O.C.G.A. § 11-9-503 (2019)

Annotations

Law reviews. For article discussing Uniform Commercial Code provisions establishing a security interest in fixtures as a means of protecting sellers, see 16 Mercer L. Rev. 404 (1965). For article discussing the Uniform Commercial Code provisions regarding the sufficiency of “The Description of Collateral in Security Agreements and Financing Statements,” see 28 Mercer L. Rev. 611 (1977). For article, “The Revisions to Article IX of the Uniform Commercial Code,” see 15 Ga. St. B.J. 120 (1977).

For article, “Fixture Financing Under Georgia’s New Article 9,” see 16 Ga. St. B.J. 110 (1980). For article, “H.B. 712: New Requirements for Financing Statements and Continuation Statements Filed in Georgia,” see 22 Ga. St. B.J. 6 (1985). For article, “H.B. 1364: Revised Requirements for Financing Statements and Continuation Statements Filed in Georgia,” see 23 Ga. St. B.J. 50 (1986). For annual survey of law of real property, see 38 Mercer L. Rev. 319 (1986). For annual survey article on commercial law, see 50 Mercer L. Rev. 193 (1998). For comment on United States v. Crittenden, 563, F.2d 678 (5th Cir. 1977), see 12 Ga. L. Rev. 692 (1977).

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. Name indicated on driver’s license. - Name “indicated on the driver’s li-

cense” refers only to the name typed on the driver’s license and does not include the name signed by the debtor. Pierce v. Farm Bureau Bank (In re Pierce), 581 B.R. 912, 2018 Bankr. LEXIS 287 (Bankr. S.D. Ga. 2018). Movant was not entitled to adequate protection or, in the alternative, relief from an automatic stay because the bankruptcy court questioned the validity of the movant’s liens under Georgia law as the movant’s financing statement did not comply with the law in that the name on the financing statement did not match the debtor’s name on the driver’s license of the debtor. Furthermore, the movant’s financing statement was so seriously misleading as to render it ineffective. In re Bryant, 630 B.R. 671, 2021 Bankr. LEXIS 1528 (Bankr. M.D. Ga. 2021). Security interest not perfected. - Where a search of the county records did not reveal a financing statement due to a mistake in the name of the debtor shown on the financing statement, the security interest in the funds relating to the financing statement was not perfected, and the money was awarded to a judgment creditor in an interpleader action. Receivables Purchasing Co. v. R & R Directional Drilling, L.L.C., 263 Ga. App. 649, 588 S.E.2d 831, 2003 Ga. App. LEXIS 1284 (2003). Because an attorney who handled a closing in the capacity of an escrow agent for the client’s business had no actual or constructive notice of a creditor’s security interest in the business due to the improper filing pursuant to O.C.G.A. §§ 119-502, 11-9-503, and 11-9-506, because the debtor’s name was not properly listed and the interest was accordingly not perfected, claims as to conversion of the business closing proceeds failed. All Bus. Corp. v. Choi, 280 Ga. App. 618, 634 S.E.2d 400, 2006 Ga. App. LEXIS 669 (2006), cert. denied, No. S06C2098, 2006 Ga. LEXIS 1016 (Ga. Nov. 20, 2006). Defendant’s financing statement was seriously misleading, making the financing statement ineffective under O.C.G.A. § 11-9-506(c) because the debtor’s name on the financing statement was seriously misleading, and a search done with the filing office’s standard search logic would

not have disclosed the defendant’s financing statement. AgGeorgia Farm Credit, ACA v. Wynn (In re Wynn), 627 B.R. 192, 2021 Bankr. LEXIS 883 (Bankr. M.D. Ga. 2021). Debtor’s name only in trade name form. - Financing statement showing debtor’s name only in unregistered trade name form is not legally sufficient to create security interest. In re Firth, 363 F. Supp. 369, 1973 U.S. Dist. LEXIS 12015 (M.D. Ga. 1973) (decided under former Code 1933, § 109A-9-402). Filing of a financing statement under a corporate debtor’s trade name, was sufficient, where business was done under the trade name and any reasonably prudent creditor would have searched the records under that name. In re Simpson Motor Co., 101 B.R. 813, 1989 Bankr. LEXIS 1027 (Bankr. N.D. Ga. 1989) (decided under former Code Section 11-9-402). Creditor’s filing of a financing statement on the debtor’s automobiles in the debtor’s trade name rather than its legal name was sufficient, even though the creditor knew the legal name but decided not to file under it, where the debtor did business only under one trade name. Willson v. Habersham Bank, 111 B.R. 368, 1990 U.S. Dist. LEXIS 2059 (N.D. Ga. 1990) (decided under former Code Section 11-9-402). Signature material aspect of financing statement. - Unless former subsection (2) of this section applies, the debtor’s signature is a material aspect of the financing statement. USI Capital & Leasing v. Medical Oxygen Serv., Inc., 36 B.R. 341, 1984 Bankr. LEXIS 6461 (Bankr. N.D. Ga. 1984) (decided under former Code Section 11-9-402). Signature by real debtor in individual capacity on behalf of fictitious entity. - Where real debtor has not signed financing statement in his individual capacity, but only on behalf of fictitious business entity, it is conceptually insufficient since signature of real debtor in his real name does not appear thereon. In re Firth, 363 F. Supp. 369, 1973 U.S. Dist. LEXIS 12015 (M.D. Ga. 1973) (decided under former Code 1933, § 109A-9402). Fictitious signature is insufficient notice to subsequent creditors. - While this section has effect of binding

