This case involves a novel question wherein a creditor claims a lien on personal property by virtue of the filing of a financing statement unsigned by the debtor, to which there was affixed a purported security agreement between the debtor and an entity different than the creditor. There is no reported case upholding as a lien a financing statement unsigned by the debtor to which no valid security agreement or lease is attached.
Maple Contractors, Inc. (hereinafter "Maple"), is a New Jersey corporation incorporated prior to 1973. On November 2, 1979 it made an assignment for the benefit of creditors to Myron
S. Lehman, assignee. At that time the corporation was the owner of certain personal property, consisting of miscellaneous office equipment, certain construction equipment and seven motor vehicles. A notice of public sale of the personal property, to be held November 16, 1979, was duly mailed and advertised.
On November 14 and 16, 1979 the attorneys for United Pacific Insurance Company (hereinafter "United Pacific") made application to this court to restrain the sale of all personal property upon the ground that United Pacific was a secured creditor and therefore entitled to all of the property. The court on November 16 determined that since the seven motor vehicles had no encumbrances shown on their title certificates, United Pacific did not have a valid lien on the vehicles. Therefore, the court permitted the sale of the seven motor vehicles to take place, the same being confirmed by the court. N.J.S.A. 39:10-11 and N.J.S.A. 12A:9-302. At that time the court denied the application to restrain the sale but ruled that the confirmation of the sale of all other personal property would not take place unless and until the court determined that United Pacific had no valid lien on such property.
At that time the only evidence given the court was a certification of an attorney, who was also an employee of United Pacific, who stated that Reliance Insurance Company (hereinafter "Reliance") was at all relevant time periods herein, and still is, the parent company of United Pacific. He stated that
3. On or about December 10, 1975, Maple Contractors, Inc. (hereinafter "Maple"), entered into four separate written agreements with the Borough of Point Pleasant for the construction of a sanitary sewerage system for that municipality. These contracts were designated Contracts PP-6A-6D, inclusive. Pursuant to specifications made part of the Contract by the municipality, Maple obtained from United Pacific four performance bonds in respect of these Contracts.
4. On or about April 6, 1979, the Borough of Point Pleasant declared Maple to be in default on these Contracts, terminated its participation and called upon United Pacific to honor its obligations under the bonds in question. United Pacific responded to the municipality's overtures, and after a series of lengthy meetings, a formal take-over agreement was entered into whereby United Pacific, inter alia , agreed to undertake the task of completion of these projects. * * * As of the present, United Pacific has sustained loss in the approximate amount of $1,300,000.00 on account of Maple, and it is presently projected that United Pacific's ultimate loss will amount to approximately $1,600,000.00.
There was no reference in said certification to any security agreement between United Pacific and Maple.
On August 13, 1976 Reliance and Maple entered into a continuing agreement of indemnity by which Maple purported to assign and transfer, as collateral security for the full performance of the continuing agreement, all the right, title and interest of Maple in and to all its equipment on the day of execution of any such bond or bonds. The agreement stated that it "shall constitute a Security Agreement to Surety and also a Financing Statement."
The foregoing indemnity agreement between Maple and Reliance was attached to the form UCC 1 Financing Statement (and referred to in the financing statement) listing Maple as the debtor and United Pacific as the creditor, and it was then filed with the Secretary of State of New Jersey on May 22, 1979. The financing statement was signed by United Pacific (not a party to the filed indemnity agreement), but it was not signed by the debtor. A U.C.C. search indicates that this financing statement was the only one of record against Maple as of October 1, 1979, and at the time of the assignment for benefit of creditors.
At the plenary hearing held on November 30, 1979 neither party offered any testimony, but United Pacific for the first time submitted a Continuing Agreement of Indemnity-Contractor's Form, executed between United Pacific and Maple, dated August 27, 1973. This agreement is identical ...