Also known as: stocks of goods · inventory
Written by attorneys · grounded in primary & secondary sources — see below
Goods held by a merchant or business for sale or lease in the ordinary course of business.
After Stella Shapiro's van was towed following an arrest, officers followed department policy and opened the rear doors to inventory the contents. Inside they found crates of electronics that constituted her stock of goods for resale at weekend markets. The resulting list of items was admissible because the search was conducted as a routine administrative step rather than an investigative fishing expedition.
Sydney Santos, appointed personal representative for her uncle's estate, prepared the required inventory within three months. She listed the uncle's remaining stock of goods at his hardware store, noting fair market values and any liens on each item before mailing copies to the heirs who requested them.
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Sterling Dynamics sold Santiago Sanchez a shipment of power tools on credit and perfected its purchase-money security interest the same day Sanchez took possession. Because the tools constituted stock of goods, Sterling's interest took priority over an earlier blanket filing by another lender after satisfying the statutory notification conditions.
Simon Stern parked his truck loaded with counterfeit watches in a public lot. Officers with probable cause that the watches were contraband seized the vehicle and later conducted an inventory search that produced a detailed list of the stock of goods inside. The evidence was admissible because the initial seizure was lawful.
Silverline Industries financed Seth Shapiro's purchase of seasonal apparel inventory and perfected its interest before delivery. Silverline also sent timely notice to the bank holding a prior security interest in Shapiro's inventory, satisfying the statutory conditions for priority in the stock of goods and its cash proceeds.
After arresting Steven Silva on an outstanding warrant, officers at the station inventoried the contents of his duffel bag before booking him. The bag contained samples from his stock of goods that he carried to sales calls. The inventory was upheld as a standard administrative procedure incident to lawful incarceration.
No. When officers follow standardized inventory procedures, they may open closed containers and list the stock of goods without a warrant. The search is treated as an administrative caretaking function rather than an investigative search.
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The representative must list each item with reasonable detail, state its fair market value as of the date of death, and note any encumbrances. The inventory must be prepared and distributed within three months of appointment.
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For inventory, the PMSI must be perfected when the debtor receives possession, the secured party must send timely notification to the conflicting secured party, and the notification must describe the inventory. These steps give the PMSI priority in the goods and certain proceeds.
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