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his lien on the Crestwood property in favor of NBSC.8 On the
same date, NBSC recorded its security interest on the Crestwood
property. Subsequently, Hollis Bowden transferred the security
interest in the 41 vending machines to petitioners in return for
stock in the Aqualator corporations.
On October 19, 1994, NBSC notified petitioners that its
records showed payment in full of the $442,595 secured by “a lien
on your home and 41 vending machines”. On October 20, 1994, NBSC
advised petitioners that the bank’s records indicated that the
“lien” on the 41 vending machines was transferred, along with an
assignment of certain lease proceeds, to Hollis Bowden.
Clement Smith (Mr. Smith), a senior commercial lending
officer for NBSC, believed that when NBSC took assignments from
Pac-Tech on a number of leases, the financial institution became
the owners of the leases. It was Mr. Smith’s belief that the
lease documents conveyed ownership to NBSC. Mr. Smith believed
that by filing a security interest on the vending machines NBSC
acquired a titled interest. Mr. Smith also believed that NBSC
was entitled to take depreciation on the vending machines in
question. He also stated that NBSC had the right to sell the
vending machines, absent default on the part of petitioners, to
third parties.
8 On Oct. 29, 1985, Hollis Bowden had given Mr. Bowden
special power of attorney over his interest in the Crestwood
property.
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