Plemens v. Didde-Glaser, Inc.

• Court: Maryland Supreme Court
• Writing for the Court: Before HAMMOND; MARBURY
• Citation: Plemens v. Didde-Glaser, Inc., 244 Md. 556, 224 A.2d 464 (Md. 1966)
• Decision Date: 07 December 1966
• Docket Number: INC,No. 492,DIDDE-GLASE,492
• Parties: , 3 UCC Rep.Serv. 1017 P. Steven PLEMENS, Trustee for Slatkoff-Tuvin, Inc. v.

Page 556

244 Md. 556

224 A.2d 464, 3 UCC Rep.Serv. 1017

P. Steven PLEMENS, Trustee for Slatkoff-Tuvin, Inc. v. DIDDE-GLASER, INC.

No. 492.

Court of Appeals of Maryland.

Dec. 7, 1966.

Joseph Pickus, Baltimore (Hyman P. Tatelbaum and Reuben Shiling, Baltimore, on the brief), for appellant.

Charles T. Albert, Baltimore (Piper & Marbury and H. Rutherford Turnbull, III, Baltimore, on the brief), for appellee.

Before HAMMOND, C. J., and HORNEY, MARBURY, BARNES and McWILLIAMS, JJ.

MARBURY, Judge.

This case involves an appeal by P. Steven Plemens, trustee for the benefit of the creditors of Slatkoff-Tuvin, Inc. (Slatkoff-Tuvin), from an order of Judge John E. Raine, Jr., of the Circuit Court for Baltimore County, in favor of Didde-Glaser, Inc. (Didde-Glaser), which was found to have a security interest in certain machinery it had sold to Slatkoff-Tuvin.

The case was submitted to the court below on a stipulation of facts. Didde-Glaser, Inc. of Kansas sold a 'Speed-Klect Collator' to Slatkoff-Tuvin, Inc., of Baltimore County, Maryland, under a conditional sales contract dated April 3, 1965. The contract was executed by Kenneth C. Slatkoff signing as president of and on behalf of Slatkoff-Tuvin, Inc., and by William F. Hegenbart signing as secretary-treasurer of and on behalf of Didde-Glaser, Inc.

A blank financing statement was taken by Mr. Al Malachuk, a sales representative of Didde-Glaser, to the office of Slatkoff-Tuvin, where the blanks were filled in and Kenneth C. Slatkoff signed his name in the place indicated for 'Signature of Debtor.' Mr. Slatkoff's name was typed below his signature. Mr. Malachuk then forwarded the financing statement to the home office of Didde-Glaser where it was signed by William F. Hegenbart in the place indicated for 'Signature of Secured Party.' Mr. Hegenbart's name was typed below together with the words 'Sec'y-Treas.' The financing statement was returned to Mr. Malachuk, who presented it for filing in the financing statement records of Baltimore County, where it was received for record on April 13, 1965. The financing statement was indexed solely under the corporate names of the parties. The financing statement in pertinent part read as follows:

(Near the top of the financing statement in paragraphs 1 and 2)

'1. Dobtor

Name Slatkoff-Tuvin, Inc.

Address 443 Eastern Avenue (rear) Essex, Maryland 21221 '2. Secured Party

Name Didde-Glaser, Inc.

Address W. 12th Avenue & Graphic Arts St., Emporia, Kansas Jerry Bedner, Didde-Glaser, Emporia, Kansas

Person and Address To Whom Statement Is To Be Returned If Different From Above.

(At the bottom of the financing statement)

'Wm. F. Hegenbart

(Signature of Secured Party)

Wm. F. Hegenbart, Sec'y.-Treas.

Type or Print Above Name on Above Line

'Kenneth C. Slatkoff

(Signature of Debtor)

Kenneth C. Slatkoff

Type or Print Above Signature in Above Line

(Signature of Debtor)

Type or Print Above Signature on Above Line'

At the times the conditional sales contract and the financing statement were signed Kenneth Slatkoff was in fact president of Slatkoff-Tuvin, and Mr. William F. Hegenbart was in fact secretary-treasurer of Didde-Glaser, and both men were authorized to sign those documents on behalf of their respective corporations, and did so with the intent to authenticate the same on behalf of those corporations. There had been no prior dealings between either Mr. Malachuk and Mr. Slatkoff, or Mr. Hegenbart and Mr. Slatkoff in their individual capacities.

On October 12, 1965, Slatkoff-Tuvin executed a deed of trust conveying all its property an estate to P. Steven Plemens in trust for the benefit of its creditors. The trustee challenged the sufficiency of the financing statement in question on the ground that it was improperly signed by the debtor and thus resulted in an unperfected security interest, placing Didde-Glaser after the trustee with respect to priorities. The court found substantial compliance with the requirements of the Uniform Commercial Code (Code (1964 Repl.Vol.), Article 95B) and ordered that Didde-Glaser could retain the proceeds of the sale of the machine, free and clear from any claim by the trustee. The court, upon petition by the trustee, passed an order authorizing the trustee to file an appeal, and this appeal followed.

