{ "id": 2801966, "name": "STREVELL-PATERSON FINANCE COMPANY, Plaintiff-Appellee, v. Gene MAY, d/b/a Doc Holliday's Hock Shops, Defendant-Appellant", "name_abbreviation": "Strevell-Paterson Finance Co. v. May", "decision_date": "1967-01-03", "docket_number": "No. 8102", "first_page": "331", "last_page": "336", "citations": [ { "type": "official", "cite": "77 N.M. 331" }, { "type": "parallel", "cite": "422 P.2d 366" } ], "court": { "name_abbreviation": "N.M.", "id": 8835, "name": "Supreme Court of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "205 F.Supp. 27", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 1466589 ], "year": 1962, "opinion_index": 0, "case_paths": [ "/f-supp/205/0027-01" ] }, { "cite": "385 S.W.2d 41", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 10153727 ], "opinion_index": 0, "case_paths": [ "/sw2d/385/0041-01" ] } ], "analysis": { "cardinality": 475, "char_count": 9607, "ocr_confidence": 0.669, "pagerank": { "raw": 3.690420631259395e-07, "percentile": 0.8924458530207746 }, "sha256": "907c8da50e780bcc84ff9d18a91920dd74f971496ef0dbaa654005c051791035", "simhash": "1:7899b22038207e55", "word_count": 1510 }, "last_updated": "2023-07-14T20:38:38.028708+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "CHAVEZ and COMPTON, JJ., concur." ], "parties": [ "STREVELL-PATERSON FINANCE COMPANY, Plaintiff-Appellee, v. Gene MAY, d/b/a Doc Holliday\u2019s Hock Shops, Defendant-Appellant." ], "opinions": [ { "text": "OPINION\nE. T. HENSLEY, Jr., Chief Judge, Court \u25a0of Appeals.\nThis is an appeal from a judgment in favor of the plaintiff secured party in the amount of $475.00 plus interest against the defendant pawnshop for conversion of a guitar and its amplifier.\nThe facts disclose that on July 12, 1963, Elverio Chavez executed an instrument, entitled a \u201cchattel mortgage\u201d, in favor of the plaintiff describing a Stratocaster fender guitar and a Bandmaster fender amplifier to secure a debt. The plaintiff\u2019s address did not appear on the instrument nor did the plaintiff sign it. Otherwise the document was complete. The instrument was filed for record in the Office of the County Clerk of Bernalillo County. On November 8, 1963, Chavez traded in the Stratocaster guitar for a Jazzmaster guitar. A sales agreement was executed covering the transaction and recorded on December 18, 1963. On June 10, 1964, an instrument, also entitled \u201cchattel mortgage\u201d, was executed covering the Jazzmaster guitar and the previously mortgaged Bandmaster amplifier. It was not recorded until June 29, 1964. On June 22, 1964, Chavez pawned the guitar and amplifier to the defendant pawnshop. Later Chavez defaulted on his payments to the plaintiff who under the terms of the mortgage became entitled to repossess the guitar and amplifier. The plaintiff obtained possession of the pawn tickets and presented them to the defendant who refused to deliver or return the guitar and amplifier because \u2022they had been sold to a third party. The district court found the value of the guitar at the time of conversion to be $200.00 and the value of the amplifier at such time to be $275.00.\nThe defendant contends that the court erred in concluding the plaintiff was entitled to maintain conversion against the defendant because the plaintiff did not comply with \u00a7 50A-9-402(l), N.M.S.A. 1953. If the plaintiff had a valid security interest, properly perfected before the pledge to the defendant pawnshop, it had a right to possession of the guitar and amplifier upon Chavez\u2019 default and may maintain an action of conversion against the pawnshop for refusing to return or deliver such goods. Defendant does not question the validity of the plaintiff\u2019s security interest. Defendant\u2019s argument is that the security agreement was improperly perfected and is consequently unenforceable against third persons. If so, plaintiff\u2019s action for conversion must be dismissed.