Charles E. Williams paid for the purchase and installation of a guttering system for his home by Hanke Brothers with a Wells Fargo Home Projects Visa card. Under the terms of this particular Visa card, Williams agreed to pay Wells Fargo a principal amount plus interest in return for payment for the guttering system by Wells Fargo to Hanke Brothers. Wells Fargo made payment, and Hanke Brothers then installed the guttering system. Wells Fargo did not file a financing statement on the guttering system. Williams defaulted on his mortgage and the mortgage company brought foreclosure action. Wells Fargo said that it was entitled to the guttering system because it was personal property purchased with a credit card. The mortgage company maintains that the failure to file a financing statement means that Wells Fargo is simply an unsecured creditor as any credit card company would be. Which of the following is correct?
A) Wells Fargo is a PMSI creditor in personal property who is entitled to recover the cost of the guttering system out of any foreclosure proceedings.
B) Wells Fargo is out of luck because of its failure to file a financing statement on a fixture.
C) Wells Fargo is not a PMSI creditor because the debtor financed the guttering indirectly through the Visa card.
D) Wells Fargo is a PMSI creditor but cannot take priority over the mortgage company because of its failure to file a financing statement.
Question 2
A debtor must have rights in the collateral for a security interest to attach.
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