930                             LAWS OF MARYLAND                      [CH. 538

(b)  An unpaid transferee of the chattel paper has a security
interest in the goods against the transferor. Such security interest
is prior to a security interest asserted under paragraph (a) to the
extent that the transferee of the chattel paper was entitled to priority
under Section 9—308.

(c)  An unpaid transferee of the account has a security interest
in the goods against the transferor. Such security is subordinate to
a security interest asserted under paragraph (a).

(d)  A security interest of an unpaid transferee asserted under
paragraph (b) or (c) must be perfected for protection against
creditors of the transferor and purchasers of the returned or re-
possessed goods.

9—307. Protection of Buyers of Goods.—

(1)  A buyer in ordinary course of business (subsection (9) of Sec-
tion 1—201) other than a person buying farm products from a person
engaged in farming operations takes free of a security interest
created by his seller even though the security interest is perfected
and even though the buyer knows of its existence.

(2)  In the case of consumer goods having an original purchase
price not in excess of $500 and in the case of farm equipment
having an original purchase price not in excess of $500 (other
than fixtures, see Section 9—313), a buyer takes free of a security
interest even though perfected if he buys without knowledge of the
security interest, for value and for his own personal, family or
household purposes or his own farming operations unless prior to
the purchase the secured party has filed a financing statement cover-
ing such goods.

9—308. Purchase of Chattel Paper and Non-Negotiable Instru-
ments.—

A purchaser of chattel paper or a non-negotiable instrument who
gives new value and takes possession of it in the ordinary course of
his business and without knowledge that the specific paper or instru-
ment is subject to a security interest has priority over a security
interest which is perfected under Section 9—304 (permissive filing
and temporary perfection). A purchaser of chattel paper who gives
new value and takes possession of it in the ordinary course of his
business has priority over a security interest in chattel paper which
is claimed merely as proceeds of inventory subject to a security in-
terest (Section 9—306), even though he knows that the specific
paper is subject to the security interest.

9—309. Protection of Purchasers of Instruments and Documents.—

Nothing in this Sub-title limits the rights of a holder in due course
of a negotiable instrument (Section 3—302) or a holder to whom a
negotiable document of title has been duly negotiated (Section 7—
501) or a bona fide purchaser of a security (Section 8—301) and
such holders or purchasers take priority over an earlier security
interest even though perfected. Filing under this Sub-title does not
constitute notice of the security interest to such holders or pur-
chasers.