Court Opinion

ID: 4133090
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:33:54.202894+00
Date Added: 2024-06-11T14:35:10.992394
License: Public Domain

April    29,   1974

The Honorable   Ned Granger                                   Opinion     No,   H-   288
County Attorney
Travis  County Courthouse                                     Re:    Filing  of financing
Austin,  Texas                                                       statements    under S. 8.
                                                                     131 (63rd Leg.)    amend-
                                                                     ments to the Business
Dear   Mr.   Granger:                                                & Commerce       Code

       The 63rd Legislature   has extensively     revised    Chapter     9 of the
Business  and Commerce      Code, dealing with secured         transactions     (Acts
1973, 63rd Leg,,   ch. 400. p. 999, 4 5).      Section 9.302 of the amended
chapter provides  that, with certain   specified    exceptions,     a financing
statement  must be filed to perfect  all eecurity     interest.

         Subchapter   D of Chapter     9 is entitled   “Filing.   ” Section     9.401(a)
specifies    the “proper    place ” to file in order to perfect        the secutity    inter-
est.    It provides   that, generally,     when the collateral       is farm equipment
or farm products       or accounts    arising  from the sale of farm products,             or
consumer      goods,   the financing    statement    should be filed in the office of
the county clerk in the county of the debtor’s            residence.      It further   provides:

                      “(2)whentheoolktezal       is timber to be cut or is
               minerals    or the like (including     oil and gas) or
               accounts    subject to Subsection      (e) of Section 9.103,
               or when the financing       statement    is filed as a fixture
               filing (Section   9.313) and the collateral        is goods
               whibh are or are to become fixtures,             then in the
               office of the County Clerk in the county where a
               mortgage     on the real estate would be filed or recorded.                 ”

       All   other   statements-are       to be filed     in the Office    of the Secretary    of State.

                                              p.   1342
  .

The Honorable        Ned Granger,    page     2    (H-288)

        “Accounts   subject to Subsection(e)    of Section 9.103” are those
“resulting    from the sale thereof  [minerals     or the like including    oil and
gas] at the wellhead    or minehead. ” [ 5 9.103(e)]      A fixture  filing is defined
in 5 9. 313(a) as “the filing in the office where a mortgage        on the real
estate would be filed or recorded      of a financing    statement   covering    goods
which are or are to become fixture.        . . . ”

       Your  first question     to us is whether   the county         clerk must    record
in the real property      records   unacknowledged   financing         statements    covering
these variour    interests.

        Your     question   is prompted   by the fact that Article   6626, Vernon’s
Texas    Civil    Statutea,   dealing with the recordation   of instruments   provides:

                         “The following  instruments         of writing   which shall
                 have   been acknowledgedor    proved        according    to law, are
                 authorized   to be ,recorded,    via. : all deeds,   mortgages,
                 conveyances,     deeds of trust,    bonds for title,   bovcnantb,,
                 defeaeances    or other instruments      of writing  concerning
                 any lands or tenements,       or goods and chattels,or     move-
                 able property    of any description    . . . . “(emphasis    added)

        Section     9.402 of the Business     and Commerce          Code provides      in its
subsection      (a) that a financing    statement    is sufficient    if it ,gives the names
of the debtor and the secured party,           an address      of the secured      party,   and
a mailing     address     of the debtor,   describes     the types or items of collateral
and is signed by the debtor.          Neither    subsection     (a), which describes       a
financing     statement,     nor subsection    (c), which sets out a form which, if
followed,    is “sufficient”    to comply with subsection         (a), requires     any acknow-
ledgement       or other proof of the signature        of either party.

         As to the financing     statements       about which    you inquire,    b 9.402(e)
does    further provide:

                         “A financing   statement   covering    timber to be cut
                  or covering   minerals    or the like (including    oil and gas)
                  or accounts   subject to Subsection     (e) of Section   9.103,

                                            p*    1343
    .
.       .

    The Honorable         Ned Granger,      page 3      (H-288)

                      or a financing      statement    filed as a fixture    filing
                      (Section     9.313),must     show that it covers    this type of
                      collateral,     must    recite that it is to be filed for
                      record     in the real estate records,      and the financing
                      statement      must contain a description       of the real
                      estate sufficient      if it were contained in a mortgage
                      of the real estate to give constructive          notice of the
                      mortgage       under the law of this state. ”

           Section 9.403(g), applicable   to the same types of inatruments,further
    requires   that when such a financing   statement is filed:

                              “it shall be filed for record and the filing
                      officer    shall index it under the,names       of the debtor
                      and any owner of record        shown on the financing
                      statement      in the same fashion aa if they were the
                      mortgagors       in a mortgage    of the real estate des-
                      cribed,     and, to the extent that the law of this state
                      provides     for indexing   of mortgages    under the name
                      of the mortgagee,       under the name of the secured
                      party as if he were the mortgagee          thereunder,    or
                      where indexing       is by description   in the same fashion
                      as if the financing     statement    were a mortgage     of the
                      real estate described.       ”

                The purpose of the recordation   statutes is to protect   innocent pur-
    chasers       and incumbrancers    against previous   deeds,   mortgages,    or the like.
    Cox v.       Clay,  237 S. W. 2d 798 (Tex. Civ.App.,    Amarillo    1951, err. ref’d.
    n. r.e.).

