Question

Rawlings purchased a typewriter from Kroll Type-writer Co. for $600. At the time of the purchase, hemade an initial payment of $75 and agreed to paythe balance in monthly installments. A securityagreement that complied with the UCC was pre-pared, but no financing statement was ever filed forthe transaction. Rawlings, at a time when he stillowed a balance on the typewriter and without theconsent of Kroll, sold the typewriter to a neighbor.The neighbor, who had no knowledge of the securityinterest, used the typewriter in her home. Could Kroll repossess the typewriter from the neighbor?

Answer 1

Answer: Kroll cannot repossess the typewriter from the neighbor.

Explanation:

Based on the information given in the question, we can infer that Kroll cannot repossess the typewriter from the neighbor.

According to the UCC 9-320(b), when an individual purchases a particular consumer good in a situation whereby the individual isn't aware of the security interest and also when a financial statement wasn't filled, then the buyer is free from the security interest.

In this situation, even though a security agreement that complied with the UCC was pre-pared, but no financing statement was ever filed fort the transaction, this implies that Kroll cannot repossess back the typewriter as no financial statement was filed.