McIlroy Bank v. First National Bank of Fayetteville

Lyle Brown, Justice.

This is a contest between two banks to determine which, if either, is entitled to the proceeds of a judgment taken in favor of a creditor who was indebted to both banks. The appeal is taken from a finding by the chancellor that appellee had priority under the Uniform Commercial Code.

In September 1964 Mr. Carney became indebted to Mr. Watson and executed a note for $2,500. Watson delivered the note to appellee, First National Bank, as one of several items of security for a substantial loan. A security agreement and financing statement were executed and the note was listed…