On October 1, Toy Store, Inc., entered into a written contract with Fido Factory, Inc., for the purchase at $20 per unit of 1,000 mechanical dogs, to be specially manufactured by Fido according to Toy Store's specifications. Fido promised to deliver all of the dogs "not later than November 15, for the Yule shopping season," and Toy Store promised to pay the full $20,000 price upon delivery. In order to obtain operating funds, Fido as borrower entered into a written loan agreement on October 5 with the High Finance Company. In relevant part, this agreement recited, "Fido Factory hereby transfers and assigns to High Finance its (Fido Factory's) October 1 mechanical dog contract with Toy Store, as security for a 50-day loan of $15,000, the advance and receipt of which are hereby acknowledged by Fido Factory." No copy of this agreement, or statement relating to it, was filed in an office of public record. On October 15, Fido notified Toy Store, "We regret to advise that our master shaft burned out last night because our night supervisor let the lubricant level get too low. We have just fired the supervisor, but the shaft cannot be repaired or replaced until about January 1. We can guarantee delivery of your order, however, not later than January 20." Toy Store rejected this proposal as unacceptable and immediately contracted with the only other available manufacturer to obtain the 1,000 dogs at $30 per unit by November 15. ". For this question only, assume that by November 16, Fido, without legal excuse, has delivered no dogs, and that Toy Store has brought an action against Fido. In an action brought on November 16 by Toy Store against High Finance Company on account of Fido's default, Toy Store can recover
nothing, because the October 5 assignment by Fido to High Finance of Fido's contract with Toy Store was only an assignment for security.  nothing, because no record of the October 5 transaction between Fido and High Finance was publicly filed.  $10,000 in damages, because Toy Store was a third-party intended beneficiary of the October 5 transaction between Fido and High Finance.  $10,000 in damages, because the October 5 transaction between Fido and High Finance effected, with respect to Toy Store as creditor, a novation of debtors.