Should you take collateral without getting the court to help you?

The Uniform Commerical Code does allow “self-help” but only to the extent no breach of the peace will occur. See Neb Rev Stat UCC 9-609. “Without breach of peace” is not defined and is left up to the courts to decide. Some Nebraska cases may be useful to consider.

State v. Hinchey, 220 Neb. 825, 374 N.W.2d 14 (Neb.1985) discusses the breach of the peace issue. “It is clear that § 9-503 [currently 9-609] permits a creditor to take possession of the property without judicial process, only if it can be done without breach of the peace, such as where the debtor grants consent or permission to the creditor. Cases throughout the country which have reviewed what constitutes a “breach of the peace” are varied but in no instance has the creditor been permitted to violate the debtor’s fourth amendment rights. See, Henderson v. Security Nat. Bank, 72 Cal.App.3d 764, 140 Cal.Rptr. 388 (1977); Quest v. Barnett Bank of Pensacola, 397 So.2d 1020 (Fla.App.1981); Deavers v. Standridge, 144 Ga.App. 673, 242 S.E.2d 331 (1978); Dixon v. Ford Motor Credit Corp., 72 Ill.App.3d 983, 391 N.E.2d 493 (1979); Morris v. Bk. & Tr. Co., 21 Ohio St.2d 25, 254 N.E.2d 683 (1970); Stone Machinery Co. v. Kessler, 1 Wash.App. 750, 463 P.2d 651 (1970).

To the same extent, if force or threats of force are necessary to obtain immediate possession of collateral on a debtor’s default, the right of the secured party to obtain such possession must be effected by a judicial action rather than by self-help, thereby requiring the individual to bring an appropriate replevin action. See Platte Valley Bank of North Bend v. Kracl, 185 Neb. 168, 174 N.W.2d 724 (1970).” State v. Trackwell, 235 Neb. 845, 458 N.W.2d 181 (Neb.1990) discusses the breach of peace issue as well. “We note here the trial court found that under the self-help repossession provision of the Uniform Commercial Code, Neb. U.C.C. § 9-503 (Reissue 1980), “[a]ny privilege or right to enter upon the private property of another to peaceably retake the property would terminate upon commencement of the criminal enterprise.”

A mere trespass onto the open land of another, without more, will not usually constitute a breach of the peace under this section. See, Jefferds v. Ellis, 127 Misc.2d 477, 486 N.Y.S.2d 649, 652 (1985), rev’d on other grounds 122 A.D.2d 595, 505 N.Y.S.2d 15 (1986) (providing as it does that the only restriction on repossession is that it be without a “breach of the peace,” § 9-503 authorizes the commission of a common-law trespass, action which was not permitted at common law to regain possession of personal property); Marine Midland Bank-Central v. Cote, 351 So.2d 750 (Fla.App.1977) (when a security agreement provides the secured party has on default the rights and remedies provided by the Uniform Commercial Code, the right of repossession stated by Fla.Stat. § 679.503 (1975) implies, just as it did at common law, a limited privilege to enter upon the debtor’s land); Butler v. Ford Motor Credit Co., 829 F.2d 568 (5th Cir.1987) (rejecting the contention that entering a private driveway to repossess a vehicle without the use of force is a breach of the peace because it constitutes a trespass); 2 J. White & R. Summers, Uniform Commercial Code § 27-6 at 577 (3d ed. 1988) (“We have found no case which holds that the repossession of an automobile from a driveway or a public street (absent other circumstances, such as the debtor’s objection) itself constitutes a breach of the peace, and many cases uphold such a repossession”).

The repossession in the present case, however, was clearly a breach of the peace. Defendant and Holmes went to the farm at 11 p.m.; took the pickup, which was loaded with personal property; and fled despite Able’s protest, which was known to Holmes. There was also controverted testimony that the front part of the pickup may have been parked in an outbuilding. For representative cases concerning the facts which may constitute a breach of the peace, see, e.g., Dixon v. Ford Motor Credit Corp., 72 Ill.App.3d 983, 29 Ill.Dec. 230, 391 N.E.2d 493 (1979) (when a creditor repossesses in disregard of the debtor’s unequivocal oral protest, the repossession may be found to be a breach of the peace); Nicholson v. Schramm, 164 Ind.App. 598, 330 N.E.2d 785 (1975) (assault and battery constitutes a breach of the peace); Kimble v. Universal TV Rental, 65 Ohio Misc. 17, 417 N.E.2d 597 (1980) (breach of the peace is a violation of public order, a disturbance of the public tranquility, by an act or conduct tending to provoke or excite others to breach the peace, and includes any violation of any law enacted to preserve the peace and good order); Morris v. First Natl. Bank & Trust Co. of Ravenna, 21 Ohio St.2d 25, 254 N.E.2d 683 (1970) (breach of the peace results when creditor legally enters debtor’s premises but is physically confronted by one in charge of such premises, told to desist his efforts at repossession, and instructed to depart from the premises, and creditor refuses to heed such commands). The trial court correctly concluded that defendant would be deprived of any defense afforded by § 9-503.”

Jeanelle Lust
Managing Partner