Case Name: Patrick CHISCHILLY, Plaintiff-Appellant, v. GENERAL MOTORS ACCEPTANCE CORPORATION, a Delaware Corporation, Defendant-Appellee
Court: Court of Appeals of New Mexico
Jurisdiction: New Mexico
Decision Date: 1980-07-10
Citations: 96 N.M. 264
Docket Number: No. 4163
Parties: Patrick CHISCHILLY, Plaintiff-Appellant, v. GENERAL MOTORS ACCEPTANCE CORPORATION, a Delaware Corporation, Defendant-Appellee.
Judges: WOOD, C. J., dissents.
Reporter: New Mexico Reports
Volume: 96
Pages: 264–274

Head Matter:
629 P.2d 340
Patrick CHISCHILLY, Plaintiff-Appellant, v. GENERAL MOTORS ACCEPTANCE CORPORATION, a Delaware Corporation, Defendant-Appellee.
No. 4163.
Court of Appeals of New Mexico.
July 10, 1980.
Joseph F. Gmuca, Crownpoint, Wayne H. Bladh, Window Rock, Ariz., for plaintiff-appellant.
Nicholas R. Pica, Campbell, Cherpelis & Pica, Albuquerque, for defendant-appellee.

Opinion:
OPINION
LOPEZ, Judge.
Chischilly, a Navajo Indian, brought suit in District Court in Bernalillo County against General Motors Acceptance Corporation (hereafter, GMAC) for damages for unlawful repossession of a truck. He had purchased the truck from Schultz Buick on August 18, 1976, on a retail installment contract. GMAC financed the transaction and obtained a security interest in the truck. On two 'occasions one around August 1, 1977, and the other around January 18,1978, an employee of GMAC repossessed the truck from Chischilly's residence at the Littlewater Community and removed it to Albuquerque. On neither occasion did GMAC obtain either Chischilly's consent or a tribal court order to allow it to repossess the truck. The Littlewater community is located in McKinley County in the State of New Mexico, on land owned by the United States and held in trust for the Navajo Indians. Repossession without the debtor's consent, or a tribal order, is prohibited by Navajo law.
After studying the stipulations and briefs submitted by the parties, the lower court dismissed the complaint. The court determined that New Mexico law, not Navajo tribal law, should apply and accordingly found that Chischilly had no cause of action in a New Mexico court. We reverse.
The sole issue we must decide is whether a New Mexico court should apply New Mexico or Navajo Tribal law to repossessions which occurred on lands under the jurisdiction of the Navajo Tribe. We conclude that Navajo law should be used.
The trial court's ruling that the repossessions took place within the jurisdictional limits of the State of New Mexico is irrelevant in determining whether or not a New Mexico court should apply New Mexico law since the trial court also found that the lands where the repossessions occurred was under the jurisdiction of the Navajo Tribe.
If there is a conflict between an Indian law and a state law, the state law is unenforceable on Indian land.
Quechan Tribe of Indians v. Rowe, 350 F.Supp. 106, 109, (S.D.Cal. 1972), affd, 531 F.2d 408 (9th Cir. 1976). Thus, if the dispute were wholly between Indians on land under the tribe's jurisdiction, and concerning internal matters over which the tribe had legislated, Indian law would govern, assuming a state court even had jurisdiction to hear the case. See generally, Native American Church v. Navajo Tribal Council, 272 F.2d 131 (10th Cir. 1959). Since the dispute is between an Indian and a non-reservation entity and arose out of repossessions which took place on Indian land, the usual conflicts of laws rules should be used to determine whose law to apply. In our deliberations, we assign the same status to the Navajo tribe as we would to another state. This is proper because, in certain respects, Indian tribes possess attributes of sovereignty akin to those of the states.
Indian reservations have a peculiar and unique political status in the United States. Although physically they lie under the dominion of one or several states, politically, they exist somewhat outside of the states' authority. As early as 1882, Justice Marshall wrote:
[T]he several Indian nations [are] . . . distinct political communities, having territorial boundaries, within which their authority is exclusive.
Worcester v. Georgia, 31 U.S. 515, 557, 6 Pet. 515, 557, 8 L.Ed. 483 (1882). This principal remains essentially intact today. Absent an act of Congress, the internal affairs of the Indians are within the jurisdiction of the tribal government. Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959). The Indian tribes are free to make their own laws and be governed by them in their own territory. Id.: Native American Church, supra.
In enacting laws which regulate the manner in which goods may be repossessed in its territory, the Navajo Tribal Council was rightfully exercising its police power to insure peace on the land under its jurisdiction. The exercise of the police power is an elemental attribute of the sovereignty possessed by the Navajos. Nevertheless, the recognition of the right of the Navajos to enact their own law concerning the manner of repossession does not of itself mandate that New Mexico courts apply that law. We must be guided by the law concerning conflicts of laws.
