APPEAL from the Circuit Court of Schuyler County; the Hon.
DAVID K. SLOCUM, Judge, presiding.
MR. JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:
Rehearing denied March 18, 1980.
___ N.E.2d ___ Petitioner appeals a decision of the circuit court of Schuyler County sitting without a jury finding in favor of the respondent. The basic issues revolve about certain provisions of the Uniform Commercial Code, particularly with reference to the disposition of collateral (Ill. Rev. Stat. 1977, ch. 26, pars. 9-501, 9-504, and 9-507).
The background, as revealed in the record, indicates that petitioner on March 14, 1977, borrowed $25,000 from respondent and gave a judgment note therefor. The purpose of the loan was to purchase a crane which was pledged as collateral and petitioner added to the crane a set of concrete forms which were about 2 years old at the time.
The note was for six months' duration, and at the end of that time respondent demanded payment. None was made and the duration, by agreement, was extended for 30 days. At the end of that extension, no payment having been made, respondent placed the note in judgment on December 13, 1977. This judgment was confirmed on January 27, 1978, and thereafter respondent brought citation proceedings to enforce it.
Apparently as a result of the citation proceedings, petitioner turned the crane and the forms over to respondent who proceeded to sell them. One of the principal issues in this appeal is the nature and timeliness of the notice given to petitioner of the sales of the collateral.
On March 7, 1978, petitioner's attorney received a letter from respondent's attorney stating that respondent had received a bid of $15,000 for the crane and it would be sold "ten days from the receipt of this notice * * * as per our agreement of February 2, 1978." Petitioner replied to this by submitting an offer of $16,000 for the crane through a corporation owned and operated by him. Respondent replied to this offer by asserting three conditions: (1) that a cashier's check for $16,000 be tendered within four days; (2) that petitioner's concrete forms be tendered to respondent at the time the crane was picked up; and (3) that petitioner sign a waiver of any and all rights in the crane, including the right to object to the sale and to exercise any right of redemption. Petitioner felt unable to meet these conditions and all negotiations and communications between the parties then ceased.
Respondent on April 22, 1978, sold the crane to the $15,000 bidder without making any further efforts to secure other bids. Five days later this bidder sold the crane to an equipment dealer in Aledo, Illinois, named Henderson. The price of this sale does not appear in the record. On November 3, 1978, Henderson sold the crane for $27,500 to a contractor in Iowa, named Hall. At trial on May 4, 1979, Hall testified that the crane was worth all he had paid for it and that he had it for sale at a price of $35,000.
Respondent next proceeded to sell the concrete forms. One bid was received from a contractor who had his own forms mixed in with petitioner's forms on a job site. Another bid, $500 higher, was received from another contractor but was afterwards withdrawn because that bidder was unable to determine which of the intermingled forms he was bidding on. Respondent then sold the forms for $6,120 to the other bidder. It is uncontroverted that petitioner knew of the impending sale of the forms generally, but had no specific knowledge until later.
After both sales had been consummated, the crane and the forms, a deficiency of approximately $6,500 existed on the judgment. Respondent collected this through various post-judgment proceedings. In the same cause, petitioner on October 13, 1978, filed a petition for damages against respondent in which he alleged that the sales of the crane and the forms were not commercially reasonable within the meaning of the Commercial Code. After a bench trial, the circuit court found that the sales were commercially reasonable and dismissed the petition for damages. This appeal followed. We reverse.
A preliminary question to be answered is whether this transaction is governed by the Commercial Code. Section 9-501(5) of the Code (Ill. Rev. Stat. 1977, ch. 26, par. 9-501(5)) provides as follows:
"When a secured party has reduced his claim to judgment the lien of any levy which may be made upon his collateral by virtue of any execution based upon the judgment shall relate back to the date of the perfection of the security interest in such collateral. A judicial sale, pursuant to such execution, is a foreclosure of the security interest by judicial procedure within the meaning of this Section, and the secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this Article."
The Uniform Commercial Code Comment to this section reads in part as follows:
"The second sentence of the subsection [i.e., (5)] makes clear that a judicial sale following judgment, execution and levy is one of the methods of foreclosure contemplated by subsection (1); such a sale is governed by other law and not by this Article * * *." (Ill. Ann. Stat., ch. ...