| | | account constituting the proceeds at issue, are not cash | | proceeds, proceeds of the same type as the collateral (original | | deposit account), or an account relating to the collateral. | | Stated otherwise, once proceeds other than cash proceeds, | | proceeds of the same type as the original collateral, or an | | account relating to the original collateral intervene in the | | chain of proceeds, priority under subsection (c) [Maine cite | | subsection (3)] is thereafter unavailable. The special priority | | rule in subsection (d) [Maine cite subsection (4)] also is | | inapplicable to this case. See Comment 9, Example 13, below. | | Instead, the general first-to-file-or-perfect rule of subsections | | (a) and (b) [Maine cite subsections (1) and (2)] apply. Under | | that rule, SP-1 has priority unless its security interest in the | | inventory proceeds became unperfected under Section 9-315(d) | | [Maine cite section 9-1315, subsection (4)]. Had SP-2 filed | | against inventory before SP-1 obtained control of the original | | deposit account, the SP-2 would have had priority even if SP-1's | | security interest in the inventory proceeds remained perfected. |
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| | | 9. Proceeds of Non-filing Collateral: Special Temporal | | Priority. Under subsections (d) and (e) [Maine cite subsections | | (4) and (5)], if a security interest in non-filing collateral is | | perfected by a method other than filing (e.g., control or | | possession), it does not retain its priority over a conflicting | | security interest in proceeds that are filing collateral. | | Moreover, it is not entitled to priority in proceeds under the | | first-to file-or-perfect rule of subsections (a)(1) and (b) | | [Maine cite subsection (1), paragraph (a) and subsection (2)]. | | Instead, under subsection (d) [Maine cite subsection (4)], | | priority is determined by a new first-to-file rule. |
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| | | Example 12: SP-1 perfects its security interest in Debtor's | | deposit account by obtaining control. Thereafter, SP-2 files | | against equipment, (presumably) searches, finds no indication of | | a conflicting security interest, and advances against Debtor's | | equipment. SP-1 then files against Debtor's equipment. Debtor | | uses funds from the deposit account to purchase equipment, which | | SP-1 can trace as proceeds of its security interest in Debtor's | | deposit account. If the first-to-file-or-perfect rule were | | applied, SP-1's security interest would be senior under | | subsections (a)(1) and (b) [Maine cite subsection (1), paragraph | | (a) and subsection (2)], because it was the first to perfect in | | the original collateral and there was no period during which its | | security interest was unperfected. Under subsection (d) [Maine | | cite subsection (4)], however, SP-2's security interest would be | | senior because it filed first. This corresponds with the likely | | expectations of the parties. |
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| | | Note that under subsection (e) [Maine cite subsection (5)], | | the first-to-file rule of subsection (d) [Maine cite subsection |
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