(dissenting).
I dissent.
In Begay, the trial court made 39 findings of fact. The defendant challenged none.
A. Facts and conclusions in Begay.
Begay is a Navajo Indian, an uneducated person who does not speak English and whose understanding of commercial and legal matters is extremely limited. Defendant is a retail outlet that sells groceries and other merchandise, including Indian jewelry and other Indian goods, and which has a substantial pawn business.
On July 6, and July 24, 1974, Begay left several items of jewelry with defendant as collateral for a thirty day loan of $200.00 identified by pawn ticket # 1582 and # 2066. Begay did not repay these loans. On November 26, 1974, defendant sent notice to Begay proposing to retain the collateral in satisfaction of the two debts, which notices Begay received. Defendant’s notice of intent to retain stated that the debtor had 30 days from the date of preparation of the notice in which to object to the retention, rather than 30 days from receipt of the notice. This notice did not inform Be-gay that defendant would sell her jewelry in satisfaction of the debt or that she could require defendant to sell the jewelry and pay her any surplus received. Defendant never sent notice of intent to sell to pawn debtors and did not send such notice to Begay.
For many years prior to and during 1974, Begay borrowed money from defendant’s pawn department, usually three or four times per month, using her Indian jewelry as collateral. She was a regular pawn loan customer of defendant and was known personally by the manager, one who regarded her as a special customer and who had loaned on her pawn for approximately 15 years. In other transactions, defendant had previously kept plaintiff’s pawned jewelry after default until Begay was able to pay back the amount loaned and the course of private dealings led Begay to expect that defendant would retain her jewelry for her until she could redeem it. But defendant moved her jewelry into defendant’s sale inventory upon Begay’s default and a short time thereafter sold the jewelry in accordance with its normal business practice to Joe E. Tanner, president and director of defendant or to Joe E. Tanner, Inc., engaged in the retail and wholesale sale of Indian jewelry.
Defendant determined the amount of money that it would loan and as a general rule loaned substantially less that what it determined to be the value of the jewelry so that there would be virtually no chance of loss to defendant in event of a default.
Defendant did not maintain records sufficient to identify the date on which the sale of a particular piece of pawn took place or for how much it was sold. The value of the jewelry pawned by Begay was several times greater than the amount loaned by defendant. But Joe Tanner decided how much he would pay defendant for dead pawn by estimating the new replacement cost of a piece of jewelry and by delivering to defendant an amount equal to this cost figure plus 10%. Tanner customarily resold dead pawn received from defendant to individuals or to other retail or wholesale establishments, including retail outlets owned by Tanner in Scottsdale, Arizona and LaJolla, California.
In the Indian jewelry business, the price paid by a “jobber” for jewelry is 120% of cost, the wholesale price is 150% of cost, and the retail price is 300% of cost. Tanner offered dead pawn jewelry for sale at defendant’s place of business at the above markups.
Defendant never returned surplus proceeds from sales to dead pawn to the pawn debtors and did not return any surplus from the sale of the jewelry in question to Begay. Defendant did not act in good faith in purporting to retain Begay’s jewelry and in making an accounting to her for any surplus received after satisfaction of her debt.
Defendant’s conduct in selling, which resulted in a complete loss of the debtor’s substantial equity, was not commercially reasonable, was not in good faith, considering the relative bargaining power of the parties.
The trial court concluded that the pawn transactions were governed by the New Mexico Commercial Code; that § 55-9-504, N.M.S.A. 1978 applied to defendant’s sale of the collateral (challenged); that defendant sold jewelry without sending notice of sale, without selling in a commercially reasonable manner and without returning the surplus of such a sale to Begay, all in violation of § 55-9-504; that defendant’s failure to act in good faith in the transactions violated § 55-1-203 (challenged); that the form of notice of intention to retain used by defendant violated § 55-9-505 by giving the debtor only thirty days from preparation of the notice in which to object to retention; and that Begay was entitled to damages in the amount of $2060 plus interest at the rate of 6% from November 1, 1974, pursuant to § 55-9-507 (challenged).
Defendant challenged the three conclusions noted.
B. Unchallenged findings are binding on appellate court.
Under Rule 9(m) of the Rules of Appellate Procedure in Civil Cases, “If any finding is challenged, it must be so indicated by a parenthetical note referring to the appropriate numbered point in the argument . . . . ” [Emphasis added.] This requirement is mandatory. The mere challenge is not sufficient to raise an issue on appeal. Reference must be made to the appropriate numbered point in the argument so that an appellant can state the precise ground or grounds for challenging findings and clearly point out the claimed error or errors in the findings on which he relied. McLam v. McLam, 85 N.M. 196, 510 P.2d 914 (1973). Where no challenge is made, the appellant is not entitled to a review of the evidence, and the findings are binding on the appellate court. Citty v. Citty, 86 N.M. 345, 524 P.2d 517 (1974). These findings will not be set aside regardless of whether the reviewing court agrees with the trial court. Begay v. First National Bank of Farmington, 84 N.M. 83, 499 P.2d 1005 (Ct.App.1972).
