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When Metropolitan defaulted on its agreement with World Wide six
months later, World Wide brought suit, asserting its alleged security
agreement in Metropolitan’s accounts receivable. Bank filed a
counterclaim, asserting its perfected security interest in Metropolitan’s
accounts receivable. Who wins? World Wide Tracers, Inc. v.
Metropolitan
27.4 Priority of Security Interests Paul High purchased various items of
personal property and livestock from William and Marilyn McGowen.
To secure the purchase price, High granted the Mc-Gowens a security
interest in the personal property and livestock. Two and one-half months
later, High borrowed $86,695 from Nebraska State Bank (Bank) and
signed a promissory note, granting Bank a security interest in all his
farm products, including but not limited to all his livestock. Bank
immediately perfected its security agreement by filing a financing
statement with the county clerk in Dakota County, Nebraska. The
McGowens perfected their security interest by filing a financing
statement and security agreement with the county clerk three months
after the Bank filed its financing statement. Three years later, High
defaulted on the obligations owed to the McGowens and Bank. Whose
security interest has priority? McGowen v. Nebraska State Bank, 229
Neb. 471, 427 N.W.2d 772, Web 1988 Neb. Lexis 290 (Supreme Court
of Nebraska)
27.5 Purchase Money Security Inte rest Prior Brothers, Inc. (PBI) began
financing its farming operations through Bank of California, N.A.
(Bank). Bank’s loans were secured by PBI’s equipment and after-
acquired property. Bank immediately filed a financing statement,
perfecting its security interest. Two years later, PBI contacted the
International Harvester dealership in Sunny-side, Washington, about the
purchase of a new tractor. A retail installment contract for a model 1066
International Harvester tractor was executed. PBI took delivery of the
tractor “on approval,” agreeing that if it decided to purchase the tractor,
it would inform the dealership of its intention and would send a $6,000
down payment. The dealership received a $6,000 check. The dealership
immediately filed a financing statement concerning the tractor.
Subsequently, when PBI went into receivership, the dealership filed a