New Mexico’s Article 9 of the Uniform Commercial Code governs secured transactions. When a debtor defaults on a secured obligation, the secured party has certain rights. One crucial aspect is the disposition of collateral. After default, a secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition or following a commercially reasonable preparation or processing. This disposition must be conducted in a commercially reasonable manner, which is a fundamental principle under Article 9. The secured party must also send a reasonable authenticated notification of disposition to certain parties, including the debtor and any secondary obligors. The notification must describe the debtor, the secured party, the collateral, the method of disposition, and the time and place of any public disposition. For a public disposition, the notice must be sent a reasonable time before the disposition. For a private disposition, the notice must be sent a reasonable time before the intended disposition. The explanation of the terms of the sale, including the right to an accounting of the secured obligation and the manner of disposal, is also a key component of the notice. The question probes the understanding of the notification requirements for a private disposition of collateral under New Mexico law. Specifically, it tests the timing of when the notification must be sent relative to the private disposition. The correct answer focuses on the requirement for reasonable notification prior to the intended private disposition, ensuring the debtor has an opportunity to act.

The core issue here is determining when a security interest attaches and becomes enforceable against a debtor. Under New Mexico’s Article 9, a security interest attaches when it becomes enforceable against the debtor with respect to the collateral. This generally occurs when value has been given, the debtor has rights in the collateral, and a security agreement that describes the collateral is in authenticated by the debtor. In this scenario, “Alpaca Outfitters” provided value (the loan), and the debtor, “Ranch Rentals LLC,” has rights in the livestock. The crucial element is the security agreement. While an oral agreement might be sufficient in some limited circumstances for certain types of collateral, for livestock, which are tangible goods, a written security agreement is typically required. The authenticated security agreement must sufficiently describe the collateral. The UCC 9-108 provides guidance on adequacy of description. A description is sufficient if it reasonably identifies the collateral. A description by type, such as “livestock,” is generally sufficient for tangible collateral unless it’s too broad or generic in a way that doesn’t reasonably identify the specific collateral. Given that Ranch Rentals LLC owns a specific herd of 50 breeding llamas and 100 wool sheep, a description of “all livestock owned by debtor” would likely be considered a reasonable identification of the collateral, satisfying the description requirement. The perfection of the security interest, which is distinct from attachment, would involve filing a financing statement or taking possession, but the question focuses on attachment and enforceability against the debtor. Therefore, the security interest attaches when value is given, the debtor has rights in the collateral, and the authenticated security agreement reasonably describes the collateral, which it does in this case by referencing the livestock.

In New Mexico, under Article 9 of the Uniform Commercial Code, a purchase-money security interest (PMSI) in consumer goods generally achieves automatic perfection upon attachment. However, when the collateral is inventory, perfection requires filing a financing statement. The UCC defines inventory as goods held for sale or lease or furnished or used in business. For a PMSI in inventory, the secured party must satisfy two additional requirements beyond the standard PMSI notification rule: first, the secured party must have perfected its security interest in the inventory by filing a financing statement before or within twenty days after the debtor receives possession of the inventory, and second, the secured party must have sent an authenticated notification to any secured party or other person who had filed a financing statement covering the same inventory or who had perfected a security interest in the same collateral before the date of the filing of the financing statement that covers the purchase-money collateral. This notification must state that the debtor has acquired or will acquire a purchase-money obligation, specifying the goods. This ensures that prior secured parties are aware of the new PMSI and can take appropriate action. Without proper filing and notification, the PMSI in inventory will not have priority over prior perfected security interests.

The core issue here revolves around the perfection of a security interest in a deposit account held by a debtor. Under New Mexico’s UCC Article 9, a security interest in a deposit account can only be perfected by control. Control is established when the secured party is the bank with which the deposit account is maintained, or when the secured party obtains the bank’s agreement to comply with the secured party’s instructions regarding the deposit account. In this scenario, “Southwest Lending Inc.” (SLI) has a security agreement and a promissory note from “Desert Bloom Farms LLC” (DBF), covering all of DBF’s assets, including its deposit accounts. SLI filed a UCC-1 financing statement, which is generally sufficient for perfection in most collateral types. However, for deposit accounts, filing is not a method of perfection. DBF’s deposit account is with “First National Bank of Santa Fe.” SLI did not obtain control over this deposit account. “Rio Grande Capital LLC” (RGC) subsequently obtained a security interest in DBF’s deposit account and, crucially, obtained control by entering into a control agreement with First National Bank of Santa Fe. When DBF defaults, RGC’s perfected security interest in the deposit account will have priority over SLI’s unperfected security interest. The filing of a UCC-1 statement by SLI is irrelevant to perfecting a security interest in a deposit account. Therefore, RGC, having perfected its interest through control, has priority.

