Court Opinion

ID: 9699578
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:34:27.727351+00
Date Added: 2024-06-11T18:20:53.426288
License: Public Domain

Mr. Chief Justice Roberts,
dissenting. Responding to the certified question, the majority conclude that under the pertinent statutory provisions a financing statement accepted for filing and, in fact, filed by the Secretary of State is sufficient to perfect a security interest if the requirements of §6A-9-402(l) are satisfied. They further state that these requirements may be satisfied even though such a financing statement does not contain a separate, formal statement asserting that the collateral is not consumer goods having an aggregate original purchase price of not less than $300 excluding interest, insurance, and other charges. With this conclusion I am unable to agree, as I believe that it is based on a misconception of the thrust of the pertinent provisions of §6A-9-401(l)(c).
It is not disputed that a financing statement must be filed pursuant to the statute in order to perfect a security interest, §6A-9-302(l), and that a security interest in certain collateral that is not perfected as a consequence of a valid filing becomes subordinate to the rights of the trustee in bankruptcy, §6A-9-301(l) and (3). Section 6A-9-401(l) (c) requires as a condition precedent to the perfecting of a security interest the filing thereof with the Secretary of State. That section specifically provides “* * * that no financing statement or security agreement shall be received for filing where the collateral is consumer goods having an aggregate original purchase price of less than three hundred dollars ($300) * * The mandatory character of this latter provision is made abundantly clear by the words, “no financing statement * * * shall be received for filing * * (Emphasis added.)
The language of the statute above quoted, in my opinion, is susceptible of but one clear and sensible con*301struction: that financing statements for security interests in which the collateral is consumer goods of an original value of less than $300 are to be excluded from the filing procedure and, consequently, denied perfection. Without speculating as to the reasons upon which the Legislature predicated its decision to deny perfection to such instruments, I point to the well-settled rule that it is within the legislative power to declare public policy and that courts should not thwart such a declaration under the guise of construing the language of an unambiguous statute. To permit a creditor to obtain perfection of a security interest in consumer goods of a value less than $300 if the financing statement was filed as a result of inadvertence or misunderstanding on the part of the Secretary of State would be to encourage attempts to avoid the statutory prohibition and thus to undermine its effectiveness. Consequently, I believe even though a financing statement of a security interest in less than $300 worth of consumer goods has been filed as a result of some administrative oversight, such interest should not be deemed perfected.
Recognizing the difficulties that might be involved in ascertaining whether a security interest, the subject of a proffered financing statement, involved collateral of consumer goods of a value less than $300, the Legislature enacted §6A-9-402(5). That section provides:
“For purposes of determining whether a financing statement or security agreement shall be received for filing (see §6A-9-401(l) (c)) said financing statement or security agreement shall contain a statement indicating whether the collateral is consumer goods having an aggregate original purchase price of not less than three hundred dollars ($300) * *
As in the case of §6A-9-401(l) (c), the language of this section makes mandatory the disclosure that the collateral is not consumer goods of a value less than $300. Absent *302•some statement that adequately - discloses that the collateral is not consumer goods of a.value less than $300, a financing statement is not eligible for filing. If it is filed by inadvertence or mistake on the part of the Secretary of State, such filing should be deemed void and, thus, incapable of perfecting the security interest described in the deficient financing statement.
I do not subscribe, however, to the proposition that a financing statement which conforms to the sufficiency requirements of §6A-9-402(l), to be eligible for filing 'and, consequently, perfection, must contain a separate and formal statement included solely for the purpose of indicating whether the 'collateral is consumer goods of a value less than $300. The statement contemplated by §6A-9-402(5) is not required by the statute to be set out in any precise language or specific form. All that the statute requires is that the agreement “shall contain a statement indicating whether the collateral is consumer goods.” I am of the opinion that the Legislature, in using the word “indicating,” intended as sufficient for compliance with §6A-9-402(5) a disclosure in the financing statement that would inform the reasonable reader of the nature and value of the collateral.
The question certified to this court is phrased so broadly as to preclude our consideration of the question whether the financing statements involved in the instant case satisify the above-mentioned standard of disclosure. Thus, such a determination will fall within the province of the bankruptcy court.
In my opinion, the savings clause, so called, set out in §6A-9-402(5) presents no difficulty. The clause reads that “* * * the omission of such statement shall not affect the validity of the security interest described therein.”
This clause is clearly a statutory rule of construction introduced by the Legislature to insure that, in inter*303preting the statute, the courts will not rule that the improper filing of the agreement, if it happens to escape the scrutiny of the Secretary of State, will affect the original agreement between the debtor and the creditor. In other words, the Legislature wanted to make clear that a failure, by reason of the omission of the clause, to perfect the agreement by acomplishing a proper filing with the Secretary of State by reason of the omission of the clause would not be intepreted as invalidating the security agreement between the debtor and the creditor named therein.
William C. Hillman, Special Counsel to the Trustee-in-Bankruptcy, for petitioner.
Joseph B. Manello, Widett & Widett, Boston, Richard S. Mittleman, Zietz, Sonkin &, Radin, for James Taleott, Inc.
Alfred B. Stapleton, Robert W. Edwards, Jr., for Nat’l Commercial Finance Conference, Inc., Amicus Curiae.
Peter F. Coogan, Ropes & Gray, Boston, James Radin, Zeitz, Sonkin & Radin, for General Electric Credit Corporation.