Abstract
The clash between a creditor with a consensual security interest in personal property and a general creditor with a judicially created lien in the same property generates fundamental problems for the commercial lawyer. The respective rights of these two parties hinge upon a determination of priority. Because the interests of the parties are governed by distinct bodies of state law whose interrelationship remains unclarified, the resolution of priority problems in this context is difficult. Article Nine of the Uniform Commercial Code, which purportedly contains a comprehensive priority system, regulates the consensual security transfer, and a variety of independent state statutory provisions define the lien acquired by resort to judicial process. A complete understanding of the priority scheme requires integration of state law prejudgment and post-judgment remedies with the Code's priority principles—a task never systematically attempted. Undertaking that task, this article, comprising the first of a two-part inquiry, examines the relationship between Article Nine secured parties and those judicial process creditors who acquire an interest in personal property after judgment. The characteristics of liens generated by traditional post-judgment remedies, including execution and levy, garnishment in aid of execution, and liens resulting from equitable procedures such as creditors' bills and supplementary proceedings, will be explored and dovetailed with Article Nine priority rules. While recognizing that bankruptcy is one of the most important contexts in which the secured party measures himself against the rights of a judicial process creditor, this article analyzes the problem purely from a state law perspective. Nevertheless, this analysis of state law is directly applicable in bankruptcy. This is particularly true in two respects: where the trustee dons the mantle of a judicial process creditor in exercising his status and avoidance powers, and where a "transfer" of personal property is defined in terms of the point in time when it becomes invulnerable to a hypothetical judicial process creditor. Due process standards recently formulated by the Supreme Court may have broad implications for prejudgment judicial lienholders, but post-judgment judicial process creditors treated herein are outside the major thrust of these standards.
First Page
223
Recommended Citation
Thomas M. Ward,
Ordering the Judicial Process Lien and the Security Interest under Article Nine: Meshing Two Different Worlds Part I—Secured Parties and Post-Judgment Process Creditors,
31
Me. L. Rev.
223
(1979).
Available at:
https://digitalcommons.mainelaw.maine.edu/mlr/vol31/iss2/2