409.318(1)(1) Unless an account debtor has made an enforceable agreement not to assert defenses or claims arising out of a sale as provided in
s. 409.206 the rights of an assignee are subject to:
409.318(1)(a)
(a) All the terms of the contract between the account debtor and assignor and any defense or claim arising therefrom; and
409.318(1)(b)
(b) Any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives notification of the assignment.
409.318(2)
(2) So far as the right to payment or a part thereof under an assigned contract has not been fully earned by performance, and notwithstanding notification of the assignment, any modification of or substitution for the contract made in good faith and in accordance with reasonable commercial standards is effective against an assignee unless the account debtor has otherwise agreed but the assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that such modification or substitution is a breach by the assignor.
409.318(3)
(3) The account debtor is authorized to pay the assignor until the account debtor receives notification that the amount due or to become due has been assigned and that payment is to be made to the assignee. A notification which does not reasonably identify the rights assigned is ineffective. If requested by the account debtor, the assignee must seasonably furnish reasonable proof that the assignment has been made and unless the assignee does so the account debtor may pay the assignor.
409.318(4)
(4) A term in any contract between an account debtor and an assignor is ineffective if it prohibits assignment of an account or prohibits creation of a security interest in a general intangible for money due or to become due or requires the account debtor's consent to such assignment or security interest.
409.318 History
History: 1973 c. 215;
1991 a. 316.
409.318 Annotation
There is no distinction between a party with a security interest in a debtor's accounts receivable and a party who is an assignee of a debtor's accounts receivable. Bank of Waunakee v. Rochester Cheese Sales, Inc.
906 F.2d 1185 (1990).
FILING
409.401
409.401
Place of filing; erroneous filing; removal of collateral. 409.401(1)(1) The proper place to file in order to perfect a security interest is as follows:
409.401(1)(a)
(a) When the collateral is equipment used in farming operations, or farm products, or accounts or general intangibles arising from or relating to the sale of farm products by a farmer, or consumer goods, then in the office of the register of deeds in the county of the debtor's residence or if the debtor is not a resident of this state then in the office of the register of deeds in the county where the goods are kept, and in addition when the collateral is crops growing or to be grown in the office of the register of deeds in the county where the land is located;
409.401(1)(b)
(b) When the collateral is timber to be cut or is minerals or the like (including oil and gas) or accounts subject to
s. 409.103 (5), or when the financing statement is filed as a fixture filing (
s. 409.313) and the collateral is goods which are or are to become fixtures, then in the office where a mortgage on the real estate would be filed or recorded;
409.401(2)
(2) A filing which is made in good faith in an improper place or not in all of the places required by this section is nevertheless effective with regard to any collateral as to which the filing complied with the requirements of this chapter and is also effective with regard to collateral covered by the financing statement against any person who has knowledge of the contents of such financing statement.
409.401(3)
(3) A filing which is made in the proper place in this state continues effective even though the debtor's residence or place of business or the location of the collateral or its use, whichever controlled the original filing, is thereafter changed.
409.401(4)
(4) The rules stated in
s. 409.103 determine whether filing is necessary in this state.
409.401(5)
(5) Notwithstanding the preceding subsections, and subject to
s. 409.302 (3), the proper place to file in order to perfect a security interest in collateral, including fixtures, of a transmitting utility is with the department. This filing constitutes a fixture filing under
s. 409.313 as to the collateral described therein which is or is to become fixtures.
409.401(6)
(6) For the purposes of this section, the residence of an organization is its place of business if it has one or its chief executive office if it has more than one place of business.
409.401 Cross-reference
Cross-reference: See s.
779.97 for filing federal liens.
409.402
409.402
Formal requisites of financing statement; amendments; mortgage as financing statement. 409.402(1)(a)(a) A financing statement is sufficient if it gives the names of the debtor and the secured party, is signed by the debtor, gives an address of the secured party from which information concerning the security interest may be obtained, gives a mailing address of the debtor and contains a statement indicating the types, or describing the items, of collateral. A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.
409.402(1)(b)
(b) When the financing statement covers timber to be cut or covers minerals or the like (including oil and gas) or accounts subject to
s. 409.103 (5), or when the financing statement is filed as a fixture filing (
s. 409.313) and the collateral is goods which are or are to become fixtures, the statement must also comply with
sub. (5). In each county, the register of deeds shall enter evidence of financing statements covering fixtures on all indices kept by the register of deeds regarding the transfer of real estate. A copy of the security agreement is sufficient as a financing statement if it contains the above information and is signed by the debtor. An accurate reproduction of the security agreement or the financing statement, certified to be a true copy by the secured party, public officer or notary public, or a carbon copy bearing signatures appearing by carbon impression, may be filed.
