IN THE SUPREME COURT OF MISSISSIPPI

NO. 2001-CA-00442-SCT

WEST IMPLEMENT COMPANY, INC.

v.

FIRST SOUTH PRODUCTION CREDIT ASSOCIATION

DATE OF JUDGMENT: 2/14/2001

TRIAL JUDGE: HON. ELZY JONATHAN SMITH, JR.

COURT FROM WHICH APPEALED: BOLIVAR COUNTY CIRCUIT COURT

ATTORNEY FOR APPELLANT: BENJAMIN E. GRIFFITH

ATTORNEY FOR APPELLEE: CHARLES S. TINDALL, III

NATURE OF THE CASE: CIVIL - OTHER

DISPOSITION: AFFIRMED - 4/25/2002

MOTION FOR REHEARING FILED:

MANDATE ISSUED: 5/16/2002

BEFORE SMITH, P.J., DIAZ AND EASLEY, JJ.

DIAZ, JUSTICE, FOR THE COURT:

¶1. On January 10, 2000, First South Production Credit Association (FSPCA) filed suit against West

Implement Company, Inc. (West) in the Circuit Court of the Second Judicial District of Bolivar County.

FSPCA alleged that West converted a John Deere combine in which FSPCA held a valid and perfected

security interest.

¶2. On July 10, 2000, FSPCA filed a motion for summary judgment. On February 14, 2001, the trial court

granted the motion and entered a judgment in the amount of $60,000 against West. West now appeals

citing the following issue:

1. Whether the trial court erred in finding that FSPCA's financing statement sufficiently

identified the John Deere combine as collateral and sufficiently identified the debtor as

Mouton Farms.

FACTS

¶3. On February 2, 1998, FSPCA made a loan in the amount of $750,000 to Mouton Farms Partnership.

The partnership is composed of Napanee Planting Company, Inc., Benoit Planting Company, Inc., and the

Virginia Amy Mouton Marital Trust. The security agreement for the loan granted FSPCA a security interest

in Mouton Farms' equipment, among other things. The equipment list attached to the security agreement
specifically lists a model 9600 John Deere Combine. FSPCA filed a financing statement with the Bolivar

County Chancery Clerk's office on January 10, 1997, and with the Mississippi Secretary of State on

January 14, 1997.

¶4. In February 1998, West took the John Deere combine from Mouton Farms as a trade-in on a new

combine. West relied on the oral statements of the Mouton Farms representative that there were no existing

liens on the combine. West conducted no further research to verify this assertion, despite the fact that the

Mouton Farms representative provided West with an address and tax identification number for Mouton

Farms.

¶5. In its order granting summary judgment, the trial court found that there were no material disputed facts,

but that the parties did disagree as to the legal sufficiency of the description of the collateral and the legal

sufficiency of the identification of the debtor in FSPCA's financing statement. The trial court found this to be

an issue of law, not of fact. The trial court then made an analysis of the law pertaining to that issue and

granted summary judgment in favor of FSPCA.

DISCUSSION

1. Whether the trial court erred in finding that FSPCA's financing statement sufficiently

identified the John Deere combine as collateral and sufficiently identified the debtor as

Mouton Farms.

¶6. West argues that the trial court "misapprehended its function as a trier of fact" in granting the motion for

summary judgment and did not view the case in the light most favorable to the non-moving party as required

by Miss. R. Civ. P. 56(c). In support of its argument that the legal sufficiency of the identification of the

collateral or the debtor in a financing statement is a question of fact, West cites In re Strickland, 94 B.R.

898, 902 (Bankr. N.D. Miss. 1988)(holding that "[t]he determination of whether an error in a financing

statement is seriously misleading must turn on the facts of the particular case"). Unlike West, we interpret

Strickland as holding that whether there is an error in a financing statement is a question of law, and

whether that error is seriously misleading is a question of fact. As such, the trial court was within its

authority to determine, as a matter of law, whether there was an error in the financing statement. We must

now determine whether the trial court was correct in its finding that there was no error in the financing

statement and, consequently, no question of fact.

¶7. Miss. Code Ann. § 75-9-402(1) (1972) provides in pertinent part:

A financing statement is sufficient if it gives the names of the debtor and the secured party, is signed

by the debtor, gives an address of the secured party from which information concerning the security

interest may be obtained, gives a mailing address of the debtor, and contains a statement indicating the

types, or describing the items, of collateral....

A. Description of Collateral

¶8. The purpose of the filing system under Article 9 of the Uniform Commercial Code is to provide notice

to potential creditors of preexisting liens. In re Turnage, 493 F.2d 505, 506 (5th Cir. 1974); In re KingPorter Co., 446 F.2d 722, 729 (5th Cir. 1971); U.C.C. § 9-402 Off. Cmt.2. Under the Article 9 system,

"[w]hat is required to be filed is not, as under chattel mortgage and conditional sales act, the security

agreement itself, but only a simple notice which may be filed before the security interest attaches or
thereafter." Id.

