repetition in instructions that may have over-emphasized one rule of law was not, standing alone, reversible error
How later courts described this case
- repetition in instructions that may have over-emphasized one rule of law was not, standing alone, reversible error
Written by the judges who cited it.
The opinion
JOHNSON, Judge
(dissenting in part).
There are certain aspects of the majority opinion with which I have difficulty. The manner in which it deals with the seizure of the inventory is troubling in several respects. It would not necessarily follow that the obligation for payment of the inventory under the statute (§ 51-07-01, N.D.C.C.) would extinguish the obligation due John Deere, particularly where John Deere had not yet taken possession of the parts and other items. Such items might be set up in a judicial proceeding as a setoff or counterclaim to the claim of John Deere. However, the existence of an obligation or debt on the part of John Deere does not extinguish an obligation or debt on the part of Nygard. This is particularly true where one of the obligations is unliquidated, uncertain as to exact amount, and contingent on recovery of the inventory. See Lane v. Volunteer Co-operative Bank, 307 Mass. 508 , 30 N.E.2d 821 (1940); Bassett v. City Bank & Trust Co., 115 Conn. 1 , 160 A. 60 (1932); Rule 13 N.D.R.Civ.P.
John Deere, operating under a valid security interest, would be entitled to repossession of the collateral upon default. It would be obligated to account to Nygard for any surplus upon sale of the collateral. §§ 41-09-49 and 41-09-50, N.D.C.C. A seizure or repossession of collateral under these circumstances would not constitute a conversion. Under the Uniform Commercial Code, a secured party does not repossess collateral in excess of that needed to satisfy the obligation at his peril. It is often difficult to determine the value of collateral under a repossession sale. There may be circumstances where the amount of collateral repossessed is excessive in view of the debt to be satisfied, but the Commercial Code has no specific restrictions.
*97 It might be reasonably argued that the obligations arising under the statute upon termination of the franchise agreement constituted a remedy which should be given priority. When Nygard submitted its claim under the statute for parts and equipment inventory, such a claim could have been resolved previous to seizure of all the collateral by John Deere. It might also be argued that John Deere’s actions in retaining excessive collateral and not making a prompt disposition of such collateral constituted a conversion as to the excess. However, the case was not submitted on this basis below.