409.402(2)
(2) A financing statement which otherwise complies with
sub. (1) is sufficient when it is signed by the secured party instead of the debtor if it is filed to perfect a security interest in:
409.402(2)(a)
(a) Collateral already subject to a security interest in another jurisdiction when it is brought into this state or when the debtor's location is changed to this state. Such a financing statement must state that the collateral was brought into this state or that the debtor's location was changed to this state under such circumstances; or
409.402(2)(b)
(b) Proceeds under
s. 409.306 if the security interest in the original collateral was perfected. Such a financing statement must describe the original collateral; or
409.402(2)(c)
(c) Collateral as to which the filing has lapsed; or
409.402(2)(d)
(d) Collateral acquired after a change of name, identity or corporate structure of the debtor (
sub. (7)).
409.402(3)
(3) A form substantially as follows is sufficient to comply with
sub. (1):
Name of debtor (or assignor)
Address
Name of secured party (or assignee)
Address
409.402(3)
1. This financing statement covers the following types (or items) of property:
(Describe)
2. The above goods are to become fixtures on (Legal Description of Real Estate) .... and this financing statement is to be filed in the real estate records.
3. (If products of collateral are claimed) Products of the collateral are also covered.
Signature of Debtor (or Assignor) ....
Signature of Secured Party (or Assignee) ....
(use whichever is applicable)
409.402(3m)
(3m) The department shall prescribe by rule standard forms for filing a financing statement, continuation statement, termination statement, statement of assignment or statement of release. A filing officer may refuse to accept statements not on the required form or not containing information required under
sub. (1).
409.402(4)
(4) A financing statement may be amended by filing a writing signed by both the debtor and the secured party. An amendment which changes only the name or the address of either party need be signed only by the secured party. An amendment does not extend the period of effectiveness of a financing statement. If any amendment adds collateral, it is effective as to the added collateral only from the filing date of the amendment. In this chapter, unless the context otherwise requires, the term "financing statement" means the original financing statement and any amendments.
409.402(5)
(5) A financing statement covering timber to be cut or covering minerals or the like (including oil and gas) or accounts subject to
s. 409.103 (5), or a financing statement filed as a fixture filing (
s. 409.313) where the debtor is not a transmitting utility, must show that it covers this type of collateral, must recite that it is to be filed in the real estate records, and the financing statement must contain a legal description of the real estate.
409.402(6)(a)(a) A mortgage is effective as a financing statement filed as a fixture filing from the date of its recording if all of the following conditions are met:
409.402(6)(a)1.
1. The goods are described in the mortgage by item or type.
409.402(6)(a)2.
2. The goods are or are to become fixtures related to the real estate described in the mortgage.
409.402(6)(a)3.
3. The mortgage complies with the requirements for a financing statement in this section other than a recital that it is to be filed in the real estate records.
409.402(6)(b)
(b) No fee with reference to the financing statement is required other than the regular recording and satisfaction fees with respect to the mortgage.
409.402(7)
(7) A financing statement sufficiently shows the name of the debtor if it gives the individual, partnership, limited liability company or corporate name of the debtor, whether or not it adds other trade names or the names of partners. Where the debtor so changes the debtor's name or in the case of an organization its name, identity or corporate structure that a filed financing statement becomes seriously misleading, the filing is not effective to perfect a security interest in collateral acquired by the debtor more than 4 months after the change, unless a new appropriate financing statement is filed before the expiration of that time. A filed financing statement remains effective with respect to collateral transferred by the debtor even though the secured party knows of or consents to the transfer.
409.402(8)
(8) A financing statement substantially complying with the requirements of this section is effective even though it contains minor errors which are not seriously misleading.
409.402(9)
(9) A financing statement signed by one spouse is signed by the debtor under this section if that spouse acting alone has the right under
s. 766.51 to manage and control the collateral, unless a marital property agreement or court decree which is binding on the secured party under
s. 766.55 (4m) or
766.56 (2) (c) provides otherwise.
409.402 Annotation
Legislative Council Note, 1973: The present requirement in sub. (1) (b) that a financing statement covering crops growing or to be grown must contain the legal description and name of the record owner of the real estate concerned is not a part of the official text of the code. This special Wisconsin requirement was rejected by the Special Committee because financing statements covering growing crops and crops to be grown are to be filed with the register of deeds in the county where the land is located [s. 409.401 (1) (a)] but not in the real estate records. Accidental filing in the real estate records may cause problems. In addition, the name of the record owner is misleading if the crops are being grown by a debtor who is a tenant farmer. The Special Committee decided not to adopt the additional language of the official text relating to use of reproductions of the security agreement or financing statement for filing purposes. The Committee transferred the language presently contained in the last sentence of s. 409.403 (1) to the last sentence of par. (b).