Requested findings contrary to unchallenged findings and conclusions cannot raise an issue on appeal. Trujillo v. Tanuz, 85 N.M. 35, 508 P.2d 1332 (Ct.App.1973).
The only issue on the Begay appeal is whether a conclusion of the trial court is supported by the findings. A judgment cannot be sustained on appeal unless the conclusion on which it rests finds support in one or more of the findings. Watson Land Company v. Lucero, 85 N.M. 776, 517 P.2d 1302 (1974).
C. The conclusion of the trial court was supported by the findings.
Defendant claims that the trial court erred in not applying § 55-9-505(2), N.M. S.A. 1978. The pertinent part of this section reads:
[A] secured party in possession may, after default, propose to retain the collateral in satisfaction of the obligation. Written notice of such proposal shall be sent to the debtor .... If the debtor ... entitled to receive the notification objects in writing within thirty days from the receipt of the notification .. . the secured party must dispose of the collateral under Section 9-504 [55-9-504, NMSA 1978], .In the absence of such written objection the secured party may retain the collateral in satisfaction of the debtor’s obligation. [Emphasis added.]
By use of the word “may,” this section means that absent a written objection, it was permissible for defendant to retain the jewelry in satisfaction of Begay’s obligation. Section 12-2-2(1), N.M.S.A. 1978. McCullough v. Mobiland, Inc., 139 Ga.App. 260, 228 S.E.2d 146 (1976). Section 9-505(2) is a permissive, not a mandatory remedy. It is a provision drafted for the benefit of the secured party by allowing him the option to retain collateral in satisfaction of the debt in certain specified situations and where he manifests that intent. Jones v. Morgan, 58 Mich.App. 455, 228 N.W.2d 419 (1975). It does not direct that defendant must retain the jewelry in satisfaction of Begay’s obligation. There is an alternative remedy. If defendant did not elect to retain the jewelry in satisfaction of the debt, defendant was compelled to dispose of the jewelry within a commercially reasonable time under § 9-504. Under this alternative, § 9-505(2) was inapplicable.
No finding was made by the court that defendant retained the jewelry in satisfaction of the debt. To the contrary, the court found “That the course of prior dealings between the parties led plaintiff to expect that defendant would retain her jewelry for her until she could redeem it; That defendant moved plaintiff’s jewelry into defendant’s sale inventory upon plaintiff’s default and a short time thereafter sold the jewelry.” [Emphasis added.]
Section 55-1-205(1) reads:
A course of dealing is a sequence of previous conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct. [Emphasis added.]
For 15 years, defendant and Begay had a course of dealing in loans made upon pawns of jewelry in which defendant retained the collateral until Begay redeemed it. To now allow defendant to profit exorbitantly to the total loss of Begay is inequitable and unfair. For a debtor’s attempt to prohibit a deficiency judgment under the Commercial Code see, Ruidoso State Bank v. Garcia, 92 N.M. 288, 587 P.2d 435 (1978). The trial court did not err. Section 9-505(2) was not applicable.
The trial court properly concluded that § 9-504 applied. Defendant did not challenge the court’s conclusion that defendant violated this section of law.
Defendant also challenged the court’s conclusion that defendant failed to act in good faith. This conclusion was supported by the findings of fact. Section 55-1-203 imposes an obligation of good faith upon the parties as a duty in the performance or enforcement of every contract. “ ‘[G]ood faith’ means honesty in fact in the conduct or transaction concerned.” Section 55-1-201(19). “ ‘[G]ood faith’ in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.” Section 55-2-103(l)(b).
For a scholarly report on the meaning of “good faith” see, Holmes, A Contextual Study Of Commercial Good Faith: Good-Faith Disclosure In Contract Formation, 39 U.Pitts.L.Rev. 381 (1978). We must recognize the difficulty involved in understanding the essential elements necessary, from an objective point of view, to constitute good faith. In viewing the evidence, a trial judge arrives at findings of fact, based upon personal convictions, from the type of conduct exercised which smacks of bad faith.
On review, being far removed from the courtroom, our duty is to accept the findings of the trial court unless the mere review of the transcript shocks the conscience.
The trial court properly concluded that § 9-504 applied to defendant’s sale of the collateral and that defendant’s failure to act in good faith in the transactions violated § 1-203.
What has been decided with reference to Begay applies equally to Reeves.
Defendant violated the terms of § 9-504. Begay and Reeves were entitled to the surplus profit made by defendant. Defendant emerges as a creditor whose loan plus interest were paid in full. It cannot and it did not complain of the amount of surplus awarded Begay and Reeves. It is a business of long and broad experience as a pawn broker. It kept no books or records of the sales made of the jewelry. It should not plead that the trial court was without authority to allow interest from November 1, 1974. This is the proximate date that Begay and Reeves suffered their losses. Defendant has had the benefit and use of the money during this period of time. Its argument was feeble and without citation of authority. The point was adequately discussed in Briefs-In-Chief filed on behalf of Begay and Reeves. Not being meritorious, it deserves no response.
This appeal should be affirmed.