Financing Statement. In 1994, SouthTrust Bank, N.A., loaned funds to Environmental Aspecs, Inc (EAI), and its subsidiary, EAI of NC. SouthTrust perfected its security interest by filing financing statements that listed only EAI as the debtor, described only EAI's assets as collateral, and were signed only on EAI's behalf. SouthTrust believed that both companies were operating as a single business represented by EAI. In 1996, EAI of NC borrowed almost 300,000 from Advanced Analytics Laboratories, Inc (AAL). AAL filed financing statements that listed the assets of EAI of NC as collateral but identified the debtor as EAI. The statements referred, however, to attached copies of the security agreements, which were signed by the president of EAI of NC and identified the debtor as EAI of NC. One year later, EAI and EAI of NC renegotiated their loan with SouthTrust, and the bank filed financing statements listing both companies as debtors. In 1998, EAI and EAI of NC filed for bankruptcy. One of the issues was the priority of the security interests of SouthTrust and AAL. AAL contended that its failure to identify, on its financing statements, EAI of NC as the debtor did not give SouthTrust priority. Is AAL correct? Why or why not?
Question 2
In Armstrong v. Food Lion, the Armstrongs were beaten by employees of a grocery store. They sued the store. The South Carolina high court held that the store was not liable because:
a. the employees were not acting within the scope of their employment or in furtherance of Food Lion's business when they attacked the Armstrongs
b. the employees were acting within the scope of their employment or in furtherance of Food Lion's business when the attacked they Armstrongs
c. the employees had only worked for Food Lion for 6 months when they attacked the Armstrongs
d. the employees had worked for Food Lion for more than 6 months when they attacked the Armstrongs e. the employees were not servants of Food Lion when they attacked the Armstrongs