Ark. Code Ann. § 4-9-501 (2026)

Case Notes

Accounts.

Assignees of accounts receivable must file their interest both centrally with the secretary of state and locally with the clerk of the circuit court. United States v. Trigg, 465 F.2d 1264 (8th Cir. 1972), cert. denied, 410 U.S. 909, 93 S. Ct. 963, 35 L. Ed. 2d 270 (1973) (decision under prior law).

Where the evidence established that out of the amount listed by the contractor as accounts receivable, approximately 50 percent of this amount constituted retainage on construction contracts and which were listed on the contractor's balance sheet as accounts receivable, and where, since the contractor did not complete its work on any projects after it filed bankruptcy, the retainage proved to be uncollectible due to various counterclaims and setoffs, the district court correctly included the retainage in the contractor's total outstanding accounts. In re B. Hollis Knight Co., 605 F.2d 397 (8th Cir. 1979) (decision under prior law).

Bankruptcy.

Although creditor failed to perfect security interest by failing to comply with former § 4-9-401(1)(c), the security interest was a transfer by the debtor of an interest in property, and a preference which could be avoided in a bankruptcy action. International Ventures, Inc. v. Block Properties, 214 B.R. 590 (Bankr. E.D. Ark. 1997) (decision under prior law).

Conditional Sales Contracts.

The conditional sale contract for carpeting sold to a defendant for installation in real estate covered by a deed of trust should have been filed in the office where the deed of trust was recorded to be valid as against the interest of the holder of the deed of trust. United States v. Baptist Golden Age Home, 226 F. Supp. 892 (W.D. Ark. 1964) (decision under prior law).

Where person who sold equipment to the defendant under a conditional sale contract did not record or file the contract as provided by this section, he had only an unperfected security interest in the equipment which did not take priority over the after-acquired property clause in a deed of trust to the real estate where the equipment was placed. United States v. Baptist Golden Age Home, 226 F. Supp. 892 (W.D. Ark. 1964) (decision under prior law).

Consumer Goods.

Where a debtor's use of a video cassette recorder was primarily personal, even though the debtor made some business use of it, the recorder was properly classified as consumer goods such that the creditor's single filing of its security interest was sufficient to perfect its security interest under this chapter. Walloch TV & Appliances, Inc. v. McFadden, 18 B.R. 758 (Bankr. E.D. Ark. 1982) (decision under prior law).

Filing.

Large motel and restaurant signs anchored deep in concrete were so clearly fixtures that purchasers of the motel and restaurant had the right to rely on the records in the office of the circuit clerk of the county, where filings covering fixtures were to be made, to determine if a lien was in existence at the time of their purchase; under this chapter, a good faith filing made in the wrong place was not constructive notice to them, but only to any person who had knowledge of the contents of such financing statement. Cummings, Inc. v. Beardsley, 271 Ark. 596, 609 S.W.2d 66 (1980) (decision under prior law).

Although bank filed first, it was not the first to file correctly, which was required under this chapter in order for it to have priority. Affiliated Food Stores, Inc. v. F & M Bank, 300 Ark. 450, 780 S.W.2d 20 (1989) (decision under prior law).

Where creditor did not file the financing statements centrally with the Arkansas Secretary of State, the security interest in the 2003 government payments was not properly perfected prior to the filing of the instant case; as consequence of creditor's failure to properly perfect its security interest in the 2003 government payments, the debtors could avoid the creditor's security interest. In re Stevens, 307 B.R. 124 (Bankr. E.D. Ark. 2004).

In Arkansas, the applicable provision to determine the place of proper filing of a financing statement concerning certain government agricultural payments was § 4-9-501(a)(3), not § 4-9-501(a)(2). In re Stevens, 307 B.R. 124 (Bankr. E.D. Ark. 2004) (decided under former version of statute).

Fixtures.

A “fixture” is personal property which by reason of annexation to real property has become a part of the realty because of the nature of the surrounding structures or the impossibility of removal without substantial damage to the realty. In re Factory Homes Corp., 333 F. Supp. 126 (W.D. Ark. 1971) (decision under prior law).

The term “trade fixture” is an exception to the classification “fixture,” and in the cases in which the term is discussed it is generally stated under this chapter that a “trade fixture” remains the property of the business, not the owner of the real property, and is thus not a “fixture.” In re Factory Homes Corp., 333 F. Supp. 126 (W.D. Ark. 1971) (decision under prior law).

Referee in bankruptcy properly denied secured claim based upon times in security agreement which were trade fixtures and not fixtures within the meaning of this section where creditor filed security agreement with secretary of state in compliance with this section but subsequent to the filing of an involuntary petition in bankruptcy by debtor and thereby created no lien by virtue of such security interest. In re Factory Homes Corp., 333 F. Supp. 126 (W.D. Ark. 1971) (decision under prior law).

