May v. G.M.B., Inc.

*447OPINION

THE FACTS

On December 31, 1979, appellants Dick May and Chris May (the Mays) entered into a contract with D&D Masonry, Inc. (D&D), whereby the Mays agreed to sell 250 shares of D&D stock to D&D in return for $100,000.00. Pursuant to the contract, D&D gave the Mays a promissory note for $100,000.00 secured by a “floating lien” on D&D’s equipment.

In March, 1980, the Mays filed with the Secretaries of State of Nevada and California Uniform Commercial Code (UCC) Financing Statements that were signed by D&D’s principals and that indicated, among other things, the Mays’ security interest in…