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Flashcards in Exceptions to first in time principle Deck (16)
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4 kinds of PMSIs

-"super priority"
-PMSI in consumer goods
-PMSI in equipment
-PMSI in fixtures, and
-PMSI in inventory


PMSI in consumer goods

-perfection is automatic
- priority over everyone but BIOCB and consumer to consumer transactions


PMSI in equipment and fixtures

-perfection requires a filing within 20 days of either the debtor receiving the goods or the goods becoming fixtures



perfection require that a filing must be made prior to the debtor receiving possession


PMSI- perfected

as long as PMSI is perfected, it will generally have priority over all other SI subject to some exceptions



-the first to file or perfect rule applies EXCEPT a seller's PMSI takes priority over a lender's PMSI


PMSI in fixtures v other interests in real prop

-PMSI in fixtures has priority over a prior interest in the RP with which the fixtures are associated if:
1) the debtor has an interest of record in the RP (eg owner) or is in possession of the RP (lessee) and
2) SI is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter


construction mortgage

-a construction mortgage (secures the construction of a building, including the cost of acquiring the land, and that indicate it is a construction prop in RP records) has priority over a subsequent PMSI in a fixture if
1) the construction mortgage is recorded before the goods become fixtures and
2) only covers goods that become fixtures before the completion of construction


PMSI in non-consumer, non-inventory, non-fixutre goods

-priority over- everyone but BIOCB
-perfection: file within 20 days of debtor receiving collateral


PMSI in inventory

-perfection: filing prior to debtor receiving possession and sending proper notice to conflicting SI
-priority over: everyone but BIOCB


PMSI in fixtures

-perfection: filing a fixture prior to or w/in 20 days of goods becoming fixtures
-priority over: everyone but a construction mortgage


purchasers: buyer v. unperfected

-a buyer takes free and clear of any unperfected SI provided:
1) buyer gives value;
2) receives delivery of the collateral; and
3) buys w/o knowledge of pre-existing SI


purchasers: buyer v. perfected

-generally a buyer of goods takes subject to a perfected SI unless the SI holder authorizes the sale.


exception: buyer v. perfected

BIOCB takes free of a SI created by the buyer's seller, even if the SI is perfected and the buyer knows of its existence if:
1) buys goods (not farm products)
2) from a merchant who is in the business of selling goods of that kind and
3) in GF and without actual knowledge that the sale violates the rights of another in the same goods


consumer buyer v. secured

Garage sale rule- a buyer of CG takes free of a SI even if perfected unless prior to the purchase, the secured party has filed a financing statement covering the goods.
-consumer must:
1) buy goods for value
2)for his own personal, family, or household use
3) from a consumer seller and
4)without knowledge of the security interest to qualify under this rule
*PMSI with automatic perfection would not be protected under garage sale rule*


purchaser v. future advances

-purchaser who does not qualify as a BIOCB may still take free of a SI to the extent that it secures an advance made after the earlier of:
1) the time the secured party acquires knowledge of the buyer's purchase or
2) 45 days after the purchase