Brian Ess filed a financing statement with the proper filing office, describing as collateral "paintings, accounts, and farming equipment" owned by Brian Johnson. Brian had a valid security interest in a Van Gogh painting owned by Brian Johnson, as well as Johnson's accounts and tractor. In the financing statement, Brian Ess listed Brian Johnson’s address as 42 Ridgeview Dr. However, the Brian Johnson with whom Ess had a security interest actually resides in an apartment on 104 Glen Echo Ln.
Later, Melvin Dunsworth is looking to take a security interest in Brian Johnson’s Van Gogh painting so he does the prudent thing and conducts a search of the filing records. His search reveals the financing statement filed by Brian Ess. Upon further investigation, Melvin learns that the resident of 42 Ridgeview Dr. is a different Brian Johnson (who does own a painting, but not a Van Gogh). Based on this investigation, Melvin proceeds to loan money to Brian Johnson, takes a valid security interest in the Van Gogh, and files a proper financing statement covering the Van Gogh.
Which statement is correct?
1. Because of Ess's mistake with the debtor's address, his security interest in the collateral was never perfected.
2. Ess has a perfected security interest in the Van Gogh, and it has priority over Melvin's conflicting security interest.
3. Ess has a perfected security interest in the Van Gogh, but Melvin's conflicting security interest has priority.
4. Both Ess and Melvin have a perfected security interest in the Van Gogh, and whoever repossesses the painting first will have first priority.