priority of security interest

Question 1

secured party vs secured party

Answer 1

first to either file financing statement or perfect wins!

Question 2

unperfected secured parties vs unperfected secured party

Answer 2

first to attach has priority

Question 3

perfected vs unperfected secured parties

Answer 3

perfected security interest generally prevails over an unperfected security interest.

Question 4

PMSI super priority for equipment and consumer goods

Answer 4

has priority over conflicting security interests in the same goods or their proceeds if the interest is perfected before or within 20 days after the debtor receives possession of the goods.

Question 5

PMSI in inventory and livestock

Answer 5

has priority over a conflicting security interest in the same inventory or proceeds of the inventory that are chattel paper, instruments, or cash if:
1. perfected at time debtor gets possession.
2. secured party who filed interest in same inventory receives authenticated notification of PMSI before debtor receives the property.

Question 6

consignor rule

Answer 6

Under Article 9, a consignor’s interest in the consigned goods is considered to be a PMSI in inventory.

Question 7

PMSI v PMSI

Answer 7

seller finance PMSI beats financer- financed PMSI

Question 8

priority rule for conflicting security interest in investment property

Answer 8

security interest perfected by control has priority over a security interest perfected by any other method

Question 9

priority rule for conflicting security interest in deposit accounts

Answer 9

1. secured party who has account in their name wins.
2. bank that has control because maintains account beats everyone accept when account was changed to Secured party name

Question 10

secured party vs buyer

Answer 10

generally buy something with security interest on it then it stays on it unless exception is met

Question 11

exceptions

Answer 11

1. authorized sales
2. Buyer in ordinary course.
3. buyer not in ordinary course.
4. consumer to consumer sales.

Question 12

buyer in ordinary course exception

Answer 12

have to buy good in good faith, without knowledge sale violates rights of another person, has to be in ordinary course of business from a seller that is in the business of selling kind of good purchased. THEN takes free of security interest created by the buyer’s seller.

Question 13

buyer not in ordinary course of business

Answer 13

Buyers or lessees not in the ordinary course of business: Take subject to perfected security interests, and take free of unperfected security interest unless they knew of interest when they give value.

Question 14

consumer to consumer sales

Answer 14

a buyer takes free of a security interest, even though it’s perfected, if the buyer buys (1) without knowledge of the security interest, (2) for value, (3) for the buyer’s own personal, family, or household purposes, and (4) before a financing statement covering the goods has been filed. Note that the goods must be consumer goods in the hands of both the buyer and the seller.

Question 15

secured party vs judicial lien

Answer 15

if the security interest becomes perfected before person becomes lien creditor (time of levy) then security interest has priority.

Question 16

secured party vs mechanic lien

Answer 16

mechanic wins as long as keeps possession of the car.

Question 17

article 2 vs article 9

Answer 17

article 2 has priority as long as they retain possession.