The core issue in this scenario revolves around the perfection of a security interest in after-acquired inventory when the secured party has already filed a financing statement covering existing inventory. New Mexico, like other states, follows Article 9 of the Uniform Commercial Code. Under UCC § 9-308(c), a security interest in collateral is perfected when it has attached and all of the applicable requirements for perfection have been satisfied. For inventory, perfection is typically achieved through filing a financing statement. When a secured party has a valid, perfected security interest in a debtor’s existing inventory, and the security agreement also grants a security interest in after-acquired inventory, that interest automatically attaches to the new inventory as it is acquired by the debtor, provided the after-acquired property clause is sufficiently broad. The critical point is that a single, properly filed financing statement covering inventory is generally sufficient to perfect a security interest in both existing and after-acquired inventory, as long as the after-acquired property is of the same type as the collateral described in the financing statement. The UCC does not require a new filing or amendment to the existing financing statement every time new inventory is acquired. The initial filing provides notice to the public of the secured party’s interest in the debtor’s inventory, which encompasses future acquisitions of that type of collateral. Therefore, when the financing statement for “all inventory” was filed by First National Bank of Santa Fe, it covered all inventory owned by Southwest Artisans, including any inventory acquired after the filing date, such as the handcrafted pottery. The security agreement’s inclusion of after-acquired inventory makes this protection effective.

The core issue in this scenario revolves around the perfection of a security interest in a deposit account under New Mexico’s Article 9. New Mexico, like most states adopting revised Article 9, treats deposit accounts as a distinct type of collateral. Perfection in deposit accounts is generally achieved by control. Control is established when the secured party is the bank with which the deposit account is maintained, or when the secured party obtains the bank’s agreement to comply with the secured party’s instructions regarding the deposit account. In this case, while “Agri-Finance Corp.” has a valid security agreement with “Cactus Farms LLC,” the absence of a control agreement with “Desert Bank,” where the deposit account is held, means Agri-Finance Corp.’s security interest is unperfected. When “Cactus Farms LLC” files for bankruptcy, the trustee, acting as a hypothetical lien creditor, will have priority over unperfected security interests. Therefore, Agri-Finance Corp. cannot claim priority over the bankruptcy trustee for the funds in the deposit account. The correct answer is that Agri-Finance Corp.’s security interest is unperfected as to the deposit account.

The scenario involves a purchase money security interest (PMSI) in inventory. Under New Mexico’s Article 9 of the Uniform Commercial Code, a secured party with a PMSI in inventory must satisfy specific requirements to maintain priority over other creditors, including those with prior perfected security interests. Specifically, New Mexico UCC § 9-324(b) outlines the conditions for PMSI priority in inventory. These conditions require the secured party to: 1) obtain or retain a security interest in the inventory; 2) be entitled to give new value to the debtor in the ordinary course of business; and 3) have perfected the security interest in the inventory by a method authorized by Article 9. Crucially, for PMSI priority in inventory to be effective against a prior perfected secured party, the PMSI holder must also give an authenticated notification to any prior secured party whose financing statement covers the same inventory. This notification must state that the PMSI holder expects to acquire a PMSI in inventory of the debtor, including after-acquired inventory. The notification must be sent within a specific timeframe, generally before the debtor receives possession of the inventory. In this case, although Zia Corp. has a perfected security interest in all of El Sol’s inventory, and Desert Bank has a PMSI in new inventory, Desert Bank’s failure to send the required notification to Zia Corp. before El Sol received the new solar panels means Desert Bank’s PMSI is subordinate to Zia Corp.’s prior perfected security interest. Therefore, Zia Corp. has priority.

Under New Mexico’s Article 9 of the Uniform Commercial Code, the perfection of a security interest in a deposit account, as collateral, requires control. Control over a deposit account is achieved when the secured party is the depositary bank, the debtor has agreed in writing that the bank will comply with the secured party’s instructions concerning the balance of the account, or the secured party obtains control of the deposit account with the consent of the depositary bank. A security agreement is generally required for a security interest to attach, but perfection in deposit accounts is a distinct step. Filing a financing statement is not sufficient for perfection in deposit accounts; control is the exclusive method. Therefore, when a secured party has a valid security agreement and obtains control of the deposit account by becoming the depositary bank, the security interest is perfected.

