Sales – Uniform Trust Receipts Act – Strict Requirement of Accuracy in Designating Trustee in Filing Under the Act
Plaintiff and E. R. Millen Co., Inc., entered into a financing arrangement whereby plaintiff agreed to finance the wholesale purchase of various types of electrical appliances by E. R. Millen Co., Inc. Plaintiff promptly recorded a statement of trust receipt financing setting forth that the plaintiff “is or expects to be engaged in financing under trust receipt transactions the acquisitions by the trustee, E. R. Millen Company.” The statement then designated the trustee’s business address. This trust receipts arrangement was in operation for about a year when E. R. Millen Co., Inc., made a general assignment of all of its property to the defendant for the benefit of its creditors. Plaintiff brought suit to obtain a declaratory decree as to its security interest in the electrical equipment turned over to defendant. The trial court ruled that the statement filed by the plaintiff did not comply with the recording provisions of the Uniform Trust Receipts Act because the trustee’s name was given as “E. R. Millen Company,” instead of “E. R. Millen Co., Inc.” Consequently, the plaintiff’s security interest was void as against the defendant. On appeal, held, affirmed. As a uniform law, the Trust Receipts Act should be strictly construed if the decisions in the several states are to be uniform, and exact compliance with the recording provisions is accordingly required in order to impart constructive notice to third parties. General Motors Acceptance Corp. v. Haley, (Mass. 1952) 109 N. E. (2d) 143.