OPINION
Plaintiff-appellant (Clark) appeals a judgment on a jury verdict which denied it recovery of a deficiency judgment sought under Article Nine of the New Mexico Uniform Commercial Code, Sections 50A-9-501 to 507, N.M.S.A.1953 (hereinafter §§ 9-501 to 507). In 1969, defendant-appellee (White Sands) purchased certain logging equipment (skidders) from Clark’s contract assignor under a conditional sales contract. After making certain payments, White Sands defaulted. In September, 1970, appellant repossessed the equipment at White Sands’ request and, some nine months later, conducted a public sale. White Sands was given notice of the salе as required under § 9-504(3). The claimed deficiency owing after allowing all just credits and offsets was $20,069.25. This figure was not in dispute.
Clark first argues that the court erred as a matter of law in allowing the defense of accord and satisfaction to go to the jury. We are concerned only with common law accord аnd satisfaction. See UCC § 1-103. Section 9-505(2) is not involved since none of the procedures there provided were utilized.
Based upon the pleadings and statements of counsel, we gather that it was White Sands’ theory that Clark agreed to accept delivery of the skidders in full settlement of the former’s indebtedness. Upon trial, there was not a shred of evidence of an accord, but that issue is raised for the first time here. Clark did assert at every stage of the proceedings, however, that there could be no accord because the debt was liquidated, its amount not being in dispute. Objection was made to the instruction submitting the issue to the jury on that ground.
An accord is nothing more nor less than a contract of a specialized type. It is a new contract and must be supported by a new consideration. In the case of a liquidated claim or demand, some consideration for the asserted release of the unpaid balance, apart from the payment of a lesser sum, must be found to support an alleged accord. Yates v. Ferguson,
“Where no dispute exists with regard to the sum due, no consideration exists to support the agreement of the creditor to receive less than the agreed sum, or to release the debtor from the unpaid portion thereof.”29 N.M. at 123 ,219 P. at 493 .
See also Miller v. Prince Street Elevator Co.,
White Sands argues that New Mexico recognizes the common law precept that there can be an accord and satisfaction of a liquidated undisputed claim when there is additional consideration given, citing Yates v. Ferguson,
“ * * * shows nothing more than the attempted unilateral imposition without consideration of a condition contrary to the terms of the original contraсt recognizing the immediate right of repossession upon default. The defendant had already legally obligated himself to surrender possession upon default, and he agreed to do nothing more at the time of repossession. ‘An agreement on the part of one to do what he is already legally bоund to do is not a sufficient consideration for the promise of another.’ [Citation omitted.]” Barnes v. Reliable Tractor Company,117 Ga.App. 777 , 778,161 S.E.2d 918 , 919 (1968).
Moreover, under § 9-503, Clark had the statutory right to self-help repossession if it could be done without “breach of the peace.”
White Sands also argues sufficiency of a nеw consideration by its giving up the right under both the contract and § 9-504(2) to any surplus at resale of the equipment. But there is not the slightest intimation in the evidence that the alleged accord and satisfaction included White Sands relinquishing this contractual and statutory right.
For the reasons stated, accord and satisfaction was an insufficient defense as a matter of law. It was a false issue and it was reversible error to instruct on that theory. Reed v. Styron,
More serious questions center on the requirement of § 9-504(3) that sale or other disрosition of collateral by a secured party must be accomplished in a “commercially reasonable” manner. Issues are presented as to which party bears the burden of proving that the manner of sale was, or was not, commercially reasonable, how commercial reasonableness is to be proven, and the effect of failure to dispose of collateral in that estimable, if elusive, fashion.
Sections 9-504(1) & (3) provide a creditor broad choices for disposing of repossessed collateral.
1
But § 9-504(3) also imposes two requirements upon a reselling creditor. First, he must send the debtor reasonable notification of impending sale, which Clark did in this case. Second, every aspect of the sale, including the “method, manner, time, place and terms”, must be “commercially reasonable.” These requirements place upon the creditor the good faith duty to the debtor to use reasonable means to see that a reasonable price is received for the collateral. See Vic Hansen & Sons, Inc. v. Crowley,
“ * * * lies in the fact that the amount of the deficiency judgment will be inversely proportional to the sales price; if the price is high, the amount of the judgment will be low, and vice versa. The ‘method, manner, time, place and terms’ tests are really proxies for ‘insufficient price,’ and their importance lies аlmost exclusively in the extent they protect against an unfairly low price.” J. White & R. Summers, Uniform Commercial Code § 26-9 at 982 (1972).