No calculation is needed for this question as it tests conceptual understanding of priority rules under New Mexico’s Article 9. The core issue is the priority between a purchase money security interest (PMSI) in inventory and a prior perfected security interest in after-acquired inventory. Under New Mexico UCC § 9-324(a), a PMSI in inventory has priority over a conflicting security interest in the same inventory if certain conditions are met. These conditions include: (1) the PMSI is perfected when the debtor receives possession of the inventory; (2) a secured party with a prior perfected security interest receives an authenticated notification of the PMSI before the debtor receives possession of the inventory; and (3) the notification states or provides a reasonable indication that the person giving the notification has rights that cover the inventory of the debtor. In this scenario, Desert Bank’s security interest was perfected first. However, El Sol Finance’s security interest is a PMSI in inventory. El Sol Finance perfected its PMSI and provided Desert Bank with the required notification before the debtor received possession of the inventory. Therefore, El Sol Finance’s PMSI has priority over Desert Bank’s prior perfected security interest in the after-acquired inventory.

In New Mexico, when a secured party has a security interest in collateral that is a deposit account, the secured party perfects its security interest by control of the deposit account. Control is established when the secured party becomes the customer of the bank with respect to the deposit account, or enters into a control agreement with the debtor and the bank in which the bank agrees to comply with the secured party’s instructions regarding the deposit account without further consent from the debtor. If the secured party fails to obtain control, and another party later obtains a security interest in the same deposit account and perfects by control, the other party will generally have priority. This scenario tests the understanding of perfection by control for deposit accounts under New Mexico’s UCC Article 9, which aligns with the general principles of UCC Article 9 but emphasizes the specific method of perfection for this type of collateral. The absence of a filed financing statement does not preclude perfection; control is the exclusive method for deposit accounts. Therefore, if the secured party only filed a financing statement, its interest would be unperfected regarding the deposit account.

The core issue here is the perfection of a security interest in a deposit account that is not held by the secured party. Under New Mexico’s Article 9, a security interest in a deposit account can only be perfected by control. Control is achieved when the secured party is the bank with which the deposit account is maintained, or when the deposit account is the subject of a deposit account control agreement (DACA). In this scenario, the security agreement is between “Ranchero Goods Inc.” and “Southwest Livestock Financing LLC,” granting a security interest in all of Ranchero Goods Inc.’s assets, including its deposit accounts. Southwest Livestock Financing LLC filed a UCC-1 financing statement. However, filing is not a method of perfection for deposit accounts. Ranchero Goods Inc. maintains its primary operating account at “First National Bank of Santa Fe.” Southwest Livestock Financing LLC did not obtain a DACA with First National Bank of Santa Fe, nor is Southwest Livestock Financing LLC the bank itself. Therefore, Southwest Livestock Financing LLC’s security interest in the deposit account is unperfected. A subsequent purchaser of the deposit account, such as “Desert Sun Investments,” who takes for value and without notice of the security interest, would generally take free of an unperfected security interest. While Desert Sun Investments’ perfection status is not explicitly stated as being perfected by control, the question implies a situation where a conflict arises, and the unperfected status of Southwest Livestock Financing LLC’s interest is the critical factor. The UCC-1 filing is ineffective for perfecting a security interest in a deposit account. The only means of perfection is control. Without control, the security interest remains unperfected, leaving it vulnerable to claims from subsequent bona fide purchasers or other perfected secured parties.

