Priorities Flashcards
Perfected v. Perfected
First to file or perfect
Unperfected v. Unperfected
First to attach
Unperfected v. Perfected
Perfected wins
PMSI v. Non-PMSI
PMSIs in goods other than inventory and livestock (equipment) win if the interest is perfected before or within 20 days after the debtor receives possession.
PMSIs in inventory (and livestock) win if the interest is perfected by the time debtor gets possession and the secured party gives notice of the PMSI to other secured parties.
Deposit Account Control
Method 2 (in party’s name) beats Method 1 (bank maintains it) which beats Method 3 (agreement)
Perfected v. Buyer
A buyer takes the item with a perfected security interest unless:
1. Authorized (express or implied by type of sale) or
2. He was a buyer in the ordinary course of business and the seller created the security interest
*takes free of unperfected interests unless they know the interest existed
BIOCOB
A buyer in the ordinary course of business is one who buys goods in good faith, without knowledge that the sale violates the rights of another, from someone who is in the business of selling goods of the kind purchased.
Consumer to Consumer
In consumer-to-consumer sales (where the goods are consumer goods in the hands of both buyer and seller) a buyer takes free of security interests unless the secured party files.
Secured v. Judicial Lien
Secured wins if it perfects before lien levies
Lien wins if it levies before secured perfects
*PMSI exception: If secured party files for a PMSI within 20 days after debtor receives the collateral he has priority over a judicial lien that arises between the security interest attaching and the filing
Vehicle v. Accession
A security interest in an accession is subordinate to a security interest in the whole car that has been perfected by compliance with the notation requirements.
