## Facts

- H.M.H. Co. entered equity receivership in Rhode Island Superior Court, and co-receivers were appointed on July 2, 1962.
- On February 21, 1962, H.M.H. executed a $12,373.33 promissory note payable to Oscar A. Hillman & Sons.
- On March 14, 1962, H.M.H. and Hillman signed and filed a UCC financing statement describing certain tools and dies as collateral.
- The filed financing statement was a standard notice form and did not contain language granting or creating a security interest.
- No separate written security agreement signed by H.M.H. granted Hillman a security interest in the tools and dies.
- Hillman later filed a proof of claim in the receivership asserting secured-creditor priority in the described tools and dies.
- Receivers recommended disallowing secured status but allowing the claim as a general unsecured claim; the Superior Court entered a decree adopting that recommendation.
- Hillman appealed, relying in part on evidence of an oral understanding that the tools and dies would secure the debt.

## Issues

1. Whether UCC § 9-203(1)(b) requires a debtor-signed written security agreement describing the collateral for a security interest to attach and be enforceable.
2. Whether a debtor-signed financing statement describing collateral, supplemented by oral understandings and extrinsic evidence, can satisfy § 9-203(1)(b) when the writing lacks language indicating an intent to grant a security interest.

## Decision

- The Rhode Island Supreme Court affirmed the decree denying Hillman secured-creditor priority.
- The court held the financing statement did not qualify as a “security agreement” because it did not, on its face, evidence an agreement creating or granting a security interest.
- Because no debtor-signed written security agreement existed, no enforceable security interest attached under UCC § 9-203(1)(b).
- Hillman’s claim was properly allowed only as a general unsecured claim in the receivership.

## Legal Principles

- Under UCC § 9-203(1)(b), a security interest is not enforceable and does not attach without a security agreement signed by the debtor that describes the collateral.
- A financing statement may serve as a security agreement only if the writing itself evidences the debtor’s agreement to create a security interest; a notice-style financing statement without granting terms is insufficient.
- Parol evidence or “unique circumstances” cannot substitute for the statutory writing requirement for attachment and enforceability against the debtor and competing creditors.

## Conclusion

A filed, debtor-signed financing statement describing collateral did not create an enforceable security interest where it lacked language showing an agreement to grant a security interest and no separate signed security agreement existed; the creditor therefore had no priority and was treated as unsecured in the receivership.


American Card Co. v. H.M.H. Co., 196 A.2d 150 (R.I. 1963)