Request By:
Ms. June Feck
Deputy Clerk
Fayette County Court
Courthouse
Lexington, Kentucky 40507
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your letter concerns the proper filing of a continuation statement in keeping alive a financing statement.
Generally a financing statement is good for five years from the date of filing. KRS 355.9-403(2). In your office an original financing statement or security agreement is time stamped, dated and signed and then given an index number placed on a file card. A continuation statement properly filed under subsection (3) of the subject statute continues the effectiveness of the original financing statement for five years. When the continuation statement is filed, you pull the card made out for the original financing statement and record thereon the date the continuation statement was filed. Then the continuation statement is stapled to the original financing statement. Any additional continuation statements are handled in the same way.
A local attorney believes that you are required to make out a new index number and file card on each continuation statement and file it in the current year files in your office. You ask if that is correct?
KRS 355.9-403(4) reads:
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"(4) A filing officer shall mark each statement with a consecutive file number and with the date and hour of filing and shall hold the statement for public inspection. In addition the filing officer shall index the statements according to the name of the debtor and shall note in the index the file number and the address of the debtor given in the statement."
We think subsection (4) relates to the filing of original financing statements.
While KRS 355.9-403 is not explicit on this point, we are of the opinion, in considering the function of the continuation statement in continuing the effectiveness of the original financing statement, that implicit in KRS 355.9-403 is the idea that the continuation statement is inextricably tied to the original financing statement to which it applies. Thus the index card of the original financing statement is the proper card to record the data about the continuation statement to which it relates, and the continuation statement should properly be attached to the original financing statement which it continues.
Using the analogy to real estate records, we believe that when the clerk files a continuation statement as required by the statute, it is notice to all parties, regardless of whether the clerk has properly indexed the instrument. Seat v. Louisville & Jefferson County Board Co., 219 Ky. 418, 293 S.W. 986 (1927) 991. The proper filing of the instrument is the main thing as relates to constructive notice.
We believe our construction is in conformity with the general purpose and intent of the legislature as gathered from all parts of the statute. Department of Revenue v. Miller, 303 Ky. 822, 199 S.W.2d 622 (1947).