THE ATTORSEY GENERAL
OF TEXAS
August 12, 1987
.JlM MA.l-rox
A-~SEY DESERAL
Ronorable Mike Driscoll Opinion No. JM-767
Harris County Attorney
1001 Preston, Suite 634 He: Filing of financing state-
Houston, Texas 77002 ments with a county clerk under
section 9.403(d) of the Texas
Business and Commerce Code
Dear Mr. Driscoll:
You seek clarification of the county clerk’s responsibility for
filing financing statements under section 9.403(d) of the Texas
Business’ and Commerce Code. Your specific concern Is whether the
clerk may refuse to file financing statements that do not appear to
comply with certain requirements in section 9.402(a) of the code. As
will be shown in the discussion to follow, the clerk’s responsibility
under section 9.403(d) does not include the responsibility or
authority to “enforce” section 9.402(a).
Chapter 9 of the Business and Commerce Code governs the legal
enforceability of “security agreements ,I’ agreements that create
security interests In personal property to secure the payment or
performance of an obligation. See 59.102. The primary purpose of a
security agreement is to ass= enforcement of the’ underlying
obligation. To enforce a security interest against third parties,
such as prospective lenders or buyers, the security interest must be
“perfected.” Villa V. Alvarado State Bank, 611 S.W.2d 483, 486-87
(Tex. App. - Waco 1981, no writ). A financing statement must be filed
to perfect all security interests except those expressly excepted in
. the code. Sec. 9.302. Filing is intended as notice to third parties
that an enforceable security interest &y exist in the described
property of the debtor. 611 S.W.2d at 486-87. Section 9.402 relates
to the formal requisites of financing statements.
Section 9.402(a) provides, in part:
A financing statement is sufficient if it gives
the names of the debtor and the secured party, is
signed by the debtor, gives an address of the
secured party from which information concerning
the security interest may be obtained, gives a
mailing address of the .drbtor and contains a
statement indicating the types, or describing
the items, of collateral. . . . A copy of the
security agreement is sufficient as a financing
p. 3595
Ronorable Mike Driscoll - Page 2 (JM-767)
statement If it contains the above information and
is signed by the debtor. A carbon, photographic
or other reproduction of a security agreement or a
financing statement Is sufficient as a financing
statement If the security agreement so provides or
if the original has been filed in this state.
(Emphasis added).
Tour specific question is whether the county clerk must accept for
filing a reproduction of a security agreement or financing statement
when the security agreement is not signed and it does not show on Its
face that the original has been filed in Texas. In other words, you
ask whether the county clerk must determine whether a copy of .the
security agreement or financing statement is “sufficient” as a
financing statement within the meaning of section 9.402(a).
Authorities are split regarding the exact nature of the
signatures required by section 9-402 of the Uniform Commercial Code,
section 9.402 In the Texas Business and Commerce Code. See Sommers v.
International Business Machines, 640 F.2d 686, 691 (5thCir. 1981)
(copy of security agreement must actually be signed); but see J.K.
Merrill 6 Son. Inc. v. Carter, 702 P.2d 787. 791-92 (Idaho 1985) (copy
of signed original will suffice) (and conflicting authorities cited
therein). None of these authorities, however, address your basic
concern, i.e. whether the filing officer must determine the
“sufficiency” of the financing statement prior to accepting it for
filing. These authorities address essentially the legal meaning of
“sufficient” in section9.402. The context of these authorities makes
it clear, however, that the “sufficiency” requirements In section
9.402 relate to enforcing a security interest against a third party,
not to the prerequisites for filing the financing statement. The
question of “sufficiency” under section 9.402 is a legal question for
the courts, not a question for the filing officer.
The filing officer’s filing and recording responsibilities are
set forth in section 9.403(d):
Except as provided in Subsection (g) [special
filing and indexing for property relating to real
p*ope*tyl a filing officer shall mark each
financing statement with a file number and with
the date and hour of filing and shall hold the
financing statement or a microfilm or other
photographic copy thereof for public inspection.
In’ addition the filing officer shall index the
financing statements according to the name of the
debtor and shall note in the index the file number
and .the address of the debtor given in the
financing statement. The filing off ice? shall
mark each continuation statement with the date and
hour of filing and shall note it in the index of
the original financing statement.
p. 3596
Honorable Mike Driscoll - Page 3 (JM-767)
Nothing in this provision or in any other provision of chapter 9 of
the code refers to any responsibility of the filing officer to accept
only financing statements that are legally “sufficient” within the
meaning of section 9.402(a).
Sections 9.402(a) and 9.403(d) are independent provisions of the
code. The filing officer’s responsibility under subsection (d) of
section 9.403 is governed by section q.403. This duty is ‘simply to
accept, record, and index financing statements as soon as the
appropriate fees, as provided in subsection (e) of section 9.403. are
tendered. The order of the filing of financing statements is of vital
importance because it relates to priorities between conflicting
security interests. See 59.312; see, e.g., Borg-Warner Acceptance
Corporation v. Wolfe i%y National Bank, 544 S.W.2d 947 (Tex. Civ.
APP . - Dallas 1976, no writ). It is in the self-interest of the
filing party to assure that the financing statement is legally
sufficient; it is not the filing officer’s responsibility to datermine
whether the financing statement is legally sufficient to perfect a
security interest. Of course, the clerk has the authority to require
that financing statements be legible and contain the information
necessary to record and index the statements. As indicated, however,
under section 9.403(d) the clerk’s responsibility is to record
correctly the order of filing and to index financing statements, not
to verify or question the correctness of the information- in the
P financing statement. When the legislature defines the duty of a
county clerk as a duty simply to file certain ‘documents. that duty is
generally deemed ministerial rather than discretionary. See R.E.
Turrentine v. Lasane. 389 S.W.2d 336, 337 (Tex. Clv. App. - Wax1965,
no wit). Such a duty cannot be expanded to enforcing other
provisions related to the legal effect of the documents filed. See,
s, Attorney General Opinion Nos. JM-508 (1986) ; C-695 (1966).
SUMMARY
Sections 9.402(a) and 9.403(d) of the Texas
Business and Commerce Code are independent
provisions. The filing officer’s legal responsi-
bility with regard to filing financing statements,
and authority is governed by section 9.403, cot by
section 9.402. The filing officer may not refuse
to file financing statements that do not appear to
be legally “sufficient” within the meaning of
section 9.402(a).
J
Very truly yours,
JIM MATTOX
Attorney General of Texas
p. 3597
Honorable Mike Driscoll - Page 4 (JM-767)
MARY KELLER
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman. Opinion Committee
Prepared by Jennifer Riggs
Assistant Attorney General
p. 3598