PC Jennings and the Pawnshop
PC Jennings sold computers and cell phones. The company sold Junior and his girlfriend a new laptop and cell phone. Each purchase was on credit, and in each instance, a security agreement was executed. A week later, Junior took the computer to the local pawnshop and pledged it for a loan. Subsequently, Junior defaulted on his payments to PC Jennings and the local pawn shop. The manager of PC Jennings sought to repossess the computer, but the local pawnshop dealer refused to give it to her. The dealer contended that its lien had priority over the unrecorded security interest of PC Jennings. Explain who has priority.
The dealer is correct. Junior was in breach of his contract with the PC shop when he pawned the computer. He can't pawn an asset that is protected by a security agreement. In this case, Junior basically rented the computer while making payments, and when the laptop and ...
This solution explains the legal issues involved in the PC Jennings pawn shop case. All relevant facts and laws are addressed in the solution.