Legal Question in Real Estate Law in California

Re: legal advice

Unless you were granted a security interest in the living room set, then yes, your family member/debtor is correct to claim theft. You cannot exercise self help.

Your remedy now is to sue your relative for the repayment of the loan.

Re: legal advice

I disagree with the preceding answer based on my reading of the facts to show that the collateral was placed in your possession by the borrower with an express, although oral, understanding that it was to be collateral for the $10,000 loan. When the property was delivered to your possession and the loan was made, you acquired a perfected security interest in the collateral. Delivery of the collateral is an exception to the usual requirement that a security interest be in writing. See Commercial Code sections 9203(b)(3)(B) and 9313(a). This was also the rule under the common law preceding the adoption of the Uniform Commercial Code. Therefore, there is no way (under the facts given) for this to be theft.