            The purpose of acknowledgement     is to authenticate   the instrument     and
    to avoid fraud.    The drafters of $9.402 of the Uniform      Commercial      Code
    were aware of this and purposely    omitted the acknowledgement,         stating in
    their   comment       to $ 9.402:

                             “This Section departs from the requirements                  of
                      many   chattel mortgage  statutes that the instrument              filed

                                                 p.   1344
   .

The Honorable        Ned Granger,       page    4     (H-288)

                be acknowledged    or-witnessed     or accompanied       by
                affidavits  of good faith.     Those requirements       do
                not seem to have been successful          as a deterrent     to
                fraud; their principal     effect has been to penalize
                good faith mortgagees       who have inadvertently       failed
                to comply with the statutory       niceties.    These are
                here abandoned in the interest        of a simplified    and
                workable   filing system. ”

         In answering      your question,       it is necessary     that we determine         the
legislative     intent.     The Code Construction          Act (Article     5429b-2,V.T,CS.),
by which we must be guided,              is helpful.     We are told for instance,          that we
should consider,         among other matters,          the object sought to be attained,
the circumstances          under which the statute was enacted,              its legislative      his-
tory,    etc.    Section    3.03.    If two statutes    are irreconcilable        the statute
latest in date prevails.           Section   3.05(a).    If a general     provision     conflicts
with a special       provision     and they are irreconcilable          the special    provision
prevails      as an exception      to the general     provision.      Section 3.06.       Bearing
these rules ,in mind, it is our opinion that, even if Article                   6626 and $9.402
are interpreted        to be in irreconcilable        conflict,  the Legislature        intended
the financing       statement     to be an exception      to the general      requirements        of
Article     6626, that an inatrument          to be recorded,     first be acknowledged.

       We are further   of the opinion that the language which we have hereto-
fore quoted from $9.403(g)      of the Business and Commerce     Ccdemakes itclear
that these instruments    are to be filed by the county clerk “in the same fash-
ion as if the financing  statements    were a mortgage  of the real estate described.                    ”

       Our answer     to your first question,   therefore,   is that the county clerk
must record    in the deed of trust records     or such other records      in which he
would file a mortgage       upon real property   an unacknowledgedfinancing       state-
ment covering    timber to be cut or minerals       or the like (including   oil and gas)
or accounts   resulting    from the sale of minerals     or the like (including   oil and
gas) at the wellhead     or minehead,    or goods which are or are to become fix-
tures.

       Your second question    asks           whether    the fee schedule  prescribed  in the
amended    Chapter 9 contravenes             or conflicts    with the fee schedule of Article
3930(2),  V.T. C.S.

                                               p.   1345
.       .
    -       .

        The Honorable             Ned Granger,      page 5       (H-288)

                    Section     9.403(e)   of Chapter     9 provides:

                                      “The uniform fee for filing and indexing          and for
                              stamping    a copy furnished      by the secured    party to
                              show the date and place of filing for an original           financ-
                              ing statement    or for a continuation      statement    shall be
                              $3.00 if the statement      is in the standard form pre-
                              scribed    by the Secretary     of State and otherwise      shall
                              be $6.00,    plus in each case, if the.financing        statement
                .
                              is subject to Subsection      (e) of Section 9.402.$3.00..        .. ”

                    We construe        this to mean     that,   as to the instruments       about which   you
        have inquired,   the fee            would be either      $6.00     if a standard   form   is used or
        $9.00 if a non-standard              form is used.

               Article    3930, V. T. C. S., generally          governs    the fees to be charged        by
        county clerks and county recorders.                Its subsection      (2) applies to the filing
        and recording      of instruments      in the real property        records     and provides     for
        a fee of $1. 50 for the first page, $1.00 for each additional                  page, and certain
        other charges.        Subsection    (2) makes no mention of fees prescribed                by the
        Uniform    Comme~rcial       Code.     However,       subsection    (I), which applies      to instru-
        ments to be filed in the personal           property     records,     specifically    excepts    "those

        instruments     the filing fee for which are fixed in the Uniform                  Commercial
        Code.”     The latest amendment           to Article    3930 was in 1967 (Acts 1967, 60th
        Leg.,   p.   1789,   ch.  681)  and  at  that  time    Chapter    9 did not permit      the filing in
        the real property       records.

                Bearing    in mind the same rules we have previously      cited from                    the Code
        Construction     Act,  supra, it is our conclusion  that it was the intention                    of the
        Legislature     that the fees provided by $9.403(e)   of the Chapter   should                   prevail
        over those of Article      3930, V. T. C. S.

                                                     SUMMARY

                                     Unacknowledged   financing     statements    covering
                              timber  to be cut, mineral    interests,    accounts   resulting
                              from the sale of mineral    interests,and      goods which are

                                                          p.    1346
.   .     I

        The Honorable   Ned Granger,    page    6     (H-288)

                    or are to become fixtures     are to be filed by county
                    clerks in the same records      in which they would file
                    mortgages   or deeds of trust    upon real property.
                    They are to charge the fees prescribed       by $9.403(e)
                    of the Business  and Commerce       Code.

                                               Very     truly    yours,

                                               Attorney         General   of Texas

        DAVID M. KENDALL,        Chairman
        Opinion Committee

                                               p.   1347