Does anyone in the state of Texas file purchase money on items? If so, does that supersede an exhisting UCC filed? For example, bank A has a ucc filed I in the state of Texas for all equipment prior to all other filings and bank B loans the customer money to purchase a tractor. There is another bank that actually has the tractor financed and they have a UCC on the purchase money for the tractor which is dated after the initial ucc for all eq. If the bank that has the ucc on the tractor assigns you the tractor would the supersede the all eq ucc? This bank is also in another state!!!

I'm not sure I understand exactly, but there are a couple of things to think about. (This assumes that Texas UCC 9 isn't differernt from the standard). Also, I am not an expert or an attorney.

A Purchase Money Security Interest (PMSI) will take priority lien over a general "Equipment" filing. However, the burden of proof is on the PMSI institution to prove that the funds disbursed went for the purchase of the specific equipment. Generally, this would entail a payment directly to the dealer or something similar.

Now it sounds like in your case, you're going to get an assignment of that UCC filing from the other bank in a refinance? I don't know if that would work to retain a PMSI position or not. I don't think so. Generally, with a PMSI loan, as the principal is paid down, your lien amount decreases as well. So even if you have a PMSI for a $100,000 tractor, if they've paid it down to $10,000... that's the maximum value of your lien.

Can you have a PMSI on a used piece of equipment if the seller is an individual?

Yes. Look at the definition of PMSI in 9-103. Existence of a PMSI doesn't depend on the identity of the seller, just on the use of the proceeds to purchase the collateral.

However, purchasing from an individual means the purchaser cannot be a "buyer in the ordinary course." That has an impact on whether the purchaser (and the purchaser's lender with a PMSI) take their interests free of a security interest created by the seller.