Opinion ID: 1752024
Heading Depth: 1
Heading Rank: 9

Heading: Was the Bank Entitled to the Proceeds of the Sale of Two Motor Scrapers?

Text: The $20,000 note owed by Stigler to Bank was secured by a security agreement conveying a security interest in two Allis-Chalmers Motor Scrapers, as particularly described in the instrument. The receiver sold the two motor scrapers for $8,150, and Bank claims that said sum should have been paid to it free and clear of expenses of the receivership under the terms of its security agreement. The chancellor denied Bank's claim as a secured claim. Bank and the receiver stipulated with reference to the two motor scrapers as follows: The financing statement on Bank's security interest in and to these two motor scrapers was duly and properly filed for record in the office of the chancery clerk of LeFlore County, Mississippi, on May 27, 1969, at 8 o'clock a.m., as provided by law. Under the provisions of Mississippi Code 1942 Annotated section 41A:9-401(1) (c), the security agreement is required to be filed in the office of the Secretary of State. It was incumbent upon Bank to show that it was entitled to its security by proving that it was filed in accordance with the requirements of the statute. This it failed to do and the chancellor correctly denied the enforcement of the security agreement. In summary, the decree of the trial court is reversed in part and affirmed in part. Travelers' total claim of $23,943.03 paid to suppliers of materials and labor on the Chiwapa project, plus attorneys' fees of $4,500 allowed in the trial court and $2,250 allowed in this Court, and $261.63 legal expenses, or a total of $30,954.66, less $21,974.21 already paid, is adjudged to be a preference claim to be paid from the proceeds of the Chiwapa project in the hands of the receiver. Travelers' claim on the Webster County project consists of $8,459.47 paid to suppliers of materials and labor, plus $750 attorneys' fees allowed by the trial court, $375 attorneys' fees allowed by this Court, and $87.21 legal expenses, or a total of $9,671.68, and the sum of $7,342.41 now held by the receiver as proceeds from the Webster County contract shall be paid to Travelers to apply on its claim, and the balance of the claim is allowed as a general, unsecured claim. The claim of Travelers on the Yalobusha project consists of $12,217.35 paid to suppliers of material and labor, plus $750 attorneys' fees allowed in the trial court, plus $375 attorneys' fees allowed for services in this Court, plus legal expenses of $87.21, or a total claim of $13,429.56. The sum of $8,191.13 held by the receiver as proceeds from the Yalobusha County project shall be paid over to Travelers to apply on its claim and the balance of Travelers' claim on the Yalobusha project is allowed as a general, unsecured claim. The decree of the trial court is affirmed as to the claim of Leflore Bank & Trust Company, except that the trial court is reversed in respect to the allowance of attorneys' fees on Bank's notes and the sum of $12,153.80 is allowed as attorneys' fees instead of $6,000. The judgment of the trial court is therefore reversed in part as stated and otherwise affirmed, and judgment is entered here accordingly. Reversed in part; affirmed in part, and remanded. JONES, BRADY, INZER and ROBERTSON, JJ., concur.