Noble Co. v. Mack Financial Corp. (1970)

Citation: 107 R.I. 12, 264 A.2d 325 · Court: Supreme Court of Rhode Island (opinion by Roberts, C.J.; Joslin, J., not participating) · Decided: April 16, 1970

Source note (2026-10-18):

• Links on this page to https://static.case.law/ri/107/cases/0012-01.json are an (unofficial Caselaw Access Project copy, retrieved before 2026-10-18; host disallows automated access); no official or otherwise permitted full-text copy was located on 2026-10-18.

Text retrieved from the Caselaw Access Project’s static copy, an unofficial reproduction of the reported opinion.

Facts

Noble sold three Autocar trucks to A B C Truck Rentals, taking notes, a chattel mortgage and a security agreement, but never filed a financing statement. Noble conditionally consented to Truck Rentals trading two Autocars to Mack Trucks toward two new Mack trucks. Mack Financial, assignee of Mack’s purchase-money security agreement, repossessed the Mack trucks and scheduled a public-auction foreclosure sale. Noble sued to enjoin the sale and claimed a superior interest in the Mack trucks as proceeds of its collateral. The court refused to restrain the sale but ordered that the parties’ rights attach to the proceeds; the sale went ahead and produced a deficiency. The complaint was then dismissed under Rule 12(b)(6).

Holding

Affirmed. Even accepting Noble’s allegations, its unperfected interest was subordinate under former § 6A-9-301(1)(a) to Mack Financial’s purchase-money security interest, which had priority under former § 6A-9-312(4) even though Mack had knowledge of Noble’s interest.

Reasoning

Former § 6A-9-312(4) gives a purchase-money security interest in non-inventory collateral priority over conflicting interests in the same collateral if perfected when the debtor takes possession or within ten days; the official comment confirms knowledge of the other interest is irrelevant.

Practical impact

The court treated the replacement Mack trucks as identifiable proceeds in which Noble had an unperfected interest; it did not simply hold that conditional consent erased all proceeds rights. It affirmed dismissal because the competing purchase-money priority defeated that asserted interest even accepting the pleaded facts.

The interim order preserved the parties’ rights against proceeds while permitting the auction. The reported decision does not separately adjudicate a buyer’s good faith, every sale notice, commercial reasonableness, or all possible senior liens. Current buyer discharge follows § 6A-9-617, not a universal buyer-immunity inference from this priority appeal.

Good-law status

Full eight-page opinion independently retrieved and read October 18, 2026, including the Rule 12(b)(6) standard, conditional-consent/proceeds analysis and knowledge discussion. The historical noninventory PMSI grace period was ten days; current § 6A-9-324(a) uses twenty days, with separate inventory and other conditions. Rhode Island-titled vehicles use § 31-3.1-19 and its statutory exceptions for perfection.

Bounded treatment searches found no verified judicial overruling; later statutory revision limits direct use of the former section numbers and timing. This is full holding verification, not a comprehensive still-good-law certificate.

Applies in →

rhode-island · Topic: ucc-article-9-dispositions

Legal information, not legal advice.