Case Summary:
Dispute between two creditors over purchase money status of one creditor’s lien on a tractor.  Creditor claimed to have perfected its PMSI by mailing the UCC-1 financing statement to the appropriate office for filing.  However, there was no record of the financing statement having been filed, or even received by the filing office.  Creditor contended that the common law “presumption of receipt” mandated that it be deemed to have filed the financing statement when it was mailed.

Court held that the creditor had to demonstrate actual receipt of the financing statement by the filing office.  Although Wis. Stat. § 409.403(1) relieves the creditor of any responsibility for the filing officer’s failure to properly docket the financing statement, the creditor still must prove that the item was actually presented for filing.  The “presumption of receipt” is insufficient to do so given the need to prove not only the fact of receipt but the time of filing for priority purposes.  The court also rejected the creditor’s argument that the second lienholder’s claim to the tractor should be subordinated under either unjust enrichment or the principles of equitable subordination.

Statue/Rule References:
11 U.S.C. § 510(c) -- Equitable Subordination
Wis Stat. § 409.403(1) -- Security interests - Filing

Key Terms:
Equitable Subordination
Financing Statements -- Perfection
Security Interests -- Time of Filing