## Facts

- The Cobados sold a herd of cattle to the plaintiffs, secured by a real property “collateral security mortgage” and, after additional demands, a chattel mortgage covering “68 cows and 1 bull.”
- The instruments set the debt at $48,200, payable in $1,000 monthly installments at 11% interest.
- After delivery, plaintiffs culled and replaced some cattle; following dispute, the parties executed a later chattel mortgage listing “37 replacement cows” and fixing the balance at $39,552.77 on the same $1,000-per-month, 11% terms.
- Plaintiffs were not in default on the required payments.
- Despite no payment default, Kent Cobado went to the Szata farm with deputy sheriffs and took cattle over the plaintiffs’ objections after plaintiffs protested and requested that he leave.
- The chattel mortgage language authorized repossession only upon default and permitted entry to repossess only if done “peaceably,” consistent with the UCC.
- Criminal charges arose from the incident (including against Cobado for possession of stolen property), and related matters were pending when the civil court addressed injunctive relief.

## Issues

1. Whether a secured party may use UCC self-help repossession when the debtor is not in default.
2. Whether taking collateral over the debtor’s objection, with law-enforcement involvement and confrontation, constitutes a breach of the peace that defeats self-help repossession.
3. Whether the plaintiffs satisfied the requirements for a preliminary injunction ordering the return of the seized cattle.

## Decision

- The court granted a preliminary injunction directing return of the cattle taken from the plaintiffs’ farm.
- The court found the plaintiffs had not been in default, so contractual and UCC self-help repossession rights were not triggered.
- The court concluded that, even if self-help were otherwise available, the manner of the seizure was not peaceable and amounted to a breach of the peace.
- Applying CPLR 6301 standards, the court determined the plaintiffs showed a likelihood of success on the merits, irreparable harm from loss of the cattle, and equities favoring restoration of possession pending final resolution.

## Legal Principles

- Under UCC self-help repossession rules, a secured party may repossess collateral without judicial process only after default.
- Even after default, self-help repossession is permitted only if it can be accomplished without breach of the peace; resistance, confrontation, or threats of arrest are indicators that repossession is not peaceable.
- Where self-help is unauthorized (no default) or carried out in a non-peaceable manner, equitable relief may issue to restore the status quo, including an order compelling return of the collateral.
- A preliminary injunction under CPLR 6301 requires a showing of likelihood of success on the merits, irreparable harm absent injunctive relief, and a balance of equities favoring the movant.

## Conclusion

The court ordered the seized cattle returned because the buyers were not in default and the attempted self-help repossession was not peaceable, making injunctive relief appropriate to prevent continued wrongful deprivation of the collateral while the underlying dispute proceeded.


Hilliman v. Cobado, 499 N.Y.S.2d 610 (N.Y. Sup. Ct. 1986)