Court Opinion

ID: 8889273
Source: CourtListenerOpinion
Date Created: 2022-11-26 22:48:09.387584+00
Date Added: 2024-06-11T17:07:06.671938
License: Public Domain

OAKES, Circuit Judge:
Appellant made a secured loan to the bankrupt, Laminated Veneers Co., Inc., which was validly executed on December 20, 1968. The covering security agreement specifically pledged items (including a truck) described in its Schedule A and generally pledged other items *1125through an “omnibus clause” set out in the margin below.1 The omnibus clause gave the appellant a valid secured interest in accounts receivable, inventory, fixtures, machinery, equipment, and tools of the bankrupt. The question here is whether Commercial’s secured interest in “equipment” gave it a lien on two Oldsmobile automobiles owned by the bankrupt. We hold that it did not.
The appellant relies upon the broad language of New York Uniform Commercial Code § 9-109(2) (McKinney 1964) (hereinafter cited as “U.C.C.”) to show that the “equipment” term of the omnibus clause included the two automobiles. Section 9-109(2) defines “equipment” for present purposes as a residual category which includes all goods not included in the definitions of inventory, farm products or consumer goods. Thus automobiles would fall within this broad category if the definition of Section 9-109 governed for purposes of the security agreement. The classifications of Section 9-109, however, are intended primarily for the purposes of determining which set of filing requirements is proper.
 We look rather to U.C.C. § 9-110 which requires that the description of personal property “reasonably identif[y]” what is described. The conclusion that greater specificity is required finds additional support in U.C.C. § 9-203(1) (b), which provides that the security agreement must contain a “description” of the collateral. Certainly the word “equipment” does not constitute a “description” of the Oldsmobiles. Unlike a financing statement (U.C.C. § 9-402) which is designed merely to put creditors on notice that further inquiry is prudent, see In re Leichter, 471 F.2d 785 (2d Cir. 1972), the security agreement embodies the intentions of the parties. It is the primary source to which a creditor’s or potential creditor’s inquiry is directed and must be reasonably specific. See U.C.C. § 9-203, Practice Commentary 1 at 394; P. Coogan, W. Hogan & D. Vagts, Secured Transactions Under the Uniform Commercial Code § 4.06, at 289-90 (Bender’s Uniform Commercial Code Service Vol. 1, 1968). Cf. In re Weiner’s Men’s Apparel, 2 Bankr.L.Rep. (4th ed.) ¶63,727 (S.D.N.Y.1970); Mammoth Cave Production Credit Association v. York, 429 S.W.2d 26, 28-29 (Ky.1968).
What would a potential creditor find upon examination of the security agreement in this case? The only mention of vehicles of any kind in the agreement is the listing of an International truck in Schedule A. Beyond that there is only the “omnibus clause” and the generic “equipment” therein. Any examining creditor would conclude that the truck as the only vehicle mentioned was the only one intended to be covered. We thus need not reach the contention that a prior invalid lien on one of the automobiles inured to the benefit of the trustee for benefit of the estate and as such is superior to the lien of Commercial.
For the reasons stated above we affirm the decision of the court below.

. In addition to all the above enumerated items, it is the intention that this mortgage shall cover all chattels, machinery, equipment, tables, chairs, work benches, factory chairs, stools, shelving, cabinets, power lines, switch boxes, control panels, machine parts, motors, pumps, electrical equipment, measuring and calibrating instruments, office supplies, sundries, office furniture, fixtures, and all other items of equipment and fixtures belonging to the mortgagor, whether herein enumerated or not, now at the plant of Laminated Veneers Co., Inc. located at 115-02 15th Ave. College Point, New York, and all chattels, machinery, fixtures, or equipment that may hereafter be brought in or installed in said premises or any new premises of the mortgagor, to replace, substitute for, or in addition to the above mentioned chattels and equipment with the exception of stock in trade.