Priority of Security Agreements World Wide Tracers, Inc. (World Wide), sold certain of its assets and properties, including equipment, furniture, uniforms, accounts receivable, and contract rights, to Metropolitan Protection, Inc. (Metropolitan). To secure payment of the purchase price, Metropolitan executed a security agreement and financing statement in favor of World Wide. The agreement, which was filed with the Minnesota secretary of state, stated that “all of the property listed on Exhibit A (equipment, furniture, and fixtures) together with any property of the debtor acquired after” the agreement was executed was collateral.

One and one-half years later, State Bank (Bank) loaned money to Metropolitan, which executed a security agreement and financing statement in favor of Bank. Bank filed the financing statement with the Minnesota secretary of state’s office one month later. The financing statement contained the following language describing the collateral: “All accounts receivable and contract rights owned or hereafter acquired. All equipment now owned and hereafter acquired, including but not limited to, office furniture and uniforms.”

When Metropolitan defaulted on its agreement with World Wide six months later, World Wide brought suit, asserting its alleged security agreement in Metropolitan’s accounts receivable. Bank filed a counterclaim, asserting its perfected security interest in Metropolitan’s accounts receivable. Who wins? World Wide Tracers, Inc. v. Metropolitan Protection, Inc., 384 N.W.2d 442, Web 1986 Minn. Lexis 753 (Supreme Court of Minnesota)