Still Associates, Inc. v. Murphy

• Decision Date: 02 March 1971
• Citation: 8 U.C.C.Rep.Serv. 929,358 Mass. 760,267 N.E.2d 217
• Parties: , 8 UCC Rep.Serv. 929 STILL ASSOCIATES, INC. v. Kenneth F. MURPHY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 217

267 N.E.2d 217

358 Mass. 760, 8 UCC Rep.Serv. 929

STILL ASSOCIATES, INC. v. Kenneth F. MURPHY.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Dec. 10, 1970.

Decided March 2, 1971.

Max L. Rubin, Boston, for plaintiff.

Daniel J. Bailey, Jr., Weymouth, for defendant.

Before TAURO, C.J., and SPALDING, CUTTER, REARDON and QUIRICO, JJ.

REARDON, Justice.

The plaintiff in this action of tort seeks damages for the conversion by the defendant of a 1967 Dodge truck. The defendant's answer was a general denial. The judge found for the defendant. The case comes to us on appeal by the plaintiff from an order of the Appellate Division of the Municipal Court of the City of Boston which dismissed a report.

The facts agreed upon by the prties and summarized in a report of the Municipal Court judge are as follows. On October 31, 1967, Charles J. Lavoie and his wife executed a promissory note, a chattel mortgage, financing statement, and security agreement for the plaintiff covering among other items 'one (1) 1967 Dodge 6 cyl. D--100 pickup serial #1161--702080.' The serial number was in error in that the correct number was 1161--702088, the error being due to the inadvertence of an agent of the plaintiff who prepared the documents. On September 30, 1968, while the Lavoies were in default on their payments to the plaintiff, Lavoie gave a bill of sale of the truck to the defendant in which the vehicle was correctly identified. The defendant never had actual notice of the existence of the plaintiff's lien and acted in good faith in purchasing the truck from Lavoie. He is now in possession of the truck, having refused the demand by the plaintiff on December 12, 1968, to return it. At the time of the sale to the defendant, the fair market value of the truck was $1,500, which had depreciated by $150 at the time of the plaintiff's demand. Relying on Wise v. Kennedy, 248 Mass. 83, 142 N.E. 755, the Appellate Division dismissed the report.

1. The validity of the financing statement, upon which resolution of this case hinges, is to be determined under the provisions of the Uniform Commercial Code, G.L. c. 106, §§ 9--402(1) and 9--402(5), as appearing in St.1957, c. 765, § 1. Section 9--402 sets up a system of 'notice filing' which we have previously described as 'a method of protecting security interests which at the same time would give subsequent potential creditors and other interested persons information and procedures adequate to enable the ascertainment of the facts they needed to know' (emphasis supplied). National Cash Register Co. v. Firestone & Co. Inc., 346 Mass. 255, 261, 191 N.E.2d 471. Section 9--402(5) provides in particular that '(a) financing statement substantially complying with the requirements of this section is effective even though it contains minor errors which are not seriously misleading.' If we apply this provision to the facts of this case consistently with 'the broad purposes of the act' (see National Cash Register Co. v. Firestone & Co. Inc., supra, at p. 261, 191 N.E.2d at p. 475.) we are led to conclude that the validity of the financing statement was not affected by the mistake in the last digit of the serial number.

Section 9--402(1) requires only a 'statement indicating the types, or describing the items, of collateral,' and the concededly accurate description, 'one (1) 1967 Dodge 6 cyl. D--100 pickup,' fully satisfied this requirement. Courts in other jurisdictions have held much less to be sufficient. General Motors Acceptance Corp. v. Terra Contractors Corp., 161 N.Y.L.J. No. 94, p. 18, May 14, 1969 (N.Y.Civil Court, N.Y. City) ('motor vehicle' sufficient). In the face of a sufficient description, the mere fact of an erroneous serial number following it cannot be held to be 'seriously misleading.' Bank of North America v. Bank of Nutley, 94 N.J.Super. 220, 227, 227 A.2d 535 (accurate description of car in financing statement by year, model, and maker; serial number off by one digit). In re Esquire Produce Co. Inc., 5 U.C.C.Rep.Serv. 257 (E.D.N.Y., February 27, 1968, Bankruptcy No. 66--B--1052) (description of collateral only as '1966 Ford'; serial number off by one digit). It has been held that the necessity of listing by serial number that property which serves as collateral under a security agreement was taken away by the Uniform Commercial Code...