Okla. Stat. tit. 12A § 1-9-108
Okla. Stat. tit. 12A, § 1-9-108
Oklahoma Code Comment
Oklahoma cases dealing with the adequacy of a collateral description in the security agreement are discussed infra in the Oklahoma Comment to section 9- 203 . That discussion will not be repeated here, except to note that the test under both old and revised Article 9 is whether the description in the security agreement is sufficient to allow a third party to reasonably identify the collateral subject to the security interest. See, e.g., Farmers and Merchants Nat'l. Bank, Fairview v. Fairview State Bank, 766 P.2d 330 (1988); In re R.W. Southwestern, Inc., 23 B.R. 252 (Bankr. 1982). The description in the financing statement is subject to a lower standard: all that is required is sufficient information to provide notice of a need for further inquiry. See, e.g., Consolidated Equipment Sales, Inc. v. First Bank & Trust Co. of Guthrie, 627 P.2d 432 (1981); revised section 9-504 .
Revised section 9-108 provides more guidance than old Article 9 as to what constitutes a sufficient description, and is consistent with Oklahoma case law, but the expanded language at section 9-108 is largely illustrative, not mandatory or exclusive. Thus descriptive practices that have been sufficient in the past should continue to be upheld, even if not within the examples at revised section 9-108(b) . See, e.g., Security State Bank of Wewoka v. Dooley, 604 P.2d 153 (Okla. 1979) ("pickup truck" was sufficient for a financing statement C note however that today this would require a certificate of title lien entry pursuant to revised section 9-311 ). The broad language at revised section 9-108(b)(6) rejects more strict cases to the contrary from other jurisdictions, such as In re Cilek, 115 B.R. 974 (Bankr. W.D. Wis. 1990) ("Honda parts" not sufficient to describe Honda parts). Still, the safest course remains the use of Article 9 definitional terms.
There is an exception to these general rules, for consumer transactions, consumer goods transactions, security entitlements, securities accounts, commodities accounts, and commercial tort claims (see definitions at revised section 9-102 ). In such cases a security agreement description only by broad type of Article 9 category is insufficient; greater specificity is required. This is also consistent with Oklahoma case law. See In re Shirel, 251 B.R. 157 (Bankr. Okla. 2000) ("merchandise" as the collateral description in a credit card slip security agreement was insufficient to cover a refrigerator). However, revised Article 9 retains the long-standing principle that a minor error in the financing statement (or lien entry form) that is not seriously misleading will not impair perfection. See revised section 9-506 ; In re Suddarth 222 B.R. 352 (Bankr. Okla. 1998), aff'd, 201 F.3d 449 (10th Cir. 1999) (unpublished) (omission of date on certificate of title lien entry form was not seriously misleading); City Bank & Trust v. Warthen, 535 P.2d 162 (Nev. 1975) (error in VIN not seriously misleading). Revised section 9-311(b) provides that a certificate of title lien entry is equivalent to filing a financing statement, thereby making clear that the Article 9 harmless error rule at revised section 9-506 also applies to certificate of title lien entries.
When specifically identifying collateral, it may also be important to identify the nature or type of the collateral. For example, in Farmers & Merchants Bank of Trenton v. State, 306 S.E.2d 11 (Ga. 1983), the collateral was described as "67-402-Cessna," without noting it was an airplane. While the secured party ultimately prevailed, it took an appellate court reversal of the trial court's conclusion that this description was not sufficient. See generally Alvin C. Harrell, Fred H. Miller and William E. Carroll, The Law of Personal Property Secured Transactions Under the Uniform Commercial Code and Related Laws Ch. 5 (1994) ("Describing the Collateral").
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