Opinion ID: 1236472
Heading Depth: 1
Heading Rank: 5

Heading: creation of security interest [3]

Text: A mobile home usually is classified as personal property. See City of North Charleston v. Claxton, 315 S.C. 56, 431 S.E.2d 610 (Ct.App.1993) (finding that mobile homes were personal property because they had no significant attachments to the property such as permanent foundations or additions). A security interest in a mobile home is perfected by listing the interest on the certificate of title. See S.C.Code Ann. § 36-9-302(3)(b) (Supp.1999) and Note 1 of South Carolina Reporter's Notes; S.C.Code Ann. §§ 56-19-210, 56-19-290(3), and 56-19-340 (1991 & Supp.1999). However, the certificate of title statutes only govern the issue of whether or not the security interest in the collateral in question has been duly perfected. All other aspects of such transactions are governed by the Article 9 rules. Note 1 of South Carolina Reporter's Notes to S.C.Code Ann. § 36-9-302 (Supp.1999). Article 9 of the UCC applies to any transaction (regardless of its form) which is intended to create a security interest in personal property or fixtures including goods, documents, instruments, general intangibles, chattel paper, or accounts. S.C.Code Ann. § 36-9-102(1)(a) (Supp.1999). The fundamental objective of Article 9 of the Uniform Code [is to] provid[e] uniform and simplified rules governing chattel security which meet modern commercial needs.... Article 9 rejects any distinction based on form or designation of the device employed. In re Berry, 189 B.R. 82, 86 (Bankr.D.S.C. 1995) (quoting S.C.Code Ann. Title 36, Commercial Code, Background and Introduction, p. 14) (internal quotes omitted). No magic words or precise form are necessary to create a security interest so long as the minimum formal requirements regarding perfection, attachment and enforceability are met. In re CFLC, Inc., 166 F.3d 1012, 1016 (9th Cir.1999) (citing In re Amex-Protein Dev. Corp., 504 F.2d 1056, 1058-59 (9th Cir.1974)); accord United Virginia Bank/Seaboard Natl. v. B.F. Saul Real Estate Inv. Trust, 641 F.2d 185, 189 (4th Cir.1981); Mitchell v. Shepherd Mall State Bank, 458 F.2d 700, 703 (10th Cir.1972). The court must find both language in a written agreement that objectively indicates the parties' intent to create a security interest and the presence of a subjective intent by the parties to create a security interest. In re CFLC, 166 F.3d at 1016. The UCC defines a security interest as an interest in personal property or fixtures which secures payment or performance of an obligation. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer ... is limited in effect to a reservation of a security interest. S.C.Code Ann. § 36-1-201(37) (Supp. 1999); accord S.C.Code Ann. § 36-2-401(1) (1976). Furthermore, Article 9 explicitly applies to security interests created by contract including ... [a] conditional sale. S.C.Code Ann. § 36-9-102(2) (Supp.1999); see also S.C.Code Ann. § 36-9-107 (Supp.1999) (defining purchase money security interest, which reporter noted is the rough equivalent of a conditional sales device). The Court of Appeals correctly concluded that the Agreement in this case is a conditional sales contract. The Agreement expressly provides for title to remain in the seller until payment of the purchase price. Because such a contract actually is a security device, the interest in the parties are governed by Article 9 from the time the buyer takes possession.... Reporter's Comments to S.C.Code Ann. § Section 36-2-401; see also Black's Law Dictionary 295 (1990) (defining conditional sales contract). The Agreement required that Debtor surrender the mobile home to Creditor in the event of default, that Debtor name Creditor as the loss payee in the fire insurance policy, that Debtor could not assign his rights in the home without Creditor's prior written permission, that Debtor could not move the home until repaying the loan in full, that Debtor maintain the home, and that Creditor could inspect it at any reasonable time. These provisions indicate, both objectively and subjectively, the parties' intent to create a security interest in the mobile home.