On October 28, 1983, Steve Gresham, doing business as Midway Cycle Sales, entered into a Wholesale Financing Agreement with ITT Commercial Finance Corporation. The agreement was to finance the purchase of new motorcycles from Suzuki Motor Corporation. ITT filed a financing statement with the Indiana secretary of state on December 16, 1983. The description of the collateral in which ITT asserted a security interest included "all inventory.....replacements and proceeds." On January 9, 1984, Union Bank filed a financing statement with the Indiana secretary of state claiming it was engaged in "floor planning of new motorcycles" for Midway Cycle Sales. In August 1984, ITT began paying Suzuki invoices for Gresham. In July 1985, ITT sent a letter to Union Bank notifying it that it expected to acquire purchase money security interests in the inventory of Stephan Gresham d/b/a Midway Cycle Sales. In early 1986, Union Bank began loaning money to Gresham under its floor planning agreement with him. Actually, Gresham was "double floor planning"-that is, he was taking invoices for motorcycles that had been paid for by ITT to the Union Bank and claiming that he had paid for the motorcycles but had decided to floor plan them. When Union Bank advanced money to him, he used the money to make payments on the loans to ITT. He made no payments to Union Bank and did not pay off all of his loan to ITT. Midway Cycle Sales went bankrupt when Union Bank repossessed 22 new Suzuki motorcycles. ITT brought suit against Union Bank, claiming it had paid for the motorcycles and had a perfected security interest in the motorcycles that had priority over Union Bank's security interest in them. Did ITT's security interest have priority over Union Bank's security interest?
Answer to relevant QuestionsOn November 18, Firestone & Company made a loan to Edmund Carroll, doing business as Kozy Kitchen. To secure the loan, a security agreement was executed, which listed the items of property included, and concluded as follows: ...Brian Scholz was involved in an automobile collision with a person insured by The Travelers Insurance Company. At the time, Scholz was cited for, and pled no contest to, a criminal charge of driving under the influence of ...Wiley, Tate & Irby, buyers and sellers of used cars, sold several autos to Houston Auto Sales. Houston wrote out the order for payment on the outside of several envelopes. He signed them and they were drawn on his bank, ...On January 22, 2002, as a result of a real estate transaction, First Service Title Agency issued three checks drawn on its account with Key Bank. The first check was for $850 and was payable to the order of "Richard G. ...Charles Peterson, a farmer and rancher, was indebted to Crown Financial Corporation on a $4,450,000 promissory note that was due on December 29, 1992. Shortly before the note was due, Crown sent Peterson a statement of ...
Post your question