Noninventory goods were purchased and delivered on June 15, 1993. Several security interests exist in these goods. Which of the following security interests has priority over the others?
a.
Security interest in future goods attached June 10, 1993.
b.
Security interest perfected June 20, 1993.
c.
Purchase money security interest perfected June 24, 1993.
Choice "C" is correct. A purchase money security interest (PMSI) in noninventory goods has priority over all other security interests in the same collateral if the PMSI is perfected within 20 days of the debtor's getting possession. Here, the PMSI was filed 9 days after the debtor got possession of the noninventory goods.Choices "a" and "d" are incorrect because an unperfected security interest is subordinate to a perfected security interest.
Choice "b" is incorrect. Although the general rule among competing security interests is that the creditor who is the first to file or to perfect has priority, a purchase money security interest (PMSI) in noninventory goods has priority over all other security interests in the same collateral if the PMSI is perfected within 20 days of the debtor's getting possession of the noninventory goods.
