Citizens Bank v. Preuit Estate

Decision Date24 November 1982
Citation425 So.2d 470
Parties35 UCC Rep.Serv. 1358 The CITIZENS BANK v. Leonard PREUIT ESTATE and E.F. Mauldin d/b/a Preuit & Mauldin, a partnership. Civ. 3405.
CourtAlabama Court of Civil Appeals

A.P. Reich, II of Speake, Speake & Reich, Moulton, for appellant.

D.L. Martin, Moulton, for appellees.

WRIGHT, Presiding Judge.

This is a U.C.C. Article 9 case requiring judicial interpretation of the filing requirements contained in § 7-9-403, Code of Alabama 1975.

Preuit and Mauldin (hereinafter Mechanic) was the plaintiff below in a suit seeking enforcement of a mechanic's lien against Samuel Jones, Jr., defendant below, for work done on an International Harvester 416 Diesel Cotton Picker. Suit was filed pursuant to § 35-11-111, Code of Alabama 1975, seeking $7,310.82 for repairs on the cotton picker. The Mechanic joined the Citizens Bank (hereinafter Bank) as an involuntary plaintiff in the action because of its alleged interest in the cotton picker. A default judgment was entered against Samuel Jones for failure to answer and a hearing was had to determine the respective interests of the plaintiff and involuntary plaintiff.

On December 16, 1980, Jones had borrowed $8,500 from the Bank to buy the cotton picker. Wayne Anderton, vice president of the Bank, made the loan to Jones and executed a security agreement. A financing statement listing an indebtedness of $8,500 was signed by Jones and Anderton and filed in January of 1981. Both the security agreement and the financing statement described the collateral as a "1975 International Cotton Picker, 2-Row Diesel, Ser. # 161587." The security agreement was for a ninety-day term, expiring March 19, 1981. The financing statement contained no maturity date.

The original note was not paid and a renewal note was executed April 30, 1981, for $9,152.87, the amount of the original indebtedness plus interest. The renewal note listed the cotton picker as security and made reference to the original financing statement. No new financing statement was filed.

The renewal note matured on December 5, 1981, unpaid, and on April 2, 1982, a second renewal note was executed. The second renewal note listed an indebtedness of $19,989.90, and described the same cotton picker, as in the two previous notes, as collateral, together with descriptions of other collateral. The second renewal note expires December 15, 1982.

The complaint to enforce the mechanic's lien was filed February 16, 1982--after the expiration of the first renewal note and before the execution of the second. An order for attachment of the cotton picker was obtained. The complaint described the cotton picker as an "International Harvester 416 Diesel Cotton Picker Serial Number CH 886K."

Obviously, the serial number listed on the Mechanic's complaint is not the same as that listed on the security agreements and financing statement executed by the Bank. However, Anderton and Jones both testified that the cotton picker listed on those security agreements was the same as that attached by the sheriff pursuant to the attachment proceedings initiated by the Mechanic. Jones further testified that he owned four other cotton pickers.

Following a brief hearing the court announced from the bench that the Bank's security interest was defective and that the Mechanic's lien was entitled to priority in the subject collateral. The Bank requested a finding of fact which was refused. The final order was entered July 2, 1982. This appeal followed.

A statutory mechanic's lien under § 35-11-110, Code 1975, is subordinate to a prior perfected security interest unless the contribution of labor or material was authorized by the secured party. Bryce Hospital Credit Union, Inc. v. Warrior Dodge, Inc., 50 Ala.App. 15, 276 So.2d 602 (1973). Thus, if the Bank had a perfected security interest at the time of the filing of the Mechanic's complaint, it is superior to the mechanic's lien.

The first issue raised on appeal is whether the financing statement as filed by the Bank, containing an incorrect serial number, sufficiently describes the collateral as required by § 7-9-402, Code 1975. Section 7-9-402(5) provides: "A financial statement substantially complying with the requirements of this section is effective even though it contains minor errors which are not seriously misleading." The question raised here is whether an incorrect recitation of a serial number is seriously misleading. We answered that question in Associates Capital Corp. v. Bank of Huntsville, 49 Ala.App. 523, 274 So.2d 80...

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3 cases
  • Jones v. Preuit & Mauldin
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • August 10, 1988
    ...The court reversed the county court's denial of the Bank's motion to dissolve the writs of attachment. See Citizens Bank v. Preuit Estate, 425 So.2d 470 (Ala.Civ.App.1982).5 In filing this motion, Jones was counseled by J.G. Speake of Speake, Speake and Reich of Moulton, Alabama. A.P. Reich......
  • Jones v. Preuit & Mauldin, Civ. A. No. 84-AR-5131-NW.
    • United States
    • U.S. District Court — Northern District of Alabama
    • May 28, 1986
    ...January 5, 1983), reversed Judge Burney's holding that Preuit & Mauldin's lien was superior to that of the bank. Citizens Bank v. Preuit Estate, 425 So.2d 470 (Ala.Civ.App.1983). The appellate procedures of Alabama require that the notice of appeal be given to all who were parties in the lo......
  • Citizens Bank v. Mauldin
    • United States
    • Alabama Supreme Court
    • September 13, 1985
    ...to priority over the Partnership, as it had a valid prior perfected security interest in the cotton picker. Citizens Bank v. Preuit Estate, 425 So.2d 470 (Ala.Civ.App.1982). In light of that decision, the Bank instituted this action against the Partnership, seeking compensatory and punitive......

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