\nAt the outset we note that filing is not necessary to perfect a security interest taken or retained by a seller or other person who finances the actual purchase of consumer goods, \u00a7 50A-9-302(l) (d), N.M.S.A.1953. Here the guitar and amplifier, however, were not \u201cconsumer goods\u201d as they were primarily used by Chavez to perform in night clubs and are \u201cequipment\u201d, \u00a7 50A-9-109(2), N.M.S.A. 1953. Consequently, perfection by filing of the security agreement was required.\nAppellant apparently contends that since the agreement filed is described as a \u201cchattel mortgage\u201d that it does not meet the requirements of \u00a7 50A-9-402(l), supra, which requires a \u201cfinancing statement.\u201d Some clarification of the terms \u201csecurity interest\u201d, \u201csecurity agreement\u201d, and \u201cfinancing statement\u201d is necessary.\nAs a matter of terminology the Code makes two terms grow where one grew before.\n\u201cMortgage, for example, referred both to the interest created by the security transaction and to the document .of writing which evidenced the interest. Under the Code we have \u2018security interest\u2019 for the. former and \u2018security agreement\u2019 for the latter.\u201d I Gilmore, Security Interests in Personal Property 346 (1965).\n\u00a7 50A-9-203, N.M.S.A.1953 says \u201c* * * a security interest is not enforceable [without] a security agreement. * * * \u201d\nThe fact that an agreement offered for filing is denominated a \u201cchattel mortgage\u201d is immaterial. The traditional forms-of security agreements in use before the enactment of \u00a7 50A-9-203, N.M.S.A.1953 and \u00a7 50A-9-402, supra, may continue t0\u2018 be used after their enactment. Uniform Commercial Code, \u00a7 9-101, comment 2. A \u201csecurity agreement\u201d is defined as \u201can agreement which creates or provides for a security interest. * * * \u201d \u00a7 50A-9-105 (1) (h), N.M.S.A.1953. A \u201csecurity interest\u201d is defined as \u201c * * * an interest in personal property or fixtures which secures, payment or performance of an obligation. * * *\u201d \u00a7 50A-1-201(37), N.M.S.A.1953. It is clear that the old form \u201cchattel' mortgage\u201d meets the definition of a \u201csecurity agreement.\u201d \u00a7 50A-9-402(l), supra,, specifically provides that a copy of the security agreement is sufficient as a financing statement if it is signed by the debtor and secured party, gives an address'of the secured party from which information concerning the security interest may be obtained, gives a mailing address of the-debtor and contains a statement indicating the types, or describing the items of collateral. Thus, an instrument denominated as. .a \u201cchattel mortgage\u201d may be filed as a financing statement so long as it contains, the necessary information. Ops. N.M. Atty. Gen. 62-2, Jan. 3, 1962. We must now determine whether the instrument contained the information required by \u00a7 50A-9-402 (1), supra. \u25a0 \u25a0\nAppellant contends that since the secured party did not sign the instrument that \u00a7 50A-9-402(l), supra, was not satisfied. We note that the Uniform Commercial Code is to be construed liberally and applied to promote its underlying purposes and policies \u00a7 50A-1-102(1), N.M.S.A.1953. Professor Gilmore, Security Interests in Personal Property, supra, says:\n\u201cConfusingly, and unnecessarily, the formal requisites of the security agreement (\u00a7 9-203) and the formal requisites of the financing statement (\u00a7 9-402) are not the same. Under \u00a7 9-203, all that is required in the \u2018security agreement\u2019 is the debtor\u2019s signature and a description of the collateral * * * Under \u00a7 9-402, however, the \u2018financing statement\u2019 must contain the signatures of both the secured party and the debtor and must also give addresses for both of them. The financing statement must also contain descriptions of collateral * *\nProfessor Gilmore\u2019s reasoning, page 347, in resolving the conflict