In New Mexico, as under the Uniform Commercial Code (UCC) Article 9, a secured party’s rights upon a debtor’s default are subject to specific procedures. When a debtor defaults on a secured obligation, the secured party generally has the right to take possession of the collateral. This right of possession is often referred to as repossession. However, this right is not absolute and must be exercised without breaching the peace. New Mexico UCC § 9-609 outlines these rights and limitations. Specifically, § 9-609(b) states that after default, a secured party may take possession of the collateral. If so agreed, the secured party may require the debtor to make the collateral available to the secured party in a manner that is reasonably convenient to both parties. If the collateral is consumer goods, the secured party may also render equipment used in the business of the debtor inoperable, and remove the collateral from the debtor’s premises. The key limitation is the prohibition against a “breach of the peace.” A breach of the peace in the context of repossession generally involves violence, threats of violence, or conduct that is likely to provoke violence or public disturbance. Simply entering a debtor’s property without permission when the property is not readily accessible, or engaging in deceptive practices to gain entry, can constitute a breach of the peace. However, entering an unlocked garage or unattached shed to repossess a vehicle, without causing damage or confrontation, is typically not considered a breach of the peace. The question hinges on the permissible methods of obtaining possession without violating this critical UCC provision. The scenario describes a secured party entering an unlocked shed on the debtor’s property to repossess a motorcycle. This action, assuming no damage or confrontation, aligns with the secured party’s right to take possession under § 9-609 and does not inherently constitute a breach of the peace, provided the shed was genuinely unlocked and accessible without force or deception.

The core issue here is the priority of a security interest in after-acquired property when a financing statement has been filed. New Mexico’s Article 9, like the UCC generally, addresses after-acquired property clauses in security agreements. Section 9-204(a) permits security interests in after-acquired collateral. The critical point for priority is the filing of the financing statement. Under Section 9-322, a perfected security interest generally has priority over an unperfected one, and between perfected security interests, priority is typically determined by the order of filing or perfection. In this scenario, “Artisan Auto Parts” perfected its security interest in all of “Desert Motors'” inventory, including after-acquired inventory, by filing a financing statement on January 15th. “Southwest Bank” later perfected its security interest in the same collateral on March 10th. Since Artisan Auto Parts’ security interest attached to the after-acquired inventory (the new vehicles) when Desert Motors acquired rights in them and Artisan’s security interest was already perfected, its prior perfection generally gives it priority over Southwest Bank’s later perfected security interest in the same collateral. The fact that the vehicles were acquired after the initial filing is precisely what after-acquired property clauses are designed to cover, and the perfection dates dictate priority. Therefore, Artisan Auto Parts has priority.

The core issue here is the priority of security interests when a buyer of inventory purchases goods in the ordinary course of business. New Mexico’s UCC Article 9, specifically § 9-320 (formerly § 9-307(1)), addresses this. A buyer in the ordinary course of business (BIOC) takes free of a security interest created by the seller, even if the BIOC knows of the security interest, unless the buyer knows that the sale is in violation of the security agreement. In this scenario, “Ranchero Rugs,” a retailer of artisan goods, has granted a security interest in its inventory to “First National Bank of Santa Fe.” “Elena,” a consumer, purchases a rug from Ranchero Rugs in the ordinary course of business, meaning she is buying from a merchant who sells goods of that kind, in good faith, and without knowledge that the sale violates the security agreement. Ranchero Rugs is in the business of selling rugs. Elena’s purchase is a typical retail transaction. Therefore, Elena takes the rug free of First National Bank’s security interest. The security interest attaches to the proceeds of the sale, which is the money Ranchero Rugs receives from Elena. The bank’s security interest in the rug itself is terminated upon its sale to a BIOC. The question asks about the status of the security interest in the rug after Elena’s purchase. Since Elena is a BIOC, she takes the rug free of the bank’s security interest.

In New Mexico, under Article 9 of the Uniform Commercial Code, the perfection of a security interest in a deposit account is generally achieved by control. Section 9-314 of the UCC, as adopted in New Mexico, specifies that a security interest in a deposit account as-collateral is perfected when the secured party obtains control over the deposit account. Control is defined in Section 9-104. For a deposit account, control is typically achieved in one of three ways: (1) the secured party becomes the bank’s customer with respect to the deposit account; (2) the secured party is authorized to charge the deposit account to its own order; or (3) the secured party exercises control pursuant to an agreement with the bank. Filing a financing statement alone is insufficient to perfect a security interest in a deposit account, as it is an exclusive method of perfection for deposit accounts. Therefore, even if a financing statement is filed, if the secured party does not obtain control, the security interest remains unperfected against a buyer of the account or a competing secured party who has obtained control.

