1.National Cash Register Company (NCR), a manufacturer of cash registers, entered into a sales contract for a cash register with Edmund Carroll. On November 18, Firestone and Company made a loan to Carroll, who conveyed certain property to Firestone as collateral under a security agreement. The property outlined in the security agreement included “[a]ll contents of luncheonette including equipment such as … ‘twenty-five different listed items,’ … together with all property and articles now, and which may hereafter be, used … with, [or] added … to … any of the foregoing described property.” A similarly detailed description of the property conveyed as collateral appeared in Firestone’s financing statement, but the financing statement made no mention of property to be acquired thereafter, and neither document made a specific reference to a cash register. NCR delivered the cash register to Carroll in Canton between November 19 and November 25 and filed a financing statement with the town clerk of Canton on December 20 and with the Secretary of State on December
2. Carroll subsequently defaulted both on the contract with NCR and on the security agreement with Firestone. Firestone took possession of the cash register and sold it at auction. Discuss whether Firestone has a security interest in the cash register.
3. National Acceptance Company loaned Ultra Precision Industries $692,000 and to secure repayment of the loan Ultra executed a chattel mortgage security agreement on National’s behalf on March 7, 2011. National perfected the security interest by timely filing a financing statement. Although the security interest covered specifically described equipment of Ultra, both the security agreement and the financing statement contained an after-acquired property clause that did not refer to any specific equipment. Later in 2011 and in 2012, Ultra placed three separate orders for machines from Wolf Machinery Company. In each case, it was agreed that after the machines had been shipped to Ultra and installed, Ultra would be given an opportunity to test them in operation for a reasonable period. If the machines passed inspection, Wolf would then provide financing that was satisfactory to Ultra. In all three cases, financing was arranged with Community Bank (Bank) and accepted, and a security interest was given in the machines. Furthermore, in each case, a security agreement was entered into, and the secured parties then filed a financing statement within ten days. Ultra became bankrupt on October 7, 2014. National claimed that its security interest in the after-acquired machines should take priority over those of Wolf and Bank because their interests were not perfected by timely filed financing statements. Discuss who has priority in the disputed collateral.
4. Elizabeth Tilleraas received three student loans totaling $3,500 under the Federal Insured Student Loan Program (FISLP) of the Higher Education Act. These loans were secured by three promissory notes executed in favor of Dakota National Bank & Trust Co., Fargo, North Dakota. Under the terms of these student loans, periodic payments were required beginning twelve months after Tilleraas ceased to carry at least one-half of a full-time academic workload at an eligible institution. Her student status terminated on January 28, 2014, and the first installment payment thus became due January 28, 2015. She never made a payment on any of her loans. Under the provisions of the FISLP, the United States assured the lender bank repayment in the event of any failure to pay by the borrower. The first payment due on the loans was in “default” on July 27, 2015, 180 days after the failure to make the first installment payment. On December 17, 2016, Dakota National Bank & Trust sent notice of its election under the provisions of the loan to accelerate the maturity of the note. The bank demanded payment in full by December 27, 2016. It then filed FISLP insurance claims against the United States on May 6, 2017, and assigned the three Tilleraas notes to the United States on May 10, 2017. The government, in turn, paid the bank’s claim in full on July 5, 2017. The government subsequently filed suit against Tilleraas. Discuss whether the United States will prevail.
5. New West Fruit Corporation (New West) and Coastal Berry Corporation are both brokers of fresh strawberries. In the second half of 2015, New West’s predecessor, Monc’s Consolidated Produce, Inc., loaned money and strawberry plants to a group of strawberry growers known as Cooperativa La Paz (La Paz). In September 2015, Monc’s and La Paz signed a “Sales and Marketing Agreement” to allow Monc’s the exclusive right to market the strawberries grown by La Paz during the 2015–2017 season. The agreement did not mention the advances of money or plants, but did give Monc’s a security interest in all crops and proceeds on specified property in the 2016–2017 season. The financing statement was properly signed and filed. Monc’s closed down in January 2017, and its assets were assigned to New West. In April, New West learned that La Paz had agreed to market its 2017 crop through Coastal Berry. New West immediately arranged a meeting to advise the Coastal Berry officers of its contract with the growers. New West requested that Coastal Berry either pay New West the amounts owed by the growers or allow New West to market the berries to recover the money. Coastal Berry did not respond. After Coastal Berry began marketing the berries, New West sent letters demanding payment of the proceeds. In August 2017, New West filed suit against Coastal Berry, La Paz, the individual growers, and a berry-freezing company that its security interest was valid and that it had duly notified Coastal Berry both through the financing statement on file and through the letters it had sent to Coastal Berry directly. Coastal Berry claimed that the security agreement was not effective because it did not specifically identify the debt (money and plants) being secured. Discuss.
6. Standridge purchased a Chevrolet automobile from Billy Deavers, an agent of Walker Motor Company. According to the sales contract, the balance due after the trade-in allowance was $282.50, to be paid in twelve weekly installments. Standridge claims that he was unable to make the second payment and that Billy Deavers orally agreed that he could make two payments the next week. The day after the double payment was due, Standridge still had not paid. That day, Ronnie Deavers, Billy’s brother, went to Standridge’s place of employment to repossess the car, which the Walker Motor contract permitted. Rather than consenting to the repossession, Standridge drove the car to the Walker Motor Company’s place of business and tendered the overdue payments. The Deaverses refused to accept the late payment and instead demanded the entire unpaid balance. Standridge could not pay it. The Deaverses then blocked Standridge’s car with another car and told him he could just “walk his … home.” Standridge brought suit, seeking damages for the Deavers’s wrongful repossession of his car. The Deaverses deny that they granted Standridge permission to make a double payment, that Standridge tendered the double payment, and that they rejected it. They claim that he made no payment and that, therefore, they were entitled to repossess the car. Discuss whether the car was properly repossessed.
7. In July 2016, Edward Slater purchased a new Galaxy boat primarily for personal purposes. To finance the purchase, Slater obtained a loan from Howell State Bank, agreeing to repay the loan in ninety-six monthly installments of $151.41. The Galaxy boat was purchased in the State of New Jersey, and Howell State Bank filed a copy of the Financing Statement Agreement in the office of the Secretary of State of New Jersey. Subsequently, the boat was moved to the State of New York. Explain whether Howell has a perfected security interest in the boat.


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