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In July of 1978 Dr. Jose B. Namer executed to Citizens & Southern National Bank a note in the amount of $35,000 with an accompanying

In July of 1978 Dr. Jose B. Namer executed to Citizens & Southern National Bank a note in the amount of $35,000 with an accompanying security agreement covering the following property: "All equipment of the debtor of every description used or useful in the conduct of the debtor's business, now or hereafter existing or acquired . . . The listed assets held for collateral are presently located at 4385 Hugh Powell Road, Tucker, GA." In July of 1980 Dr. Namer moved some of his equipment to a new office owned by Hudson Properties, Inc. in Fairburn, Georgia. To finance this move, Dr. Namer procured a loan from a Fairburn bank, and Hudson co-signed the note. The Fairburn bank prepared a security agreement covering the same equipment as the 1978 security agreement. In September of 1980, Dr. Namer defaulted on the first note and absconded with the equipment from the Fairburn office. Hudson received an insurance payment as cash proceeds from the missing equipment. Citizens & Southern National Bank claimed priority rights to the missing equipment or the insurance proceeds even though the equipment had been moved to Fairburn. Do you think Citizens & Southern National Bank recovered this insurance money from Hudson? Why or why not?

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