Law School Case Brief
Sommers v. Int'l Bus. Machs. - 640 F.2d 686 (5th Cir. 1981)
When a photocopy of a security agreement is to serve as a financing statement, the "signed" requirement under Tex. Bus. & Com. Code Ann. § 9.402(a) (Supp. 1980-1981) necessitates that a debtor execute a symbol with a present intention to authenticate a writing as a financing statement. This is done by either having a debtor "sign" a photocopy of a security agreement or by providing a debtor notice in a security agreement that it may be used as a financing statement. The only exception to the "signed" requirement is when an original security agreement has been filed in the state.
A bankruptcy trustee filed a complaint to sell a debtor's personal property that were free and clear of liens, including law books which are the subject of the claimed perfected security interest of defendant, West Publishing Company. The bankruptcy judge denied the trustee's complaint, and the district court affirmed.
Was the security interest of West Publishing Company perfected?
The appellate court reversed the decision of the trial court and remanded. The Court held that West Publishing Company's security interest was not perfected under Tex. Bus. & Com. Code Ann. § 9.402 because it was not signed by debtor. A photocopy of the security agreement, rather than the original, was filed with the Secretary of State and that such copy did not contain debtor's original signature under § 9.402(a). There was nothing on the photocopy to indicate an intention to authenticate the writing as a financing statement. Because West Publishing Company's security interest in the collateral was not perfected, the trustee was entitled to avoid the obligation.
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