priority

Question 1

Priority rules - secured v secured

Answer 1

1. 1st to file or perfect wins (whichever occurs first)
2. Between 2 unperfected, 1st to attach wins
3. special rule - PMSI in goods not inventory or livestock (usually equipment) - PSMI has priority over a conflicting security interest in the same goods/proceeds IF PMSI is perfected at the time debtor receives possession of the collateral or within 20 days thereafter.
4. special rule - PMSI v PMSI - seller-financed PMSI wins over financer-financed PMSI
5. Other special priority - Control/time obtaining control/putting dep acct in own name/bank

Question 2

Priority rules - secured v unsecured

Answer 2

secured wins over unsecured

Question 3

Priority rules - secured v buyer

Answer 3

1. General rule: sec int rides w/collateral
2. Authorized sale exception: If sale is authorized by the secured party free of sec int, buyer takes from of sec int.
3. Unauthorized sale: Buyer in the ordinary course of business takes free of a sec int created by the seller EVEN THOUGH the sec int is perfected and EVEN THOUGH the buyer knows if its existence
4. Buyers not in the ordinary course of business take subject to perfected sec inst
5. Special rule for consumer to consumer sales: Buyer takes free of sec int EVEN THOUGH perfected if he buys w/o knowledge of the sec int UNLESS secured party has filed a financing statement covering such goods. Must be consumer goods that Buyer must buy for value.

Question 4

Priority rules - secured v judgment lien holders

Answer 4

Unperfected sec int v JLH = JLH wins
perfected sec int v JLH = perfected sec int wins
Special rule: PMSI v lien creditor - PMSI wins over lien creditor

Question 5

Priority rules - secured v statutory lien claimants

Answer 5

statutory lien claimant wins over secured