Allis-Chalmers Cred. Corp. v. Cheney Investment

The opinion of the court was delivered by This is a dispute between two secured creditors over the priority of their security interests in an Allis-Chalmers combine. The facts in the case are undisputed and are covered generally by a stipulation of fact filed by the parties in district court. The factual circumstances giving rise to the controversy are set out in chronological order as follows: On November 16, 1970, Lloyd Catlin executed a retail installment contract to Ochs, Inc., a dealer for Allis-Chalmers Corporation, to cover the purchase price of an Allis-Chalmers combine identified as G-7754. This contract was in a total amount of $10,149.44 including the financing charge. There was no provision in the contract for future advances. In the course of the opinion, this will be referred to as contract #1. This contract was assigned to plaintiff-appellant, Allis-Chalmers Credit Corporation, who financed the transaction. On November 27, 1970, a financing statement covering combine G-7754 was filed by Allis-Chalmers with the register of deeds of Barber County, Kansas. On December 19, 1970, Cheney Investment Company, Inc., the defendant-appellee, made a cash advance to Lloyd Catlin, taking [227 Kan. 5]