Stone Machinery Co. v. Kessler

• Citation: 1 Wn.App. 750,463 P.2d 651
• Decision Date: 12 January 1970
• Docket Number: No. 18--40123,18--40123
• Court: Court of Appeals of Washington
• Parties: , 7 UCC Rep.Serv. 135 STONE MACHINERY COMPANY, a corporation, Appellant, v. Frank KESSLER, Respondent.

Page 750

1 Wn.App. 750

463 P.2d 651, 7 UCC Rep.Serv. 135

STONE MACHINERY COMPANY, a corporation, Appellant, v. Frank KESSLER, Respondent.

No. 18--40123.

Court of Appeals of Washington, Division 3.

Jan. 12, 1970.

Rehearing Denied Jan. 21, 1970.

Rehearing Denied Feb. 16, 1970.

Review Denied March 13, 1970.

S. Dean Arnold, Clarkston, and Minnick, Hahner & Hubbard, Walla Walla, for appellant.

E. J. Stanfill, Asotin, for respondent.

EVANS, Chief Judge.

Plaintiff Stone Machinery brought this action in Asotin County to repossess a D-9 Caterpillar Tractor which plaintiff had sold to defendant Frank Kessler under conditional sales contract. Service of process was not made on the defendant but plaintiff located the tractor in Oregon and repossessed it. The defendant then filed an answer and cross-complaint in the Asotin County replevin action, alleging that the plaintiff wrongfully and maliciously repossessed the tractor, and sought compensatory and punitive damages under Oregon law. Trial was to the court without a jury and the court awarded defendant compensatory damages in the sum of $18,586.20, and punitive damages in the sum of $12,000 on defendant's cross-complaint.

The operative facts are not in serious dispute. Defendant Kessler purchased, by conditional sales contract, a used D-9 Caterpillar Tractor from the plaintiff Stone Machinery, for the sum of.$23,500. The unpaid balance of $17,500 was to be paid in monthly installments, with skip payments. The defendant's payment record was erratic and several payments were made late. However, payments of $3600 on March 29, 1966, and $1800 on July 18, 1966, put the contract payments on a current basis. The payment due on August 10, 1966 was not made and, on September 7, 1966, plaintiff's credit manager, Richard Kazanis, went to the defendant's ranch in Garfield, Washington, and demanded payment of the balance due on the contract or immediate possession of the tractor. At this time defendant had made payments on the purchase price totaling $17,200, including the trade-in. The defendant was unable to make full payment, or any payment at that time, and informed Mr. Kazanis that he would not relinquish possession of the tractor to him at that time, or at any time in the future, in the absence of proper judicial proceedings showing his right to repossess, and that 'someone would get hurt' if an attempt was made to repossess without 'proper papers.' At that time the defendant informed Mr. Kazanis that he, the defendant, expected to be awarded a contract by the U.S. Bureau of Fisheries to do some work with the D-9 at their installation on the Grande Ronde River near Troy, Oregon, and that he would then be able to pay on the tractor.

On September 13, 1966, the plaintiff instituted this action in Asotin County, Washington, but the sheriff was unable to locate the tractor in that county. Thereafter, the plaintiff instituted another action in Garfield County, but the sheriff was unable to locate the tractor in that county. The evidence indicates that on September 24 Kessler took the tractor to Oregon to work the bureau of fisheries job.

On September 27, 1966, Mr. Kazanis, by use of an airplane, located the tractor on the Grande Ronde River, west of Troy, Wallowa County, Oregon. He then contacted the sheriff of Wallowa County and requested him to accompany them in the repossession of the tractor to prevent any violence by the defendant. The sheriff agreed to meet with Mr. Kazanis at Troy, Oregon, and on September 27, 1966, Mr. Kazanis in his private car, plaintiff's mechanic in a company pickup; and the plaintiff's truck driver in the company lo-boy truck, left Walla Walla, and the following morning met the Wallowa County Sheriff at Troy, where the sheriff was shown a copy of the conditional sales contract. The sheriff confirmed previous legal advice plaintiff had received that the plaintiff had the right to repossess the tractor (although not by the use of force) and thereupon the sheriff, in his official sheriff's car, followed by Mr. Kazanis in his private car, the mechanic in the pickup, and the truck driver in the lo-boy, proceeded to the scene where the defendant was operating the D-9 tractor in the Grande Ronde River approximately 7 miles west of Troy, pursuant to contract with the U.S. Bureau of Fisheries.

