dissenting:
What we confront today is another nettle in the thicket of the Texas Uniform Commercial Code. A thorny question of statutory interpretation that could cause scratch and abrasion if not reconnoitered under the illumination provided by the Texas Supreme Court. After examining the relevant statutes and commentaries, however, I believe that the majority has not construed the code as would the Texas Supreme Court in the face of the same problem. So because the scratch of a thorn may cause infection if not properly treated, I must respectfully DISSENT.
The nettle of this case is whether an account receivable should be considered “collateral” in the words of the purchase money security interest statute so that the purchase money interest has priority over a security interest previously perfected in an identical account. My belief is that accounts receivable are an appropriate form of collateral because they can be used to invigorate marginal businesses. I would thus hold that Raytheon established a purchase money security interest in the specified accounts of Howe x-ray.
I. THE FACTS
Both MBank and DuPont had loaned money to Howe, a dealer in medical equipment including expensive x-ray machines. To guard against the possibility that Howe would default on these loans, MBank, whose loan was made before DuPonts, perfected a security interest in Howe’s accounts receivable then existing and subsequently arising and also perfected a similar security interest in Howe’s inventory. DuPont’s security interest was also perfected in Howe’s accounts receivable then existing and subsequently arising but was filed after MBank’s interest.
While the MBank/DuPont loans were outstanding, Raytheon entered into a series of transactions with Howe. Each transaction was executed according to a preexisting distribution agreement which allowed Howe to contract with customers for the sale of Raytheon x-ray machines. Under this agreement, Raytheon promised to supply an x-ray machine to Howe in exchange for Howe’s promise to assign the account receivable that arose from the sale of the machine to Raytheon. Raytheon gave notice of its security interest in each account by filing a financing statement within the applicable 20 day period after the creation of the account. The structure of this agreement between Howe and Raytheon arose because Howe had begun to experience difficulty in obtaining additional financing and was spiraling down toward bankruptcy, its final fate.
II. DISCUSSION
Before I get involved in the details of Raytheon’s purchase money security interest, however, a momentary step back is in order to scan the general landscape of security interests. As a general observation, the usual method for growth in the area of commercial law has been the daring creativity of a company pushing out beyond the boundaries of “normal practice” in response to business exigencies. The history of trust receipts, the factor’s liens, and the eventual adoption of Article 9 of the Uniform Commercial Code illustrates this general observation in the area of security interests. See G. Gilmore, Security Interests in Personal Property, Ch. 1-8 (1965).
“The idea which the draftsmen [of Article 9] started with was that the system of independent security devices [developed in different area of commerce] had served its time; that the formal differences which separated one device from another should be scrapped and replaced with the simple concept of a security interest in personal property; that all types of personal property, whether held for use or for sale, should be recog*1456nized as available for security.” Id. at 290 (emphasis added).
Article nine was thus intended to be a flexible statute that could respond to divergent commercial needs.
The facts of this case present exactly the type of problematic situation which demands a creative solution. Raytheon, as a manufacturer of expensive x-ray equipment, often does not seek out customers itself but instead uses local distributors such as Howe to make sales. But Howe had to borrow money for it to function as a merchant of medical equipment. MBank and DuPont provided this money protecting themselves by with security interests in the collateral Howe had available, Howe’s present and future accounts receivable and inventory. This type of security interest in a borrower’s intangibles such as accounts receivable is extremely common. The key to who has priority is to determine who filed the security interest in the collateral first. First in time, first in line goes the rhyme.
The problem with this situation is that a manufacturer will not loan or give a heavily indebted merchant any goods to sell on credit because once the merchant sells the goods, the banker, not the manufacturer, will have priority in the resulting accounts under the first in time first in line principle. Raytheon would thus not advance any x-ray machines to Howe because MBank and DuPont would have priority in any accounts that arose from the sale of the machines. Yet it is these very sales which would enable Howe to make profits to pay off its loans to MBank and DuPont. So how does an indebted merchant, who is unable to pay a manufacturer for goods that the merchant must sell to service the banker’s loan, stay in business? Often what occurs is a scenario where the banker’s loan is not paid, the merchant goes out of business, and the manufacturer loses an opportunity to distribute its goods on the market.
