Bank of Virginia-Central v. Taurus Construction Co.

VAUGHN, Judge. Counsel are to be congratulated on their well prepared briefs which reflect careful research on the several Uniform Commercial Code questions they raise. In our view of the case, however, it is not necessary for us to discuss either whether the transaction between Craig and his solely owned corporation was a disposition of the property within the meaning of the code or whether the rights of the parties are affected by plaintiff’s actual knowledge or lack of knowledge of the security agreement between Craig and The Carolina Bank. The applicable code section is as follows: “(2) Except where this article otherwise provides, a security interest continues in collateral notwithstanding sale, exchange or other disposition thereof by the debtor unless his action was authorized by the secured party in the security agreement or otherwise, and also continues in any identifiable proceeds including collections received by the debtor.” G.S. 25-9-306. *224 Thus, unless Carolina Bank authorized the “transfer” from Craig to Taurus Construction Company, that Bank’s security interest continues in the equipment. Whether The Carolina Bank authorized the transfer was a question of fact for determination by the trial judge. The judge found as a fact that Carolina Bank did not authorize the transfer. If the trial judge’s findings of fact are supported by competent evidence, they are conclusive on appeal. There is evidence in the record to support the judge’s finding. Craig testified: “I never received any authorization from The Carolina Bank to organize Taurus in the manner that I did or to assign the equipment to Taurus Construction Company. Paul was the general manager and he worked this corporation up. I was the owner of the equipment that came from The Carolina Bank. Neither The Carolina Bank nor anyone representing it told me to transfer the equipment to Taurus Construction Company. I did not receive any other consideration. I did not discuss with Mr. Rush or anyone else in The Carolina Bank the organization or Taurus Construction Company. I did not authorize anyone to have such discussion.” The finding of fact also finds support elsewhere in the record including the testimony of the witness Rush, Vice President of Carolina Bank. The judgment from which plaintiff appeals is affirmed. Affirmed. Judges Martin and Clark concur.