Opinion ID: 2064767
Heading Depth: 1
Heading Rank: 3

Heading: Transfer of the Property to the Corporation

Text: If the property covered by the security agreement never became the property of R & S Hardware, Inc.the bankruptthen, of course, the trustee has no claim thereon even if the security interest was not perfected. Again, there is no dispute on the material facts. The question is, did Rumbaugh sell the assets of the sole proprietorship to the corporation? The applicable provisions of the Uniform Commercial Code are the following: Section 2-106, U.C.C., provides in part: `Contract for sale' includes both a present sale of goods and a contract to sell goods at a future time. A `sale' consists in the passing of title from the seller to the buyer for a price (section 2-401). A `present sale' means a sale which is accomplished by the making of the contract. Section 2-207(3), U.C.C., provides: Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act. Section 2-204(1), U.C.C., provides: A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract. Most important in this case is section 2-401(3), U.C.C., which says in part: Unless otherwise explicitly agreed where delivery is to be made without moving the goods,... (b) if the goods are at the time of contracting already identified and no documents are to be delivered, title passes at the time and place of contracting. The essential facts are that Rumbaugh and the corporation did contract, as evidenced by the corporate minutes and his acceptance of the stock certificate. At that time the goods were identified and they consisted of the fixtures and inventory then located in the store at 2918 South 84th Street in Omaha, Nebraska. No physical delivery needed to be made. Rumbaugh testified he intended the corporation become the owner of that property. The evidence is not contradicted. The contract did not contemplate the delivery of any document of title. Title passed under the provisions of section 2-401(3)(b), U.C.C., at the time of contracting. The after the fact recital, in the schedule attached to the petition in bankruptcy that the fixtures and inventory had not been transferred to the corporation, cannot change what had occurred before.