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Marshalling And The Personal Property Security Acts: Doing Unto Others…, Bruce Macdougall

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Where a senior creditor has access to two funds from the same debtor to satisfy its claims and the junior creditor has access to only one of these funds, it could be equitable to expect that the senior creditor satisfy itself out of the fund in which the junior creditor does not have an interest. Where a court makes an order based on this principle, it has invoked the doctrine of marshalling, sometimes called the two-fund rule.' Marshalling is an equitable doctrine and therein lies its strengths and weaknesses. Equity gives it its flexibility, adaptibility and utility. Equity also gives …