To be sufficient, a financing statement must be signed by the debtor and the secured party, must give mailing addresses of both parties, and must contain a sufficient description of the type, or items, of collateral. Section 9-402(1). 'Signed' is the key word in the present case, since it is not contended that the name and address of the secured party and of the debtor are incorrectly stated ¹ or that the description of the collateral is insufficient. ² Nor is this a case of the lack of a typed, printed, stamped, or written 'signature' of the secured party or the debtor. ³ The sole question in this case is whether the signature of Kenneth C. Slatkoff, without an indication that he signed as an authorized representative of the debtor corporation named in paragraph 1 of the financing statement, was so defective as to constitute substantial noncompliance with the provisions of Article 95B.

The Code includes within the definition of 'signed' and symbol executed or adopted by a party with present intent to authenticate a writing. Section 1-201(39). What is meant by this definition is that a complete signature is not necessary. That is, authentication of the document may be accomplished by a printed, stamped, or written symbol. In dealing with such symbol, it must be determined whether the symbol was executed or adopted by the party with present intention to authenticate the writing. ⁴ See Official Comment 39 to Section 1-201(39). In construing those provisions, courts must be mindful of the provisions of Section 1-102 which, in summary, state that Article 95B is to be liberally construed so as to promote the simplification, clarification, and modernization of the law governing commercial transactions by recognizing the customs, usages, and agreements common in commercial practices, and to make uniform the law among the various jurisdictions.

Appellant argues that the signature of an individual is not the signature of a corporation and that the signature of an individual can not authenticate a corporate signature. He cites as controlling Section 3-403(2)(a) and (b), ⁵ which obligates personally an authorized representative who signed an instrument for a principal in his own name without indicating any representative capacity, and Code (1957), Article 23, Section 5(a)(1), ⁶ which sets out prerequisites for corporate names. No personal liability is created by the execution of a financing statement. The creation of liability between the parties is the purpose of the execution of a security agreement or other instrument. The financing statement is a paper separate and apart from the security agreement itself, although a copy of the agreement may suffice as the financing statement if it is signed by both parties and meets the other requirements of Section 9-402. Lincoln Bank & Trust Co. v. Queenan, 344 S.W.2d 383 (Ky.Ct.App.1961). See Official Comment 1 to Section 9-402. A signed financing statement is filed for the purpose of showing that the statement is genuine and can be accepted for filing. Benedict v. Lebowitz, 346 F.2d 120 (2d Cir. 1965); In re Carlstrom, U.S.D.C. (Me. Oct. 4, 1966), 3 U.C.C.Rep. 764 (Uniform Commercial Code Reporting Service, published by Callaghan & Co.). The purpose of recording financing statements under the Code is to provide any interested person, not with all the information he needs to understand a secured transaction, but only with the information that such a transaction has taken place and that the particulars may be obtained from the named secured party at the address shown as provided in Section 9-208. ⁷ In the present case, it was stipulated that both Mr. Slatkoff and Mr. Hegenbart were authorized to sign the conditional sales contract and the financing statement on behalf of their respective corporations and did so with the intent to authenticate those documents on behalf of those corporations. Such authorization is sufficient and need not be filed. In re State Discount Furniture Co., Inc., U.S.D.C. (Conn. Jan. 22, 1964), 2 U.C.C.Rep. 20. Mr. Slatkoff's signature on the line designated 'Signature of Debtor' indicates he was signing for the debtor. The name and address of the debtor is clearly indicated in paragraph 1 of the financing statement. The financing statement was indexed under the corporate names, and there is no showing that any one was misled by this signature. Minor errors which are not seriously misleading do not render ineffective the financing statement which substantially complies with the requirements of Section 9-402(5). ⁸

A case which is similar to the present one and in which Section 9-402(5) was construed is In re Excel Stores, Inc., 341 F.2d 961 (2d Cir. 1965). In that case, there were two stores in a shopping center in Pawcatuck, Connecticut, which were operated under the same management and as part of a single venture. One was named 'Excel Stores, Inc.,' which was a Connecticut corporation, and the other, a Massachusetts corporation, was named 'Excel Enterprises, Inc.' Cash registers were sold through a conditional sales agreement to Excel Stores, but the treasurer of Excel Stores, Inc., Andrew F. Machado, inadvertently made the mistake of writing 'Excel Department Stores' instead of 'Excel Stores, Inc.' when he filled out the security agreement, adding, after the printed word 'by,' his signature, 'Andrew F. Machado.' These names were subsequently typed by the creditor in an appropriate place indicated in the agreement. No question was raised with respect to the filing of the contract as a financing statement. The district court held that the contract was not a sufficient compliance with Section 9-402 because it was not properly...