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Jovan Co Owns a Building in Winnipeg in Which Saturn

Question 45

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Jovan Co owns a building in Winnipeg in which Saturn Shoes Inc has rented a store premises since 2000.In 2012, Galaxy Shoes Inc agreed to supply Saturn with its inventory of shoes on credit.Under its agreement with Saturn, Saturn gives Galaxy a security interest in its shoe inventory.Galaxy filed a financing statement to register its interest under the Manitoba Personal Property Security Act.No other financing statements have been registered against Saturn.Saturn has not paid its rent for two months and is in default under its agreement with Galaxy.Jovan and Galaxy both claim to be entitled to seize the shoes currently in Saturn's store.Which of the following is TRUE?


A) Galaxy is entitled to the shoes because it has a purchase money security interest in the shoes.
B) Jovan is entitled to the shoes because, as a landlord, it has a distraint right that prevails over most security interests.
C) Galaxy is entitled to the shoes because Jovan's distraint right is not given priority under the Manitoba Personal Property Security Act.
D) Jovan is entitled to the shoes because it has been Saturn's landlord longer than Galaxy has been Saturn's supplier.
E) Galaxy is entitled to the shoes because security interests always prevail over landlord's distraint rights.

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