Article 9 provides a solution: the purchase money security interest. This device, with its root in the Railroad Car Trusts of the Nineteenth Century, has priority over security interests filed earlier because of its specific transaction oriented function. Id. at 743-53 (citing U.S. v. New Orleans R.R., 79 U.S. (12 Wall.) 362, 364-65, 20 L.Ed. 434 (1871) (pre Erie commercial case giving priority to the later in time party)). The purchase money security interest operates outside the notice principle which favors early interest holders over later ones. Notice is not the driving force behind the purchase money security interest.
It was this purchase money device that allowed Howe an opportunity to continue doing business to the benefit of MBank, DuPont and Raytheon. Howe did not have enough money to purchase a $140,000 x-ray machine for inventory but Raytheon would not advance a machine on credit to Howe. A creative alternative was necessary. Ray-theon agreed to advance a machine to Howe in exchange for Howe’s enforceable purchase order or account receivable. Ray-theon thus used the account as a vehicle to ensure Howe’s payment for the machine. It was a creative solution to the meeting of two creditors, a manufacturer of expensive equipment, and a heavily indebted retailer, that allowed commerce to continue to flow.
But for the law to recognize this creativity, it must be determined whether Ray-theon has complied with the elements of the Texas purchase money security interest statute. Admittedly this arrangement does not present a paradigmatic purchase money security interest, but I believe that creativity, when in harmony with the statutory requirements, should be encouraged.
A. THE VALUE REQUIREMENT
Purchase money security interests are defined in section 9.107 of the Texas Uniform Commercial Code.1 Section 9.107, states, in pertinent part:
A security interest is a “purchase money security interest” to the extent that it is ... (2) taken by a person who by making advances or incurring an obligation gives value to enable the debtor to acquire *1457rights in or the use of collateral if such value is in fact so used.
Under the statute, Raytheon must satisfy three requirements. Raytheon must demonstrate that: (1) it gave value to Howe by making advances or incurring an obligation; (2) its extension of value enabled Howe to acquire rights in the collateral — the account receivable in each particular transaction; and, (3) the Texas U.C.C. recognizes an account receivable as collateral for the purposes of a purchase money security interest.
There is no question that Raytheon extended value. Raytheon gave value when it shipped, according to the purchase order, an x-ray machine that a particular customer had ordered. This interpretation of the value requirement is consistent with the definition of value as set out in section 1.201(44) of the Texas Uniform Commercial Code. Section 1.201(44) is applicable through the direction of the definitional cross reference of section 9.107. It states in pertinent part, that: “[a] person gives ‘value’ for rights if he acquires them ... (D) generally, in return for any consideration sufficient to support a simple contract.” Raytheon satisfied section 1.201(44) because the advance of the x-ray machine in exchange for a promise from Howe to assign an accounts receivable arising from the sale of that x-ray machine is consideration sufficient to support a contract. Moreover, under section 9.107(2) itself, “ ‘A secured party may give value by committing ... to supply goods or [by] actually supplying] the goods.’ ” Thet Mah and Associates Inc. v. First Bank of North Dakota, 336 N.W.2d 134, 138 (N.D. 1983) (citing 1 Bender U.C.C. Service, Secured Transactions, section 4.05(4) p. 304 (1983).2
This advance also satisfied the limitation on the type of value that may be given as defined in comment 2 of section 9.107.3 Comment 2 states, in pertinent part:
“[t]his section ... provides that the purchase money party must be one who gives value “ ‘by making advances or incurring an obligation’ ”: the quoted language excludes from the purchase money category any security interest taken as security for or in satisfaction of a preexisting claim or antecedent debt.”
