If both First Bank and Second Bank had properly perfected their security interest, which creditor's interest would take priority?

A) First Bank, because in a dispute between a secured perfected creditor and a secured unperfected creditor, the secured perfected creditor takes priority.
B) First Bank, because in a dispute between two secured and perfected creditors, the party who perfected first takes priority.
C) First Bank, because in a dispute between two secured but unperfected creditors, the party who attached first takes priority.
D) The two banks will have equal rights to the property.
E) Second Bank, because "after-acquired property" is not specific enough to grant attachment right to First Bank, and, thus, the secured agreement of Second Bank takes priority.

Question

Camryn Davis · Accepted Answer

Final Answer : B, Explanation :  In disputes involving two secured and perfected creditors, priority is generally determined by the order in which the security interests were perfected. Since First Bank's interest in the after-acquired property was perfected before Second Bank's interest in the delivery truck, First Bank would have priority.

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