World Wide Tracers, Inc. v. Metropolitan Protection, Inc.

POPOVICH, Chief Judge

(dissenting).

I respectfully dissent:

1. When World Wide Tracers, Inc. received a security agreement and financing statement covering any property acquired after July 15, 1980, and the property listed on Exhibit A, the financing statement was filed with the Secretary of State. When Metropolitan State Bank made its later loan in 1982, it also received a security agreement and financing statement.

The function of a financing statement is to warn a third party what it can take from the debtor. The Bank, however, failed to make inquiry when it made the loan and failed to discover what was already encum*843bered. It failed to exercise ordinary diligence in inquiring what property was already encumbered by the filed financing statement.

2. The words “any property acquired after July 15, 1980” was sufficient to put the Bank on notice if it had bothered to check the filings with the Secretary of State’s office. The description “all property” or “any property” stated what the parties intended in the first loan. It reasonably would have put the Bank on notice before the Bank made its subsequent loan what the prior financing statement covered. All the Bank needed to do was to check the filings and make a proper inquiry. Its failure to take the necessary precautions prior to making its loan should not defeat appellant’s prior secured interests.

3. The Minnesota Supreme Court said in James Talcott v. Franklin National Bank of Minneapolis, 292 Minn. 277, 194 N.W.2d 775 (1972):

If the debtor himself is willing to give a creditor a security interest in everything he owns, the code does not prevent it, whether his action is prudent or not. Upon the default, the creditor takes everything to which the debtor previously agreed, hence, identification is no problem.

Id. at 282, 194 N.W.2d 775.