This antecedent debt limitation is satisfied here because Howe’s debt to Raytheon was not preexisting but was instead created by the advance of the machine. Only then was Howe indebted to Raytheon for the machine’s value. In turn, the debt was secured by the accounts receivable that Howe assigned to Raytheon pursuant to their agreement.
B. THE ENABLING REQUIREMENT
The second element of a purchase money security interest is the requirement that Raytheon give value “to enable” Howe to acquire rights in the particular account receivable.4 This requirement means that the advance made by Raytheon must have made it possible for Howe X-ray to obtain the collateral.5 In the present case, the enabling requirement is satisfied because Raytheon’s agreement with Howe, which preceded all of the particular transactions, was that Raytheon would advance an x-ray machine to Howe in exchange for an accounts receivable generated by Howe’s sale of the machine to a customer. This preexisting agreement, together with the advance of the machine by Raytheon, enabled Howe to make the sale. At the same moment in time, in the twinkling of an eye, the sale created the particular account receivable payable to Howe which Howe then assigned to Raytheon pursuant to their preexisting agreement. “If the loan transaction appears closely allied to the purchase transaction, that should suffice. The *1458evident intent of paragraph (b) [U.C.C. 9-107(b) ] is to free the purchase-money concept from artificial limitations; rigid adherence to particular formalities and sequences should not be required.” G. Gilmore, I Security Interests in Personal Property, 782 (1965).6
C. THE COLLATERAL REQUIREMENT
The thorny question in this case centers on whether accounts receivable should be considered collateral for the purpose of a purchase money security interest under Section 9-107(b). To my mind, Raytheon has jumped this hurdle.7
Under section 9.105(a)(3), which is listed in the definitional cross references of section 9.107, collateral is defined as “the property subject to a security interest and includes accounts and chattel paper which have been sold_” Moreover, under section 9.106, which is also listed in the definitional cross references of section 9.107, *1459“[ajecount means any right to payment for goods sold or leased or for services rendered which is not evidenced by an instrument or chattel paper, whether or not it has been earned by performance.” The comment to 9.106 states that the section is referring to “ordinary commercial accounts receivable.” By reading these two definitional sections in tandem, it is clear that an account receivable can be collateral for the purposes of a purchase money security interest under section 9.107.
There is, however, no other authority to our knowledge that expressly states that accounts receivable should be considered collateral for the purpose of a purchase money security interest. The Supreme Court of Minnesota has suggested that a purchase money security interest in accounts could validly arise. See Northwestern National Bank Southwest v. Lectro Systems, 262 N.W.2d 678, 680 (Minn.1977) (“This is not a case in which funds were advanced and used for purchase of a receivable.”). And, Professor Grant Gilmore, one of the original drafters of article 9, has stated in his treatise on security interests, that the purchase money concept might apply to intangible property in occasional cases. G. Gilmore, I Security Interests in Personal Property, 781 (1965) (“There seems to be no reason, however, why the term ‘collateral’ should have other than its normal meaning: the purchase-money concept may thus, in an occasional case, apply to intangible property_”).
MBank and DuPont have asserted that accounts receivable should not be considered collateral for the purpose of defining a purchase money security interest under Section 9.107(2). Their argument, adopted by the majority, is that because accounts receivable financing has been accorded a special importance by the Texas Uniform Commercial Code, its legal position should not be made less certain by the operation of Sections 9.107(2) and 9.312(d). Once a security interest has been created under section 9.107(2), section 9.312(d) grants it special status. Section 9.312(d) states that “a purchase money security interest in collateral other than inventory has priority over a conflicting security interest in the same collateral or its proceeds if the purchase money security interest is perfected at the time the debtor receives possession of the collateral or within 20 days thereafter.” 8
The significance of this special priority granted to purchase money security interests in subsection (2) becomes apparent when compared to the general priority rule in section 9.312(e). Under section 9.312(e)(1), conflicting security interests in the same collateral rank according to the time of filing. The first party to file notice of its interest in an account has priority over any subsequently filed interests in the identical account.
