Better Check Possession

Okay, say you want to take a security interest on a widget.  You file a UCC1 on April 1st. Then, you wait.  On April 15th, you run a search on your debtor and see that your name is the only one that came back.  Sweet.  This means you are the first to file.  You then go and check on the widget to make sure no one has possession.  You see it in the possession of the debtor, hell, he even gives it to you to hold.  We are super secure now.  Right?  Wrong!

You better check possession when you file.  Picture this.  You file on April 1st, and someone other than the debtor has possession at that time (and an attached security interest, of course).   On the 9th, they file and return the item to the item to the debtor.  You know what that means, right?  They trump you!  Under 9-308(c), they have continued perfection without being unperfected, and so they go back before your April 1st filing.

Sucker.