32. Second National Bank loaned $400,000 to Thomas, so that Thomas could buy inventory of 1,000 carpets for his Oriental Carpet Store at Northgate Mall. The Bank asked Thomas to sign a Promissory Note for the $400,000, and a UCC Financing Statement, giving the Bank a security interest in all of the inventory of carpets, in case Thomas defaulted. After Thomas had been in business for 6 months, he had only sold one carpet for $5,000. He used the $5,000 to pay one months rent on his store space in the mall. Thomas made none of the monthly payments to the Bank like he had promised. If the mall sues Thomas for the unpaid rent on the mall store, and the Bank sues Thomas for the unpaid loan, who will have the best legal claim on the remaining inventory of carpets?

1. Whichever creditor completes their lawsuit, and gets a court Judgment against Thomas first will have top priority.
2. The mall will have top priority in claiming the proceeds from sale of the inventory.
3. Second National Bank will have top priority in claiming the proceeds from sale of the inventory.