NationsBank of Tennessee, N.A. v. Hardwick Carpets International, Inc.

Beasley, Judge.

The question in this case is whether a bank’s perfected security interest in the inventory of a carpet manufacturer has priority over a third-party’s later-acquired mechanic’s lien.

In 1991, Hardwick Carpets International, Inc. began using the services of Georgia Carpet Finishers, Inc. to back and finish the carpet it manufactures. Georgia Carpet ships the finished carpet to Hardwick’s customers after performing its work. In the process, Georgia Carpet acquires a commission and a mechanic’s lien on the carpet in its possession to secure payment for its services.

In 1993,…