The following example explains the subtle relationship between this rule and the choice-of-law rules in Section 9-303 [Maine cite section 9-1303] and former Section 9-103(2):

Example: Goods are located in State A and covered by a certificate of title issued under the law of State A. The State A certificate of title is "clean"; it does not reflect a security interest. Owner takes the goods to State B and sells (trades in) the goods to Dealer, who is located (within the meaning of Section 9-307 [Maine cite section 9-1307]) in State B. As is customary, Dealer retains the duly assigned State A certificate of title pending resale of the goods. Dealer's inventory financer, SP, obtains a security interest in the goods under its after-acquired property clause.

Under Section 9-311(d) [Maine cite section 9-1311, subsection (4)] of both State A and State B, Dealer's inventory financer, SP, must perfect by filing instead of complying with a certificate-of-title statute. If Section 9-303 [Maine cite section 9-1303] were read to provide that the law applicable to perfection of SP's security interest is that of State A, because the goods are covered by a State A certificate, then SP would be required to file in State A under State A's Section 9-501 [Maine cite section 9-1501]. That result would be anomalous, to say the least, since the principle underlying Section 9-311(d) [Maine cite section 9-1311, subsection (4)] is that the inventory should be treated as ordinary goods.

Section 9-303 [Maine cite section 9-1303] (and former Section 9-103(2)) should be read as providing that the law of State B, not State A, applies. A court looking to the forum's Section 9- 303(a) [Maine cite section 9-1303, subsection (1)] would find that Section 9-303 [Maine cite section 9-1303] applies only if two conditions are met: (i) the goods are covered by the certificate as explained in Section 9-303(b) [Maine cite section 9-1303, subsection (2)], i.e., application had been made for a State (here, State A) to issue a certificate of title covering the goods and (ii) the certificate is a "certificate of title" as defined in Section 9-102 [Maine cite section 9-1102], i.e., "a statute provides for the security interest in question to be indicated on the certificate as a condition or result of the security interest's obtaining priority over the rights of a lien creditor." Stated otherwise, Section 9-303 [Maine cite section 9-1303] applies only when compliance with a certificate-of-title statute, and not filing, is the appropriate method of