Chrysler Credit Corp. v. Gillaspie

321 N.E.2d 509, 24 Ill. App. 3d 620, 16 U.C.C. Rep. Serv. (West) 573, 1974 Ill. App. LEXIS 1754
CourtAppellate Court of Illinois
DecidedDecember 5, 1974
DocketNo. 58307
StatusPublished

This text of 321 N.E.2d 509 (Chrysler Credit Corp. v. Gillaspie) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chrysler Credit Corp. v. Gillaspie, 321 N.E.2d 509, 24 Ill. App. 3d 620, 16 U.C.C. Rep. Serv. (West) 573, 1974 Ill. App. LEXIS 1754 (Ill. Ct. App. 1974).

Opinion

Mr. PRESIDING JUSTICE McNAMARA

delivered the opinion of the court:

Defendant, Timothy Gillaspie, appeals from a deficiency judgment entered in the circuit court of Cook County in favor of plaintiff, Chrysler Credit Corporation, in the amount of $1,750.89 plus costs. The deficiency existed after the disposition of defendant’s automobile. On appeal, defendant challenges the constitutionality of section 9 — 503 of the Uniform Commercial Code (Ill. Rev. Stat. 1969, par. 9 — 503), the self-help repossession section of the Uniform Commercial Code, as violative of his due process rights under the Fifth and Four tenth Amendments of the Constitution. He argues that this section of the Code improperly permits the taking of his property without prior notice and hearing. While we do not believe that the facts and circumstances of the present case warrant our reaching the constitutional question, we consider a brief discussion of that issue to be pertinent to explain our decision.

Defendant’s argument represents another attempt to strike down a creditor’s resort to prejudgment remedies without notice or hearing to the holder of the property. The major case in this area, Sniadach v. Family Finance Corp. (1969), 395 U.S. 337, held unconstitutional on procedural due process grounds a Wisconsin wage-garnishment procedure which permitted wage garnishment without prior notice or hearing to the employee. Subsequently, in Fuentes v. Shevin (1972), 407 U.S. 67, a plurality of the Supreme Court held the prejudgment wilt of replevin procedures set out in Florida and Pennsylvania statutes to be violative of the Fourteenth Amendment’s requirements of notice and hearing. These procedures had allowed a creditor, upon an ex parte application to a court clerk accompanied by the posting of bond, to obtain a writ of replevin to be executed by the sheriff upon the holder of property and to summarily seize the person’s possessions. The court held that the failure of the statutes to provide the right to a prior hearing to test the creditor’s claims to the goods was a defect of constitutional proportions. (But See Mitchell v. W.T. Grant Co. (1974), 416 U.S. 600.) This court has applied the Fuentes rationale to other prejudgment situations. In Brooks v. LaSalle National Bank (1973), 11 Ill.App.3d 791, 298 N.E.2d 262, we held that a tenant’s personal property could not constitutionally be withheld by the landlord for non-payment of rent pursuant to the Innkeeper’s Lien Statute without according the tenant prior notice and hearing. Additionally, in Leavitt v. Charles R. Hearn, Inc. (1974), 19 Ill.App.3d 980, 312 N.E.2d 806, we refused to vest a mechanic with a prejudgment right to summarily repossess a specific item to enforce his lien, and expressly rejected section 9 — 503 as secondary authority.

By its terms, section 9 — 503 permits secured parties, upon default, to repossess secured chattels by self-help if such procedures can be accompanied “without breach of the peace.” Since the self-help remedy is not predicated upon the issuance of prior notice and hearing to the holder of the collateral, the viability of the provision in constitutional terms rests upon the determination of the existence of sufficient State involvement through the enactment of the provision to constitute “state action.”

