Court Opinion

ID: 9663716
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:49:07.45464+00
Date Added: 2024-06-11T18:14:55.296535
License: Public Domain

WINANS, Justice
(dissenting).
*171It is my opinion that the bank and Weiss complied with the requirements of the Uniform Commercial Code (U.C.C.) in foreclosing their security interest. Thus, for all of the reasons indicated below, I would affirm the decision of the trial court.
First of all, the steps taken by the bank to foreclose its security interest complied with the U.C.C. Pursuant to SDCL 57-39-8, as well as the terms of the security agreement, the bank had the right to possession of the collateral after Otten defaulted on the security agreement. After taking possession of the collateral, the bank sought to foreclose its security interest by bringing an action on the secured note. Such a judicial proceeding is specifically authorized by the U.C.C. as a method of foreclosing a security interest. SDCL 57-39-1. By bringing an action on the note, the bank did not waive its right to possession of the collateral under the security agreement. SDCL 57-39-1 specifically provides that the rights and remedies of the secured party are cumulative. Accordingly, until the debt is satisfied, a creditor may proceed with any number of remedies, so long as they are consistent. Olsen v. Valley National Bank of Aurora, 91 Ill.App.2d 365, 234 N.E.2d 547 (1968). The recovery of collateral by a secured party is consistent with his action on the underlying debt. In re Adrian Research and Chemical Company, D.C.E.D.Pa., 169 F.Supp. 357 (1958). As such, the bank was acting within the provisions of the U.C.C. when it retained possession of the collateral after bringing an action on the note. See also “Election of Remedies on Default: Article 9 of the U.C.C.” Duke L.T. (Fall 1959).
Furthermore, the disposition of the collateral was “timely”. Under the U.C.C., no specific time is set within which the secured party must make a disposition of the collateral, except in the case of consumer goods which pursuant to SDCL 57-39-14 must be sold within ninety days after the secured party takes possession. See U.C.C. § 9-504, comment 6. In all other cases, the U.C.C. merely requires that the collateral be sold within a commercially reasonable period of time. SDCL 57-39-11. What constitutes a commercially reasonable time depends entirely on the facts and circumstances of each particular case.
In the present case, the lower court properly found that the *172delay by the bank in disposing of the collateral was caused by a combination of justifiable factors, including an attempt by the bank to get the defendant to pay the delinquent installments, the bank’s subsequent commencement of an action to obtain, a money judgment, and the expected delay in bringing the matter to trial. In light of these factors, the evidence was sufficient to sustain the trial court’s finding that the bank’s delay in disposing of the collateral was reasonable under the circumstances.
I would also affirm the trial court’s decision for the reason that the debtor, under the circumstances of this case, would not be entitled to damages even if the bank had failed to comply with the U.C.C. At the time of trial, the secured party was still in possession of the collateral.
SDCL 57-39-17 provides:
“If it is established that the secured party is not proceeding in accordance with the provisions of this chapter disposition may be ordered or restrained on appropriate terms and conditions. If the disposition has occurred the debtor * * * has a right to recover from the secured party any loss caused by a failure to comply with the provisions of this chapter.”
The remedy of Otten, under the above quoted statute, was to compel the bank to make a disposition of the collateral. The right to recover damages exists only where the collateral has already been disposed of by the secured party.