Opinion ID: 339025
Heading Depth: 2
Heading Rank: 4

Heading: Relationship of the Property to the Debt and the Existence of a Contract

Text: 23 We look for a relationship between the property involved and the underlying debt to insure that the state has not granted private individuals the power to exercise a roving commission to satisfy an unrelated debt. A conditional seller has special interests which attach to those goods that act as his collateral; so it is with Kennedy. See Culbertson, supra, at 431, and Adams v. Southern California First National Bank, supra, at 336-337. This is not a general and indiscriminate levy of unrelated property to act as collateral and satisfaction. Kennedy's power to enforce the warehouseman's lien is narrowly confined. It is limited to those goods which are stored with him; enforcement is peaceful. None of the dangers attributed to the grant of a roving commission, due to its lack of definition and broadness, are present here. 24 Further, Melara had notice of Kennedy's right of extra-judicial sale. Although Kennedy acted pursuant to statutory authorization, the contract establishing the debtor-creditor relationship provided notice to the debtor of the creditor's potential exercise of his rights under law. 25 In Adams v. Southern California First National Bank, there was a relationship between the property seized and the underlying debt. There was also present in Adams a contract, which established the debtor-creditor relationship, and which explicitly provided notice that seizure could be made in the event of default. In Culbertson, the only relationship that existed between the property and the debt was that the debtor's property was seized from the room on which the rent was owing. This was held insufficient. Unlike the situation here, the Arizona statute in Culbertson purported to give hotel managers a roving commission to the extent that they could seize the debtor's personal property remaining in his room as collateral for unpaid rent. Further, the rental agreement in Culbertson gave no notice to the tenant of any potential seizure. 26 In the instant case, there is a direct relationship between the property involved and the debt. Storage of the property with Kennedy is the basis of Melara's obligation. Also, the storage agreement, defining the terms of the underlying debt, provides notice of the challenged lien enforcement in the event of nonpayment for a period of three months. 9