Summary of Moe v. John Deere
S. Ct. S. Dakota 
Relevant Facts: Pl, Moe bouth a farm tractor from Day Equipment. In financing Moe traded two tractors for $77K and agreed to pay the difference in 5 equal installments each due Oct 1st. After the agreement was executed it was assigned to Deere. Moe was two months late with his first payment until Dec. Moe was untimely in his second, and Deere waived full payment and extended the time to make the payment. Moe made a partial 3 mos late. Deere agreed to pay a second amt March 1. Moe failed to pay so Deere sent a letter extending the due date. Moe failed to make the payment. Deere sent a rep. who agreed w/ Moe to pay the balance when he started his harvest. No due date was indicated. Deere repossessed the tractor sent Moe a certified letter which was returned. It then sent another letter which was received. Implement sold the tractor.
Legal Issue(s): Whether acceptance of late payments by Deere waives their right to repossess without notice?
Court’s Holding: Yes
Procedure: Trial ct partial Summary for Deere (3,4); then summary on (1,2); Reversed.
Law or Rule(s): A secured party who has not insisted upon strict compliance in the past, who has accepted late payments as a matter of course, must, before he may validly rely upon a clause to declare a default and effect repossession, give notice to the debtor that strict compliance with the terms will be demanded henceforth if repossession is to be avoided.
Court Rationale: The basis for imposing a duty on the secured party is that they are estopped from asserting his contract rights because his conduct has induced the debtor’s reliance in believing that late payments were acceptable. The acts which induce reliance are repeated acceptance of late payments. The reliance is evidenced by continual pattern of irregular and late payments. Adopting the rule that a creditor must give pre-possession notice upon modification of a contract results in both the debtor and the creditor being protected. The debtor is protected from surprise and from damaging repossession by being forewarned. The creditor would be protected by preserving its remedies so that if the account continues in default, repossession could be pursued as provided w/o further notice.
Plaintiff’s Argument: Df continued to accept late payments, waived certain charges, extended the periods for payments, thus modified the contract.
Defendant’s Argument: Acceptance of late payments does not waive or otherwise affect the right of a creditor to repossess w/o notice after subsequent late payment defaults when a non waiver clause exists in the contract.