Jacob runs a business of selling and repairing used phones, computer games and video consoles. On January 15th 2020, a financial institution gave him a loan of $22,000 against security interest in all present and after acquired property (All PAAP) of the business. The financial institution registers a financing statement on the PPSR site. Jacob is supposed to repay the loan through monthly instalments of $1,000 for a period of 24 months. On March 20th, 2020 Jacob urgently needs $9,000 to purchase a new stock of used phones from a supplier. He approaches Joanna who is willing to finance this purchase against a security interest in this stock. According to their agreement, Jacob is supposed to repay the loan in two instalments ($5,500 each) which should take place on April 1st 2020 and May 1st 2020. The agreement between Jacob and Joanna states that Joanna's interest in the collateral extends to "all type and class of proceeds arising from the sale of the collateral" and that Jacob is NOT allowed to sell the phones until the payment of the first instalment on April 1st 2020. Joanna searches on the PPSR site and sees the registered security interest of the financial institution and yet, she proceeds with the deal. The parties sign the security agreement on March 21st, 2020. Jacob purchases the phones on March 23rd, 2020. The phones are delivered to Jacob's business on March 27th, 2020. Joanna registers her financing statement on March 22nd, 2020 in the following manner: - She ticks the "PMSI" box' - She ticks the "proceeds" - and then "all present and after acquired property" box Jacob desperately needs capital. Despite his agreement with Joanna, he sells some of the phones on March 29 and March 30 and deposits the money ($3,000) in his bank account. Unfortunately, financial difficulties overcome him and on April 1st (and this is not a joke) he does not pay his monthly payments neither to Joanna nor to the financial institution. Part A: Joanna v the financial institution; Joanna's claim to proceeds Question 1 Both the financial institution and Joanna claim Jacob's phones that were purchased on March 23rd, 2020. Who will win in this competition? Question 2 Assume that Joanna wins her competition with the financial institution, repossesses the phones and sells them. However, the sale does not cover the outstanding balance of her loan to Jacob. Could Joanna claim the $3,000 placed on Jacob's account, representing the revenue of the sold phones? And if yes, should she wait until the end of the enforcement proceedings with respect to the phones, or can she claim the $3,000 simultaneously to her claim on the phones?