1. ABC Yard Equipment sold a lawn mower to Alice for mowing the yard at her home. Alice financed the purchase and granted ABC a security interest in the mower. ABC did not file a financing statement on the mower. After a month of mowing her own lawn, Alice decided that she did not like the heat and that she preferred using a lawn service. Therefore, she sold the mower to her neighbor, Ted, who knew nothing about the loan from ABC, and used the mower to mow the yard at his home. Alice planned to use the money she got from Ted to pay off ABC, but her car broke down, and she used the money for car repairs. Alice failed to pay the loan from ABC for two months and was in default. ABC called wanting to repossess the mower and sell it at a commercially reasonable sale in order to recoup loan amounts. Which of the following is true regarding the position of the parties?
a. Regardless of whether or not ABC filed a financing statement, Ted, a bona fide purchaser, is entitled to keep the mower, and ABC’s only remedy is to seek recovery of the amounts due from Alice.
b.Regardless of whether or not a consumer good is involved, ABC did not have to file a financing statement in order to be perfected, Ted must return the mower to ABC, and his only remedy is against Alice.
c.Because a consumer good is involved, ABC did not have to file a financing statement in order to be perfected, Ted must return the mower to ABC, and his only remedy is against Alice.
d. Because ABC did not file a financing statement, Ted, a bona fide purchaser, is entitled to keep the mower, and ABC’s only remedy is to seek recovery of the amounts due from Alice