We first consider the burden of proof, confining our comments to actions by secured creditors for deficiencies, as distinguished from actions, counterclaims or setoffs asserted by debtors. See Vic Hansen & Sons, Inc. v. Crowley, supra at 113 n. 4,
In this case, both parties undertook the burden of proof, Clark in its opening statement and White Sands by pleading a want of commercial reasonableness as an affirmative defense. Each now stoutly asserts that the burden properly belongs to the other. We do not attach much significance to this state of the rеcord. The case must be retried in any event so it might as well be done correctly.
It is scarcely a revelation to say that a plaintiff normally has the burden of proving his case. In light of the specific requirement of § 9-504(3) as to commercial reasonableness, it seems clear that a creditor, whеn suing for a deficiency, should allege and prove that disposition of the collateral was conducted in compliance with that statute. The issue would be formulated by a denial. While asserting that the debtor has the burden, Clark fails to cite a supporting case. We are of the opinion that in a сase such as this, the creditor must allege and, unless admitted, prove that the sale was commercially reasonable. Vic Hansen & Sons, Inc. v. Crowley, supra; First National Bank of Bellevue v. Rose,
The parties also differ as to what factors are relevant in determining commercial reasonableness. Obviously, each case will turn on its particular facts but recent decisions provide instructive reading.
2
Generally, evidence as to every aspect of the sale including the amount of advertising done, normal commercial practices in disposing of particular collateral, the length of time elapsing between repossession and resale, whether deterioration of the collateral has occurred, the number of persons contacted concerning the sale, and even the price obtained, is pertinent. See Beneficial Finance Co. of Black Hawk County v. Reed,
Clark’s major challenge squarely raises, for the first time in New Mexico, the question whether or not a secured creditor is absolutely precluded from recovering a deficiency judgment under the UCC if he fails to dispose of repossessed collateral as required under § 9-504(3). 3 The trial court instructed the jury, in effect, that if the sale was commercially unreasonable, Clark was automatically denied its claim for a deficiency. Challenging the instruction, Clark argues that it was error not to instruct, as it requested, that even if the jury believed the sale was not commercially reasonable, it nevertheless had the right to recover the claimed deficiency less any loss occasioned by its failure to sell in a commercially reasonable manner.
Decisions regarding the remedy of a debtor suffering from a sale of collateral in violation of the Uniform Commercial Code have, ironically, resulted in non-uniform interpretations of its remedial provisions. The apparent majority hold that the failure of the secured party to comply with his duties under § 9-504(3) bars recovery of a deficienсy judgment. See Leasing Associates, Inc. v. Slaughter & Son, Inc.,
We agree with thosе courts that hold a secured party’s failure to comply with § 9-504(3) does not result in a forfeiture of the right to a deficiency. See Wirth v. Heavey,
Clark also contends that it was entitled to a directed verdict on the issue of default of the conditional 'sales contract. Terse as this statement may seem, it presents a mare’s nest of legal problems, stemming largely from the manner in which the question was presented to the trial court. Normally, such motions are not directed to bits and рieces of lawsuits. It was undisputed that White Sands was in default in its payments. Default was, in effect, stipulated by agreeing to the payments contracted and payments made, and White Sands’ witness admitted default. Yet Clark did not object to the instructions submitting the issue to the jury or request an instruction that White Sands’ default was establishеd or otherwise removing the issue of default from the jury’s consideration. Inasmuch as the new trial will be restricted in its scope to certain issues which will not include default, no useful purpose would be served by further discussion of this claim.
The judgment of the district court is reversed. The case is remanded to the trial court with directions to set aside its judgment and to grant a new trial to be conducted in a manner consistent with the views we have expressed in this opinion. The issue upon retrial will be whether or not the disposition of the collateral was conducted in a commercially reasonable manner and, if not, the amоunt by which the deficiency should be diminished.
It is so ordered.
Notes
. Under § 9-504(1) he may “ * * * sell, lease or otherwise dispose of any or all of the collateral in its then condition or following any commercially reasonable preparation or processing.” § 9-504(3) provides that: “Disposition of the collateral may be by public оr private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms * *
. See, e. g., California Airmotive Corporation v. Jones,
. The question has been eliminated by the Legislature where the collateral involved is consumer goods. No deficiency is allowed under any circumstances. § 50A-9-504(2), N.M.S.A.1953 (Supp.1971).
. Several jurisdictions have placed New Mexico in the corner of absolute preclusion of a deficiency judgment for failure to give proper notice citing Foundation Discounts, Inc. v. Serna,