If New Mexico and Navajo law were the same, there would be no conflicts of law issue. But, they are not the. same; New Mexico had adopted the Uniform Commercial Code; the Navajos have not. Under New Mexico law, repossession of goods upon default is permissible without the consent of the debtor.
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....
Section 55-9-503, N.M.S.A. 1978. Under Navajo Law, however, self-help repossession of personal property is prohibited without the debtor's consent, or a tribal court order. Title 7 of the Navajo Tribal Code § 607 reads:
Repossession of personal property
The personal property of Navajo Indians shall not be taken from land subject to the jurisdiction of the Navajo Tribe under the procedures of repossession except in strict compliance with the following:
(1) Written consent to remove the property from land subject to the jurisdiction of the Navajo Tribe shall be secured from the purchaser at the time repossession is sought. The written consent shall be retained by the creditor and exhibited to the Navajo Tribe upon proper demand.
(2) Where the Navajo refuses to sign said written consent to permit removal of the property from land subject to the jurisdiction of the Navajo Tribe, the property shall be removed only by order of a Tribal Court of the Navajo Tribe in an appropriate legal proceeding.
In the event of unlawful repossession, The Tribal Code allows the wronged purchaser to recover damages.
Civil liability
Any person who violated 7 N.T.C. § 607 and any business whose employee violated such section is deemed to have breached the peace of the lands under the jurisdiction of the Navajo Tribe, and shall be civilly liable to the purchaser for any loss caused by the failure to comply with 7 N.T.C. § 607-609.
If the personal property repossessed is consumer goods (to wit: goods used or bought for use primarily for personal, family or household purposes), the purchaser has the right to recover in any event an amount not less than the credit service charge plus 10% of the principal amount of the debt or the time price differential plus 10% of the cash price.
7 N.T.C. § 609. The parties do not dispute that the truck was a consumer good under Navajo Law. Consequently, if Navajo law applies in this case, Chischilly is entitled to recover "not less than the credit service charge plus 10% of the principle amount of the debt or the time price differential plus 10% of the cash price." Id.
This is a case of first impression in New Mexico. When five years ago, a case with similar facts came before the New Mexico Supreme Court, it was remanded for determination of what law the parties, in their contract, had agreed would govern. Jim v. CIT Financial Services Corp., 87 N.M. 362, 533 P.2d 751 (1975). The question of which law to apply in the event the parties had not themselves made a choice of law was not reached. In the case before us, however, the court found that the contract made no provision as to which law should apply. This ruling is not contested on appeal. Consequently, we must determine from New Mexico choice of law rules whether to apply New Mexico or Navajo law.
The appropriate choice of law rule is found in the Uniform Commercial Code, which has 'been adopted in New Mexico. Sections 55-1-101 et. seq., N.M.S.A. 1978. Section 9-102 of the Code [§ 55-9-102, N.M.S.A. 1978] provides the choice of law rule applicable in a case of repossession arising from a conditional sale of personal property wherein a security interest was created. It is, therefore, governing in the instant case. Section 55-9-102 reads:
(1) Except as otherwise provided in Section 9-103 [55-9-103 NMSA 1978] on multiple state transactions and in section 9-104 [55-9-104 NMSA 1978] on excluded transactions, this article applies so far as concerns any personal property and fixtures within the jurisdiction of this state:
(a) to any transaction (regardless of its form) which is intended to create a security interest in personal property or fixtures including goods . . .
(2) This article applies to security interests created by contract including . . . conditional sale. . . . [Emphasis added.]
The exceptions in § 9-103 and 9-104 do not apply to the case before us. Section 9-103 [55-9-103, N.M.S.A. 1978] provides a choice of law rule governing the validity and perfection of security interests. Since those issues are not before us, Section 9-103 is not pertinent. Section 9-104 [§ 55-9-104, N.M.S.A. 1978] lists transactions not included under Article 9. The conditional sale of consumer goods wherein a security interest in the goods is created is not includ ed in this list. Hence, § 9-102 is the proper section to consider in the present case.
