## Facts

- A bank loaned Richard Spillers $25,000 to purchase a crane and took a security interest in the crane; the crane was affixed to concrete forms Spillers already owned.
- The note required repayment within six months; Spillers failed to pay, and the bank granted a 30-day extension that also went unpaid.
- In January 1978, the bank sued to collect on the note; around that time Spillers delivered possession of the crane and concrete forms to the bank.
- In March 1978, the bank’s attorney notified Spillers’s attorney that the bank had a $15,000 offer for the crane and would sell within 10 days.
- Spillers counteroffered to buy the crane for $16,000; the bank agreed only if Spillers satisfied stated conditions, including providing a cashier’s check within four days.
- Spillers did not meet those conditions and stopped pursuing the purchase.
- The bank sold the crane for $15,000 and sold the concrete forms for $6,120.
- The bank later obtained a deficiency judgment against Spillers for approximately $6,500.
- Spillers filed a separate damages action alleging the bank’s disposition of the crane and forms was not commercially reasonable under UCC Article 9 and seeking damages and related relief from the deficiency.

## Issues

1. Whether the bank’s disposition of the repossessed crane and concrete forms complied with UCC Article 9’s “commercially reasonable” requirement as to method, manner, time, place, and terms.
2. Whether the bank provided adequate notice of the intended sale and proceeded properly after Spillers failed to perform on his proposed purchase.
3. Whether any failure of commercial reasonableness would entitle Spillers to damages and/or affect the deficiency judgment.

## Decision

- The appellate court affirmed the judgment for the bank.
- The court held the sales of the crane and concrete forms were commercially reasonable under UCC Article 9.
- The court rejected Spillers’s reliance on later higher third-party resale prices as proof that the bank’s sale price was commercially unreasonable.
- The court concluded the record showed a completed sale after notice was given and after Spillers failed to timely satisfy conditions to purchase the crane himself.
- Spillers failed to prove entitlement to damages; the dismissal of his complaint was proper and the deficiency remained enforceable.

## Legal Principles

- Under UCC Article 9, every aspect of a secured party’s disposition of collateral after default (method, manner, time, place, and terms) must be commercially reasonable.
- A higher resale price obtained later by a third party does not, by itself, establish that the secured party’s earlier sale was commercially unreasonable; the inquiry focuses on circumstances at the time of the challenged sale.
- Reasonable notice of sale and a fair opportunity for the debtor to protect his interest can satisfy Article 9, even if the debtor does not follow through on conditions for redemption or purchase.
- A debtor seeking damages (or to defeat a deficiency) bears the burden to prove the disposition was not commercially reasonable.

## Conclusion

The court upheld the bank’s post-default disposition of the crane and concrete forms as commercially reasonable because the bank gave notice, offered Spillers an opportunity to buy on specified terms that he did not meet, and later higher resale prices did not prove the bank’s sale was improper or warrant damages or deficiency relief.


Spillers v. First Nat'l Bank of Arenzville, 400 N.E.2d 1057 (Ill. App. Ct. 1980)