Census Federal Credit Union v. Wann

• Decision Date: 15 April 1980
• Docket Number: No. 1-1179A333,1-1179A333
• Citation: 403 N.E.2d 348
• Parties: 28 UCC Rep.Serv. 1207 CENSUS FEDERAL CREDIT UNION, Defendant-Appellant, v. Richard Henry WANN, Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 348

403 N.E.2d 348

28 UCC Rep.Serv. 1207

CENSUS FEDERAL CREDIT UNION, Defendant-Appellant, v. Richard Henry WANN, Plaintiff-Appellee.

No. 1-1179A333.

Court of Appeals of Indiana, First District.

April 15, 1980.

William R. Mapother, Mapother & Mapother, Jeffersonville, for defendant-appellant.

Stephen W. Voelker, Fifer, Vogt & Lanum, Jeffersonville, for plaintiff-appellee.

NEAL, Judge.

STATEMENT OF THE CASE

This is an appeal by the defendant-appellant, The Census Federal Credit Union, from an adverse judgment for trespass to personal property, in favor of the plaintiff-appellee, Richard Henry Wann.

We reverse.

FACTS

The facts most favorable to support the judgment are as follows: Plaintiff borrowed money from defendant and executed a note and a security agreement on his automobile to defendant. The parties stipulated at the trial that the note was in default and that defendant had "every right under the security agreement to repossess the automobile." The security agreement contained a provision that in the event of default, defendant had all remedies of a secured creditor under the Uniform Commercial Code. Defendant made demand on plaintiff for possession of the automobile, but plaintiff refused to give possession of it to defendant. Defendant, through its agents, thereafter, without benefit of any judicial process, took possession of the automobile by taking it from the parking lot of the apartment building where plaintiff lived at approximately 12:30 a. m. During this second and successful attempt to repossess the automobile, no contact whatever was had by defendant's agents with plaintiff or other person in the immediate control of the automobile.

ISSUE

The sole issue in this case is whether defendant was subject to any civil liability under the facts herein stated for exercising self-help repossession of the automobile under the authority of Ind.Code 26-1-9-503. Defendant contends that under this statute it had every right to take possession of the automobile without judicial process so long as it committed no breach of the peace in doing so. Plaintiff concedes that this general statement of the law is correct, but argues that defendant committed a breach of the peace by its actions. Therefore the sole issue in this appeal is whether the acts of the defendant amounted to a breach of the peace. At the trial the plaintiff proceeded upon the theory that when the defendant repossessed the automobile without the consent of plaintiff, it violated Ind.Code 35-43-2-2(4) (Supp.1979) which is a criminal trespass statute, and thereby committed a technical breach of the peace. ¹

The scope of review in appeals questioning the sufficiency of the evidence is limited to an examination of the evidence most favorable to the judgment of the trial court and the reasonable inferences to be drawn therefrom. We will neither weigh the evidence nor judge the credibility of the witnesses, but will affirm the judgment if supported by evidence of probative value. Foreman v. State ex rel. Department of Natural Resources, (1979) Ind.App., 387 N.E.2d 455.

DISCUSSION

Ind.Code 26-1-9-503, a section of the Uniform Commercial Code (U.C.C.) adopted by Indiana, provides, in part, as follows:

"Unless otherwise agreed a secured party has on default the right to take possession of the collateral. In taking possession a secured party may proceed without judicial process if this can be done without breach of the peace or may proceed by action."

In Singer Sewing Mach. Co. v. Phipps, (1911) 49 Ind.App. 116, 94 N.E. 793, the court held that an assault and battery committed in furtherance of a repossession by a seller without judicial process pursuant to a self-help provision contained in its contract was actionable. The court held that the goods could be retaken so long as the repossession was not accompanied by a breach of the peace. In 49 Ind.App. at 123, 94 N.E. at 796, the court said:

"(T)he owner of goods, who has been deprived of them, 'may lawfully claim and retake them, wherever he happens to find them; so it be not in a riotous manner, or attended with a breach of the peace; * * * that this natural right of recaption shall never be exerted, where such exertion must occasion strife . . . or endanger the peace of society.' "

In Nicholson's Mobile Home Sales, Inc. v. Schramm, (1975) 164 Ind.App. 598, 330 N.E.2d 785, the court held that repossession under Ind.Code 26-1-9-503 attended by assault and battery by the secured party's agents was actionable. It further held that this statute codified Singer Sewing Mach. Co., supra. In Lou Leventhal Auto Co., Inc. v. Munns, (1975) 164 Ind.App. 368, 328 N.E.2d 734, 742, the court said, "(W)e note in passing that the mere existence of statutory procedures for self-help repossession does not automatically sanction all conduct related thereto."

A breach of the peace includes all violations of public peace, order, or decorum. A breach of the peace is a violation or disturbance of the public tranquility or order, and the offense includes breaking or disturbing the public peace by any riotous, forceful, or unlawful proceedings. In accordance with the above definition, a breach of the peace may be an element of, or involved in, other offenses. 4 I.L.E. Breach of Peace, § 1 (1958).

Disorderly conduct involves breaches of the peace as its proscriptions include fighting or tumultuous conduct, disruption of lawful assembly, obstruction of vehicular traffic, and rioting. Ind.Code 35-45-1-3 (Supp.1979).

We have examined holdings in other jurisdictions addressed to this issue under the U.C.C.

In Morris v. First National Bank and Trust Co. of Ravenna, (1970) 21 Ohio St.2d 25, 254 N.E.2d 683, the court held that intimidation or putting a person in fear for his safety exceeded the secured party's rights under the self-help provisions of the U.C.C. The court said that a breach of the peace for these purposes may consist of an act of violence or an act likely to produce violence, and that it was a public policy to discourage extrajudicial acts by citizens where those acts are fraught with the likelihood of resulting violence.

In Deavers v. Standridge, (1978) 144 Ga.App. 673, 242 S.E.2d 331, the court held that blocking the movement of the defaulting debtor's automobile after his oral protest to the secured party's repossession attempt was a breach of the peace.

A definitive statement of this type of suit and the rights and limitations of a secured party and the defaulting debtor was expressed in Thompson v. Ford Motor Credit Company, (5th Cir. 1977) 550 F.2d 256. In that case the finance company under a similar self-help statute winkled the automobile of a defaulting party away from a garageman who had custody of it for repairs. There the court, in ruling for the finance company, said, in 550 F.2d at 258:

"The gist of the action of trespass is an injury to the possession of personal property by use of unlawful force. Unlawful force is the essential element of the action. . . . Such force...