Perfection. Richard E. Walker, Kelly E. Walker, and Kenneth W. Walker were partners in the Walker Brothers Dairy, a general partnership located in Florida. The Walkers purchased a "Model 2955 utility tractor, a round bale saw, and a feed mixer box" from

Question

the John Deere Company. John Deere took a security interest in the equipment. The security agreement stated that the debtor was a partnership known as "Walker Brothers Dairy." John Deere filed a financing statement, however, that listed the debtors as "Richard Walker, Kelly Walker, and Kenneth Wendell Walker." The statement was signed by each of the three partners. Their signatures were followed by a typewritten statement indicating that the partners were doing business as "Walker Brothers Dairy." When Walker Brothers Dairy voluntarily filed for bankruptcy, John Deere sought to repossess the equipment. The issue before the court was whether the financing statement, which listed the partners as debtors rather than the partnership, was sufficient to perfect John Deere's security interest in the partnership equipment. What should the court decide? Discuss.

Answer 1

Perfection
The court held that the financing statement did not fulfill the requirements of Article 9 because the name of the partnership was not included on the form. The court noted that the Official Comment to the UCC 9-402(7) states in part, "In the case of a partnership it contemplates filing in the partnership name, not in the names of any of the partners." The court pointed out that the financing statement in this case was filed in the names of the three individuals and not in the partnership name, and reasoned that thus, it was insufficient to perfect John Deere's security interest in the farming equipment. The court explained that "[a] bank making a loan to Walker Brothers would only be required to search under the partnership name and in the case sub judice no partnership name would surface. Accordingly, the financing statements in the instant case were insufficient to perfect movant's security interests." The court added that "[t]he policy and purpose behind requiring the correct name on financing statements is notice. A financing statement is not sufficient if it does not give notice. A misspelling, an omission, or a wrong name most likely would defeat the notice goal."