Because of the operation of section 9.312(d), however, the first party to file notice of a security interest in an account would not necessarily have priority under section 9.312(e)(1). Section 9.312(d) would grant priority over any interest filed previously in the same account if purchase money status in the account was first established under section 9.107. The legal position of accounts receivable financing might thus be made less certain if a purchase money security interest could be claimed in accounts receivable under section 9.107(2). Diminished certainty could result in the sense that the first party to file notice of its interest in an account under section 9.312(e) would be uncertain as to whether it had priority in the account or whether another party has priority because the latter established purchase money status in the same account under 9.107(2).
MBank and DuPont argue that this uncertainty in the legal position of accounts receivable financing should be prohibited because of the special importance accorded to accounts receivable financing under the code. They find this importance in the history of section 9.312(c) which prohibits the establishment of purchase money security interests in accounts receivable, derivatively, as proceeds of inventory. The argument points out that this prohibition was created due to the importance of ac*1460counts receivable financing in the economy. Based on these premises, the argument concludes that the possibility of a purchase money security interest in accounts receivable under section 9.107(2) should also be prohibited. The fallacy of this logic, however, is that it equates the value of accounts receivable as applied to a problem that arose in the area of inventory financing with the values behind the section 9.107 purchase money security interest.
The argument thus rests upon MBank and DuPont’s interpretation of section 9.312(c). Section 9.312(c) provides that “a perfected purchase money security interest in inventory has priority over a conflicting security interest in the same inventory and also has priority in any identifiable cash proceeds received on or before the delivery of inventory to a buyer.”9 This section of the code was changed in 1972 to address the problem of priority conflicts between a claim to accounts receivable derivatively as proceeds of inventory and a claim to the accounts established by the filing of a direct security interest.10 The conflict arose between inventory financiers who claimed priority in the accounts as proceeds of the inventory that they helped the debtor to acquire and lenders who had taken a direct security interest in the accounts as collateral for money loaned to the debtor.
Section 9.312(c) offered a solution to this conflict. It states that a prior right to the inventory of a debtor does not confer a prior right to any proceeds that arise from the sale of the inventory except for identifiable cash proceeds. There is no prior right to accounts receivable as proceeds from the sale of the inventory. Under this section, it would not be possible to establish a purchase money security interest in inventory and then claim a purchase money security interest in any of the accounts that arose from the sale of that inventory. This exclusion of accounts receivable as proceeds of inventory under section 9.312(c) rests upon the assumption that accounts receivable financing is more important in the economy than the financing of the types of inventory that produce accounts when sold.
MBank and DuPont thus argue that a purchase money security interest in accounts receivable should not be permitted under section 9.107(2) because a purchase money security interest in accounts receivable may not be claimed derivatively as proceeds of the sale of inventory under section 9.312(c). However, when this argument is examined in light of the policy interests underpinning section 9.107(2), the argument’s core assumption, the importance of accounts receivable financing in the economy, dictates precisely the opposite result.
The most important policy justification for a purchase money security interest under section 9.107(2) is the protection that it gives to a debtor who is unable to raise additional funds to remain in business. Creditors who have previously loaned money to the debtor and taken a security interest in the debtor’s goods may be unwilling to advance additional value or funds.11 These additional funds, however, could enable a debtor to purchase goods, make sales, and in turn, generate profits. Profits which could not only be used to create more business, but also, to allow the debtor to pay off the creditor’s loans. The purchase money security provisions thus enable a leveraged debtor who is able to find a new lender to give that new lender a first claim on the new collateral purchased notwithstanding a prior filing by another creditor.12
The arrangement between Raytheon and Howe exemplifies the use of accounts receivable to advance the policy rationale behind the purchase money security interest. It was the use of the accounts receivable by Raytheon as collateral for the x-ray *1461machines that allowed Howe to continue to do business. The additional business that Howe was able to generate with the advance of the x-ray machines, at minimum, gave Howe an additional opportunity to stay in business. This opportunity was a benefit to creditors such as MBank and DuPont whose loans would not be repaid unless Howe had the ability to generate profits. It also demonstrated the importance of accounts receivable financing in another forum, the creation of purchase money security interests.
