Marina Inc. sells and services sailboats. On April 1, Marina financed the purchase of its entire inventory with ACE Finance Company. ACE required Marina to execute a security agreement and a UCC-1 financing statement covering the inventory and proceeds. On April 4, ACE properly filed the UCC-1 Financing Statement covering the inventory, proceeds and after-acquired inventory. On April 27, Marina sold one of the sailboats to Wally for use in his charter business for $100,000 ($50,000 cash and $50,000 on credit). Wally, who had once worked for Marina, knew that Marina regularly financed its inventory with ACE. Marina defaults on its obligations to ACE.

Can ACE repossess the sailboat purchased by Wally?

Marina Inc. is a firm that sell and services sailboat in it's ordinary course of business, in the same vein ACE financing it's inventory is in line with normal course of business.

ACE cannot repossessed the sailboat from Waliy because selling sailboat it's Marina ordinary course of business.

ACE also knew before signing the inventory financing contract that Waliy will sell the inventory to third parties.