Upon arriving at the scene the sheriff, accompanied by Mr. Kazanis, walked to the edge of the river and motioned the defendant, who was working with the tractor in the river, to bring the tractor to shore. The sheriff was in uniform and wearing his badge and sidearms. The sheriff informed the defendant that the plaintiff Stone Machinery had a right to repossess the tractor, and stated, 'We come to pick up the tractor.' The defendant asked the sheriff if he had proper papers to take the tractor and the sheriff replied, 'No.' The defendant Kessler protested and objected to the taking of the tractor but offered no physical resistance because, as he testified, 'he didn't think he had to disregard an order of the sheriff.' The plaintiff's employee then loaded the tractor on the lo-boy and left for Walla Walla, Washington.

Within a few days the tractor was sold to a road contractor at Milton-Freewater, Oregon, for the sum of $7447.80 cash, on an 'as is' basis. The sale price represented the balance due on the contract, plus the plaintiff's charges for repossession.

Plaintiff's first assignments of error are directed to the following findings of the trial court:

XII

That the plaintiffs actions in repossessing the defendant's tractor on September 28, 1966, and the actions of the Wallowa County Sheriff, in aid of the plaintiffs, amounted to constructive force, intimidation and oppression, constituting a breach of the peace and conversion version of defendant's tractor.

XIV

That the plaintiffs failed to show just cause or excuse for the wrongful act of repossession of the defendant's tractor on September 28, 1966.

XV

That the wrongful act of repossession, done intentionally on September 28, 1966, was malicious and was so wanton and reckless as to show disregard for the rights of the defendant, Frank Kessler.

Defendant Kessler's cross-claim is predicated on the theory that Stone Machinery Company committed a tort in Oregon. To resolve this question we must look to Oregon law. As stated in Maag v. Voykovich, 46 Wash.2d 302, 303, 280 P.2d 680 (1955):

The law of the place where a tort is committed controls the questions in connection with the act, the responsibility therefor, and the nature of a cause of action based thereon. Richardson v. Pacific Power & Light Co. (1941), 11 Wash.2d 288, 118 P.2d 985; Mountain v. Price (1944), 20 Wash.2d 129, 146 P.2d 327.

Where a servant acts in one state under direction of a master in another, the law of the state where the servant acts governs. Restatement, Conflict of Laws, §§ 67, 387 (1934).

Retaking possession of a chattel by a conditional seller, upon the default of the buyer, is governed by O.R.S. 79.5030 (U.C.C. 9--503) Secured party's right to take possession after default. 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. * * *

(Italics ours.)

Defendant Kessler was admittedly in default for nonpayment of the August and September contract installments. By the terms of the above statute Stone Machinery had the right to take possession of the tractor without judicial process, but only if this could be done without a breach of the peace. The question is whether the method by which they proceeded constituted a breach of the peace.

No Oregon cases have been cited which define the term 'breach of peace' so we must look to other authority. In 1 Restatement of Torts 2d, § 116 (1965), the term is defined as follows:

A breach of the peace is a public offense done by violence, or one causing or likely to cause an immediate disturbance of public order.

In the case of McKee v. State, 75 Okl.Cr. 390, 132 P.2d 173, breach of peace is defined (headnote 9, 132 P.2d 173), as follows:

To constitute a 'breach of the peace' it is not necessary that the peace be actually broken, and if what is done is unjustifiable and unlawful, tending with sufficient directness to break the peace, no more is required, nor is actual personal violence an essential element of the offense. * * *

In the instant case it was the sheriff who said that he had no legal papers but that 'we come over to pick up this tractor.' Whereupon, the defendant Kessler stated, 'I told him I was resisting this; there was an action started and I wanted to have a few days to get money together to pay them off.' At this point defendant Kessler had a right to obstruct, by all lawful and reasonable means, any attempt by plaintiff to forceably repossess the tractor. Burgin v. Universal Credit Co., 2 Wash.2d 364, 98 P.2d 291 (1940). Had the defendant offered any physical resistance, there existed upon both the sheriff and plaintiff's agents a duty to retreat. See Westerman v. Oregon Auto. Credit Corp., 168 Or. 216, 122 P.2d 435 (1942). However, confronted by the sheriff, who announced his intention to participate in the repossession, it was not necessary for Kessler to either threaten violence or offer physical resistance. As stated by the court in Roberts v. Speck, 169 Wash. 613, at 616, 14 P.2d 33 at 34 (1932), citing from Jones on Chattel Mortgages (4th ed.), § 705:

'The mortgagee becomes a trespasser by going upon the premises of the mortgagor, accompanied by a deputy sheriff who has no legal process, but claims to act Colore officii, and taking possession...