409.402 Annotation
Changes in various provisions of the official text make it unnecessary in certain instances to have both the signature of the debtor and the secured party on the financing statement or a copy of the security agreement. The Special Committee is of the opinion that it is not the responsibility of a filing officer to determine whether or not one or 2 signatures are necessary or if only one, which one.
409.402 Annotation
For an explanation of the change in sub. (3) 2., see NOTE to s. 409.402 (1) (b). The Special Committee also deleted the following language at the end of sub. (3) 3: "(If the debtor does not have an interest of record) The name of the record owner is ....". This change was made to conform to the change in s. 409.313 (4) (a) and (b). See the note to those paragraphs. A similar deletion is made in s. 409.402 (5). For the purposes of clarification, except in s. 409.402 (1) (b), the Special Committee decided that where a description of real estate is required, what is meant is a "legal" description. This clarification has been made throughout the bill.
409.402 Annotation
The Special Committee added the language concerning amendments which change only the name or address of the parties. The Special Committee is of the opinion that only the secured party could be affected adversely by a name or address change and that the requirement of signatures of both parties is unnecessary.
409.402 Annotation
Language was deleted in new sub. (5). See note to s. 409.402 (3) 3. With respect to the requirement in s. 409.402 (5) that certain financing statements must specify that they are to be filed in the real estate records, the Special Committee rejected additional language which would have provided that, "failure to indicate on the financing statement that proper filing is in the real estate records does not invalidate a financing statement that otherwise complies with the law." The Special Committee was of the opinion that such a notation on a financing statement serves only as an instruction to the filing officer and that the failure to include this instruction would be only a minor error which is not seriously misleading as long as the financing statement is, in fact, properly filed. In reaching this conclusion, the Special Committee took cognizance of s. 409.402 (8) [present sub. (5)] which provides that minor errors, which are not seriously misleading, do not jeopardize the effectiveness of financing statements. (Bill 177-S)
409.402 Annotation
A creditor's filing statement became "seriously misleading" under sub. (7) after the debtors' name change and so was insufficient to perfect a security interest in property acquired more than 4 months after the name change. First Agri Services, Inc. v. Kahl,
129 Wis. 2d 464,
385 N.W.2d 191 (Ct. App. 1986).
409.402 Annotation
A wrong statement of section, township, range and county where crops were grown was not minor, and, without directing further inquiry, was insufficient. Whether a party is misled by the description is not part of the inquiry under s. 409.110 or 409.402. Smith & Spindahl Enterprises, Inc. v. Lee,
206 Wis. 2d 662,
557 N.W.2d 865 (Ct. App. 1996).
409.402 Annotation
Address as a formal requisite of the financing statement. Neimann, 55 MLR 387.
409.403
409.403
What constitutes filing; duration of filing; effect of lapsed filing; duties of filing officer. 409.403(1)
(1) Presentation for filing of a financing statement and tender of the filing fee constitutes filing under this chapter unless the filing officer refuses to accept the statement under
s. 409.402 (3m). Presentation for filing of a financing statement and acceptance of the statement by the filing officer constitutes filing under this chapter.
409.403(2)
(2) Except as provided in
sub. (6) a filed financing statement is effective for a period of 5 years from the date of filing. The effectiveness of a filed financing statement lapses on the expiration of the 5-year period unless a continuation statement is filed prior to the lapse. If a security interest perfected by filing exists at the time insolvency proceedings are commenced by or against the debtor, the security interest remains perfected until termination of the insolvency proceedings and thereafter for a period of 60 days or until expiration of the 5-year period, whichever occurs later. Upon lapse the security interest becomes unperfected, unless it is perfected without filing. If the security interest becomes unperfected upon lapse, it is deemed to have been unperfected as against a person who became a purchaser or lien creditor before lapse.
409.403(3)
(3) A continuation statement may be filed by the secured party within 6 months prior to the expiration of the 5-year period specified in
sub. (2). Any such continuation statement must be signed by the secured party, identify the original statement by file number and state that the original statement is still effective. A continuation statement signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record and complying with
s. 409.405 (2), including payment of the required fee. Upon timely filing of the continuation statement, the effectiveness of the original statement is continued for 5 years after the last date to which the filing was effective whereupon it lapses in the same manner as provided in
sub. (2) unless another continuation statement is filed prior to such lapse. Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the original statement. Unless a statute on disposition of public records provides otherwise, the filing officer may remove a lapsed statement from the files and destroy it immediately if the officer has retained a microfilm or other photographic record or an optical disk or electronic copy. In other cases a lapsed statement may not be destroyed until after one year after the lapse. The filing officer shall so arrange matters by physical annexation of financing statements to continuation statements or other related filings, or by other means, that if the officer physically destroys the financing statements of a period more than 5 years past, those which have been continued by a continuation statement or which are still effective under
sub. (6) shall be retained.
