Checkett v. Schoenfeld (In re Schoenfeld)

111 B.R. 832, 12 U.C.C. Rep. Serv. 2d (West) 574, 1990 Bankr. LEXIS 524
District Court, W.D. Missouri·Decided March 19, 1990·No. Bankruptcy No. 88-03290-SW-7; Adv. No. 89-3031-SW-7·Published

Opinion

ORDER FINDING THAT DEFENDANT DOES NOT HOLD A PERFECTED SECURITY INTEREST, AND REQUIRING TURNOVER

ARTHUR B. FEDERMAN, Bankruptcy Judge.

Plaintiff bankruptcy trustee filed this action seeking a determination that defendant does not hold a perfected security interest in certain assets of the debtor. The Court finds for the Plaintiff. On January 14, 1987, the debtor, Dr. Roger Harold Schoenfeld, borrowed $4,000.00 from his father, defendant, Roger P. Schoenfeld. In exchange, the debtor signed a promissory note as well as a security agreement granting defendant a security interest in the debtor’s gun collection.- The determination of the perfection of the security interest in this case is complicated by the fact that the city of Joplin, Missouri, is located within two counties — Jasper County and Newton County. The father attempted to perfect such security interest by filing UCC-1 financing statements with the Secretary of State and with the Recorder of Deeds of Jasper County, Missouri. The UCC-1 filed by the father lists an address for the debt- or which was his office in Newton County, Missouri. The security agreement states that the guns will be kept at such address.

The Trustee contends that the UCC-1 filings were not sufficient to perfect the lien. Missouri law provides for the perfection of security interests in consumer goods by the filing of a financing statement “... in the office of the Recorder of Deeds in the county of the debtor’s residence or if the debtor is not a resident of this state then in the office of the Recorder of Deeds in the county where the goods are kept ...” (R.S.Mo. § 400.9-401(l)(a)). In his response, the father contends that his son was a resident of Jasper County on the date the financing statement was filed and that, therefore, the lien was validly perfected. While not referred to in his answer, the father at trial also offered evidence to show, in the alternative, that the lien was perfected by possession as to a substantial number — and apparently the most valuable — of the guns.* Missouri law provides that a secured party can perfect a security interest in goods by possession. R.S.Mo. § 400.9-305 reads in part as follows:

“A security interest in letters of credit and advices of credit (subsection (2)(a) of section 400.5-116), goods, instruments, money, negotiable documents or chattel paper may be perfected by the secured party’s taking possession of the collateral. ... A security interest is perfected by possession from the time possession is taken without relation back and eontin-[834] ues only so long as possession is retained, unless otherwise specified in this article. The security interest may be otherwise perfected as provided in this article before or after the period of possession by the secured party.”

The evidence at trial showed that on January 14, 1987, the debtor did own a house in Jasper County, Missouri. However, the evidence showed that in September of 1986, he had moved his furniture and other personal belongings to Miami, Oklahoma, to the house of Kay Francis Walker, whom he married on January 10, 1987. A child of he and Ms. Walker, born on January 24, 1987, was issued a birth certificate stating both parents to be residents of Miami, Oklahoma. Ms. Walker testified that such certificate was based on information provided by Dr. Sehoenfeld. The debtor and Ms. Walker remained, married until September 25, 1987. During the period immediately before and after the grant of the security interest to the defendant, Ms. Walker testified that the debtor either stayed at her house or, on evenings when he worked late, at his office, which is located in Joplin, Newton County, Missouri. In fact, she testified that after August, 1986 there was no bed or other furniture at the Jasper County home. The debtor himself testified that at various other times he lived at his office and that accommodations were available at such office. On February 3 or 4, 1987, the debtor and Ms. Walker purchased a residence in Newton County, Missouri using the $4,000 lent from the debtor’s father as the down payment.

The debtor agrees that almost all his household goods were moved to Oklahoma in August or September, 1986 but contends that he kept a pallet and some changes of clothes at the Jasper County address for when he worked late or had a disagreement with his new wife. He acknowledges that water service to the Jasper County home was turned off prior to January, 1987, but says that electrical service was maintained. However, as the trustee points out, the amount of electricity actually used in late 1986 and early 1987 is nowhere near that which would be used if the house had been occupied.

From the evidence, it is obvious that the debtor did not reside in Jasper County, on January 14, 1987. He either lived in Newton County or, more likely, in Oklahoma. If in Newton County, the UCC-1 should have been filed there, but was not. If in Oklahoma, the UCC-1 should have been filed in the county in which the goods were kept as of the date the security interest was granted.

The question of where the goods were kept is also related to the father’s claim of a possessory lien. At trial, both the debtor and his father testified that certain of the guns were kept in the father's possession. The debtor testified that he kept them there because his father had a safe at his house in which the guns could be stored, and also that he kept them there because he periodically went hunting on his father’s farm. His father testified that the guns were brought to him “as part of the loan process” in order to prepare the list attached to the financing statement. (Tr. 44) The father’s residence is in St. Louis, Missouri, and his farm is near St. Louis, in Owensville. Neither is located in Jasper County, Missouri. Therefore, at least as to the guns in the father’s possession, the financing statement was not properly filed in the county where such guns were kept, and the lien granted to him in these guns was not perfected.

That leaves two questions. Does the father have a possessory lien on the guns held by him? And did the father’s UCC filing in Jasper county perfect a lien on the guns not in his possession — that is, were those guns kept in Jasper County?

Free access — add to your briefcase to read the full text and ask questions with AI

Checkett v. Schoenfeld (In re Schoenfeld), 111 B.R. 832, 12 U.C.C. Rep. Serv. 2d (West) 574, 1990 Bankr. LEXIS 524 (W.D. Mo. 1990).

111 B.R. 832 (Checkett v. Schoenfeld (In re Schoenfeld)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related