Anne, a mother of three, dies and leaves her entire estate to her three children: B, C, and D.  Included in the estate is a very valuable diamond that Anne's will gives to the three children in equal shares.  B, deciding he wants to add on to his house, borrows $50,000 from E Bank and signs a security agreement that grants E Bank a security interest in the diamond.  E Bank does not perfect its security interest in the diamond. 

Unfortunately for her three children, Anne had a lot of debts from creditors and to pay off these debts, the children decide to sell the diamond to F without the knowledge or authorization of E Bank.  F did not know of E Bank’s security interest in the diamond. 

B has now defaulted. E Bank attempts to repossess the diamond.  Which statement is correct?

1. E Bank can repossess the entire diamond from F

2. E Bank cannot repossess the diamond from F

3. E Bank cannot repossess the diamond from F, but has an action for conversion against F

4. E Bank can recover only a 1/3 interest in the diamond.