Question
In July of 2015 Dr. Ronald Ware executed to United Capital Source a note in the amount of $150,000 with an accompanying security agreement covering
In July of 2015 Dr. Ronald Ware executed to United Capital Source a note in the amount of $150,000 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 8950 Knolls Road, Myrtle Beach, South Carolina." In July of 2017 Dr. Ware moved some of his equipment to a new office owned by Jackson Properties, Inc. in Charleston, South Carolina. To finance this move, Dr. Ware procured a loan from a Charleston bank, and Jackson co-signed the note. The Charleston bank prepared a security agreement covering the same equipment as the 2015 security agreement. In September of 2017, Dr. Ware defaulted on the first note and absconded with the equipment from the Charleston office. Jackson received an insurance payment as cash proceeds from the missing equipment. United Capital Source claimed priority rights to the missing equipment or the insurance proceeds even though the equipment had been moved to Charleston. Do you think United Capital Source recovered this insurance money from Jackson? Why or why not? (Make sure your argument is supported by applicable law).
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