Victor financed Bonnie's purchase of a refrigerator for $600 payable over 20 months. Bonnie signed a security agreement granting Victor an interest in the refrigerator. After making the first 3 payments:
1) Bonnie sold the refrigerator to a new occupant for $350 cash. Victor's rights to the refrigerator and payments are superior to the new occupant's.
2) Bonnie filed for bankruptcy. Victor's security interest in the refrigerator allows his claim to be superior to the bankruptcy trustee's.
Bonnie moves from her apartment and sells the refrigerator in.docx
1. Bonnie moves from her apartment and sells the refrigerator in
ASSIGNMENTVictor sells to Bonnie a refrigerator for $600 payable in monthly installments
of $30 for twenty months. Bonnie signs a security agreement granting Victor a security
interest in the refrigerator. The refrigerator is installed in the kitchen of Bonnie’s
apartment. There is no filing of any financing statement. Assume that after Bonnie has made
the first three monthly payments:a. Bonnie moves from her apartment and sells the
refrigerator in place to the new occupant for $350 cash. What are the rights of Victor?b.
Bonnie is adjudicated bankrupt, and her trustee in bankruptcy claims the refrigerator. What
are the rights of the parties?2. On January 2, Burt asked Logan to loan him money “against
my diamond ring.” Logan agreed to do so. To guard against intervening liens, Logan
received permission to file a financing statement, and Burt and Logan signed a security
agreement giving Logan an interest in the ring. Burt also signed a financing statement,
which Logan properly filed on January 3. On January 4, Burt borrowed money from Tillo,
pledging his ring to secure the debt. Tillo took possession of the ring and paid Burt the
money on the same day. The next day, January 5,Logan loaned Burt the money under the
assumption that Burt still had the ring. Who has priority, Logan or Tillo? Explain.3. Joanna
takes a security interest in the equipment in Jason Store and files a financing statement
claiming “equipment and all after acquired equipment.” Berkeley later sells Jason Store a
cash register, taking a security interest in the register, and (a) files nine days after Jason
receives the register or (b) files twenty-five days after Jason receives the register. If Jason
fails to pay both Joanna and Berkeley and they foreclose their security interests, who has
priority on the cash register? Explain.4. Finley Motor Company sells an automobile to Sara
and retains a security interest in it. The automobile is insured, and Finley is named
beneficiary. Three days after the automobile is totally destroyed in an accident, Sara files a
petition in bankruptcy. As between Finley and Sara’s trustee in bankruptcy, who is entitled
to the insurance proceeds?5. On September 5, Wanda, a widow who occasionally teaches
piano and organ in her home, purchased an electric organ from Murphy’s music store for
$4,800, trading in her old organ for $1,200 and promising in writing to pay the balance at
$120 per month and granting to Murphy a security interest in the property in terms
consistent with and incorporating provisions ofthe Uniform Commercial Code. A financing
statement covering the transaction was also properly filled out and signed, and Murphy
properly filed it. After Wanda failed to make the December or January payments, Murphy
went to her home to collect the payments or take the organ. Finding no one home and the
door unlocked, he went in and took the organ. Two hours later, Tia, a third party and the
2. present occupant of the house, who had purchased the organ for her own use, stormed into
Murphy’s store, demanding the return of the organ. She showed Murphy a bill of sale from
Wanda to her, dated December 15, that listed the organ and other furnishings in the
house.a. What are the rights of Murphy, Tia, and Wanda?b. Would your answer change if
Murphy had not filed a financing statement? Why?c. Would your answer change if the organ
had been used principally to give lessons? Explain