Okla. Stat. tit. 12A § 2-107

Current through Laws 2024, c. 378.

Section 2-107 - Goods to be Severed from Realty: Recording

(1) A contract for the sale of minerals or the like, including oil and gas, or a structure or its materials to be removed from realty is a contract for the sale of goods within this article if they are to be severed by the seller, but until severance, a purported present sale thereof which is not effective as a transfer of an interest in land is effective only as a contract to sell.

(2) A contract for the sale, apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto, but not described in subsection (1) of this section or of timber to be cut is a contract for the sale of goods within this article whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting, and the parties can by identification effect a present sale before severance.

(3) The provisions of this section are subject to any third party rights provided by the law relating to realty records, and the contract for sale may be executed and recorded as a document transferring an interest in land and shall then constitute notice to third parties of the buyer's rights under the contract for sale.

Okla. Stat. tit. 12A, § 2-107

Laws 1961, p. 76, § 2-107; Laws 1981, c. 194, § 3.

Oklahoma Code Comment

(1) Timber, minerals, structures, etc. are treated as realty, unless they are to be severed by the seller. Until severed, however, the agreement is effective only as a contract to sell, and not as a present transfer of property. If the timber, etc. is to be severed by the buyer, the transaction is not a contract to sell goods, but to sell realty, and therefore is not governed by the Code. This is a departure from the Uniform Sales Act, under which timber, minerals, etc. were considered as chattels if they were to be severed by either party before the sale or under the contract of sale. There are no Oklahoma decisions.

(2) Growing crops. The previous Oklahoma decisions have made a distinction between "fructus industriales" and "fructus naturales." "Fructus industriales," or "industrial crops" are annual crops, which were considered as personally, and subject to a sale as chattels even before severed "Fructus naturales" or perennial crops were considered a part of the realty until severed. Cockrum v. Johnston, 74 Okl. 325, 194 P. 210 (1921). The Commercial Code abolishes this distinction, and places the emphasis upon whether they are capable of being severed without material harm to the realty. Undoubtedly, under this test, both types of crops shall be treated as "goods" subject to the Commercial Code.

Fixtures. This section also deals with fixtures, but the term is avoided because of diverse definitions. "Fixtures" are defined in 60 O.S. § 7 as "A thing is deemed to be affixed to land when it is attached to it by roots, as in the case of trees, vines or shrubs, or imbedded in it, as in the case of walls, or permanently resting upon it, as in the case of buildings, or permanently attached to what is thus permanent, as by means of cement, plaster, nails, bolts or screws." 60 O.S. § 334. dealing with removal of fixtures in general and of trade fixtures by a tenant. As to the latter it uses the test "if without injury to the premises."

The previous Oklahoma decisions have held that the intent of the parties, the nature of the equipment, the structure and mode of installation and purpose for which the installation has been made must all be considered in determining whether or not equipment is a "fixture." Gray v. Prudential Ins. Co., 182 Okl. 342, 77 P.2d 563 (1938). Although the Commercial Code test of "capable of severance without material harm" appears to be much simpler, it is doubtful whether it will substantially change Oklahoma law, for many of the circumstances mentioned in the Gray case must be considered in determining whether or not there is "material harm."

(3) Oklahoma has had no previous specific similar statutory provision.