those persons who contract in fictitious names to contracts, so executed, it does not have effect of saying that financing statements given in fictitious names are sufficient to notify subsequent creditors of identity of party using the fictitious name. Were a court to hold otherwise, the purpose of statutory scheme of requiring security interest to be perfected by filing a financing statement - to give notice to future creditors of debtor - would be seriously undermined. In re Firth, 363 F. Supp. 369, 1973 U.S. Dist. LEXIS 12015 (M.D. Ga. 1973) (decided under former Code 1933, § 109A-9-402). Signatures required for amendments. - Section was amended in 1978 specifically to require signatures of debtors to amendments to financing statements. Walter E. Heller & Co. v. Aetna Bus. Credit, Inc., 158 Ga. App. 249, 280 S.E.2d 144, 1981 Ga. App. LEXIS 2151 (1981) (decided under former Code Section 11-9-402). Question of fact as to whether financing statement seriously misleading. - In a suit involving the defendant defaulting on loans secured by property that was allegedly tortuously converted by sale, the grant of summary judgment to the plaintiff was reversed, in part, because an issue of material fact remained

as to whether the financing statement was valid as to the name provided on the financing statement and whether the incorrect name made the statement seriously misleading. Rebel Auction Co. v. Citizens Bank, 343 Ga. App. 81, 805 S.E.2d 913, 2017 Ga. App. LEXIS 451 (2017). Failure to file amended financing statement. - Where creditor failed to file an amended financing statement reflecting debtor’s name change, its original filing was not effective to perfect a security interest in collateral acquired by debtor more than four months after it changed its name. Pettigrew v. Consultants United, Inc. (In re Specialcare, Inc.), 209 B.R. 13, 1997 Bankr. LEXIS 117 (Bankr. N.D. Ga. 1997) (decided under former Code Section 11-9-503). First lienholder still protected despite error in financing statement. - Even assuming a financing statement became seriously misleading due to a change in the debtor’s name after dissolution of the corporation, the first lienholder was still protected as to collateral acquired through that time and up to four months thereafter. Western Auto Supply Co. v. McKenzie, 227 Ga. App. 477, 489 S.E.2d 537, 1997 Ga. App. LEXIS 844 (1997) (decided under former Code Section 11-9503).

RESEARCH REFERENCES Am. Jur. 2d. 68A Am. Jur. 2d, Secured Transactions, §§ 32, 192 et seq., 310, 311, 329 et seq., 352-354, 365, 395. C.J.S. 76 C.J.S., Records, § 4. U.L.A. Uniform Commercial Code (U.L.A.) § 9503. ALR. What amounts to a conditional sale, 17 A.L.R. 1421; 43 A.L.R. 1247; 92 A.L.R. 304; 175 A.L.R. 1366. Violation of statute as to form of, or terms to be included in, conditional sale contract, as invalidating entire transaction or merely its effect to reserve title in vendor, 144 A.L.R. 1103. Priority as between federal tax lien and mortgage to secure future advances or

expenditures by mortgagee, 90 A.L.R.2d 1179. 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. Sufficiency of designation of debtor or secured party in security agreement or financing statement under UCC § 9-402, 99 A.L.R.3d 478. Sufficiency of address of debtor in financing statement required by UCC § 9402(1), 99 A.L.R.3d 807. Sufficiency of address of secured party in financing statement required under UCC § 9-402(1), 99 A.L.R.3d 1080. Effectiveness of original financing statement under UCC Article 9 after change in debtor’s name, identity, or business structure, 99 A.L.R.3d 1194.

Sufficiency of secured party’s signature on financing statement or security agreement under UCC § 9-402, 100 A.L.R.3d 390. Sufficiency of debtor’s signature on security agreement or financing statement under UCC §§ 9-203 and 9-402, 3 A.L.R.4th 502.

Sufficiency and effectiveness of designation of debtor in financing statement under Uniform Commercial Code §§ 9-503 and 9-506 (revised 2000), 28 A.L.R.6th 461.