Under New Mexico’s Article 9 of the Uniform Commercial Code, the perfection of a security interest in a deposit account is achieved solely by control. New Mexico, like most states adopting the UCC, has specific rules regarding deposit accounts. Control is defined in UCC Section 9-104 as the secured party being the bank’s customer with respect to the deposit account, or the secured party obtaining the agreement of the bank in which the deposit account is maintained to comply with the secured party’s instructions concerning the deposit account. This means that simply having a security agreement that grants a security interest in the deposit account is insufficient for perfection. Filing a financing statement is also not the method for perfecting a security interest in a deposit account. The secured party must have possession of the account or, more commonly, have entered into a control agreement with the bank. Therefore, if a secured party only files a financing statement covering the deposit account, their security interest remains unperfected against a subsequent party who obtains control. The scenario describes a situation where a security interest is granted in a deposit account, and the secured party files a financing statement. However, another party subsequently obtains control of the deposit account. In this context, the party with control will have priority. The question tests the understanding that perfection in deposit accounts requires control, not filing. The calculation is conceptual: Perfection = Control. No control = Unperfected. Filing is irrelevant for perfection in deposit accounts.

No calculation is required for this question as it tests conceptual understanding of secured transactions law. The perfection of a security interest in deposit accounts, as collateral, is governed by Article 9 of the Uniform Commercial Code, as adopted in New Mexico. Under New Mexico law, a security interest in a deposit account can only be perfected by control. Control is defined in New Mexico UCC § 9-104 as the secured party being the depositary bank, or the debtor agreeing to the secured party’s exercise of control, or the depositary bank becoming the secured party’s agent. Therefore, simply filing a financing statement is insufficient to perfect a security interest in a deposit account. Similarly, possession is not a method of perfection for deposit accounts. The core principle is that the secured party must have the ability to use or direct the disposition of the funds in the account, which is achieved through control. New Mexico UCC § 9-312(b) explicitly states that a security interest in deposit accounts as original collateral can only be perfected by control.

The core issue here revolves around the priority of security interests when collateral is transferred and the secured party fails to properly re-file their financing statement in the new jurisdiction. Under New Mexico’s adoption of UCC Article 9, specifically regarding the perfection of security interests in goods that are moved from one state to another, the rules for determining priority are crucial. When collateral is covered by a certificate of title, the perfection requirements of the jurisdiction that issued the certificate generally control. However, if the collateral is not covered by a certificate of title, or if the perfection was not noted on a certificate of title, then UCC § 9-307 governs. New Mexico UCC § 9-307(a) states that a security interest that is perfected in a jurisdiction when collateral is brought into New Mexico remains perfected for a period of four months after the collateral arrives in New Mexico. After this four-month period, the security interest becomes unperfected unless it is perfected in New Mexico by the methods authorized by Article 9, which typically involves filing a financing statement in New Mexico. In this scenario, Aurora Bank had a perfected security interest in the specialized drilling equipment in Texas. When the equipment was moved to New Mexico, Aurora Bank had four months from the date of arrival to perfect its security interest in New Mexico by filing a financing statement. Since the equipment was not covered by a certificate of title, the four-month grace period under § 9-307(a) applies. As Aurora Bank did not file a financing statement in New Mexico within this four-month period, its security interest became unperfected in New Mexico. When Mesa Equipment subsequently obtained and perfected a security interest in the same equipment in New Mexico by filing a financing statement, Mesa’s interest took priority. Under New Mexico UCC § 9-322(a)(1), a perfected security interest generally has priority over an unperfected security interest. Therefore, Mesa Equipment’s properly perfected security interest in New Mexico has priority over Aurora Bank’s unperfected security interest. The calculation is conceptual, not numerical. The critical period is the four-month window from the collateral’s arrival in New Mexico. If perfection is not achieved in New Mexico within this period, the prior perfection lapses. Since Mesa perfected after this lapse, Mesa’s interest is senior.

This question tests the understanding of the priority rules for purchase money security interests (PMSIs) in inventory under New Mexico’s Article 9. A PMSI grants the secured party special priority rights if certain conditions are met. For inventory, the secured party must perfect its security interest and provide notice to any other secured party whose security interest was perfected prior to the debtor receiving possession of the inventory, and whose collateral covers the same inventory. In New Mexico, as in most jurisdictions following UCC Article 9, perfection of a PMSI in inventory requires filing a financing statement and taking possession or control, but the key to priority over prior perfected security interests in the same inventory is the notification requirement. The debtor, “Desert Bloom Growers,” obtained a loan from “AgriFinance Corp.” secured by its existing and after-acquired inventory. AgriFinance Corp. properly perfected its security interest by filing a financing statement in New Mexico. Subsequently, “FarmTools Inc.” sold new irrigation equipment to Desert Bloom Growers on credit, taking a security interest in that equipment and any inventory it became part of. FarmTools Inc. properly perfected its PMSI by filing a financing statement before Desert Bloom Growers received possession of the equipment. To maintain its priority over AgriFinance Corp.’s previously perfected security interest in the same inventory, FarmTools Inc. must have also satisfied the notification requirement of UCC § 9-324(b). This requires FarmTools Inc. to have sent an authenticated notification to AgriFinance Corp. stating that it expects to acquire a PMSI in inventory of Desert Bloom Growers, and AgriFinance Corp. must have received the notification within five years before Desert Bloom Growers received possession of the inventory. Without this notification, AgriFinance Corp.’s prior perfected security interest would have priority over FarmTools Inc.’s PMSI in the inventory.

