Manhattan Credit Co. v. Burns

In 1957 the appellees, Thornton Burns and his wife, bought a new car from a Little Bock dealer. The purchase was almost entirely on credit and was financed by the appellant, which took the buyers’ note for $2,817.30, secured by a chattel mortgage on the car and on certain household goods. When the car was damaged beyond repair a few months later, it was found that the collision insurance on the vehicle lacked about $700 of being enough to discharge the purchasers’ debt to the finance company.

The appellees brought this suit for a cancellation of their note and mortgage, asserting that the…