409.403(4)
(4) Except as provided in
sub. (7), a filing officer shall mark each statement with a file number and with the date and hour of filing and shall hold the statement or a microfilm or other photographic copy thereof, or an optical disk or electronic copy thereof, for public inspection. In addition the filing officer shall index the statements according to the name of the debtor and shall note in the index the file number and the address of the debtor given in the statement.
409.403(5)(a)(a)
Fees for filing with the office of the register of deeds. 409.403(5)(a)1.1. The fee for filing and indexing and for stamping a copy furnished by the secured party to show the date and place of filing for an original financing statement is $8 if the statement is on the standard form prescribed by the department and is $16 if the statement is not on the standard form or if additional pages are attached to the standard form. The fee for filing an original financing statement subject to
s. 409.402 (5) is $10 if the statement is on the standard form and is $20 if the statement is not on the standard form or if additional pages are attached to the standard form.
409.403(5)(a)2.
2. The fee for filing and indexing and for stamping a copy furnished by the secured party to show the date and place of filing for an amendment or a continuation statement is $5 if the amendment or statement is on the standard form prescribed by the department and is $10 if the amendment or statement is not on the standard form or if additional pages are attached to the standard form.
409.403(5)(a)3.
3. A register of deeds shall forward $3 to the department for each original financing statement filed with the office of the register of deeds under
subd. 1. and for each amendment and each continuation statement filed with the office of the register of deeds under
subd. 2.
409.403(5)(b)
(b)
Fees for filing with the department of financial institutions. 409.403(5)(b)1.1. The fee for filing and indexing and for stamping a copy furnished by the secured party to show the date and place of filing for an original financing statement is $8 if the statement is on the standard form prescribed by the department and is $16 if the statement is not on the standard form or if additional pages are attached to the standard form.
409.403(5)(b)2.
2. The fee for filing and indexing and for stamping a copy furnished by the secured party to show the date and place of filing for an amendment or a continuation statement is $5 if the amendment or statement is on the standard form prescribed by the department and is $10 if the amendment or statement is not on the standard form or if additional pages are attached to the standard form.
409.403(6)
(6) If the debtor is a transmitting utility (
s. 409.401 (5)) and a filed financing statement so states, it is effective until a termination statement is filed. A real estate mortgage which is effective as a fixture filing under
s. 409.402 (6) remains effective as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real estate.
409.403(7)
(7) When a financing statement covers timber to be cut or covers minerals or the like (including oil and gas) or accounts subject to
s. 409.103 (5), or is filed as a fixture filing, the filing officer shall index it under the names of the debtor in the same fashion as if they were the mortgagors in a mortgage of the real estate described, and, to the extent that the law of this state provides for indexing of mortgages under the name of the mortgagee, under the name of the secured party as if the secured party were the mortgagee thereunder, or where indexing is by description in the same fashion as if the financing statement were a mortgage of the real estate described.
409.403(8)
(8) A separate amendment, continuation statement, termination statement, statement of assignment or statement of release shall be filed for each original financing statement to be affected.
409.403 Annotation
Legislative Council Note, 1973: In sub. (7), the Special Committee deleted the words "and any owner of record shown on the financing statement" which appear after the word "debtor" in the official text. This change is in conformity with changes made in ss. 409.402 (3) 3. and 409.402 (5). See the note to s. 409.402 (3) 3. (Bill 177-S)
409.403 Annotation
When a creditor fails to file a continuation statement under sub. (2), perfection lapses and the creditor may assume status of an unperfected secured creditor as against prelapse purchaser. Hanley Implement v. Riesterer Equipment Inc.
150 Wis. 2d 161,
441 N.W.2d 304 (Ct. App. 1989).
409.403 Annotation
The filing of a 2nd financing statement that does not refer to the original filing does not bring the creditor into substantial compliance with sub. (3). Bostwick-Braun Co. v. Owens,
634 F. Supp. 839 (1986).
409.404
409.404
Termination statement. 409.404(1)(a)(a)
Requirement for filing termination statement with the office of the register of deeds. If a financing statement covering consumer goods is filed on or after July 1, 1974, then within one month or within 10 days following written demand by the debtor after there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must file with each filing officer with whom the financing statement was filed, a termination statement to the effect that the secured party no longer claims a security interest under the financing statement, which shall be identified by file number. In other cases whenever there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must on written demand by the debtor send the debtor, for each filing officer with whom the financing statement was filed, a termination statement to the effect that the secured party no longer claims a security interest under the financing statement, which shall be identified by file number. A termination statement signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record complying with
s. 409.405 (2), including payment of the required fee.
