[Pottery Store] A&B Bank loaned money to Potter's Pottery Store to finance the purchase of several kilns, a delivery van, and pottery wheels. In return, Potter's granted a security interest to A&B Bank for "all equipment of Potter's". The kiln manufacturer also wants to place a security interest on the kilns and the delivery van for Potter's Pottery.
-Before perfecting its interest, if the kiln manufacturer examines the van's title but does not find any notation of a secured interest, which of the following statements is true?
A) The kiln manufacturer would have to check if any other creditors filed financing statements with the state in order to determine if any other creditors have priority.
B) The kiln manufacturer would have to check if any other creditors filed financing statements with the state in order to determine if any other creditors have priority, and if not, the kiln manufacturer would have priority if it filed its financial statement.
C) The kiln manufacturer would have to check if any other creditors filed financing statements with the state in order to determine if any other creditors have priority, and if not, the kiln manufacturer would have priority if it made a notation on the van's title.
D) The kiln manufacturer can assume that no other creditors have a secured interest in the vehicle and thus it would have priority if it perfected its interest by making a notation on the van's title.
E) The bank's interest in the van would take priority over the kiln manufacturer because it filed first.
Correct Answer:
Verified
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