National Bank of Joliet v. Bergeron Cadillac, Inc.

• Decision Date: 23 March 1977
• Docket Number: No. 48667,48667
• Citation: 5 Ill.Dec. 588,361 N.E.2d 1116,66 Ill.2d 140
• Parties: , 5 Ill.Dec. 588, 21 UCC Rep.Serv. 660 NATIONAL BANK OF JOLIET, Appellant, v. BERGERON CADILLAC, INC., Appellee.
• Court: Illinois Supreme Court

Page 1116

361 N.E.2d 1116

66 Ill.2d 140, 5 Ill.Dec. 588, 21 UCC

Rep.Serv. 660

NATIONAL BANK OF JOLIET, Appellant, v. BERGERON CADILLAC, INC., Appellee.

No. 48667.

Supreme Court of Illinois.

March 23, 1977.

Arnold, Gesell & Schwulst, Bloomington, for appellant.

Markowitz, Lawrence, Lenz, Jennings, Naylor & Mueller, Bloomington (John T. Naylor and Bernard E. Wall, Bloomington, of counsel), for appellee.

WARD, Chief Justice:

In December of 1973, the plaintiff, the National Bank of Joliet, brought a replevin action (Ill.Rev.Stat.1973, ch. 119, par. 1 Et seq.) in the circuit court of McLean County against the defendant, Bergeron Cadillac, Inc., seeking to recover a 1971 Cadillac automobile. The trial court entered judgment for the defendant, holding that its common law possessory lien based on repairs it had made on the auto had priority over the plaintiff's prior security interest under section 9--310 of the Uniform Commercial Code (Ill.Rev.Stat.1973, ch. 26, par. 9--310). The appellate court, with one justice dissenting affirmed (38 Ill.App.3d 598, 347 N.E.2d 874), and we allowed the plaintiff's petition for leave to appeal. 58 Ill.2d R. 315.

In February of 1973 the plaintiff loaned Gladys Schmidt $4,120 to enable her to purchase the automobile, taking a security interest in the automobile to secure the loan. This security interest was perfected by filing in the office of the Secretary of State. (Ill.Rev.Stat.1973, ch. 95 1/2, par. 3--202.) In August of 1973 Schmidt brought the auto to the defendant's shop for repairs. The cost of the materials and service was approximately $2,000, and, when Schmidt failed to pay, the defendant, through an inquiry to the Secretary of State, learned of the plaintiff's security interest. The defendant exercised its right of lien for the unpaid charges and retained possession of the auto. In September, Schmidt defaulted on her loan payments, and in October the plaintiff ascertained that the Cadillac was in the defendant's possession. The plaintiff's demand on the defendant for the Cadillac under its security interest was refused, and the plaintiff filed the action in replevin.

The plaintiff contends that the right to a common law possessory lien has been superseded in Illinois by two statutes which provide for repairmen's liens. Ill.Rev.Stat.1973, ch. 82, pars. 40 through 47 and 47a through 47f.

Section 9--310 of the Uniform Commercial Code, which has been in effect in Illinois since July 1, 1962, provides 'When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise.' Ill.Rev.Stat.1973, ch. 26, par. 9--310.

The plain language of section 9--310 gives the lien of persons furnishing services or materials upon goods in their possession priority over a perfected security interest unless the lien is created by statute and the statute expressly provides otherwise.

The comment of Anderson (Anderson, Uniform Commercial Code) is:

'Code section 9--310 declares the priority of the line of persons furnishing services or materials with respect to goods in their possession. Such a lien is, basically, the artisan's lien of the common law. Whether such a lien is based upon decision or statute law, Code section 9--310 gives it priority, with one exception, over a pre-existing security interest in the goods.

The single exception relates to a lien created by statute; such a lien does not have such priority if the statute expressly provides otherwise. Accordingly, the lien has priority when it is based upon the common law or decision, or when it is based upon a statute which is silent as to priorities or which gives the lien priority. The lien is subordinated to the security interest only when the lien statute expressly so declares.' 4 Anderson, Uniform Commercial Code sec. 9--310, at 341--42 (2d ed. 1971); see also Ill.Ann.Stat., ch. 26, par. 9--310, Illinois Code Commentary, at 208 (Smith-Hurd 1974).

The artisan's possessory lien of the...