Sarah, a Public Servant, Gave a Security Interest to Her

question 70

Multiple Choice

Sarah, a public servant, gave a security interest to her brother Peter in all her assets to secure her obligation to repay a loan from Peter.Peter filed a financing statement to register his interest.Subsequently, Joan bought some furniture from Sarah.Joan had no knowledge of Peter's security interest.Which of the following statements best describes Joan's legal position?

• A)Joan's interest in the furniture is subject to Peter's security interest.
• B)Joan's bought the furniture free of Peter's security interest because Sarah is not in the business of selling furniture.
• C)Joan bought the furniture free of Peter's security interest because security interests of close family relatives are not enforceable against third parties.
• D)Joan bought the furniture free of Peter's security interest because she had no notice of it.
• E)Joan is obliged to give the furniture to Peter.

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