Helfinstine v. Martin

1977 OK 42, 561 P.2d 951, 21 U.C.C. Rep. Serv. (West) 670, 1977 Okla. LEXIS 497
CourtSupreme Court of Oklahoma
DecidedMarch 15, 1977
Docket47719
StatusPublished
Cited by19 cases

This text of 1977 OK 42 (Helfinstine v. Martin) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Helfinstine v. Martin, 1977 OK 42, 561 P.2d 951, 21 U.C.C. Rep. Serv. (West) 670, 1977 Okla. LEXIS 497 (Okla. 1977).

Opinion

BARNES, Justice:

Appellees filed Petition for Certiorari from a decision rendered April 20, 1976, by the Court of Appeals, Division No. 2, wherein it was held that the Appellees’ act of repossessing certain collateral from Appellant was in violation of Article II, Section 7, of the Oklahoma Constitution in that such conduct constituted a deprivation of Appellant’s property without first affording him due process of law, i.e., affording Appellant notice and an opportunity to be heard. The Court of Appeals specifically overruled the holding of the Trial Court, which upheld Appellees’ act of repossessing its collateral, and, in effect, rendered unconstitutional both the statutory self-help repossession of 12A O.S.1971, § 9-503, and the self-help repossession terms of the parties’ security agreement.

These issues raised in Appellant’s original brief were:

“1. That the court erred in sustaining Defendants’ Motion for judgment, notwithstanding the jury verdict for the reason that the court had no jurisdiction to render a judgment.
“2. That the court erred in sustaining Defendant’s Motion for judgment, notwithstanding the verdict, for the reason that there was adequate evidence presented on the part of the Plaintiff to support the verdict of the jury.
“3. That the court erred in refusing to give Plaintiff’s requested instruction to the fact that, ‘A trespass may be considered a breach of the peace.’ ”

The facts are not in dispute. Appellant, Robert E. Helfinstine, a painter by trade, entered into a retail installment contract and security agreement with Appellee Ford Motor Credit Company’s assignor for the purchase of one 1970 El Camino Chevrolet pickup truck, pledging said vehicle as security for his obligation on the contract. Para *953 graph 19 1 of the agreement provided that in the event the buyer defaults or fails to comply with any other provision of the contract the seller shall have the right to declare “all amounts due or to become due” and “shall have all the rights and remedies of a Secured Party under the Uniform Commercial Code, including the right to repossess the Property wherever the same may be found with free right to entry, and to recondition and sell the same at public or private sale.”

Monthly payments on the mortgaged vehicle, though usually late, were made through August, 1973. Thereafter, in October, 1973, Appellant defaulted upon the installment obligation which was secured by the above-mentioned personal property. Appellee, Ford Motor Credit Company, was the creditor holding possession of the installment obligation and corresponding security agreement. Upon default, Appellee’s agent, Shelby Martin, was dispatched to collect. He found Appellant incarcerated following a domestic complaint. After demand for and refusal of payment and after refusal of delivery of possession of the collateral by the debtor, the creditor, through its agent, Martin, repossessed the collateral from Appellant’s driveway by means of self-help and drove the vehicle to Kirk’s Wrecker Service and Salvage.

Upon his release from jail several days later, Appellant went directly to the credit company office to make arrangements to make up any payments. At that time he learned that his truck had been repossessed. Appellees refused to return the vehicle. Appellant’s wife then joined him at the credit office and offered to make up to three payments for possession of the truck, but the woman in charge, on instructions from Florida, refused, and demanded the entire balance.

Appellant then instituted suit as against Appellees for conversion of the vehicle and sought (after amendment at trial) redelivery of his truck and cancellation of the mortgage which Appellees had against the property, or payment of its value and $50,-000.00 punitive damages. Appellees’ answer admitted taking the truck, but pleaded the right to do so arising from the retail installment contract Appellant signed and the Uniform Commercial Code, 12A O.S. 1971, § 9-503.

The Trial Court rendered judgment for the Appellees notwithstanding the verdict of the jury in favor of Appellant for $594.00 actual and $20,000.00 punitive damages. On appeal, the Court of Appeals reversed, finding a wrongful conversion, that the self-help repossession terms of 12A O.S.1971, § 9-503, and of the security agreement were unconstitutional, and that the evidence was sufficient to sustain the verdict for the actual damages awarded.

*954 On Petition for Certiorari Appellees contend (1) the Court of Appeals erroneously held 12A O.S.1971, § 9-503, to be unconstitutional.

The validity of self-help repossession as authorized in § 9-503 of the Uniform Commercial Code has been extensively litigated. That section which was adopted in Oklahoma in 1961 is set forth in 12A O.S.1971, § 9-503, and provides:

“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. If the security agreement so provides the secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties. Without removal a secured party may render equipment unusable, and may dispose of collateral on the debtor’s premises under Section 9—504. Laws 1961, p. 179, § 9-503.”

The Oklahoma Code Comment following this section states Oklahoma has previously allowed the secured party to take possession without judicial process so long as it was done without breach of the peace. Firebaugh v. Gunther, 106 Okl. 131, 233 p. 460 (1925). Furthermore, the right to peaceful self-help repossession of property under circumstances such as are here involved, far from being a right created by § 9-503 or case law, has roots deep in the common law. [2 F. Pollock and F. Maitland, The History of English Law, 573 (2d Ed. 1899), and 2 Blackstone, Commentaries on the Law of England, 857-858 (4th Ed. T. Colley, 1899)].

While the Supreme Court of the United States has not considered the constitutionality of § 9-503 of the Uniform Commercial Code, Appellant contends the statute does not on its face meet the requirements of notice and fair hearing established by the Supreme Court in Fuentes v. Shevin, 407 U.S. 67, 69, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), and North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975).

The United States Supreme Court, in Shelley v. Kraemer, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1948), held:

“Since the decision of this Court in the Civil Rights Cases, 109 U.S. 3, 3 S.Ct. 18, 27 L.Ed.

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Bluebook (online)
1977 OK 42, 561 P.2d 951, 21 U.C.C. Rep. Serv. (West) 670, 1977 Okla. LEXIS 497, Counsel Stack Legal Research, https://law.counselstack.com/opinion/helfinstine-v-martin-okla-1977.