BARNES, Circuit Judge:
Appellee Costello is trustee of the estate of Elliott Oil Company, a bankrupt. The district court held he was the owner of the bankrupt's accounts receivable, and any moneys paid thereon, free and clear of any claim of appellant Wilshire Oil Co.
Bankrupt had assigned these accounts to appellant on November 19, 1959, as security for $100,000 in notes representing an indebtedness to Wilshire. Wilshire collected after default on the notes on February 15, 1961. On March 27, 1961, Elliott Oil filed a voluntary petition in bankruptcy, one year and four months after assignment.
The notice of assignment was filed November 30, 1959 with the Recorder of Contra Costa County. It was signed by assignor; not by assignee, as required by California law. The district court held the notice of assignment did not comply with California Civil Code § 3019.
Appellant urges error on four grounds, reduced to three in argument:
(1) The assignment did comply with Cal.Civ.Code § 3019.
(2) The requirement of § 3019 that both assignor and assignee sign the assignment is merely directory, not mandatory.
(3) There was a substantial compliance, if not a complete compliance with § 3019.
We cannot agree with appellant. California Civil Code § 3018 refers to assignments of accounts receivable. Three times it requires that the "notice" is to be filed "as provided in this chapter." Section 3019 is in the same chapter, and requires the filing, not of the assignment, but of a notice thereof.
It is conceded no rule of thumb exists as to what is merely "directory" in a statute, and what is "mandatory." "The word `shall' in a statute may sometimes be directory only, whereas the word `may,' seemingly much less forceful, may be mandatory. Pulcifer v. County of Alameda, 29 Cal.2d 258, 262, 175 P.2d 1 [(1946)]." Carter v. Seaboard Fin. Co., 33 Cal.2d 564, 573, 203 P.2d 758, 764 (1949). A statute should not be construed as to be rendered meaningless. Ibid. If such language were merely desirable matter, to be included at the option of one party, then it would not be mandatory. Cf. Carter v. Seaboard Fin. Co., supra, at 573, 203 P.2d at p. 764.
Is the requirement under consideration material or immaterial? Is it a matter of convenience, or substance?
Appellant urges that because it was designated as assignee, adequate notice was given to assignor's debtors, and hence a characterization of the signature requirement as "directory" only would not render the statute ineffective and meaningless. No cases are cited by appellant on this precise point.
Appellee, on the other hand, points out that the requirement that both assignor and assignee sign was inserted not only in § 3019, but in the Uniform Trust Receipts Act, the Inventory Lien Law of 1957 and the Commercial Code (§ 9402), and that there must have been some legislative purpose in including the provision for double signing in each such statutory enactment. Appellee also asserts that what constitutes "substantial compliance" should not be passed upon by the courts each time there has been a failure to follow a specific statutory requirement, for the purpose of the enactment is to establish some definite rule and some certainty.
Unlike § 3019 (which has no provision for "substantial performance" to take the place of actual performance), § 9402(5) of the Uniform Commercial Code permits "minor errors which are not seriously misleading" to be corrected because there has been "substantial compliance." In the Uniform Commercial Code's official comments, there is reference to General Motors Acceptance Corp. v. Haley, 329 Mass. 559, 109 N.E.2d 143 (1952) as an example of what is considered a "minor error." There the name of the company as signed omitted the word "Inc."; otherwise it was correct. To hold that despite such an error there is a "substantial compliance" does not subvert the statute; it subserves its purpose.
But can this court say as a matter of law that the state legislature could not conclude there was some value to requiring both signatures? We think not. We think the hypothetical situation described by appellee has merit.
Nor are we impressed with the argument that there has been compliance because the document recorded was requested to be recorded by a "cover letter" signed by Wilshire Oil Co. This transmittal letter was not recorded, and it is not the purpose of the statutory recording requirements to require one searching the recorder's office to also search the recorder's files for unrecorded transmittal letters, assuming such documents are first, retained, and secondly, available to public examination.
We agree the holding in the court below correctly expresses the law; that each party's signature to the assignment of accounts is required because the words of the statute are "express, clear, and couched in mandatory language."