is persuasive:\n\u201c * * * There is no sensible reason for the discrepancies between the formal requisites of \u00a7 9-203 and \u00a7 9-402. With respect to signatures \u00a7 9-203 seems to be right: the debtor\u2019s signature on a document binding him to liability is obviously essential; there seems to be no reason for the secured party\u2019s signature to be required on either \u2018agreement\u2019 or \u2018statement\u2019 * *\nWe conclude that the lack of the secured party\u2019s signature does not make the instrument defective within the meaning of \u00a7 50A~9-402(1), supra. The defendant had due notice even though the secured party did not sign the instrument. Alloway v. Stuart, Ky., 385 S.W.2d 41.\nThe lack of the secured party\u2019s address is more difficult. \u00a7 50A-9-402(l) says:\n\u201cA financing statement is sufficient if it * * * gives an address of the secured party from which information concerning the security interest may be obtained * *\nAs in the situation of no signature by the secured party, which we have already resolved, there is a conflict between \u00a7 50A-9-203 and \u00a7 50A-9-402, supra. The latter requires the address of the secured party while the former does not. Professor Gilmore, Security Interests in Personal Property, 347, supra, notes:\n\u201cThe addresses are required in the document which is filed for record and, for simplicity\u2019s sake, might as well be included in the underlying \u2018agreement\u2019 * *\nIn this case, the plaintiff\u2019s name appears only on the cover of the instrument of July 12, 1963. We cannot say that the plaintiff substantially complied with the requirements of \u00a7 50A-9-403(1). See In re Smith, 205 F.Supp. 27 (E.D.Penn., 1962). Consequently, the instrument of July 12, 1963, is defective as financing statement and did not give notice to the defendant of the plaintiff\u2019s security interest in the guitar and amplifier.\nOur conclusion is not inconsistent with the intent of the Uniform Commercial Code to adopt a system of \u201cnotice filing.\u201d Section 9-402, Uniform Commercial Code, comment 2 says:\n\u201c * * * The notice itself indicates merely that the secured party who has filed may have a security interest in the collateral described. Further inquiry from the parties concerned will be necessary to disclose the complete state of affairs. * * *\u201d\nIf the secured party\u2019s address does not appear it would be an undue burden on the person seeking such information to find him. The filing system will perform its intended function only if secured party substantially complies with the requirements of \u00a7 50A-9-402(l), supra.\nWe need not consider the effect of the instrument, denominated \u201cPurchase Agreement\u201d, of November 8, 1963, as it was not considered by the district court. Nor do we need to consider defendant\u2019s remaining points since we have determined that the instrument of July 12, 1963, does not meet the requirements of \u00a7 50A-9-402(l), supra. The plaintiff did not perfect its security interest and cannot maintain an action against the pawnshop in conversion. The cause will be remanded to the District Court with direction to vacate the judgment in favor of the plaintiff and enter a new judgment dismissing the plaintiff\u2019s complaint.\nIt is so ordered.\nCHAVEZ and COMPTON, JJ., concur.", "type": "majority", "author": "E. T. HENSLEY, Jr., Chief Judge, Court \u25a0of Appeals." } ], "attorneys": [ "McAtee, Marchiondo & Michael, Albuquerque, for appellant.", "Louis J. Vener, Albuquerque, for appellee." ], "corrections": "", "head_matter": "422 P.2d 366\nSTREVELL-PATERSON FINANCE COMPANY, Plaintiff-Appellee, v. Gene MAY, d/b/a Doc Holliday\u2019s Hock Shops, Defendant-Appellant.\nNo. 8102.\nSupreme Court of New Mexico.\nJan. 3, 1967.\nMcAtee, Marchiondo & Michael, Albuquerque, for appellant.\nLouis J. Vener, Albuquerque, for appellee." }, "file_name": "0331-01", "first_page_order": 363, "last_page_order": 368 }