In New Mexico, when a secured party intends to file a financing statement to perfect a security interest in collateral, the filing must occur in the correct jurisdiction. For most types of collateral, including general intangibles and accounts, the relevant jurisdiction is determined by the location of the debtor. Specifically, under New Mexico’s Uniform Commercial Code (UCC) Article 9, the location of the debtor is defined as their chief executive office. If the debtor is an individual, this is generally their principal residence. If the debtor is an organization, it is the place of its chief executive office. Therefore, for a security interest in the accounts of “Southwest Solar Solutions,” a New Mexico limited liability company whose chief executive office is located in Albuquerque, New Mexico, the financing statement must be filed in the New Mexico Secretary of State’s office. This ensures proper public notice and perfection of the security interest against third-party claims. Filing in any other state, such as Arizona, would be ineffective for perfection against creditors and purchasers in New Mexico, as the debtor’s location dictates the proper filing office. The UCC’s emphasis on the debtor’s location for perfection is a fundamental principle to ensure predictability and a uniform system for notice filing across states.

In New Mexico, under Article 9 of the Uniform Commercial Code, the priority of security interests in collateral is generally determined by the order of filing or perfection. However, specific rules apply to certain types of collateral. For inventory, a buyer in the ordinary course of business takes free of a security interest created by the seller even though the security interest is perfected and the buyer knows of its existence, unless the buyer knows that the sale is in ordinary course of business of the seller. The UCC 9-320(a) specifically addresses this scenario. This means that if the collateral is inventory and the buyer is a buyer in the ordinary course of business, they acquire rights to the goods free of the secured party’s interest, provided they do not know the sale is outside the ordinary course of business. This rule is crucial for facilitating commerce by ensuring that routine transactions involving inventory are not encumbered by hidden security interests. The key is that the buyer is purchasing from a seller who is in the business of selling that type of goods, and the transaction itself is a typical sale. The fact that the secured party has a perfected security interest in the inventory does not prevent a buyer in the ordinary course from taking free of it. The explanation does not involve any calculations as the question is conceptual.

The scenario involves a purchase money security interest (PMSI) in inventory. Under New Mexico’s Article 9 of the Uniform Commercial Code, a PMSI holder in inventory must satisfy specific notification requirements to maintain priority over other secured parties who have filed a financing statement covering the same inventory. Specifically, New Mexico UCC § 9-324(b) requires that the PMSI holder give an authenticated notification to any other secured party that has previously filed a financing statement covering the goods in which the PMSI is taken. This notification must be given within a specified timeframe before the debtor receives possession of the inventory. Furthermore, the notification must state that the PMSI holder expects to acquire a PMSI in inventory of the debtor, and must describe the inventory by item or type. In this case, the creditor, “Southwest Capital,” perfected its security interest in “Desert Blooms’s” inventory by filing a financing statement on January 15th. “Mountain View Lending” acquired a PMSI in the same inventory and filed its financing statement on February 1st. For Mountain View Lending to have priority over Southwest Capital’s earlier-filed security interest, it must have provided the required notification to Southwest Capital *before* Desert Blooms received possession of the inventory. Since Mountain View Lending failed to provide any notification to Southwest Capital, its later-filed PMSI will not have priority over Southwest Capital’s earlier perfected security interest in the inventory. Therefore, Southwest Capital has priority.