The use of accounts receivable as collateral in this case benefited MBank and DuPont as creditors because the consequences of an unpaid account were relatively greater to Raytheon. Raytheon, MBank and DuPont would each have been harmed if Howe’s customers failed to pay their accounts. If an account receivable were to remain unpaid, Raytheon would lose the entire value of the x-ray machine advanced to Howe. In contrast, it is unlikely that the failure of one account would drive Howe into bankruptcy so that Howe would be unable to repay MBank and DuPont. Yet it is this additional risk taken by Raytheon which allowed Howe a profit that could be used to fund its business to the advantage of MBank and DuPont.
Finally, any obligation imposed on MBank and DuPont to determine whether Howe was using its accounts receivable to collateralize purchase money security transactions is diminished in two respects. First, as stated, it is these very purchase money transactions that allowed Howe an additional opportunity to service its debts to these creditors. Second, MBank and DuPont as creditors had already established relationships with Howe. In future transactions, it would not have been difficult for them to ascertain whether Howe was using any accounts to collateralize purchase money transactions with other creditors and draft the loan contracts accordingly-
D. THE LIMIT OF RAYTHEON’S PURCHASE MONEY SECURITY INTEREST
I would, however, posit a serious limit on the extent of Raytheon’s purchase money security interest. Under section 9.107, a security interest has purchase money character only to the extent of the value given to acquire the collateral. In the present case, the value given by Raytheon was the price of the x-ray machine as measured by the difference in the price Howe charged customers and the price Raytheon charged Howe. This price measures the extent of Raytheon’s purchase money security interest in the specific accounts receivable of Howe. I do not mean to imply that the value given to a distributor such as Howe will always be measured by the wholesale price. In some situations, it could be the retail price depending upon what the debtor was meant to gain by the transaction. I would leave these transactional details for the district court.
The difference between the price Ray-theon charged Howe and the price Howe charged its customers would thus not be a part of Raytheon’s purchase money security interest. There is evidence to the effect that Howe used a portion of this difference, Howe’s profit margin, to pay a preexisting debt owing from Howe to Raytheon. This money could not be a part of Ray-theon’s purchase money security interest because a purchase money security interest may not be used to secure a preexisting debt.13
There is also evidence which suggests that Raytheon may have loaned money to Howe to cover Howe’s costs of installing the x-ray machine. Any such money would not be a part of Raytheon’s purchase money security interest. There should not be any additional opportunities created under the code to give simple loans purchase money character.14
To my mind, Raytheon has established a valid purchase money security interest under section 9.107(2) of the Texas Uniform *1462Commercial Code. The x-ray machine advanced by Raytheon constituted the value that enabled Howe to acquire accounts receivable, the collateral, for the purposes of section 9.107(2). As such, this case should be reversed and remanded, where the issue of waiver could be examined with a headlight’s incandescence and the retroactivity issue appropriately explored. I therefore respectfully DISSENT.
. Tex.Bus. & Comm.Code Ann. Section 9.107 (Vernon 1968 and West Supp.1989).
. See Gilmore, The Purchase Money Security Priority, 76 Harv.L.Rev. 1333, 1375 (1963) ("The something [given as value] need not be a purse of gold or its present day negotiable equivalent.”).
. Texas Bus. & Comm.Code Ann. section 9.107 (Vernon 1968 and West Supp.1989).
. Howe’s rights in the collateral, the accounts receivable that Howe assigned to Raytheon, have not been contested.
. See Gilmore, supra note 2 at 1373 (1963).
