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The Transformation Rule Under Section 522 Of The Bankruptcy Code Of 1978, Raymond B. Check

Michigan Law Review

This Note rejects the statutory arguments that have been advanced in favor of the transformation rule, and argues that the rule is inconsistent with both the policies motivating section 522 of the Bankruptcy Code and the overall purposes of the U.C.C. priority system. Part I examines the treatment of purchase money security in the U.C.C. scheme. It also describes the exemption provisions of the 1978 Bankruptcy Code and the legislative concerns that shaped those provisions. Part II summarizes the judicial adoption of the transformation rule and the statutory basis relied upon by courts in applying it. Part III argues that …

Ucc--Secured Transactions--Judicial Sales--Purchaser At Judicial Sale Takes Property Subject To Unperfected Security Interest Of Which He Has Knowledge, Michigan Law Review

Michigan Law Review

p>The first question for consideration is the applicability of the "shelter provision" of section 2-403(1) to these cases. This section may be relied upon by different parties depending upon the nature of the sale. When a bankruptcy sale is involved, the buyer may claim, as Armstrong did in Mitchell, that the section allows him to succeed to the trustee's priority over unperfected security interests. When an ordinary judicial sale is involved, however, there is no intermediate transferee with both title to the property and a clear claim to priority, and the secured party may rely on this section …

Conflicting Perfected Security Interests In Proceeds Under Article 9 Of The Uniform Commercial Code, Michigan Law Review

Michigan Law Review

Section 9-306 gives the inventory financer a "continuously perfected" security interest in the proceeds of the inventory if the security interest in the original collateral was perfected. "Proceeds" is defined as including "whatever is received when collateral or proceeds is sold, exchanged, collected or otherwise disposed of." Thus, the inventory financer may have a security interest in the proceeds of the original collateral or the proceeds of the proceeds. The security interest in the proceeds may be perfected in either of two ways: (1) under section 9-306(3)(a) the security interest is perfected by filing a financing statement that expressly covers …

Purchaser's Remedies For Absence Of Marketable Title, Lawrence Linville

Michigan Law Review

"Where a person takes upon himself to contract for the sale of an estate, and is not the absolute owner of it, nor has it in his power by the ordinary course of law or equity to make himself so; though the owner offer to make the seller a title, yet equity will not force the buyer to take it, for every seller ought to be a bona fide contractor: and it would lead to infinite mischief if one man were permitted to speculate upon the sale of another's estate."

The apprehensions of Sugden were not groundless, as three quarters …

Mortgages - Subrogation Of One Whose Loan Is Used To Pay A Senior Mortgage, Theodore R. Vogt

Michigan Law Review

S mortgaged the property in question to U, then conveyed the land and certain water rights to H, who gave a second mortgage on the land to M. Thereafter H conveyed the land and water rights to F, who borrowed from Z funds to retire the first mortgage, giving to Z a mortgage which it was agreed between F and Z should be a first mortgage, and transferring to Z the water rights as additional security. In an action by M to foreclose, held, Z was entitled to subrogation to the position of first mortgagee …

Sales - Status Of Title-Retaining Instruments As Against Third Persons

Michigan Law Review

The exploitation of the legal concept of divided property interests in chattels by ingenious draftsman-lawyers has resulted in the variety of title-retaining instruments commonly used today in the creation of vendor-vendee relationships. Among the more familiar forms may be mentioned the conditional sale, bailment lease, chattel mortgage, and trust receipt. The chief motive of the seller in resorting to these devices seems to lie in the belief that the buyer is a poor credit risk, and the particular instrument which a seller will employ in a given situation will depend largely upon the relative legal advantages which he seeks to …

Bill Of Lading As Collateral Security Under Federal Laws, Frederick Thulin

Michigan Law Review

The desirability of the bill of lading as collateral security has been recognized in business transactions for many decades. The foregoing fact arises from the inherent nature of the financing of transactions of foreign or domestic trade.