409.313 When possession by or delivery to secured party perfects security interest without filing. (1) Perfection by possession or delivery. Except as otherwise provided in sub. (2), a secured party may perfect a security interest in negotiable documents, goods, instruments, money, or tangible chattel paper by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery of the certificated securities under s. 408.301.
(2) Goods covered by certificate of title. With respect to goods covered by a certificate of title issued by this state, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in s. 409.316 (4).
(3) Collateral in possession of person other than debtor. With respect to collateral other than certificated securities and goods covered by a document, a secured party takes possession of collateral in the possession of a person other than the debtor, the secured party, or a lessee of the collateral from the debtor in the ordinary course of the debtor's business, when:
(a) The person in possession authenticates a record acknowledging that the person holds possession of the collateral for the secured party's benefit; or
(b) The person takes possession of the collateral after having authenticated a record acknowledging that the person will hold possession of collateral for the secured party's benefit.
(4) Time of perfection by possession; continuation of perfection. If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no earlier than the time the secured party takes possession and continues only while the secured party retains possession.
(5) Time of perfection by delivery; continuation of perfection. A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under s. 408.301 and remains perfected by delivery until the debtor obtains possession of the security certificate.
(6) Acknowledgment not required. A person in possession of collateral is not required to acknowledge that it holds possession for a secured party's benefit.
(7) Effectiveness of acknowledgment; no duties or confirmation. If a person acknowledges that it holds possession for the secured party's benefit:
(a) The acknowledgment is effective under sub. (3) or s. 408.301 (1), even if the acknowledgment violates the rights of a debtor; and
(b) Unless the person otherwise agrees or law other than this chapter otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.
(8) Secured party's delivery to person other than debtor. A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor's business if the person was instructed before the delivery or is instructed contemporaneously with the delivery:
(a) To hold possession of the collateral for the secured party's benefit; or
(b) To redeliver the collateral to the secured party.
(9) Effect of delivery under sub. (8); no duties or confirmation. A secured party does not relinquish possession, even if a delivery under sub. (8) violates the rights of a debtor. A person to which collateral is delivered under sub. (8) does not owe any duty to the secured party and is not required to confirm the delivery to another person unless the person otherwise agrees or law other than this chapter otherwise provides.
409.314 Perfection by control. (1) Perfection by control. A security interest in investment property, deposit accounts, letter-of-credit rights, or electronic chattel paper may be perfected by control of the collateral under s. 409.104, 409.105, 409.106, or 409.107.
(2) Specified collateral: time of perfection by control; continuation of perfection. A security interest in deposit accounts, electronic chattel paper, or letter-of-credit rights is perfected by control under s. 409.104, 409.105, or 409.107 when the secured party obtains control and remains perfected by control only while the secured party retains control.
(3) Investment property: time of perfection by control; continuation of perfection. A security interest in investment property is perfected by control under s. 409.106 from the time the secured party obtains control and remains perfected by control until:
(a) The secured party does not have control; and
(b) One of the following occurs:
1. If the collateral is a certificated security, the debtor has or acquires possession of the security certificate;
2. If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner; or
3. If the collateral is a security entitlement, the debtor is or becomes the entitlement holder.
409.315 Secured party's rights on disposition of collateral and in proceeds. (1) Disposition of collateral: continuation of security interest or agricultural lien; proceeds. Except as otherwise provided in this chapter and in s. 402.403 (2):
(a) A security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and
(b) A security interest attaches to any identifiable proceeds of collateral.
(2) When commingled proceeds identifiable. Proceeds that are commingled with other property are identifiable proceeds:
(a) If the proceeds are goods, to the extent provided by s. 409.336; and
(b) If the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this chapter with respect to commingled property of the type involved.
(3) Perfection of security interest in proceeds. A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.
(4) Continuation of perfection. A perfected security interest in proceeds becomes unperfected on the 21st day after the security interest attaches to the proceeds unless:
(a) The following conditions are satisfied:
1. A filed financing statement covers the original collateral;
2. The proceeds are collateral in which a security interest may be perfected by filing in the office in which the financing statement has been filed; and
3. The proceeds are not acquired with cash proceeds;
(b) The proceeds are identifiable cash proceeds; or
(c) The security interest in the proceeds is perfected other than under sub. (3) when the security interest attaches to the proceeds or within 20 days thereafter.
(5) When perfected security interest in proceeds becomes unperfected. If a filed financing statement covers the original collateral, a security interest in proceeds which remains perfected under sub. (4) (a) becomes unperfected at the later of:
(a) When the effectiveness of the filed financing statement lapses under s. 409.515 or is terminated under s. 409.513; or
(b) The 21st day after the security interest attaches to the proceeds.
409.316 Continued perfection of security interest following change in governing law. (1) General rule: effect on perfection of change in governing law. A security interest perfected pursuant to the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) remains perfected until the earliest of:
(a) The time perfection would have ceased under the law of that jurisdiction;
(b) The expiration of 4 months after a change of the debtor's location to another jurisdiction; or
(c) The expiration of one year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction.
(2) Security interest perfected or unperfected under law of new jurisdiction. If a security interest described in sub. (1) becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.
(3) Possessory security interest in collateral moved to new jurisdiction. A possessory security interest in collateral, other than goods covered by a certificate of title and as-extracted collateral consisting of goods, remains continuously perfected if:
(a) The collateral is located in one jurisdiction and subject to a security interest perfected under the law of that jurisdiction;
(b) Thereafter the collateral is brought into another jurisdiction; and
(c) Upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction.
