Can Kroll Repossess the Typewriter From the Neighbor?

Question:

Rawlings purchased a typewriter from Kroll Type-writer Co. for $600. He made an initial payment of $75 and agreed to pay the balance in monthly installments. A security agreement was prepared, but no financing statement was filed. Rawlings then sold the typewriter to a neighbor without Kroll's consent. Can Kroll repossess the typewriter from the neighbor?

Answer:

Kroll cannot repossess the typewriter from the neighbor.

Explanation:

Based on the information given in the question, we can infer that Kroll cannot repossess the typewriter from the neighbor.

According to the UCC 9-320(b), when an individual purchases a consumer good without being aware of the security interest and no financing statement is filed, the buyer is free from the security interest. In this case, despite a security agreement being prepared, the lack of a filed financing statement means that Kroll cannot repossess the typewriter.