¶9. Many courts have been faced with this question of whether the description of the collateral in a financing

statement is sufficient. In one such case, a bankruptcy trustee sought priority over a secured creditor for

certain collateral described as "machinery and equipment" in the financing statement because the financing

statement indicated that a security agreement was attached when it was not. The court held that the

description, "equipment and machinery" was sufficient, even without the security agreement In re Tebbs

Constr. Co., 39 B.R. 742, 747 (Bkrtcy. E.D. Va. 1984).

¶10. One court has found the description, "consumer goods" located at a particular address, a sufficient

description to put a subsequent searcher on notice of a possible preexisting security interest. In re

Turnage, 493 F.2d at 506. In Elf Atochem N. Am., Inc. v. CELCO, Inc., 927 P.2d 355 (Ariz. Ct.

App.1990), the court held that the term "equipment" is defined as a sub-category of goods and is a "type"

of collateral as is required to be provided in a financing statement under § 402. Id. at 355. See also In re

Sarex Corp., 509 F.2d 689, 691 (2d Cir. 1975; Drysdale v. Cornerstone Bank, 562 S.W.2d 182

(Mo. Ct. App. 1978); Bankers Trust Co. v. Zecher, 426 N.Y.S.2d 960 (N.Y. Sup. Ct. 1980). In Gulf

Forge Co. v. Ellwood Quality Steels Co., 202 B.R. 238, 241 (S.D. Tex. 1996), the court held that

although it is preferable to use § 109 classifications of collateral, it was acceptable to use the broad term

"goods."

¶11. Here, there was no error in the financing statement concerning the description of the collateral. The

terms "equipment and machinery" should put a searcher on notice that a 9600 model John Deere combine

may be included in the secured interest property. As such, there is no question of fact as to whether an

error was misleading, as there was no error. Therefore, we affirm the trial court's grant of summary

judgment against West.

B. Identification of Debtor

¶12. West next argues that, if it had made a search, it would not have found FSPCA's security interest in

the combine because FSPCA filed its lien under the wrong name of the debtor. West claims that FSPCA

should have identified the debtor under "Mouton Farms d/b/a Mouton Farms Partnership" instead of

"Mouton Farms Partnership."

¶13. Again, Miss. Code Ann. § 75-9-402 provides in part:

(1) A financing statement is sufficient if it gives the names of the debtor and the secured party, is

signed by the debtor, gives an address of the secured party from which information concerning the

security interest may be obtained, gives a mailing address of the debtor, and contains a statement

indicating the types, or describing the items, of collateral. ...

* * * *

(7) A financing statement sufficiently shows the name of the debtor if it gives the individual, partnership

or corporate name of the debtor, whether or not it adds other trade names or the names of partners.

...

(8) A financing statement substantially complying with the requirements of this section is effective even

though it contains minor errors which are not seriously misleading.
¶14. Here, FSPCA did supply the partnership name of the debtor as required by statute. Thus, there is no

error in the financing statement regarding the identification of the debtor. Even more support for the trial

court's grant of summary judgment is found in Strickland. There, the court was presented with the

opposite issue of whether the use of the debtor's trade name in the financing statement, Strickland Builders

Mfg. Company and Strickland Builders and Supply Company, rather than the debtor's correct legal name,

James Terence Strickland, rendered the financing statements seriously misleading. In deciding that the error

was not seriously misleading, the court found that "[i]f the debtors' trade name is sufficiently similar to its

real or corporate name and therefore not seriously misleading, then perfection of the creditor's security

interest should remain intact. 94 B.R. at 900 (citing In re Hammons, 438 F. Supp. 1143 (S.D. Miss.

1977), rev'd on other grounds, 614 F.2d 399 (5th Cir. 1980)).

¶15. Clearly, the statute required FSPCA to use the debtor's partnership name. Furthermore, even when

filers do not use the individual, partnership or corporate name of the debtor, but instead err and use the

trade name of the debtor, that error is not fatal to perfection of the security interest if the names are

sufficiently similar. Although inconsequential in light of the fact that FSPCA correctly identified the debtor, it

is interesting to note that the alleged trade name of the debtor, "Mouton Farms," could not be any more

similar to the partnership name of the debtor, "Mouton Farms Partnership."

¶16. West also claims that the entity West allowed to trade-in the subject combine is called "Mouton

Farms" and has a different tax identification number than "Mouton Farms Partnership." Because West has

provided no evidence of this other number, we will disregard this argument.

¶17. FSPCA did not err in filing its security interest under the debtor's partnership name, as is required by

statute. Consequently, we affirm the trial court's grant of summary judgment in favor of FSPCA.

CONCLUSION

¶18. There was no error in the financing statement's description of the collateral as "equipment and

machinery" or its identification of the debtor as "Mouton Farms Partnership." Therefore, the trial court's

judgment is affirmed.

¶19. AFFIRMED.

PITTMAN, C.J., SMITH, P.J., WALLER, COBB, EASLEY, CARLSON AND GRAVES,

JJ., CONCUR. McRAE, P.J., CONCURS IN RESULT ONLY.