(4) Goods covered by certificate of title from this state. Except as otherwise provided in sub. (5), a security interest in goods covered by a certificate of title which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this state remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered.
(5) When sub. (4) security interest becomes unperfected against purchasers. A security interest described in sub. (4) becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection under s. 409.311 (2) or 409.313 are not satisfied before the earlier of:
(a) The time the security interest would have become unperfected under the law of the other jurisdiction had the goods not become covered by a certificate of title from this state; or
(b) The expiration of 4 months after the goods had become so covered.
(6) Change in jurisdiction of bank, issuer, nominated person, securities intermediary, or commodity intermediary. A security interest in deposit accounts, letter-of-credit rights, or investment property which is perfected under the law of the bank's jurisdiction, the issuer's jurisdiction, a nominated person's jurisdiction, the securities intermediary's jurisdiction, or the commodity intermediary's jurisdiction, as applicable, remains perfected until the earlier of:
(a) The time the security interest would have become unperfected under the law of that jurisdiction; or
(b) The expiration of 4 months after a change of the applicable jurisdiction to another jurisdiction.
(7) Sub. (6) security interest perfected or unperfected under law of new jurisdiction. If a security interest described in sub. (6) becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.
409.317 Interests that take priority over or take free of security interest or agricultural lien. (1) Conflicting security interests and rights of lien creditors. A security interest or agricultural lien is subordinate to the rights of:
(a) A person entitled to priority under s. 409.322; and
(b) Except as otherwise provided in sub. (5), a person that becomes a lien creditor before the earlier of the time:
1. The security interest or agricultural lien is perfected; or
2. One of the conditions specified in s. 409.203 (2) (c) is met and a financing statement covering the collateral is filed.
(2) Buyers that receive delivery. Except as otherwise provided in sub. (5), a buyer, other than a secured party, of tangible chattel paper, documents, goods, instruments, or a security certificate takes free of a security interest or agricultural lien if the buyer gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.
(3) Lessees that receive delivery. Except as otherwise provided in sub. (5), a lessee of goods takes free of a security interest or agricultural lien if the lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.
(4) Licensees and buyers of certain collateral. A licensee of a general intangible or a buyer, other than a secured party, of accounts, electronic chattel paper, general intangibles, or investment property other than a certificated security takes free of a security interest if the licensee or buyer gives value without knowledge of the security interest and before it is perfected.
(5) Purchase-money security interest. Except as otherwise provided in ss. 409.320 and 409.321, if a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee, or lien creditor which arise between the time the security interest attaches and the time of filing.
409.318 No interest retained in right to payment that is sold; rights and title of seller of account or chattel paper with respect to creditors and purchasers. (1) Seller retains no interest. A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold.
(2) Deemed rights of debtor if buyer's security interest unperfected. For purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper from, a debtor that has sold an account or chattel paper, while the buyer's security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold.
409.319 Rights and title of consignee with respect to creditors and purchasers. (1) Consignee has consignor's rights. Except as otherwise provided in sub. (2), for purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer.
(2) Applicability of other law. For purposes of determining the rights of a creditor of a consignee, law other than this chapter determines the rights and title of a consignee while goods are in the consignee's possession if, under this subchapter, a perfected security interest held by the consignor would have priority over the rights of the creditor.
409.320 Buyer of goods. (1) Buyer in ordinary course of business. Except as otherwise provided in sub. (5), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer's seller, even if the security interest is perfected and the buyer knows of its existence.
(2) Buyer of consumer goods. Except as otherwise provided in sub. (5), a buyer of goods from a person who used or bought the goods for use primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys:
(a) Without knowledge of the security interest;
(b) For value;
(c) Primarily for the buyer's personal, family, or household purposes; and
(d) Before the filing of a financing statement covering the goods.
(3) Effectiveness of filing for sub. (2). To the extent that it affects the priority of a security interest over a buyer of goods under sub. (2), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by s. 409.316 (1) and (2).
(4) Buyer in ordinary course of business at wellhead or minehead. A buyer in ordinary course of business buying oil, gas, or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance.
(5) Possessory security interest not affected. Subsections (1) and (2) do not affect a security interest in goods in the possession of the secured party under s. 409.313.
409.321 Licensee of general intangible and lessee of goods in ordinary course of business. (1)
Licensee in ordinary course of business. In this section, "licensee in ordinary course of business" means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor's own usual or customary practices.
(2) Rights of licensee in ordinary course of business. A licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence.
(3) Rights of lessee in ordinary course of business. A lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor, even if the security interest is perfected and the lessee knows of its existence.
409.322 Priorities among conflicting security interests in and agricultural liens on same collateral. (1) General priority rules. Except as otherwise provided in this section, priority among conflicting security interests and agricultural liens in the same collateral is determined according to the following rules:
(a) Conflicting perfected security interests and agricultural liens rank according to priority in time of filing or perfection. Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest or agricultural lien is first perfected, if there is no period thereafter when there is neither filing nor perfection.
(b) A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien.
(c) The first security interest or agricultural lien to attach or become effective has priority if conflicting security interests and agricultural liens are unperfected.
(2) Time of perfection: proceeds and supporting obligations. For the purposes of sub. (1) (a):
(a) The time of filing or perfection as to a security interest in collateral is also the time of filing or perfection as to a security interest in proceeds; and
(b) The time of filing or perfection as to a security interest in collateral supported by a supporting obligation is also the time of filing or perfection as to a security interest in the supporting obligation.