In New Mexico, under Article 9 of the Uniform Commercial Code, the perfection of a security interest in a deposit account is generally achieved by control. Control over a deposit account is established when the secured party is the bank in which the deposit account is maintained, or when the secured party obtains the agreement of the bank with which the deposit account is maintained and becomes the customer of the bank with respect to that deposit account, or when the secured party obtains the right to direct the disposition of the funds in the deposit account. Section 9-314 of the New Mexico UCC specifically addresses perfection by control. When a secured party has control over a deposit account, its security interest is perfected. This perfection is not dependent on filing a financing statement for deposit accounts. Therefore, if a bank (like First National Bank of Santa Fe) has a security interest in a debtor’s deposit account at that same bank and has obtained control as defined in the UCC, that security interest is perfected. The question asks about the status of the security interest when the bank has control. Control itself perfects the security interest in a deposit account.

The core issue in this scenario is determining when a security interest attaches and becomes enforceable against third parties, specifically in the context of after-acquired property. In New Mexico, as under Article 9 of the UCC, a security interest attaches when value has been given, the debtor has rights in the collateral, and a security agreement has been authenticated which describes the collateral. For inventory, which is constantly changing, a description of “all inventory” is generally sufficient under UCC § 9-108. However, the question hinges on the perfection of the security interest in the *after-acquired* inventory. Perfection of a security interest in inventory is typically achieved by filing a financing statement. If a financing statement is filed before the debtor acquires the collateral, the security interest in that after-acquired inventory is perfected at the time the debtor acquires rights in it. In this case, “Southwest Auto Sales” granted a security interest in “all of its inventory, now owned or hereafter acquired” to “First National Bank of Santa Fe” on January 15th. First National Bank filed a financing statement covering this collateral on January 20th. Southwest Auto Sales then acquired new inventory on February 1st. The security interest attached when value was given (the loan), the debtor had rights in the collateral (when it acquired the inventory on February 1st), and the security agreement was authenticated. The filing on January 20th perfected the security interest in the inventory acquired on February 1st because the financing statement covered after-acquired property and was filed before the property was acquired. Therefore, First National Bank has a perfected security interest in the inventory acquired on February 1st, and its interest has priority over any unperfected security interests or subsequent perfected security interests in that specific collateral.

In New Mexico, when a secured party has a security interest in collateral that is covered by a certificate of title, such as a motor vehicle, perfection of that security interest is governed by specific rules. Article 9 of the Uniform Commercial Code, as adopted in New Mexico, generally defers to state certificate of title statutes for perfection in these specific types of collateral. New Mexico’s Certificate of Title Act (NMSA 1978, § 66-3-101 et seq.) dictates that the exclusive method of perfection for a security interest in a vehicle subject to titling is by notation on the certificate of title. Filing a financing statement with the Secretary of State, which is the standard method for perfection for most other types of collateral under Article 9, is insufficient and ineffective for perfection of a security interest in a titled vehicle. Therefore, if a secured party only files a financing statement and does not ensure the notation of its lien on the certificate of title issued by the New Mexico Department of Transportation, its security interest will not be perfected against a buyer that takes possession of the vehicle, even if the buyer has actual knowledge of the unperfected security interest. This is because the certificate of title serves as the primary indicia of ownership and encumbrances for such vehicles.

Under New Mexico’s Article 9 of the Uniform Commercial Code, the perfection of a security interest in accounts is generally achieved by filing a financing statement in the appropriate jurisdiction, which for a domestic business is typically the state of the debtor’s chief executive office. However, there is a specific exception for “accounts” as defined in UCC § 9-102(a)(2). This exception dictates that perfection of a security interest in accounts is governed by the law of the jurisdiction where the assignor of the accounts has its chief executive office. This rule is intended to provide a clear and predictable rule for perfection, avoiding the complexities that might arise from a multi-state approach to accounts receivable. Therefore, if a New Mexico business has its chief executive office in New Mexico, a financing statement filed in New Mexico would be the correct method for perfection against third parties. The scenario involves a New Mexico-based company, “Desert Bloom Enterprises,” whose chief executive office is indeed located in New Mexico. The collateral is “accounts.” Consequently, perfection of the security interest in these accounts is achieved by filing a financing statement in New Mexico. The question asks about the proper place to file to perfect a security interest in accounts for a New Mexico-based company with its chief executive office in New Mexico. The UCC § 9-307(e) and § 9-301(1) provide the framework for this determination. For accounts, the location of the debtor’s chief executive office governs perfection. Since Desert Bloom Enterprises’ chief executive office is in New Mexico, filing in New Mexico is the correct procedure.

