Hilliman v. Cobado

Hilliman and Szata (plaintiffs) bought a herd of cattle from Cobado (defendant). The collateral security mortgage granted Cobado a security interest Szata’s farm. Before delivery, Cobado demanded additional security and was granted a lien on sixty-eight cows and one bull under a chattel mortgage. After delivery, Szata culled a portion of the cows. Cobado was offended by the practice, and the plaintiffs wound up granting Cobado another chattel mortgage in thirty-seven replacement cows. The chattel mortgages gave Cobado the right to “enter debtor’s premises peaceably” on default to repossess the cattle, “in accordance with the Uniform Commercial Code (UCC). The plaintiffs made all required payments under the contract and never defaulted. Nevertheless, Cobado arrived at Szata’s property with two deputy sheriffs to repossess the cattle. Cobado had given Szata no notice prior to his arrival. Szata and his wife stated that they were not in default and asked Cobado to leave. Cobado said “to hell with this we’re taking the cows.” Cobado then entered the property and herded the cattle onto trucks, over the Szata’s protests. Szata was threatened with arrest if he “got out of line.” A lieutenant arrived and threatened to arrest Cobado if he took the cattle. Cobado did so and was arrested and charged with possession of stolen property. Szata was also criminally charged with fraudulent sale of mortgaged property. Those cases are pending. The plaintiffs sued Cobado to recover the repossessed cattle.