Hilliman v. Cobado

499 N.Y.S.2d 610 (1986)

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Nature of the Case

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Facts

D sold P a herd of cattle. The sale was tied to a 'collateral security mortgage' dated February 1, 1984. the sale was secured by a mortgage on the farm realty of P. Before delivery of the cattle, D demanded additional security. A second instrument entitled 'chattel mortgage' dated February 8, 1984, was executed by P. D was given a chattel mortgage interest in '68 cows and 1 bull.' Both instruments were for $48,200. Payment was to be made by P by even monthly payments of $ 1,000. Interest was provided at 11% per annum. P under a claim of right culled a number of the cattle delivered. D took exception to this practice. A third instrument was executed. This was also denominated a 'chattel mortgage.' It is dated June 20, 1985. Under the terms of this instrument, the collateral is recited to be '37 replacement cows.' The balance due was fixed at $39,552.77. Provision for payment of this reduced amount continued as previously provided at $ 1,000 per month with the balance drawing interest at 11% per annum. P has never been in default on the required contract payments. Only one financing statement was filed and this was in connection with the second chattel mortgage of June 20, 1985, only. The first instrument denominated a collateral security mortgage, dated February 1, 1984, giving security on the farm premises (realty), was recorded on February 9, 1984. Without any prior warning, D and two Deputy Sheriffs arrived at the premises of Szata (P). Mr. Szata, a cripple, proceeding with the aid of a cane and his wife went out of their home to meet D and the deputies. The deputies advised them that D 'was here to repossess the collateral under the terms of the security agreement.' Mr. Szata immediately replied that he was not in default and that D was to leave the premises immediately and could not have the cattle. D simply turned and ran to the barn saying 'to hell with this we're taking the cows.' Deputy Buchardt told Mr. and Mrs. Szata that D had a violent temper and a reputation for violence. The deputy also told Mr. Szata that he would be arrested if he got out of line. Mr. and Mrs. Szata went to the barn and again told D to stop. D refused and was beating the released cattle and trying to herd them through a small opening in the barn door, a Fay Hilliman, the mother-in-law of Mr. Szata and the mother of Mrs. Szata arrived at the barn. She joined the Szatas in ordering D to desist. D ignored them and continued to push the cattle through the barn opening. Lt. Ernie Travis of the Sheriff's Department appeared on the scene. He advised D that if he, left with the cattle he would be arrested. D ignored the warning and was arrested for possession of stolen property. Later Mr. Szata was charged with fraudulent sale of mortgaged property. Ps sued D seeking injunctive relief.