O.C.G.A. § 11-9-108 (2019)

Annotations

Law reviews. For article discussing the classification of a continuing security interest in changing collateral as an unenforceable preference under Section 60a of the Bankruptcy Act, see 1 Ga. L. Rev. 257 (1967). For comment on United States v. Crittenden, 563 F.2d 678 (5th Cir. 1977), ap-

pearing below, see 12 Ga. L. Rev. 692 (1977). For article discussing the U.C.C. provisions regarding the sufficiency of “The Description of Collateral in Security Agreements and Financing Statements,” see 28 Mercer L. Rev. 611 (1977). For article surveying developments in Georgia commercial law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 33 (1981).

JUDICIAL DECISIONS Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Article 9 are included in the annotations for this Code section. For a table of comparable provisions, see the table at the beginning of the Article. Sufficiency in financing statements. - Property listed in financing statements need not be specific but must only reasonably identify same, giving dated leases and amount of same, “secured by” equipment listed in leases and its location. Stephens v. Bank of Camilla, 133 Ga. App. 210, 210 S.E.2d 358, 1974 Ga. App. LEXIS 1020 (1974), aff’d, 234 Ga. 293, 216 S.E.2d 71, 1975 Ga. LEXIS 1109 (1975) (decided under former Code Section 11-9-110). Physical description in financing statement need not be sufficient in itself to identify the property. It is sufficient if description provides such key to identity

of property as would enable a person of ordinary business prudence, upon inquiry, to discover actual identity of property described. Abney v. ITT Diversified Credit Corp. (In re Environmental Elec. Sys.), 11 B.R. 965, 1981 Bankr. LEXIS 3479 (Bankr. N.D. Ga. 1981) (decided under former Code Section 11-9-110). Description of the collateral contained in the financing statement was insufficient because the description did not indicate that the collateral covered all assets or all personal property of the debtor, nor did the description meet the requirements under O.C.G.A. § 11-9-108 for a reasonable identification. If the description had been “all future receivables of the Debtor,” it would have met the requirements under § 11-9-108 by describing the collateral through category. Scarver v. Silverline Servs. (In re Wastetech, LLC), 605 B.R.

264, 2019 Bankr. LEXIS 1713 (Bankr. N.D. Ga. 2019). Description need not be of exact or detailed nature. - Courts should refuse to follow holdings, often found in older chattel mortgage cases, that descriptions are insufficient unless they are of exact and detailed nature, i.e., so-called “serial number” test. BVA Credit Corp. v. Mullins, 552 F.2d 1145, 1977 U.S. App. LEXIS 13189 (5th Cir. 1977) (decided under former Code Section 11-9-110). Sufficient description enables one to identify thing described. - Test of the sufficiency of a description is that the description do the job assigned to it, that it make possible identification of thing described. Personal Thrift Plan of Perry, Inc. v. Georgia Power Co., 242 Ga. 388, 249 S.E.2d 72, 1978 Ga. LEXIS 1223 (1978) (decided under former Code Section 11-9-110). Sufficiency of description is question of law, while identity is question of fact. - Question of sufficiency of description of property is one of law, for the court; that of identity of property is one of fact, to be decided by jury. Bank of Cumming v. Chapman, 245 Ga. 261, 264 S.E.2d 201, 1980 Ga. LEXIS 761 (1980). Description of collateral in security agreements. - Purchase money security agreements on consumer goods are not required to be filed, and purpose of description of collateral in such agreements is not to give notice, as a financing statement, but is to provide identification of collateral so as to avoid disputes over its identity. Personal Thrift Plan of Perry, Inc. v. Georgia Power Co., 242 Ga. 388, 249 S.E.2d 72, 1978 Ga. LEXIS 1223 (1978) (decided under former Code 1933, § 109A-9-302). Requirement that identification of collateral indicate type of collateral is applicable to financing statements, not security agreements. Personal Thrift Plan of Perry, Inc. v. Georgia Power Co., 242 Ga. 388, 249 S.E.2d 72, 1978 Ga. LEXIS 1223 (1978) (decided under former Code Section 11-9-110). Bankruptcy court found that: (1) the equipment in issue was incorrectly described in both the security agreement and the financing statement; and (2) the

