Opinion
No. WC 78-69-X
November 28, 1979
Security Interests — Perfection — Title Certificates — Misspelled Name
The issuance of an automobile title certificate with a misspelling of the owner's name does not perfect a creditor's security interest in the automobile under state law so that the interest is invalid as against a trustee in bankruptcy under Section 70c of the Bankruptcy Act.
In preparing the title application, the owner's last name was filled in as "Irwin" instead of "Irvin". The title application was sent to the Motor Vehicle Comptroller's office in that form and the certificate of title was issued naming "Irwin, Clarence L." as owner and naming the creditor as first lien holder. The title certificate was sent by the Motor Vehicle Commissioner's office to the creditor in conformity with Mississippi Code of 1972 § 63-21-21. The creditor sought reclamation of the motor vehicle alleging that the name "Irwin" is so close to "Irvin" as to make the difference in name an error that should be disregarded.
The court adopted the opinion of Bankruptcy Judge Raphael in In re Irvin, No. WBK75-47, issued May 12, 1978. There it was held that while the determination of whether differences in names are to be treated as substantial or inconsequential is a question of fact rather than one of law, other factors in this case require that the creditor's security interest be found unperfected and not valid as against the trustee. Among these factors is the fact that motor vehicle titles are only found in the Motor Vehicle Comptroller's office in Jackson, Mississippi. This situation requires that a creditor, who would generally have to make inquiry only by way of alphabetical index, would not make a title search himself, but would inquire of the Comptroller, most frequently by telephone. Further, the error was not made by the filing or recording officer. Rather, the application was signed by the creditor's assignor as well as by the bankrupt. The creditor received the original title certificate months before the petition in bankruptcy so that it had plenty of time to get the error in the title certificate corrected. A security interest in a vehicle for which a certificate of title is required is not valid against creditors unless perfected as required by Mississippi Code of 1972 § 63-21-43. One requirement of perfection is that the title application and the certificate of title state the owner's last name. Because the name was not properly stated, the creditor's security interest was unperfected and not valid as against the trustee, an ideal lien creditor under Section 70c. See Sec. 70c [§ 541(e)] at ¶ 9512.