Under New Mexico’s Article 9 of the Uniform Commercial Code, when a secured party has a security interest in both goods that become fixtures and in the related real property, the priority of the security interest in the fixtures is generally determined by real property law. However, a specific exception exists for purchase-money security interests in fixtures. A purchase-money security interest in a fixture has priority over a conflicting interest of an owner or encumbrancer of the real property if the purchase-money security interest is perfected before the goods become fixtures or within a specified grace period after they become fixtures. New Mexico law, mirroring the UCC, generally allows for perfection by filing a fixture filing. A fixture filing is a financing statement that indicates it covers fixtures and is filed in the real property records. The critical timing for a purchase-money security interest in a fixture to maintain its priority against a conflicting real property interest is that the perfection must occur before the goods become fixtures or within twenty days thereafter. This twenty-day period is a statutory grace period designed to allow for the filing after the goods have already been attached to the real property. Therefore, if the purchase-money secured party files its fixture filing within this twenty-day window after the goods are affixed, it will have priority over a prior encumbrancer of the real property whose interest arose before the goods became fixtures.

In New Mexico, under Article 9 of the Uniform Commercial Code, the perfection of a security interest in deposit accounts is governed by specific rules. A security interest in a deposit account as collateral can only be perfected by control. Control is achieved when the secured party is the bank with which the deposit account is maintained, or when the debtor has agreed in writing that the bank will comply with the secured party’s instructions regarding the deposit account. NMSA § 55-9-104. Therefore, if a secured party has a security interest in a deposit account and has not obtained control, their security interest is unperfected. An unperfected security interest is subordinate to the rights of a lien creditor, such as a judgment creditor who has levied on the deposit account. A judgment creditor who levies on the account before the secured party perfects their interest generally has priority.

In New Mexico, as in other states that have adopted Article 9 of the Uniform Commercial Code, the perfection of a security interest in deposit accounts is governed by specific rules. Unlike many other types of collateral, a security interest in a deposit account can only be perfected by the secured party taking “control” of the account. New Mexico UCC § 9-104 defines control of a deposit account as occurring when the secured party is the bank in which the deposit account is maintained, or when the secured party obtains the agreement of the bank in which the deposit account is maintained to comply with the secured party’s instructions concerning the deposit account without further consent by the debtor. Filing a financing statement, which is the typical method for perfecting security interests in many other types of collateral like inventory or equipment, is insufficient on its own to perfect a security interest in a deposit account. Therefore, a secured party who has only filed a financing statement against a debtor whose sole asset is a deposit account held at a bank where the secured party is not the bank maintaining the account, has not perfected its security interest in that deposit account.

The core issue in this scenario revolves around the perfection of a security interest in accounts and the priority of competing claims. Under New Mexico’s Article 9 of the Uniform Commercial Code, a security interest in accounts is generally perfected by filing a financing statement. However, there is a special rule for “certain assignments of accounts” that allows for perfection without filing if the assignment does not, alone or in combination with other assignments, transfer a significant portion of the assignor’s outstanding accounts. This is often referred to as the “isolated assignment” exception or the “casual or isolated sale” exclusion from the definition of “security interest” in some contexts, though Article 9 generally applies to all sales of accounts. In this case, Southwestern Bancorp has a perfected security interest in all of Amigo’s accounts by filing a financing statement. This filing provides notice to the world of Southwestern’s claim. The subsequent assignment of a single, significant account to Desert Bank, without a filing, raises the question of whether Desert Bank has a perfected security interest and, if so, its priority. New Mexico UCC § 9-309(2) (which mirrors the UCC generally) states that a security interest in a supporting obligation for an account, chattel paper, document, general intangible, instrument, or investment property, or a letter-of-credit right, is perfected when control or possession is obtained. However, this does not apply to the account itself. For accounts, perfection is typically achieved through filing. An assignment of accounts is generally subject to Article 9. If Desert Bank did not file a financing statement, its security interest in the account assigned by Amigo would generally be unperfected as against a prior perfected secured party like Southwestern Bancorp. Southwestern’s earlier filing perfected its security interest in all of Amigo’s accounts, including the one subsequently assigned to Desert Bank. Therefore, Southwestern’s perfected security interest has priority over Desert Bank’s unperfected security interest. The fact that the assignment to Desert Bank was for a significant portion of Amigo’s outstanding accounts means it would not qualify for any filing exceptions that might otherwise apply to very small or isolated transactions.