rights of the debtor, as a hypothetical lien creditor, were superior to the rights of the creditor. Deere Credit, Inc. v. Pickle Logging, Inc., 286 B.R. 181, 2002 Bankr. LEXIS 1297 (Bankr. M.D. Ga. 2002). Description by model and serial number. - Description of collateral in a purchase money security agreement by model and serial number alone meets requirements of former §§ 11-9-203(1)(b) and 11-9-110, where secured party named is manufacturer or dealer in specialty appliances sold under trade name. Personal Thrift Plan of Perry, Inc. v. Georgia Power Co., 242 Ga. 388, 249 S.E.2d 72, 1978 Ga. LEXIS 1223 (1978) (decided under former Code Section 11-9-110). Merely stating incorrect serial number will not vitiate contract if key is there. Thomas Ford Tractor, Inc. v. North Ga. Prod. Credit Ass’n, 153 Ga. App. 820, 266 S.E.2d 571, 1980 Ga. App. LEXIS 1994 (1980) (decided under former Code Section 11-9-110). Description of land or crops. - Description in security instrument of land or crops must raise warning flag, providing key to identity of property. United States v. Big Z Whse., 311 F. Supp. 283, 1970 U.S. Dist. LEXIS 12207 (S.D. Ga. 1970) (decided under former Code Section 11-9110). Crop need not be described as tobacco crop when all crops on land are collateral for debt. The description that reasonably identifies what is described is adequate. United States v. Big Z Whse., 311 F. Supp. 283, 1970 U.S. Dist. LEXIS 12207 (S.D. Ga. 1970) (decided under former Code Section 11-9-110). Determining whether record gives sufficient notice. - Whether record gives sufficient notice depends not only on language appearing in mortgage, but also upon what a person of ordinary business prudence would have ascertained from pursuing such lines of inquiry as data given in mortgage would naturally suggest to the reasonable person’s mind; and, additionally, any further information actually possessed by claimants at time of transaction, which would have led an ordinary man to believe that dealings were with mortgaged property, or would ordinarily have led the reasonable man to

further inquiry, may be taken into consideration in determining whether they had notice of lien, or were legally chargeable with notice. Yancey Bros. Co. v. Dehco, Inc., 108 Ga. App. 875, 134 S.E.2d 828, 1964 Ga. App. LEXIS 1047 (1964) (decided under former Code Section 11-9-110). Valid security interest in airplane established. - While description of bank’s collateral as “67 #402 Cessna”

could be ambiguous to one who is unaware that a “Cessna” is an airplane, the note and documents obtained by the bank from the borrower when it made the loan removed all doubt that the bank did have a valid security interest in the plane. F & M Bank v. State, 167 Ga. App. 77, 306 S.E.2d 11, 1983 Ga. App. LEXIS 2398 (1983) (decided under former Code Section 11-9110).

OPINIONS OF THE ATTORNEY GENERAL Editor’s notes. In light of the similarity of the statutory provisions, opinions rendered under former Article 9 are included in the opinions for this Code section. Duty of superior court clerks. - Clerks

of superior court are not required to determine that property subject to a U.C.C. financing statement is properly described before recording the statement. 1982 Op. Att’y Gen. No. U82-38 (decided under former Article 9).

RESEARCH REFERENCES Am. Jur. 2d. 68A Am. Jur. 2d, Secured Transactions, § 351. C.J.S. 72 C.J.S., Pledges, § 10. U.L.A. Uniform Commercial Code (U.L.A.) § 9108. ALR. Sufficiency of description of property in mortgage on animals, 124 A.L.R. 944. Sufficiency of description in chattel mortgage as covering all property of a particular kind, 2 A.L.R.3d 839; 30 A.L.R.3d 9; 25 A.L.R.5th 696. Sufficiency of description of crops under UCC §§ 9-203(1)(b) and 9-402(1), 67 A.L.R.3d 308; 100 A.L.R.3d 10; 100 A.L.R.3d 940.

Equipment leases as security interest within Uniform Commercial Code sec. 1-201(37), 76 A.L.R.3d 11. Sufficiency of address of debtor in financing statement required by UCC sec. 9-402(1), 99 A.L.R.3d 807. Sufficiency of address of secured party in financing statement required under UCC sec. 9-402(1), 99 A.L.R.3d 1080. What is “commercially reasonable” disposition of collateral required by UCC sec. 9-504(3), 7 A.L.R.4th 308. Sufficiency of secured party’s notification of sale or other intended disposition of collateral under UCC sec. 9-504(3), 11 A.L.R.4th 241. Construction and effect of “future advances” clauses under UCC Article 9, 90 A.L.R.4th 859.

Subpart 2 Applicability of Article