On March 1, 2000, Tom borrowed $20,000 to be paid back in installments from Smith Bank of St. Louis to purchase new ovens for his store. Smith Bank took a security interest in the ovens at the time of sale, and that same day filed an appropriate UCC-1 financing statement covering the ovens.
On January 2, 2016, Tom sold his ovens to Sports Bar and Grill for $10,000, to be made in 2 installments of $5,000. Tom retained a security interest in the ovens and filed a UCC-1 that same day. Yellow Bank has a security interest in all of Sports Bar and Grill's present and after-acquired equipment, which was perfected on April 1, 2015 by a filed financing statement.
Who has first priority as to the ovens?
1. Smith Bank, which was first to file or perfect by virtue of its March 1, 2000 financing statement.
2. Yellow Bank, which was first to file or perfect by virtue of its April 1, 2015 financing statement
3. Smith Bank, because it holds a purchase money security interest in the ovens and qualifies for purchase money priority
4. Tom, because he holds a purchase money security interest in the ovens and qualifies for purchase money priority