SECURED TRANSACTIONS
In
In order to perfect a chattel
mortgage or other security agreement, the agreement (1) must be in writing
signed by the person to be bound and attested to by at least one witness; (2)
must be filed with the territorial registrar within 10 days after its execution;
and (3) must truly state the consideration upon which it was based or the debt
or liability which it was intended to secure, and contain a description of the
specific article, articles, or land sold or mortgaged. Bank of Hawaii v. Neru, 1 A.S.R.3d
51 (1997).
One cannot grant a chattel mortgage
or security interest in property without first having some rights in that
property. Bank of Hawaii v. Neru, 1 A.S.R.3d 51 (1997).
The common law rule that title passes
as soon as the bargain is struck is ill-suited for determining when the
transfer of title occurs in today's sophisticated global economy. Bank of Hawaii v. Neru, 1 A.S.R.3d
51 (1997).
Under Uniform Commercial Code § 2-401(2) title passes to the buyer at the
time and place at which the seller completes his performance with reference to
the physical delivery of the goods, despite any reservation of a security
interest and even though a document of title is to be delivered at a different
time or place; and in particular and despite any reservation of a security
interest by the bill of lading, (a) if the contract requires or authorizes the
seller to send the goods to the buyer but does not require him to deliver them
at destination, title passes to the buyer at the time and place of shipment; but
(b) if the contract requires delivery at
destination, title passes on tender there.
Uniform Commercial Code § 2-401(2) is an appropriate rule for
determining when title passes in
A “buyer in the ordinary course of
business” is a U.C.C. term and is defined as a person who in good faith and
without knowledge that the sale to him is in violation of the ownership rights
or security interest of a third party in goods buys in ordinary course from a
person in the business of selling goods of that kind but does not include a
pawnbroker. Bank of Hawaii v. Neru, 1 A.S.R.3d 51 (1997).
Under the U.C.C., a buyer in ordinary
course of business takes free of a security interest created by his seller even
though the security interest is perfected and even though the buyer know of its
existence. Bank of Hawaii v. Neru, 1 A.S.R.3d 51 (1997).
Rule regarding “buyer in the ordinary course of business” did not apply
against seller-defendants were they were
not in the business of selling buses, were not licensed bus dealers, and did
not hold themselves out to the general public as bus dealers. Bank of Hawaii v. Neru, 1 A.S.R.3d
51 (1997).
Where security holder waited until
over eight months after debtor transferred possession and title of chattel to
third party to assert its interest, such delay was unreasonable and estopped
security holder from asserting said interest.
Bank of Hawaii v.
Neru, 1 A.S.R.3d 51 (1997).
Fact that bus was of a different model year and had different VIN number
was of no consequence since all parties knew that particular bus was to be
covered by the security agreement. Bank of Hawaii v. Neru, 1 A.S.R.3d 51 (1997).
A security agreement
can secure after acquired property. Bank of Hawaii v. Neru, 1 A.S.R.3d 69 (1997).
Although a mortgage
must truly describe the property secured by the mortgage, a description is
sufficient if it furnishes a reasonable basis for identification, even though
it is not specific enough to fully identify the property by itself. Bank of Hawaii v. Neru, 1 A.S.R.3d
69 (1997).
Inclusion of an
erroneous serial number has no effect on the validity of a security agreement
when the property is otherwise adequately described. Bank of Hawaii v. Neru, 1 A.S.R.3d
69 (1997).