Chapter29 - CHAPTER 29 SECURED TRANSACTIONS ANSWERS TO...

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227 C HAPTER 29 S ECURED T RANSACTIONS A NSWERS TO Q UESTIONS AT THE E NDS OF THE C ASES CASE 29.1 QUESTIONS (PAGE 594) 1A. Under what circumstances might a financing statement not be consi- dered effective even if it does not identify the debtor correctly? The court in this case stated that ―[t]here is a safe harbor‖ under UCC 9–506(c). . ―If a search of the filing office's records under the debtor's correct name, using the filing office's standard search logic, if any, would nevertheless disclose that financing statement, the name pro- vided does not make the financing statement seriously misleading.‖ Also, a financing statement that uses an incorrect name might be acceptable if no other creditor challenges the filing, either because no other creditor is interested or because the other creditor uses the same misidentifying name. 2A. In most Latin American countries, a person’s surname consists of the father's name followed by the mother's name. Should this fact have changed the result in this case? Why or why not? Corona made the argument that the UCC‘s ―debtor name requirement is governed by the naming convention of Latin American countries because debtor is from Mexico.‖ The court ―reject[ed] the argument b e- cause the strawberries were planted in and the debt obligation arose in Santa Barbara County, not Mexico.‖ The court added that the Latin American naming convention ―is exac t- ly opposite Anglo-American tradition . . . . Debtor's last name did not change when he crossed the border into the United States. The ‗naming convention‘ is legally irrel evant for UCC-1 purposes and, if accepted, would seriously undermine the concept of . . . perfec tion.‖ CASE 29.2 (PAGE 600) THE GLOBAL DIMENSION Motor vehicles can be moved easily from one jurisdiction to another. Is it likely that the result would have been different if the Murphys or Laxton had purchased the vehicles in, say, Canada? Why or why not? No, assuming all of the other facts in the case were the same. The same law would have applied
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228 UNIT SIX: CREDITOR S‘ RIGHTS AND BANKRU PTCY to the other parties, and the buyers completing their transaction in a different country would not have affected the interplay of the statutes among the other parties to this case. THE E-COMMERCE DIMENSION Would it have affected the outcome in this case if the title certifi- cates had been filed in a database that could be accessed online? Ex- plain. No. In fact, R.C. 4505.13(A)(2) which the court relied on to establish that the UCC‘s provisions take precedence in the circumstances of this case— provides no exception for the ―entry of a notation of the security interest into the automated title processing sys- tem if a physical certificate of title for the motor vehicle has not been issued.‖ CASE 29.3 (PAGE 606) WHAT IF THE FACTS WERE DIFFERENT? If Bank One had refused to negotiate with Johnson and Layne, and had
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Chapter29 - CHAPTER 29 SECURED TRANSACTIONS ANSWERS TO...

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