Problem 96

Simon Mustache decided to erect an apartment building on a vacant lot he owned, so he borrowed $4 million from Construction State Bank (CSB), to which he mortgaged the real estate "and all appurtenances or things affixed thereto, now present or after-acquired." Simon and SB signed the mortgage, which contained a legal description of the realty, and the mortgage was filed in the real property recorder's office.

During construction of the apartment building, Simon Mustache bought a furnace on credit from Blast Home Supplies, giving Blast a security interest in the furnace that described the real estate.

If CSB's interest is not perfected, will Blast prevail? See 9-334(e)(1).

I think the answer is yes because CSB is unperfected. But, I am not sure.