5. On March 1, Bank extends a line of credit to Farmer. Farmer grants Bank a security interest in all "equipment and farm products, now owned or hereafter acquired." Bank properly files a financing statement on March 10, with the financing statement containing after-acquired language. 3 On October 1, Farmer approaches FinanceCo to request a loan for the purchase of a combine. FinanceCo agrees to make the loan and disburses the funds for the purchase directly to the equipment dealer. Farmer signs a security agreement granting FinanceCo a security interest in the combine. Farmer takes delivery of the combine on November 1. On November 26, FinanceCo properly files a financing statement describing the combine by brand, model, and serial number. Farmer subsequently defaults on his obligations to Bank and Finance Co. Who has priority in the combine?
5. On March 1, Bank extends a line of credit to Farmer. Farmer grants Bank a security interest in all "equipment and farm products, now owned or hereafter acquired." Bank properly files a financing statement on March 10, with the financing statement containing after-acquired language. 3 On October 1, Farmer approaches FinanceCo to request a loan for the purchase of a combine. FinanceCo agrees to make the loan and disburses the funds for the purchase directly to the equipment dealer. Farmer signs a security agreement granting FinanceCo a security interest in the combine. Farmer takes delivery of the combine on November 1. On November 26, FinanceCo properly files a financing statement describing the combine by brand, model, and serial number. Farmer subsequently defaults on his obligations to Bank and Finance Co. Who has priority in the combine?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:5. On March 1, Bank extends a line of credit to Farmer. Farmer grants Bank a security
interest in all "equipment and farm products, now owned or hereafter acquired." Bank
properly files a financing statement on March 10, with the financing statement
containing after-acquired language.
3
On October 1, Farmer approaches FinanceCo to request a loan for the purchase of a
combine. FinanceCo agrees to make the loan and disburses the funds for the purchase
directly to the equipment dealer. Farmer signs a security agreement granting FinanceCo
a security interest in the combine.
Farmer takes delivery of the combine on November 1.
On November 26, FinanceCo properly files a financing statement describing the combine
by brand, model, and serial number. Farmer subsequently defaults on his obligations to
Bank and FinanceCo. Who has priority in the combine?
6. Assume similar facts as above, but that instead of filing a financing statement on
November 26 FinanceCo files its financing statement on November 16. Who has priority
in this situation?
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