National-Dime Bank v. Cleveland Bros. Equipment Co.

20 Pa. D. & C.2d 511, 1959 Pa. Dist. & Cnty. Dec. LEXIS 350
CourtPennsylvania Court of Common Pleas, Dauphin County
DecidedOctober 13, 1959
Docketno. 55
StatusPublished

This text of 20 Pa. D. & C.2d 511 (National-Dime Bank v. Cleveland Bros. Equipment Co.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Dauphin County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National-Dime Bank v. Cleveland Bros. Equipment Co., 20 Pa. D. & C.2d 511, 1959 Pa. Dist. & Cnty. Dec. LEXIS 350 (Pa. Super. Ct. 1959).

Opinion

Kreider, J.,

— We have before us defendant’s preliminary objections to plaintiff’s complaint. Some of these were withdrawn and others were eliminated by certain amendments to the complaint. The remaining objections fall into three classes:

A. That the three “Security Agreements” in question are invalid because they are not signed by the secured party, although they are signed by’ the debtor.

[512]*512B. That the complaint is vague and contradictory-in that it describes in various ways the equipment in question.

C. That the allegations in paragraphs 10 and 11 of the complaint are scandalous, impertinent, immaterial and irrelevant.

Statement of the Facts

Plaintiff’s Complaint alleges that on or about April 17, 1958, defendant received as a trade-in .from one Harry D. Reitz, a Used Caterpillar D-7 Tractor, Serial Number 4T1370, and a used “Unit” Model 614 Backhoe or shovel and gave him credit of $8,500 for the said items. It is further alleged that defendant later sold or otherwise disposed of the said equipment. Plaintiff claims to have security interests under the Uniform Commercial Code in the said equipment arising from: (1) A security agreement entered into between Harry D.Reitz and Mary A. Reitz, as debtors, and the Snyder County Trust Company of Selinsgrove, as creditor, on August,3, 1954; (2) a second security agreement between the same parties dated June 21, 1955; and (3) a security agreement dated November -^¿97-1-957, between Harry D. Reitz, debtor, and plaintiff, The National-Dime Bank of Shamokin, as creditor, j plaintiff claims under the first two agreements by assignments dated October —, 1958.

Plaintiff contends that Harry D. Reitz had no authority to dispose of the tractor and backhoe or shovel without plaintiff’s consent, and that defendant’s action in accepting and later disposing of the equipment without satisfying plaintiff’s liens thereon, constituted a Í conversion thereof so that defendant is now liable to [ plaintiff for the value of the equipment which is alleged to be $12,000.

Discussion

Defendant contends plaintiff’s liens are not valid for two reasons. It avers that the first and most com[513]*513pelling reason is that none of the three security agreements relied on by plaintiff is signed by the secured party. However, each is signed by debtor, as above stated. It is alleged that plaintiff or its assignors attempted to perfect their liens under the provisions of the Uniform Commercial Code of April 6, 1953, P. L. 3, sec. 9-101 et seq., 12A PS §9-101, et seq. Defendant calls attention to section 9-402 thereof, entitled “Formal Requisites of Financing Statement,” which provides:

“(1) A financing statement is sufficient if it is signed by the debtor and the 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 property covered. When the collateral is crops growing or to be grown or goods affixed or to be affixed to realty so as to be a part thereof the statement must also contain a description of the land or realty concerned. A copy of the security agreement is sufficient as a financing statement if it contains the above information and is signed by both parties. When the collateral is goods affixed or to be affixed to realty, the collateral must be described by item and not by type.” (Italics supplied.)

Defendant contends that the failure of the secured party to sign the security agreements is a fatal defect. Arcady Farms Milling Company v. Sedler, 367 Pa. 314 (1951), and Associated Lumber and Manufacturing Company, Inc. v. Mastroianni, 173 Pa. Superior Ct. 310 (1953), are relied upon in support of this proposition. The Arcady Farms case involved the Chattel Mortgage Act of June 1, 1945, P. L. 1358, which provides, inter alia, that a mortgage given pursuant to the terms of the act, “shall be in writing and signed, witnessed and duly acknowledged by the [514]*514mortgagor. . . .” It was held that a mortgage not witnessed created no lien. In the Associated Lumber Manufacturing case the court held that the failure to have verification placed on a notice of intention to file a mechanics’ lien was a fatal defect which precluded plaintiff from asserting its lien.

Plaintiff asserts that its liens are valid and that defendant has failed to distinguish between the formal requisites of a security agreement as set forth in article IX of the Uniform Commercial Code of April 6, 1953, P. L. 3, sec. 9-203(1) (6), 12A PS §9-203(1) (6), supra, and the formal requisites of a financing statement which is found in section 9-402 of the same act.

Section 9-203 of the Uniform Commercial Code, entitled “Enforceability of Security Interests; Formal Requisites,” provides:

“ (1) A security interest is not enforceable against the debtor or third parties unless . . .

“(b) the debtor has signed a security agreement which contains a description of the collateral . . .”

Plaintiff argues that section 9-402 of the Uniform Commercial Code, supra, entitled “Formal Requisites of Financing Statement,” applies solely to the requisites of a financing statement and that it is only the financing statement, and not the security agreement, that must be signed by. both the secured party and the debtor.

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

Related

Arcady Farms Milling Co. v. Sedler
80 A.2d 845 (Supreme Court of Pennsylvania, 1951)
Associated Lumber & Manufacturing Co. v. Mastroianni
98 A.2d 52 (Superior Court of Pennsylvania, 1953)
Huber v. Cloud
130 A. 562 (Supreme Court of New Jersey, 1925)
Twin City Motor Co. v. Rouzer Motor Co.
148 S.E. 461 (Supreme Court of North Carolina, 1929)

Cite This Page — Counsel Stack

Bluebook (online)
20 Pa. D. & C.2d 511, 1959 Pa. Dist. & Cnty. Dec. LEXIS 350, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-dime-bank-v-cleveland-bros-equipment-co-pactcompldauphi-1959.