arguingithadapurchase   moneysecurityinterestinthetractorandthatthetractorwaspawnedbyDonaldLongindividually   andwithoutauthority.Thecourtawardedsummaryjudgmentto_Kubota_.Mr._Tillman_Ԁnonsuited   thethirdpartycomplaintagainstMs._Hubbard_,DonaldLongandLongsConstruction,andperfected   anappealtothisCourt.  p   Issues  L   Mr._Tillman_ԀsubmitsthefollowingissuesforreviewbythisCourt:  p 8  (1)0`   WhetheragenuineissueofmaterialfactexistsregardingwhetherDeborah H G._Hubbard_ԀgaveDonaldLongtheauthoritytoplacethetractorwhichisthe 4 subjectmatterofthislitigationwithapawnbroker,theappellantBud   _Tillman_,d/b/aCollateralLoan&JewelryCompany. ` `  8  (2)0`   Whetheragenuineissueofmaterialfactexistsregardingwhether_Kubota_  CreditCorpssecurityinterestwasproperlyperfected,givingitpriorityover  theinterestoftheappellantBud_Tillman_,d/b/aCollateralLoan&Jewelry l Company.0` ` X      _Kubota_Ԁassertsthatthe_dispositive_Ԁissueis: 0"  8   ` WhetherDoug_Tillman_Ԁhasshownthathehasanyrighttopossessionofthe $X" tractorthatissuperiorto_Kubota_ԀCreditsclaimforpossession.$D #     StandardofReview  &"% "#X+XX X ` #X XXX+  Summaryjudgmentshouldbeawardedwhenthemovingpartycandemonstratethatthere (#' arenogenuineissuesregardingmaterialfactsofthecauseofactionandthatitisentitledtoa )$( judgmentasamatteroflaw.Tenn.R.Civ.P.56.04; Byrdv.Hall ,847S.W.2d208,214(Tenn. x*%) 1993);#X+XXX ## X XXX+ _McCarley_Ԁv.WestQualityFoodServ. ,960S.W.2d585,588(Tenn.1998).#X+XX X $#X XXX+Ԁ#X+XXX z%# X XXX+Mereassertions d+&* thatthenonmovingpartyhasnoevidencedoesnotsufficetoentitlethe_movant_Ԁtosummary  judgment. #X+XX X %#X XXX+Ԁ#X+XXX &# X XXX+ _McCarley_ ,960S.W.2dat588.Themovingpartymusteitherconclusivelydemonstrate  anaffirmativedefenseoraffirmativelynegateanelementwhichisessentialtothenonmovingpartys  claim. Id. Ifthemovingpartycandemonstratethatthenonmovingpartywillnotbeabletocarry t itsburdenofproofattrialonanessentialelementofitscase,summaryjudgmentisappropriate. Id.  `   #X+XX X '#X XXX+Whenapartymakesaproperlysupportedmotionforsummaryjudgment,theburdenshifts 8  tothenonmovingpartytoestablishtheexistenceofdisputedmaterialfactsorthatthemovingparty $ t isnotentitledtosummaryjudgmentasamatteroflaw. #X+XXX x)#X XXX+Id. ; Staplesv._CBL_Ԁ&_Assocs_. ,15S.W.3d  ` 83,89(Tenn.2000).#X+XXX *#X XXX+ #X+XXX +# X XXX+Thenonmovingpartycannotmerelyrelyonthepleadings,butmust  L  demonstratethatessentialelementsofaclaimexistby:1)pointingtoevidencethatcreatesafactual  8  dispute;2)reenforcingevidencechallengedbythemovingparty;3)offeringadditionalevidence $  whichestablishesamaterialdispute;4)submittingaTenn.R.Civ.P.56.06affidavitexplainingthe   needforadditionaltimefordiscovery. _McCarley_ ,960S.W.2dat588.     Wereviewanawardofsummaryjudgment denovo ,withnopresumptionofcorrectness   affordedtothetrialcourt. Guyv.Mut.ofOmahaIns.Co. ,79S.W.3d528,534(Tenn.2002).#X+XX X ,#X XXX+In p determiningwhethertoawardsummaryjudgment,thecourtmustviewtheevidenceinthelightmost \ favorabletothenonmovingparty,drawingallreasonableinferencesinfavorofthenonmovingparty. H  Staples ,15S.W.3dat89.Summaryjudgmentshouldbeawardedonlywhenareasonableperson 4 couldreachonlyoneconclusionbasedonthefactsandinferencesdrawnfromthosefacts. Id. #X+XXX /# X XXX+If  p thereisanydoubtaboutwhetheragenuineissueexists,summaryjudgmentshouldnotbeawarded.  \  _McCarley_ ,960S.W.2dat588. H   _Kubota_sSecurityInterest    2  Mr._Tillman_Ԁsubmitsthatagenuineissueoffactexistsregardingwhether_Kubota_Ԁproperly  perfecteditssecurityagreementcoveringthetractoratdisputeinthiscase.Hecontendsthatthe  tractorwasneitherfarmequipmentnoraconsumergood,butequipmentpurchasedforusebyLongs | Construction,apartnershipofMs._Hubbard_,DonaldLong,andtheirfather,JohnLong.Heasserts h that_Kubota_ssecurityagreementwasaccordinglynotperfectedbyfilingtheUCC1withtheregister T  for_Tipton_ԀCounty,norasapurchasemoneysecurityinterestinconsumergoodswhichisperfected @! withoutfiling. ,"|    TheperfectionofsecurityagreementsisgovernedbyTenn.CodeAnn.479101 etseq ., $T" ArticleNineoftheUniformCommercialCodeasadoptedinTennessee.Thistransactionandcause $@ # ofactionisgovernedbythetermsofArticleNinewhichwereineffectpriortoJuly1,2001,when %,!$ substantialchangestothearticlewentintoeffect.Thecodeprovides: &"% 8  Afinancingstatementmustbefiledtoperfectallsecurityinterestsexceptthe (#' following:)$(   0   ` ....x*%)(#(# 0   ` (d)apurchasemoneysecurityinterestinconsumergoods....d+&*(#(# ЇTenn.CodeAnn.479302(1)(d)(1996).Thecodefurtherprovides:  0  Theproperplacetofileinordertoperfectasecurityinterestisasfollows:(#(# 8   ` (a)Whenthecollateralisequipmentusedinfarmingoperations...or t consumergoods,thenintheofficeoftheregisterinthecountyofthedebtors ` residence....L    0   ` ....8 (#(# 0   ` (c)Inallothercases,intheofficeofthesecretaryofstate.$ t(#(# Tenn.CodeAnn.479401(1)(1996).  L    Mr._Tillman_Ԁarguesthatsincethetractorwasnotaconsumergood,_Kubota_Ԁdoesnothavea $  perfectedsecurityagreementandhasnosuperiorinterestinthetractor.  #  1      ׀Hefurtherarguesthatsince   _Kubota_ssecurityinterestwas_unperfected_,thesaleofthetractortohimbyDonaldLongis   governedbyTenn.CodeAnn479301(1)(c),whichprovides:   8  Exceptasotherwiseprovidedinsubsection(2),an_unperfected_Ԁsecurityinterestis p subordinatetotherightsof:\   0   ` ....H(#(# 8   ` (c)inthecaseofgoods,instruments,documentsandchattelpaper,aperson 4 whoisnotasecuredpartyandwhoisatransfereeinbulkorotherbuyernotinthe  p ordinarycourseofbusiness,orisabuyeroffarmproductsintheordinarycourseof  \ business,totheextentthathegivesvalueandreceivesdeliveryofthecollateral H withoutknowledgeofthesecurityinterestandbeforeitisperfected.X  #  2      ׀4   Tenn.CodeAnn479301(1)(c)(1996).Mr._Tillman_Ԁcontendsthatsinceheisnotabuyerinthe   ordinarycourseofbusiness,andsincehegavevalueforthetractorandreceiveddeliverywithout  knowledgeofthesecurityinterest,hisownershipinterestissuperiorto_Kubota_s.Mr._Tillman_  furtherreferstheCourttoTitle45,Chapter6oftheTennesseeCode,whichgovernspawnbrokers.  Thecodeprovides: l 8   ` (b)Ifthe_pledgor_Ԁfailstoredeemthepledgedgoodswiththirty(30)daysafter D! thematuritydateofthepawntransaction,the_pledgor_Ԁshalltherebyforfeitallright, 0"  titleandinterestof,inandtothepledgedgoodstothepawnbroker,whoshallthereby #l! acquireanabsolutetitletothepledgedgoodsandthedebtbecomessatisfied,andthe $X" pawnbrokershallhavetheauthoritytosellofdisposeoftheunredeemedpledged $D # goodsasthepawnbrokersownandmayselltheunredeemedpledgedgoods.%0!$    '#& ЇTenn.CodeAnn.456211(b)(1999Supp.)    _Kubota_ԀcontendsthatthetractorwaspurchasedbyMs._Hubbard_Ԁasaconsumergood,andthat  itspurchasemoneysecurityinterestthereforewasperfectedwithoutfiling.Insupportofthis t assertion,_Kubota_ԀsubmitsanaffidavitbyMs._Hubbard_Ԁinwhichshestatesthatshepurchasedthe ` tractorforherownuseandnotforthebenefitofLongConstruction.Alsoincludedintherecordis L  anaffidavitofSteve_Wooten_,anownerandmanagerof_Wooten_ԀTractor.Mr._Wooten_Ԁassertsthat 8  thetractorwassoldforthepersonaluseofMs._Hubbard_,andthatMs._Hubbard_Ԁdidnotdiscloseany $ t contemplatedbusinessusesforthetractor.Mr._Tillman_Ԁnotes,however,thatthecreditapplication  ` completedbyMs._Hubbard_Ԁdoesnotstateacontemplateduseforthetractor,andthatstatements  L  madebyMs._Hubbard_Ԁinherdepositionsupportthecontentionthatthetractorwaspurchased,atleast  8  inpart,forusebyLongConstruction. $    Inherdeposition,Ms._Hubbard_Ԁstatedthatshepurchasedtheoriginal,smallertractoratthe   directionofherbrotherandpartner,DonaldLong,andthatthedownpaymentwasprovidedbyher   father,alsoapartnerinLongsConstruction.Shestatedthattheexchangeofthistractorforalarger   onealsowascompletedatDonaldLongsdirection,andthatshedidnotknowforwhatpurposethe p tractorwasneeded.Whenaskedwhetherthetractorwasintendedforuseintheconstruction \ business,Ms._Hubbard_Ԁreplied, partofit.Ms._Hubbard_ԀalsostatedthatDonaldLongpickedup H thetractorfrom_Wooten_ԀTractor,andthatitremainedonhispropertyfromthetimeofpurchaseuntil 4 itwaspawned.SheadditionallystatedthatDonaldLongpreviouslyhadpawnedseveralotherpieces  p oflargeequipmenttoMr._Tillman_,apparentlywithoutincident.  \   DonaldLongstatedinhisdepositionthatLongsConstructionprovidedthedownpayment 4 forthetractor,andthatthetractorwaspurchasedforusebytheconstructionpartnership.He   explainedthattheoriginal,smallertractorwasexchangedforthelargermodelbecausethesmaller   tractorhadnearlyflippedoverwhenusedonaconstructionsite.DonaldLongfurtherstatedthat  Deborah_Hubbard_Ԁpurchasedthetractorinhernamebecausethepartnershiplackedsufficientcredit  tofinanceitinitsownname.Heconfirmedthathepickedupthetractorfrom_Wooten_ԀTractorand  thatitremainedathishome,whichwasalsothelocationoftheconstructionbusiness.DonaldLong l furtherstatedthatthetractorwasusedforconstructionbusinesspurposesshortlyafteritwas X  purchased. D!   Thedeterminativefactorforestablishingtheclassificationofgoodsisthepurposeforwhich #l! theyareboughtandused. InreJamesFritzButlerv.MurfreesboroProd.Credit_Assn_ ,3_B.R._ $X" 182,183(_Bankr_.E.D.Tenn.March5,1980).Whenclassifyinggoodsinordertodeterminewhether $D # asecurityinteresthasbeenperfected,thecourtlookstotheactualuseofthegoods,nottowhatuse %0!$ thegoodscouldbeput. Id. at184.Uponreviewofthisrecord,wefindagenuineissueofmaterial &"% factexistsregardingwhetherthetractorisproperlyclassifiedasaconsumergoodorequipment,and '#& whether_Kubota_ssecurityinterestwasperfected. (#'  h+&*   AuthorityofDonaldLongtoPawntheTractor   [   _Kubota_Ԁsubmitsthattheissueofwhetheritssecurityagreementwasperfectedisnota  materialissuebecause therecordlacksanyaffidavitorothercredibleevidencethatAppellanthad p lawfulpossessionofthetractor.That...is_dispositive_Ԁoftheappeal._Kubota_sargument,aswe \ understandit,isthatMs._Hubbard_Ԁpurchasedthetractorindividually,andnotonbehalfofthe H  partnership,thatthetractorwaspawnedbyDonaldLongwithoutherknowledgeorpermission,and 4  thatDonaldLonghadnoownershipinterestinthetractorwhichcouldbetransferredtoMr._Tillman_.  