Opinion ID: 1676049
Heading Depth: 1
Heading Rank: 1

Heading: Financing Statements

Text: In attacking the validity of the bank's allegedly perfected security interests, Appellant asserts that neither the financing statements in question nor the security agreements between the parties meets the law's minimum requirements. SDCL 57-38 sets out that section of the Uniform Commercial Code dealing with Secured TransactionsForm and Filing of Statements. The sufficiency of the contents of a financing statement is dealt with in SDCL 57-38-7 which provides: A financing statement is sufficient if it is signed by the debtor and the secured party, 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 financing statement may be filed before a security agreement is made or a security interest otherwise attaches. When the financing statement covers crops growing or to be grown or goods which are or are to become fixtures, the statement must also contain a description of the real estate concerned. A copy of the security agreement is sufficient as a financing statement if it contains the above information and is signed by both parties. We note that this must be read in light of SDCL 57-38-11: A financing statement substantially complying with the requirements of §§ 57-38-7 to 57-38-10, inclusive, is effective even though it contains minor errors which are not seriously misleading. There are before us two financing statements. One is numbered 026562 and the other 026563. Both were filed with the South Dakota Secretary of State January 25, 1973, at 10:30 a. m. The former covers [a]ll accounts receivables [sic], contracts and chattel paper, whatsoever, whether now owned or hereafter acquired. The latter covers [a]ll inventory of every kind whatsoever, whether now owned or hereafter acquired, and all machinery, equipment, furniture and fixtures, whatsoever, whether now owned or hereafter acquired. The box provided for debtor on each is filled in: Upton, Inc. Webster, South Dakota The box for secured party is filled in: Security Bank and Trust Co. Webster, South Dakota In the space provided for signature(s) of secured party is found: (typed) SECURITY BANK AND TRUST CO., WEBSTER, SD By: (handwriting) R. H. Garry, Pres. In the space provided for signature(s) of debtor(s) are found the handwritten signatures: Rodney Upton, II Janet T. Upton Appellant attacks the sufficiency of the financing statement because the signatures on the Uptons appear to be those of the signers as individuals rather than as corporate officers. While we acknowledge that better practice would call for some indication of corporate capacity to accompany each of the signatures we find that such an omission does not do violence to the notice-giving purpose of our law and that at worst such lack of precision can be marked down to the minor errors adverted to in SDCL 57-38-11 which are not seriously misleading. In so finding we refer to a Maryland case in which there is an issue similar to the one now before us, Plemens v. Didde-Glaser, Inc., 1966, 244 Md. 556, 224 A.2d 464, a case in which the sole question was whether the signature of Kenneth C. Slatkoff, without an indication that he signed [the financing statement] as an authorized representative of the debtor corporation named in paragraph 1 of the financing statement, was so defective as to constitute substantial noncompliance with the provisions of Article 95B. The Maryland Court of Appeals found that Mr. Slatkoff's signature on the line designated `Signature of Debtor' indicates he was signing for the debtor. The name and address of the debtor is clearly indicated in paragraph 1 of the financing statement.    There is nothing in the evidence to indicate that any one searching the records would be misled by the fact that the signature did not relate the representative capacity of Mr. Slatkoff. That court found substantial compliance with the requirements of the UCC there as do we here. In so finding we are guided by the spirit of SDCL 57-1-4 (UCC § 1-102) which directs that this title shall be liberally construed and applied to promote its underlying purposes and policies. We also note that the comment accompanying § 9-402 [SDCL 57-38-11] of the UCC, subdivision (5), states that this subdivision is designed to discourage the fanatical and impossibly refined reading of such statutory requirements in which courts have occasionally indulged themselves. We have no intention of going back into the morass of nit picking from which the UCC has refreshingly led us. It is evident that Upton, Inc. is in fact the debtor on both of these financing statements and ample notice is provided for those making a good faith search of the official records where further inquiry into the details of the listed financing may be directed.