16.6k views
5 votes
Rawlings purchased a typewriter from Kroll Type-writer Co. for $600. At the time of the purchase, hemade an initial payment of $75 and agreed to paythe balance in monthly installments. A securityagreement that complied with the UCC was pre-pared, but no financing statement was ever filed forthe transaction. Rawlings, at a time when he stillowed a balance on the typewriter and without theconsent of Kroll, sold the typewriter to a neighbor.The neighbor, who had no knowledge of the securityinterest, used the typewriter in her home. Could Kroll repossess the typewriter from the neighbor?

1 Answer

4 votes

Answer: Kroll cannot repossess the typewriter from the neighbor.

Step-by-step explanation:

Based on the information given in the question, we can infer that Kroll cannot repossess the typewriter from the neighbor.

According to the UCC 9-320(b), when an individual purchases a particular consumer good in a situation whereby the individual isn't aware of the security interest and also when a financial statement wasn't filled, then the buyer is free from the security interest.

In this situation, even though a security agreement that complied with the UCC was pre-pared, but no financing statement was ever filed fort the transaction, this implies that Kroll cannot repossess back the typewriter as no financial statement was filed.

User Proninyaroslav
by
8.1k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.