Where a debtor annexed a building on the real property for the sole purpose of operating his business, and the building was not annexed with the intention of making the building a permanent addition to the realty, the building also constituted a trade fixture and remained personal property under this chapter. In re Hot Shots Burgers & Fries, Inc., 147 B.R. 484 (Bankr. E.D. Ark. 1992) (decision under prior law).

Knowledge.

An FHA lien under a deed of trust not meeting filing requirements covering an apartment house and its furniture given by a partnership had priority over the purchase money lien of the corporation which sold the furniture to the partnership where one of the partners was also an officer of the corporation and the dominant figure in both the corporation and the partnership. United States v. Thompson, 272 F. Supp. 774 (E.D. Ark. 1967), aff'd, 408 F.2d 1075 (8th Cir. 1969) (decision under prior law).

“Knowledge of the contents” means actual rather than constructive knowledge. Affiliated Food Stores, Inc. v. F & M Bank, 300 Ark. 450, 780 S.W.2d 20 (1989) (decision under prior law).

Personal Property.

Filing in real estate records does not constitute notice as to personal property, and actual knowledge is required under this subtitle, § 4-1-201. In re King Furn. City, Inc., 240 F. Supp. 453 (E.D. Ark. 1965) (decision under prior law).

Places of Business.

Where a debtor farm supply business used a warehouse for over four years as its distribution center, the warehouse was listed as one of the company's business addresses in financing statements, and the warehouse performed an integral part of the debtor's business, the warehouse constituted a “place of business” within the meaning of former § 4-9-401(1)(c); accordingly, where the debtor owned two retail outlets in one county and the warehouse was located in a different county, the filing of the financing statements only with the Secretary of State was sufficient under former § 4-9-401(1)(c) to perfect the creditors' security interests. American Cyanamid v. McCrary's Farm Supply, Inc., 705 F.2d 330 (8th Cir. 1983) (decision under prior law).

A corporation is an organization which may be a debtor under this chapter. Rice v. Fas Fax Corp. (In re Hot Shots Burgers & Fries, Inc.), 183 B.R. 848 (Bankr. E.D. Ark. 1995) (decision under prior law).

Where individuals, rather than the corporation, were held to be the debtors, the proper place to file the financing statement under this chapter was in the office of the secretary of state and, because the individuals had no place of business, in the county in which the debtors resided. Rice v. Fas Fax Corp. (In re Hot Shots Burgers & Fries, Inc.), 183 B.R. 848 (Bankr. E.D. Ark. 1995) (decision under prior law).

Where a farming partnership had more than one place of business because it grew crops in more than one county, the farm equipment and crops had to be perfected in a county which was considered the partnership's chief executive office; all financing statements regarding the collateral at issue were filed in the proper county and were properly perfected because they were filed in the county where the partnership's executive office was located and where both partners resided. In re Curtis, 363 B.R. 572 (Bankr. E.D. Ark. 2007).

Timber as Inventory Goods.

Directed verdict, or motion to dismiss under Ark. R. Civ. P. 50(a), was properly granted because mills that purchased gatewood timber from an owner were buyers in the ordinary course of business under §§ 4-1-201(b)(9), 4-9-320, and timber, once cut, became inventory goods under § 4-9-102(a)(48); thus, the mills had no duty to conduct a lien search to find a creditor's perfected security interest in the timber. Fordyce Bank & Trust Co. v. Bean Timberland, Inc., 369 Ark. 90, 251 S.W.3d 267 (2007).

Cited: Caplinger v. Patty, 398 F.2d 471 (8th Cir. 1968); Thompson v. United States, 408 F.2d 1075 (8th Cir. 1969); Richardson v. United States, 358 F. Supp. 994 (E.D. Ark. 1973); Findley Mach. Co. v. Miller, 3 Ark. App. 264, 625 S.W.2d 542 (1981); In re Answerfone, Inc., 48 B.R. 24 (Bankr. E.D. Ark. 1985); Worthen Bank & Trust Co. v. Hilyard Drilling Co., 60 B.R. 500 (Bankr. W.D. Ark. 1986); Womack v. Newman Fixture Co., 27 Ark. App. 117, 766 S.W.2d 949 (1989); Herringer v. Mercantile Bank, 315 Ark. 218, 866 S.W.2d 390 (1993); Rice v. Fas Fax Corp. (In re Hot Shots Burgers & Fries, Inc.), 169 B.R. 920 (Bankr. E.D. Ark. 1994); Lawhon Farm Supply, Inc. v. Hayes, 316 Ark. 69, 870 S.W.2d 729 (1994); In re Morrilton Plastics Prods., Inc., 177 B.R. 622 (Bankr. E.D. Ark. 1995); Nef v. Ag Servs. of Am., Inc., 79 Ark. App. 100, 86 S.W.3d 4 (2002) (decisions under prior law).