U.C.C. Article 9, Filing-Based Authority, and Fundamental Property Principles: A Reply to Professor Plank

15 Pages Posted: 22 Feb 2014 Last revised: 23 Jun 2014

See all articles by Steven L. Harris

Steven L. Harris

IIT Chicago-Kent College of Law

Charles W. Mooney

University of Pennsylvania Law School

Date Written: September 1, 2013

Abstract

Uniform Commercial Code Article 9 generally follows the common-law principle that one cannot give rights in property that one does not have (nemo dat quod non habet). In many circumstances, however, Article 9’s priority rules, including its rule awarding priority to the first security interest that is perfected or as to which a financing statement has been filed, trump nemo dat and enable a debtor to grant a senior security interest in property that the debtor previously had encumbered. In this article, Professors Steven Harris and Charles Mooney argue that, properly understood, the first-to-file-or-perfect rule confers upon a debtor the power to create a security interest in accounts and other rights to payment that the debtor has already sold and in which it retains no interest. In doing so, they take issue with Professor Thomas Plank, whose argument to the contrary appeared in the February 2013 issue of The Business Lawyer.

Keywords: Article 9, UCC, security interests, priority, first-to-file-or-perfect, nemo dat

JEL Classification: K11, K20

Suggested Citation

Harris, Steven L. and Mooney, Charles W., U.C.C. Article 9, Filing-Based Authority, and Fundamental Property Principles: A Reply to Professor Plank (September 1, 2013). Business Lawyer, Vol. 69, Pp. 79-92, Nov. 2013, U of Penn, Inst for Law & Econ Research Paper No. 14-13, Chicago-Kent College of Law Research Paper No. 2014-07, Available at SSRN: https://ssrn.com/abstract=2399495

Steven L. Harris

IIT Chicago-Kent College of Law ( email )

565 W. Adams St.
Chicago, IL 60661-3691
United States
(312) 906-5218 (Phone)
(312) 906-5280 (Fax)

Charles W. Mooney (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

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