Practice Essay #3 Molly owns a commercial piece of property in Jim Hogg, County, Texas. She decides to build a barn on the property, so she hires Harry to do so. Harry agrees to build the barn for $40,000. Harry starts construction-related activities on January 1. Eventually, Harry hires a number of subcontractors, including Johnny, who frames the barn on February 15. After engaging Harry, Molly approaches Big State Bank and requests a loan. The bank agrees to loan Molly money so long as she gives it a security interest in her Jim Hogg property. She agrees. The loan closes on January 15, with the bank lending Molly $100,000. Big States Bank does not record until January 18. In the intervening time, Molly agrees to give a security interest in the property to Little State Bank in order to secure a loan that Little State Bank made some years ago. Little State Bank never records. Johnny does not get paid, so, upon finishing his work, he properly files and perfects his mechanics' and materialman's lien, providing all proper statutory notice to Molly. Unfortunately for Johnny, Molly had already paid the entire contract amount to Harry. On April 5, Molly misses a payment on her loan from Big State Bank and everyone seeks to foreclose.

1. Explain to me who has priority and why.

2. For what amounts do the secured parties have priority? Explain to me why.