Other jurisdictions that have adopted the Uniform Commercial Code have interpreted § 9-102 as a choice of law rule which mandates the application of the law of the situs where the collateral is located at the time the dispute arises. Joint Holdings & Trading Co. v. First Union National Bank, 50 Cal.App.3d 159, 123 Cal.Rptr. 519 (1975); Lewis v. First National Bank, 134 Ga.App. 798, 216 S.E.2d 347 (1975); Doyle v. Northrop Corp., 455 F.Supp. 1318 (D.N.J. 1978); Associates Discount Corp. v. Cary, 47 Misc.2d 369, 262 N.Y.S.2d 646 (1965); Fidelity Bank & Trust Co. v. Production Metals Corp., 366 F.Supp. 613 (E.D.Pa.1973). Thus, the law of the place where the collateral was located at the time of repossession governs any dispute involving the repossession. Lewis, supra; Cary, supra. This result also has been reached in at least one jurisdiction that has not adopted the Uniform Commercial Code Universal C.I.T. Credit Corp. v. Hulett, 151 So.2d 705 (Ct.App.La.1963).
We believe that these jurisdictions have correctly interpreted Section 9-102. As Professor Weintraub has written:
That section 9-102 is intended as a general situs choice of law rule, not as just an indication of when forum law applies, is suggested by the first sentence of official comment 3 to that section: "In general this Article adopts the position, implicit in prior law, that the law of the state where the collateral is located should be the governing law, without regard to possible contracts in other jurisdictions."
Weintraub, Choice of Law in Secured Personal Property Transactions: The Impact of Article 9 of the Uniform Commercial Code, 68 Mich.L.Rev. 683, 704 (1970). Professor Cavers suggests the policy behind the situs choice of law rule in cases involving repossession.
Rules with respect to the repossession, removal and disposition of goods conditionally sold affect the orderly enjoyment and peaceful possession of property within the community. On occasion, failure to observe the local laws may lead to violence. The law of the situs at the time of repossession should clearly supply the rules governing the seller's behavior in retaking the goods. . . .
Cavers, The Conditional Seller's Remedies and the Choice of Law Process — Some Notes on Shanahan, 35 N.YXJ.L.Rev. 1126, 1141 (1960). In the instant case, the parties having come to no agreement to the contrary, Navajo law, that is, the law of the place where the repossession occurred, is to be used to determine the rights and liabilities of the parties with respect to the method, of repossession. We do not decide here which law would apply had the parties contracted to be governed by New Mexico law as allowed by Section 1-105 [§ 55-1-105, N.M.S.A. 1978] (contracting parties may make choice of law), but contrary to Section 9-102 [§ 55-9-102, N.M.S.A. 1978] (law of situs at time of repossession governs).
The laws of the Navajo Tribe are entitled to full faith and credit in the Courts of New Mexico. Jim, supra. To rule otherwise would infringe on the Navajos' right to make their own laws and be governed by them, and would be contrary to Williams, supra. GMAC does not put forth any policy of the State of New Mexico, and we find none, which would be thwarted by our application of Navajo Law to a dispute involving repossession which occurred on lands under the jurisdiction of the Navajo Tribe.
Generally a state will not apply the penal statutes of another sovereign. See Loucks v. Standard Oil Company, 224 N.Y. 99, 120 N.E. 198 (1918). Chischilly argues persuasively that 7 N.T.C. § 609, the law under which he seeks damages, is not a penal statute. GMAC cites no authority to the contrary. The standard for determining whether a law is penal was set out by the United States Supreme Court in 1892.
The test whether a law is penal, in the strict and primary sense, is whether the wrong sought to be redressed is a wrong to the public, or a wrong to the individual... .
Huntington v. Attrill, 146 U.S. 657, 668, 13 S.Ct. 224, 228, 36 L.Ed. 1123 (1892). Justice Cardozo further amplified the meaning of penal law.
A statute penal . [within the rules of private international law] is one that awards a penalty to the state . or to a member of the public, suing in the interest of the whole community to redress a public wrong. [Cites omitted.] The purpose must be, not reparation to one aggrieved, but vindication of the public justice . [T]he statute is not penal in the international sense . . . [when] the purpose of the punishment is reparation to those aggrieved by his offense.
Loucks, supra, 224 N.Y. at 102-103, 120 N.E. at 198-199. The main purpose of 7 N.T.C. § 609 is to provide compensation to a person wronged by the unlawful repossession of consumer goods. Jim v. CIT Financial Services Corp., 86 N.M. 784, 527 P.2d 1222 (Ct.App. 1974) (Hernandez, J., dissenting), rev'd on other grounds, 87 N.M. 362, 533 P.2d 751 (1975). As such Section 609 seeks to redress a private, not a public wrong. It provides reparation to an aggrieved party and is not a penal statute. It is enforceable in the New Mexico courts.
The judgment of the trial court is reversed and the cause is remanded for proceedings consistent with this opinion.
IT IS SO ORDERED.
WOOD, C. J., dissents.
HERNANDEZ, J., concurs.
. At the time of both repossessions the relevant sections of the Navajo Tribal Code were 7 N.T.C. § 307 and 309, now recodified as 7 N.T.C. § 607 and 609.