Quiz 34: Secured Transactions in Personal Property
Definition UCC 9-203 - states how security interest is created. 1. A security agreement, e.g. a loan with collateral, is formed 2. Value is given 3. Debtor has rights in collateral Answer In this case, the first provision for security interest the security agreement was formed on March 5. The second and third provision is satisfied as the debtor has right to the car on March 10. Hence, all the provision to security interest was satisfied by March 10. The answer is c.
The case revolves around Mr. R, who executed a promissory note and mortgage in consideration for a $47,000 loan from Mr. W. The mortgage covered real estate located at 1790, Kentucky, and a manufactured home, that is to be situated on the real property. Mr. R used the proceeds of the loan to buy a manufactured home that subsequently rendered a total loss as a result of heavy damage. In light of the scenario, Mr. W failed to record its lien on the certificate of title to the replacement manufactured home. Now, in such a case, Mr. R would be right in his defense that Mr. W has no longer valid lien on the manufactured home. Had he recorded its lien on the certificate of title to the replacement manufactured home, Mr. W would have initiated a foreclosure action on the property.
A good sold on credit for consumer use with a security agreement automatically provides the seller with perfection. Hence, it seller doesn't need to file financing statement for perfection. The answer is d.