Reference no: EM131494967

Question: Security Bank loaned money to Mr. and Mrs. Russell to buy a 50-foot cabin cruiser. The Russells signed a note and a security agreement. Under the terms of the agreement, an unauthorized sale of the boat constituted a default under the security agreement. The agreement was never filed in any public office. The Russells sold the boat without the bank's consent, and the bank declared the entire balance of the loan due and payable. The Russells claim that the bank does not have a valid security interest in the boat because the security agreement was never filed. Is the claim correct? (Security Bank of Oregon v. Levens, 257 Or. 630)