The Grocers Supply Company v. Intercity Investment Properties, Inc.
Texas Court of Appeals
795 S.W.2d 225 (1990)
Grocers Supply Company (plaintiff) held a perfected security interest in the inventory of Grocery Store, Inc., with an agreement providing that any judgment or levy against Grocery would trigger default and full acceleration of the debt. After Intercity Investment Properties (defendant) won a $36,000 judgment against Grocery and had a constable levy on and seize Grocery's inventory and equipment -- despite knowing about Grocers Supply's prior recorded security interest and without notifying Grocers Supply first -- Grocers Supply sued to determine rights in the property. The trial court awarded Grocers Supply possession and damages for its recovery expenses, and Intercity appealed.
Whether, under the UCC, a prior perfected secured creditor has a superior right to possession of collateral over a judgment creditor who has already levied on and seized the same property.