p _Kubota_ԀfurtherassertsthatMr._Tillman_ԀknewDonaldLonghadnoownershipinterestinthetractor,  \ despitetheaffidavitsignedbyDonaldLongaspartofthepawntransactionthathewastherightful  H  ownerofthetractor._Kubota_ԀcontendsthatwheretheCodeprovidesthat [a]purchaserofgoods  4  acquiresalltitlewhichhistransferorhadorhadpowertotransfer,Tenn.CodeAnn.472403(1),   sinceDonaldLonghadnotitletothetractor,Mr._Tillman_Ԁcouldacquirenotitle.Wedisagreewith   thisassertion.     WefirstaddressTenn.CodeAnn.472403,whichprovides,inpertinentpart:   8  (1)Apurchaserofgoodsacquiresalltitlewhichhistransferorhadorhadpowerto X transferexceptthatapurchaseroflimitedinterestacquiresrightsonlytotheextent D oftheinterestpurchased.Apersonwithvoidabletitlehaspowertotransferagood 0 titletoagoodfaithpurchaserforvalue.Whengoodshavebeendeliveredundera l transactionofpurchasethepurchaserhassuchpowereventhough:X   8  8`   (a)thetransferorwasdeceivedastotheidentityofthepurchaser,orD` x` x 0   ` ....0(#(# 8  8`   (d)thedeliverywasprocuredthroughfraudpunishableaslarcenous  underthecriminallaw.` x` x    ` ....  8   ` (4)Therightsofotherpurchasersofgoodandofliencreditorsaregoverned  bythechaptersonSecuredTransactions(chapter9ofthistitle)andDocumentsof | Title(chapter7ofthistitle).h   Tenn.CodeAnn.472403(1)(1999Supp.). @!   Althoughathiefhasvoidtitle,onewhoisinpossessionofgoodsasaresultofavoluntary #h! deliveryisnotathiefintheordinarysense.  #  3      ׀ _Alsafi_ԀOrientalRugsv.Am.LoanCo. ,864S.W.2d $T" 41,44(Tenn.Ct.App.1993).Evenaswindlerwhoinducesavictimthroughfraudtovoluntarily $@ # deliveragoodisapurchaserunderthecode,albeitonewithvoidabletitle. Id. Apurchaserwith %,!$ voidabletitleconfersgoodtitleuponagoodfaithpurchaserforvalue,evenwheredeliverywas &"% procuredthroughactionablefraud. Id. Tenn.CodeAnn. 472403(1).Thepartiesdonotdispute '#& thatMr.LongwasinpossessionofthetractorbyvirtueofavoluntarydeliverybybothMs._Hubbard_ (#' and_Kubota_.Thushehadthepowertoconfergoodtitletoagoodfaithpurchaserforvalue._Kubota_ )$( contends,however,thatMr._Tillman_ԀisnotagoodfaithpurchaserbecauseheknewthatMs._Hubbard_  wastherightfulownerofthetractorandthatMr.Longhadnoauthoritytopawnit.Thispresents  anissueofmaterialfactfordeterminationbythetrialcourt.    Second,Mr._Tillman_ԀassertsthatDonaldLonghadauthoritytopawnthetractorsinceitwas ` equipmentofthepartnership,andnotthepersonalpropertyofMs._Hubbard_.Inlightofthe L  circumstancessurroundingthepurchaseanddeliveryofthetractorasdiscussedabove,weagreethat 8  thisisanissueofmaterialfactwhichalsomustbedeterminedbythetrialcourt. $ t   Conclusion   L  o  Thiscaseraisesanissueofmaterialfactregardingtheclassificationofthetractorwhichis   thesubjectofthisdispute.Thedeterminationofthisissueisnecessarytoestablishwhether_Kubota_s   securityagreementwasperfected.TheevidencealsoraisesissuesofDonaldLongsauthorityto   pawnthetractorandwhetherMr._Tillman_Ԁwasagoodfaithpurchaser.     Inlightoftheforegoing,wereversesummaryjudgmentandremandforatrialonthemerits. l Insodoing,weemphasizetheobligationsofgoodfaithandhonestyinfactwhicharerequiredin X everytransactionunderchaptersonethroughnineoftheUniformCommercialCode.Tenn.Code D Ann.471102(3)(1996).Costsofthisappealaretaxedtotheappellee,_Kubota_ԀCredit 0 Corporation,USA.#X+XX X 1# l    `     h     ___________________________________ (    `     h     DAVIDR.FARMER,JUDGE