Telcoe Credit Union v. Eackles

Tom Glaze, Justice. This case is one involving a debtor-creditor relationship. Appellee, Versa Eackles, executed two loan agreements with appellant, Telcoe Credit Union (Telcoe). Under the first agreement, Eackles borrowed $3,675.00. This loan was secured by her 1978 Couger XR7. The second loan was unsecured and in the amount of $483.00. About two months after the second loan was made, Eackles left her employment with Southwestern Bell and defaulted in her loan payments. Telcoe subsequently repossessed Eackles’s Cougar. Eackles then filed this suit, alleging Telcoe had unlawfully converted her automobile. Telcoe answered, denying Eackles’s allegations, and counterclaimed for the amounts due on both loans. At trial, Eackles was awarded a jury verdict of $3,000.00 in compensatory damages and $8,000.00 in punitive damages; Telcoe received a judgment for $1,831.25. Telcoe brings this appeal, and argues, among other things, that the trial court should have granted Telcoe a directed verdict. We agree. As an element of her conversion action against Telcoe, Eackles was required to show that she had made legal tender of the amount owed on the secured loan and that Telcoe thereafter refused to return the collateral, her Cougar automobile. Eackles admits she never tendered the actual cash or a check to satisfy the amount owed Telcoe, but argues that was unnecessary. Eackles explains that she had told Telcoe that she would pay the amount due on the first or secured loan, but that Telcoe refused her offer, demanding, instead, the total amount owed on both loans. In addition, Eackles had her attorney follow up her offer by letter, advising Telcoe that she was “ready, willing and able” to tender the amount owed on the secured loan. The issue for us to decide is narrowed, then, to whether Eackles’s verbal and her attorney’s written offers satisfy a lawful tender. If not, her action for conversion must fail, since Telcoe would not have been required to return Eackles’s car until a legal tender had been made. This court’s decision in Cook v. Talbert, 216 Ark. 370, 373, 225 S.W.2d 682, 684 (1950) is controlling. There, this court defined tender as follows: “Tender is an offer to perform a condition or obligation coupled with the present ability of immediate performance, so that were it not for the refusal of cooperation by the party to whom tender is made the condition or obligation would be immediately satisfied.” Williston on Contracts, Rev. Ed., Vol. 6, § 1808. At § 180 of the same work in a discussion of the essential characteristics of tender it is said: “ There must be an unconditional offer to perform, coupled with a manifested ability to carry out the offer, and a production of the subject matter of the tender . . .” (Emphasis supplied.) As already noted, Eackles undisputedly failed to produce the money or its equivalent as a part of her offer to perform (pay), and as a consequence, Telcoe had not been placed in a position of having refused it.1 We believe the facts of this case illustrate the underlying rationale of the rule adopted in Talbert. When Eackles defaulted on her loans, she was also without employment. Obviously, such circumstances, in themselves, appear inconsistent with her claim that she possessed the present ability of immediate performance, i.e., her ability to pay the secured-loan balance. We believe the rule requiring that an actual production of the subject matter of the tender — in this case, the money or its equivalent — is a reasonable threshold requirement of the law before imposing any liability against Telcoe for its refusal to return its collateral. Finally, Telcoe urges that the trial court erred in failing to grant a new trial because the only evidence presented reflects that Eackles owed $2,358.47, not the $1,831.25 amount the jury awarded Telcoe on its counterclaim. Eackles’s only response to this point is that the jury must have awarded the reduced amount because of Telcoe’s wrongful conversion of her car. In view of our holding that no such conversion occurred, the jury’s consideration of that factor, in awarding damages, was misplaced. Because Eackles was indebted to Telcoe on two loans, and any damages resulting from her default on them are susceptible of definite pecuniary measurement, we must reverse and remand this matter for a new trial for the correct assessment of recovery. See Rule 59(a) (5) of the Arkansas Rules of Civil Procedure and Roberts v. Simpson, 275 Ark. 181, 628 S.W.2d 308 (1982). Consistent with the foregoing, we reverse the judgment in its award of punitive damages to Eackles and remand this cause for trial on Telcoe’s counterclaim and request for the assessment of damages on the two loans. Purtle, J., dissents. Footnotes [1] The dissenting opinion suggests that because Telcoe demanded both loans be paid before it returned the vehicle to Eackles, the law would not require Eackles to do the vain and useless act of tendering payment only on the secured loan. This waiver theory was not argued on appeal or below nor did appellee request the trial court to instruct the jury concerning waiver. Instead, the trial court instructed the jury only that Eackles must prove that (1) Telcoe repossessed Eackles’s vehicle, (2) Eackles demanded return of her vehicle and (3) she made legal tender to Telcoe. Because Eackles never advanced the waiver theory here or below, we are unable to consider it in deciding this case.