While no Illinois court has considered this question, various courts throughout the country have, with diverse results. Several circuits of the United States Courts of Appeal have held that the self-help provision contained in section 9 — 503 amounts to private conduct not mider color of State law. (Adams v. Southern California First National Bank (9th Cir. 1973), 492 F.2d 324, cert. denied (1974), 43 U.S.L.W. 3277; Bichel Optical Laboratories, Inc. v. Marquette National Bank (8th Cir. 1973), 487 F.2d 906; Shirley v. State National Bank (2d Cir. 1974), 493 F.2d 739.) However, persuasive authority exists to the contrary — that the statute promotes an injury cognizable in the coruts. Gibbs v. Titelman (E.D. Pa. 1973), 369 F. Supp. 38; Boland v. Essex County Bank & Trust Company (D. Mass. 1973), 361 F.Supp. 917; James v. Pinnix (S.D. Miss. 1973) (1969-1973 Transfer Binder), CCH Sec. Tr. Guide ¶ 52,172, at 67,263; Michel v. Rex-Noreco, Inc. (D. Vt. 1972), 12 U.C.C. Rep. Serv. 543.

The reason we need not reach this constitutional issue rests upon the nature of the facts in the present case. On July 16, 1969, defendant purchased a new Plymouth automobile. He executed a retail installment sales contract, which was assigned to plaintiff on the same date. The total amount due was $4,443.16, payable in 36 consecutive monthly installments of $124.81 beginning August 17, 1969.

In December, 1969, defendant drove the automobile on a trip to Texas. While there, he had trouble with the transmission and took the auto to Burns Motors in McAllen, Texas, for repair. He was told that the warranty did not apply to the transmission. Subsequently Burns Motors called plaintiff to report that the vehicle which was in its ¡service department contained a payment book showing plaintiffs interest. Bums inquired of plaintiff about a disposition of the vehicle, as the bill for repairs had not been paid and defendant had returned to Chicago. At the time, defendant was 4 months delinquent in his payments to plaintiff and the latter had sent a notice of sale to defendant which had been returned undelivered.

Upon his return to Chicago, defendant talked to plaintiffs regional manager, Mr. Stitch, about the situation. Stitch informed defendant that he would have to pay the arrearages and make the account current. Defendant made several payments and, on April 29,1970, his account became current. Plaintiff then advised defendant and Bums Motors that plaintiffs “hold” on the vehicle was released. Defendant went to Texas in May, 1970, but was told by Burns Motors that unless he paid the repair biU of $257 he would not be given possession of the auto. Defendant called Stitch concerning the warranty, and was told that plaintiff could do nothing about the situation. Defendant did not pay the repair biH and returned to Chicago, leaving the auto in the possession of Bums Motors. Defendant subsequently did not make his May, 1970, payment to plaintiff. Plaintiff thereupon assigned its interest in the vehicle to Bums Motors for $900 and paid the repair bill.

The reason we need not reach the constitutional issue urged upon us is that no repossession was involved. Plaintiff neither seized nor even possessed the automobile. As shown above, defendant voluntarily brought the auto to Burns Motors in Texas for repair work. Bums retained possession of the auto pursuant to a valid mechanic’s lien acquired as a result of its labor. After defendant refused to pay for the repair, Burns could have foreclosed its lien, subject to plaintiff’s interest.

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Related

Sniadach v. Family Finance Corp. of Bay View
395 U.S. 337 (Supreme Court, 1969)
Fuentes v. Shevin
407 U.S. 67 (Supreme Court, 1972)
Mitchell v. W. T. Grant Co.
416 U.S. 600 (Supreme Court, 1974)
Joyce Shirley v. State National Bank of Connecticut
493 F.2d 739 (Second Circuit, 1974)
Boland v. Essex County Bank and Trust Company
361 F. Supp. 917 (D. Massachusetts, 1973)
Shaw v. Lorenz
246 N.E.2d 285 (Illinois Supreme Court, 1969)
Anundson v. City of Chicago
256 N.E.2d 1 (Illinois Supreme Court, 1970)
Leavitt v. Charles R. Hearn, Inc.
312 N.E.2d 806 (Appellate Court of Illinois, 1974)
Brooks v. La Salle National Bank
298 N.E.2d 262 (Appellate Court of Illinois, 1973)
Gibbs v. Titelman
369 F. Supp. 38 (E.D. Pennsylvania, 1973)
Adams v. Southern California First National Bank
492 F.2d 324 (Ninth Circuit, 1973)

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321 N.E.2d 509, 24 Ill. App. 3d 620, 16 U.C.C. Rep. Serv. (West) 573, 1974 Ill. App. LEXIS 1754, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chrysler-credit-corp-v-gillaspie-illappct-1974.