What is the rule when both parties are not perfected by filing?

When both parties are not perfected by filing, the rule is that the party who perfected first, through methods such as attachment, will prevail. This is based on the principle of priority in secured transactions, which emphasizes that if two or more parties have an interest in the same collateral, the one who has first achieved a valid attachment (assuming neither has filed) has a superior claim to the collateral.

This framework is established under the Uniform Commercial Code (UCC), which governs secured transactions. If neither party has taken steps to perfect their security interest by filing a financing statement, the timing of when the interests were attached becomes critical. Hence, the concept of "first to attach" grants the earlier party legal priority over the collateral.

The other options do not align with the established UCC rules. For example, the statement regarding the secured party who attached second prevailing contradicts the notion of priority; attachment alone does not confer a stronger claim unless it occurred before another party's attachment. Similarly, filing a UCC-1 does indicate perfection but is irrelevant here since the question specifies that neither party is perfected. The option about having high-value collateral does not influence which party has a priority claim when neither has perfected their security interest.