. See In re McHenry, 71 B.R. 60, 62 (Bkrtcy.N.D.Ohio 1987) (debtor acquires collateral based on preexisting agreement that funds will subsequently be advanced to pay for the collateral); In re Sherwood, 79 B.R. 399, 400 (Bkrtcy.W.D. Wis.1986) (preexisting loan agreement enabled debtor to acquire collateral even though loan funds disbursed after collateral acquired); Thet Mah and Associates v. First Bank of North Dakota, 336 N.W.2d 134, 138 (N.D.1983) (enabling requirement satisfied by loan commitment which allowed debtor to purchase collateral even though the actual funds were received after the installation of the collateral). But see Northwestern National Bank Southwest v. Lectro Systems, 262 N.W.2d 678, 680 (Minn.1977) (creditor did not establish a purchase money security interest because the funds were not used to acquire a receivable but were instead used for the performance of an already existing contract).
. MBank and DuPont argue that Raytheon does not have purchase money security interest in the accounts receivable of Howe. They contend that the proper way to characterize the transaction between Raytheon and Howe is to view Raytheon as having advanced credit to Howe. This credit, the argument continues, allowed Howe to purchase inventory from Raytheon in the form of the x-ray machine. Thus, according to MBank and DuPont, the x-ray machine served as collateral to secure the advance of the credit from Raytheon. Howe then sold the x-ray machines to its customers. The sales created accounts receivable which Howe assigned to Raytheon.
The implication of MBank and DuPont’s characterization of the transaction between Ray-theon and Howe is that MBank and DuPont have priority in the accounts receivable over Raytheon because Raytheon would not be able to claim a valid purchase money security interest. Raytheon would not be able to claim a purchase money security interest under section 9.312(d) because this section requires that the interest be taken in collateral other than inventory. Section 9.312(d) states that “A purchase money security interest in collateral other than inventory has priority over a conflicting security interest in the same collateral or its proceeds if the purchase money security interest is perfected at the time the debtor receives possession of the collateral or within 20 days thereafter.”
Raytheon would thus have to claim a purchase money security interest under another section because according to MBank and DuPont, the collateral in the transaction was inventory. The purchase money security interest would have to be justified under section 9.312(c) which applies to purchase money security interests in inventory. Section 9.312(c)(2) requires "the purchase money secured party [to give] notification in writing to the holder of conflicting security interests if the holder has filed a financing statement covering the same type of inventory.” Raytheon, however, failed to give any notice to MBank or DuPont and could not, therefore, establish a valid purchase money security interest under this section.
Because Raytheon would be precluded from claiming a purchase money security interest under section 9.312(c) or section 9.312(d), MBank and DuPont would have priority over Raytheon in the accounts receivable of Howe under section 9.312(e). Section 9.312(e) states that "conflicting security interests rank according to priority in time of filing or perfection." Therefore, because both MBank and DuPont filed notice of their claims prior to Raytheon, they would have superior interests, under section 9.312(e).
This analysis, however, suggested by MBank and DuPont begs the question. The question is whether Raytheon established a purchase money security interest in the accounts receivable of Howe not whether Raytheon properly perfected a purchase money security interest in the inventory of Howe. The analysis of whether Raytheon properly perfected a security interest in the inventory of Howe assumes that MBank and DuPont’s characterization of the transaction is correct. But the very question to be decided is how to characterize the transaction for the purposes of defining a purchase money security interest. Nothing in the code mandates that Raytheon to claim a purchase money security interest in Howe's inventory. Raytheon claimed a purchase money security interest in the accounts receivable of Howe. The question is thus whether accounts receivable may be considered collateral for the purposes of a purchase money security interest.
. Tex. Bus. & Comm.Code Ann. section 9.107 (Vernon 1988 and West Supp.1989).
. Tex. Bus. & Comm.Code Ann. section 9.312(c) (Vernon 1988 and West Supp.1989).
. Id.
. Jackson and Kronman, Secured Financing and Priorities Among Creditors, Yale L.J. 1143, 1165 (1979) (economic analysis suggesting that purchase money security interests may be used to free debtor from creditor’s situational monopoly).
. White and Summers, Uniform Commercial Code, 1043 (1972).
. Tex. Bus. & Comm.Code Ann. section 9.107 (Vernon 1988 and West Supp.1989) (comment 2).
. White and Summers, infra note 12 at 1045 n. 35 (1972).