| are unperfected, the first to attach has priority. Note that | Section 9-708(b) [Maine cite section 9-1708, subsection (2)] may | affect the application of subsection (a) [Maine cite subsection | (1)] to a filing that occurred before the effective date of this | Article and which would be ineffective to perfect a security | interest under former Article 9 but effective under this Article. |
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| | 4. Competing Perfected Security Interests. When there is | more than one perfected security interest, the security interests | rank according to priority in time of filing or perfection. | "Filing," of course, refers to the filing of an effective | financing statement. "Perfection" refers to the acquisition of a | perfected security interest, i.e., one that has attached and as | to which any required perfection step has been taken. See | Section 9-308 [Maine cite section 9-1308]. |
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| | Example 1: On February 1, A files a financing statement | covering a certain item of Debtor's equipment. On March 1, B | files a financing statement covering the same equipment. On | April 1, B makes a loan to Debtor and obtains a security interest | in the equipment. On May 1, A makes a loan to Debtor and obtains | a security interest in the same collateral. A has priority even | though B's loan was made earlier and was perfected when made. It | makes no difference whether A knew of B's security interest when | A made its advance. |
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| | The problem stated in Example 1 is peculiar to a notice-filing | system under which filing may occur before the security interest | attaches (see Section 9-502 [Maine cite section 9-1502]). The | justification for determining priority by order of filing lies in | the necessity of protecting the filing system-that is, of | allowing the first secured party who has filed to make subsequent | advances without each time having to check for subsequent filings | as a condition of protection. Note, however, that this first-to- | file protection is not absolute. For example, Section 9-324 | [Maine cite section 9-1324] affords priority to certain purchase- | money security interests, even if a competing secured party was | the first to file or perfect. |
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| | Example 2: A and B make nonpurchase-money advances secured | by the same collateral. The collateral is in Debtor's | possession, and neither security interest is perfected when the | second advance is made. Whichever secured party first perfects | its security interest (by taking possession of the collateral or | by filing) takes priority. It makes no difference whether that | secured party knows of the other security interest at the time it | perfects its own. |
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