Alvin Smith bought a car from XYZ Autos Inc., a car dealership, for the price of $15,000. Alvin paid $5,000 cash and entered into a conditional sales contract to finance the remaining $10,000. Alvin had obtained the $5,000 from his bank and executed a chattel mortgage for $9,000 in favour of his bank. This represented $5,000 for the deposit and $4,000 in existing indebtedness. After Alvin obtained the car, he provided the bank with a description and its serial number. The bank completed the chattel mortgage with this information and registered a financing statement under the prevailing personal property security legislation. XYZ Autos Inc. similarly registered a financing statement but was three days later than the bank. Alvin subsequently defaulted under both securities. Which of the creditors has priority to the car and why?

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The Answer of Alvin Smith bought a car from XYZ Autos Inc., a car dealership, for the price of $15,000. Alvin paid $5,000 cash and entered into a conditional sales contract to finance the remaining $10,000. Alvin had obtained the $5,000 from his bank and executed a chattel mortgage for $9,000 in favour of his bank. This represented $5,000 for the deposit and $4,000 in existing indebtedness. After Alvin obtained the car, he provided the bank with a description and its serial number. The bank completed the chattel mortgage with this information and registered a financing statement under the prevailing personal property security legislation. XYZ Autos Inc. similarly registered a financing statement but was three days later than the bank. Alvin subsequently defaulted under both securities. Which of the creditors has priority to the car and why?

Alvin Smith Bought a Car from XYZ Autos Inc