Bob sued Sam's Homing (a store that sells primarily, but not exclusively, home furnishings) for wrongful termination. Bob’s duties at Sam’s Homing were administrative in nature – Bob organized customer files. In the settlement conference, Sam's Homing offered to provide Bob with a new dining room set. Bob decided he would rather have $1,000 worth of store credit to be used at the Sam’s Homing store to purchase whatever he wanted, without having to pay cash.

Two months earlier, while Bob was still employed, Sam’s Homing received a letter from Bank accepting a request for a $100,000 loan in exchange for a security interest in all of Sam's Homing's “equipment and inventory.” Bob properly filed the correspondence, and, later that day, Sam's Homing signed the included security agreement, mailed it back to Bank and Bank filed a financing statement.

On October 6th, Bob buys $1,000 worth of gardening tools from Sam's Homing, using the store credit obtained in his settlement.

If Sam's Homing defaults to Bank, can Bank repossess the gardening tools from Bob?

a. Yes, because Bank’s perfected security interest has priority over Bob.

b. No, because Bob would take the tools free of Bank's security interest as a buyer in course of business.

c. Yes, because Bob did not buy the gardening tools in good faith because he was aware of Bank's security interest because of his status as a former employee at Sam’s Homing.

d. Yes, because Bob is not a buyer in ordinary course because he bought gardening tools rather than home furnishings, which is Sam’s Homing's main business.