Priority

Question 1

Secured v. Secured Priority where both perfected

Answer 1

First to file or perfect

Question 2

Priority of Secured v. Secured where both unperfected

Answer 2

First to attach

Question 3

Priority of Secured & Perfected v Secured & Unperfected

Answer 3

Secured and Perfected takes priority

Question 4

Super Priority of PMSI in goods other than livestock or inventory

Answer 4

PMSI retains priority if it perfects within 20 days after debtor received possession of collateral

Question 5

Super Priority of PMSI in inventory or livestock

Answer 5

PMSI has priority if, BEFORE debtor gains possession of collateral, the SP:

1. Perfects AND
2. Sends an authenticated notification to previous holder of conflicting security interest

Question 6

Super priority of Conflicting PMSIs

Answer 6

Seller-financed PMSI has priority over financer-financed PMSI

Question 7

Special Priority Rules for Investment Property

Answer 7

Perfection by Control has priority
If conflicting S.I. each perfected by control, first to perfect
S.I. granted to debtor’s intermediary has priority over one to another SP
Except as above, first to file or perfect

Question 8

Special Priority Rules for Deposit Accounts

Answer 8

S.I. perfected by control has priority over S.I. perfected by proceeds
Conflicting interests perfected by control, first to perfect
SP with control via its own name has priority over all others with control
Bank that has control has priority over all others besides SP with name on account

Question 9

Special Priority for Purchaser of Chattel Paper

Answer 9

If purchaser in good faith gives new value and takes possession, has priority

Question 10

Special Priority of Purchaser of Instruments

Answer 10

A purchaser of an instrument has priority over a perfected security interest in the instrument if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party.

Question 11

Priority of Secured Party v Buyer of Collateral

Answer 11

General Rule: If you buy something with S.I. on it, the S.I. stays
EXCEPT:
Authorized Sale
Unauthorized Sale
Consumer-Consumer

Question 12

SP v Buyer- Authorized Sale

Answer 12

If sale is authorized by SP free of S.I., the buyer takes free

Question 13

SP v Buyer- Unauthorized Sale

Answer 13

General Rule: If buyer in the ordinary course of business then takes free of the S.I. created by the seller

Question 14

Buyer in Ordinary Course of Business

Answer 14

One who buys goods in good faith, without knowledge that the sale violates the rights of another person in the goods, and in the ordinary course from a person in the business of selling goods of the kind

Question 15

Buyers not in the ordinary course of business

Answer 15

Take subject to perfected security interests

Take free from unperfected security interests unless they know of it

Question 16

Consumer-to-Consumer Sales

Answer 16

In the case of consumer goods, a buyer takes free of a security interest even though it is perfected if he buys without knowledge of the security interest, for value, and for his own personal, family, or household purposes, unless prior to the purchase the secured party has filed a financing statement covering such goods.

Question 17

Priority- Perfected Secured Party v Judgment Lien Holder

Answer 17

Perfected security interest has priority

Question 18

Priority- Unperfected Secured Party v Judgment Lien Holders

Answer 18

Unperfected is subordinate to the lien creditor if they became lien creditor prior to perfection

Question 19

Lien Creditor

Answer 19

An unsecured creditor who has obtained a judgment and has levied on that judgment

Question 20

PMSI v. Lien Creditor

Answer 20

If the secured party files with respect to a purchase money security interest within 20 days after the debtor receives possession of the collateral, he takes priority over the rights of a lien creditor which arises between the time the security interest attaches and the time of filing.

Question 21

Priority of Future Advances

Answer 21

A security agreement can secure present and future advances if the security agreement contains a future advance clause.

A future advance by a secured creditor has priority over a lien creditor if the future advance is made

(1) without knowledge of the lien, OR
(2) within 45 days of the lien arising, OR
(3) pursuant to a commitment entered into without knowledge of the lien.

Question 22

Statutory Lien v Perfected SP

Answer 22

Statutory lien has priority as long as the collateral remains in their possession, if possession given up then he loses priority