ALTEC LANSING, A DIVISION OF LTV LING ATEC, INC., APPELLANT,
v.
FRIEDMAN SOUND, INC., APPELLEE. BURT M. WISE, THIRD-PARTY CLAIMANT
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Altec Lansing appeals a trial court order dissolving a writ of execution and returning a third-party claimant's bond. The court holds that while a security agreement under the Uniform Commercial Code creates a prior lien on chattels, it does not exempt those chattels from forced judicial sale by an execution creditor.
A security agreement creates a prior lien in favor of the creditor on the chattels but does not exempt them from forced judicial sale. An execution creditor may still sell the chattel subject to the lien provided in the security agreement.
“A security agreement under § 679.9-203, Fla.Stat, F.S.A., has the same effect as did a chattel mortgage prior to the adoption of the Uniform Commercial Code, i. e., it may create a prior lien in favor of the person named in the agreement as creditor on the chattels involved but does not exempt them from a forced judicial sale.”
Establishes the core holding that security agreements do not exempt property from execution.
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Join FLexlaw to unlock all legal intelligenceWise began lending money to Friedman Sound in July-August 1966, initially $50,000. In October 1966, Altec Lansing sued Friedman Sound for an unpaid me…
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Appellant, plaintiff in the trial court, seeks review of a post-judgment order of the trial court dissolving a writ of execution and ordering return to the third party claimant, Burt M. Wise, his $7,500.00 bond.
The record on appeal reveals that the third party claimant, Wise, began lending the appellee large sums of money in July and August of 1966, the initial amount being $50,000.00. On October 19, 1966, the appellant filed suit against the appellee for the unpaid balance for merchandise sold and delivered. Wise continued to lend the appellee sums of money which were originally secured by chattel mortgages on all fixtures and inventory of the appellee. On January 3, 1967, in accordance with the Uniform Commercial Code,1 a security agreement was perfected between the appel-lee and Wise and duly recorded. Subsequent thereto, the appellant secured a judgment against the appellee and caused a writ of execution to be issued, attempting to levy on the fixtures and inventory of the appellee. Thereupon, Wise filed a third party claim bond and moved to dissolve the writ of execution, claiming he had prior right to the fixtures and assets. After hearing on the motion, the trial court entered the order appealed herein, in effect holding that the property covered by the security agreement was exempt from execution. We reverse.
A security agreement under § 679.9-203, Fla.Stat, F.S.A., has the same effect as did a chattel mortgage prior to the adoption of the Uniform Commercial Code, i. e., it may create a prior lien in favor of the person named in the agreement as creditor on the chattels involved but does not exempt them from a forced judicial sale. Said chattel may still be sold by an execution creditor subject to the lien provided in the security agreement. See: Wildwood Crate & Ice Co. v. Citizen Bank of Inverness, 98 Fla. 186, 123 So. 699; First National Bank of Bay Shore v. Stamper, 93 N.J.Super. 150, 225 A.2d 162; § 679.9-311, Fla.Stat.,2 F.S.A.
Therefore, the order here under review is hereby reversed.
Reversed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Littman v. Commercial Bank & Tr. Co., 425 So. 2d 636 (Fla. 3d DCA 1983)…ected security interest. Earthmovers, Inc. v. Clarence L. Boyd Co., Inc., 554 P. 2d 877 (Okl.Ct.App.1976); see First National Commerce and Finance Co. v. Indiana National Bank, 360 So. 2d 791 (Fla.3d DCA 1978); Altec Lansing v. Friedman Sound, Inc., 204 So. 2d 740 (Fla.3d DCA 1967); accord American Heritage Bank & Trust Co. v. O. & E., Inc., 40 Colo.App. 306, 576 P. 2d 566 (Colo.Ct.App.1978); Filker v. Honda Motor Co., Ltd., 87 Ill.App.3d 865, 42 Ill.Dec. 880, 409 N.E. 2d 495 (Ill.App.Ct.1980); Memphis Bank &…
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First Nat'l Commerce & Fin. Co. v. The Ind. Nat'l Bank, 360 So. 2d 791 (Fla. 3d DCA 1978)…otor Company, Inc., 359 F.Supp. 902 (S.D.W.Va.1973). Also cf. Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972). [*796] We believe we are supported in our view by the holding of this court in Altec Lansing v. Friedman Sound, Inc., 204 So. 2d 740 (Fla. 3d DCA 1967), where the concept of a statutorily-created priority was recognized and upheld, but without undermining the integrity of a prior, recorded security interest. We agree that the holder of such security interest must take a back seat…
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Brescher v. Assocs. Fin. Servs., 460 So. 2d 464 (Fla. 4th DCA 1984)…the collateral remains subject to claims of creditors who take appropriate action.” See Platte Valley Bank of North Bend v. Kracl, 185 Neb. 168, 174 N.W. 2d 724 (1970). The court relied upon section 679.311 in Altec Lansing v. Friedman Sound, Inc., 204 So. 2d 740 (Fla. 3d DCA 1967), and held that a secured creditor could not dissolve a writ of execution and take possession of the collateral merely because of the pend-ency of a judicial sale. The court stated: A security agreement under § 679.9-203, Fla.Stat…
Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Stidham v. Rutherford, 98 Fla. 210 (Fla. 1929)
- Wildwood Crate & Ice Co. v. The Citizens Bank of Inverness, 98 Fla. 186 (Fla. 1929)