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Question
Nellie borrowed money from Solvent National Bank and gave the bank a security interest in her business equipment, both present and after-acquired. She later borrowed money from Resilient Savings and Loan to purchase additional business equipment. Three weeks after Nellie purchased the new equipment and took possession of it, an employee of Resilient discovered the bank's filed financing statement concerning the bank's loan to Nellie. Resilient immediately recorded a financing statement, so as to perfect its purchase money security interest in the equipment. Nellie then defaulted on the obligation owed to the bank and on the obligation owed to Resilient. Who has the first priority security interest in the equipment purchased by Nellie with the funds borrowed from Resilient?
A. Solvent National Bank
B. Resilient Savings and Loan
C. Both Resilient and Solvent have equal priority
D. Both Nellie and Resilient have equal priority
Answer
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