Question

On May 2, 1990 SAFE BANK discussed the possibility of loaning Tyler Corp. $500,000. Tyler signed a security agreement and UCC-1 Financing Statement covering its existing equipment. On May 4th, SAFE BANK properly filed the UCC-1 Financing Statement. On May 7, Tyler approached ONE TIME CREDIT about borrowing $600,000 secured by the same equipment. On that same day, ONE TIME CREDIT obtained a signed security agreement, promissory note, and UCC-1 Financing Statement from Tyler Corp, gave Tyler the money and properly filed the UCC-1 Financing Statement. On May 10, Tyler signed a promissory note and received the $500,000 from SAFE BANK.
A) If Tyler defaults on both loans, who has a superior interest in the equipment?
B) Would your answer change if ONE TIME CREDIT took possession of the collateral instead of filing a UCC-1 Financing Statement?

Answer 1

Answer:A. Safe Bank

B. No

Explanation:

Safe bank did the filling before One Time credit, moreover One time is expected to do a check on Tyler credits background before giving out the loan.

The taken over of the collateral will not change the answer, because it's the filling that is more important than taken possession of the collateral.