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(r) "Uncertificated security" — s. 408.102.
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10(3) Chapter 401 definitions and principles. Chapter 401 contains general
11definitions and principles of construction and interpretation applicable throughout
12this chapter.
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13409.103 Purchase-money security interest; application of payments;
14burden of establishing. (1) Definitions. In this section:
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(a) "Purchase-money collateral" means goods or software that secures a
16purchase-money obligation incurred with respect to that collateral.
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(b) "Purchase-money obligation" means an obligation of an obligor incurred as
18all or part of the price of the collateral or for value given to enable the debtor to
19acquire rights in or the use of the collateral if the value is in fact so used.
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20(2) Purchase-money security interest in goods. A security interest in goods
21is a purchase-money security interest:
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(a) To the extent that the goods are purchase-money collateral with respect to
23that security interest;
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(b) If the security interest is in inventory that is or was purchase-money
25collateral, also to the extent that the security interest secures a purchase-money
1obligation incurred with respect to other inventory in which the secured party holds
2or held a purchase-money security interest; and
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(c) Also to the extent that the security interest secures a purchase-money
4obligation incurred with respect to software in which the secured party holds or held
5a purchase-money security interest.
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6(3) Purchase-money security interest in software. A security interest in
7software is a purchase-money security interest to the extent that the security
8interest also secures a purchase-money obligation incurred with respect to goods in
9which the secured party holds or held a purchase-money security interest if:
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(a) The debtor acquired its interest in the software in an integrated transaction
11in which it acquired an interest in the goods; and
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(b) The debtor acquired its interest in the software for the principal purpose
13of using the software in the goods.
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14(4) Consignor's inventory purchase-money security interest. The security
15interest of a consignor in goods that are the subject of a consignment is a
16purchase-money security interest in inventory.
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17(5) Application of payment in nonconsumer-goods transaction. In a
18transaction other than a consumer-goods transaction, if the extent to which a
19security interest is a purchase-money security interest depends on the application
20of a payment to a particular obligation, the payment must be applied:
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(a) In accordance with any reasonable method of application to which the
22parties agree;
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(b) In the absence of the parties' agreement to a reasonable method, in
24accordance with any intention of the obligor manifested at or before the time of
25payment; or
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1(c) In the absence of an agreement to a reasonable method and a timely
2manifestation of the obligor's intention, in the following order:
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1. To obligations that are not secured; and
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2. If more than one obligation is secured, to obligations secured by
5purchase-money security interests in the order in which those obligations were
6incurred.
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7(6) No loss of status of purchase-money security interest in
8nonconsumer-goods transaction. In a transaction other than a consumer-goods
9transaction, a purchase-money security interest does not lose its status as such, even
10if:
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(a) The purchase-money collateral also secures an obligation that is not a
12purchase-money obligation;
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(b) Collateral that is not purchase-money collateral also secures the
14purchase-money obligation; or
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(c) The purchase-money obligation has been renewed, refinanced,
16consolidated, or restructured.
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17(7) Burden of proof in nonconsumer-goods transaction. In a transaction
18other than a consumer-goods transaction, a secured party claiming a
19purchase-money security interest has the burden of establishing the extent to which
20the security interest is a purchase-money security interest.
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21(8) Nonconsumer-goods transactions; no inference. The limitation of the
22rules in subs. (5) to (7) to transactions other than consumer-goods transactions is
23intended to leave to the court the determination of the proper rules in
24consumer-goods transactions. The court may not infer from that limitation the
1nature of the proper rule in consumer-goods transactions and may continue to apply
2established approaches.
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3409.104 Control of deposit account. (1) Requirements for control. A
4secured party has control of a deposit account if:
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(a) The secured party is the bank with which the deposit account is maintained;
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(b) The debtor, secured party, and bank have agreed in an authenticated record
7that the bank will comply with instructions originated by the secured party directing
8disposition of the funds in the deposit account without further consent by the debtor;
9or
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(c) The secured party becomes the bank's customer with respect to the deposit
11account.
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12(2) Debtor's right to direct disposition. A secured party that has satisfied
13sub. (1) has control, even if the debtor retains the right to direct the disposition of
14funds from the deposit account.
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15409.105 Control of electronic chattel paper. A secured party has control
16of electronic chattel paper if the record or records comprising the chattel paper are
17created, stored, and assigned in such a manner that:
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18(1) A single authoritative copy of the record or records exists which is unique,
19identifiable and, except as otherwise provided in subs. (4) to (6), unalterable;
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20(2) The authoritative copy identifies the secured party as the assignee of the
21record or records;
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22(3) The authoritative copy is communicated to and maintained by the secured
23party or its designated custodian;
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24(4) Copies or revisions that add or change an identified assignee of the
25authoritative copy can be made only with the participation of the secured party;
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1(5) Each copy of the authoritative copy and any copy of a copy is readily
2identifiable as a copy that is not the authoritative copy; and
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3(6) Any revision of the authoritative copy is readily identifiable as an
4authorized or unauthorized revision.
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5409.106 Control of investment property. (1) Control under s. 408.106. A
6person has control of a certificated security, uncertificated security, or security
7entitlement as provided in s. 408.106.
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8(2) Control of commodity contract. A secured party has control of a
9commodity contract if:
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(a) The secured party is the commodity intermediary with which the
11commodity contract is carried; or
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(b) The commodity customer, secured party, and commodity intermediary have
13agreed that the commodity intermediary will apply any value distributed on account
14of the commodity contract as directed by the secured party without further consent
15by the commodity customer.
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16(3) Effect of control of securities account or commodity account. A secured
17party having control of all security entitlements or commodity contracts carried in
18a securities account or commodity account has control over the securities account or
19commodity account.
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20409.107 Control of letter-of-credit right. A secured party has control of
21a letter-of-credit right to the extent of any right to payment or performance by the
22issuer or any nominated person if the issuer or nominated person has consented to
23an assignment of proceeds of the letter of credit under ch. 405 or otherwise applicable
24law or practice.
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1409.108 Sufficiency of description. (1)
Sufficiency of description. Except
2as otherwise provided in subs. (3) to (5), a description of personal or real property is
3sufficient, whether or not it is specific, if it reasonably identifies what is described.
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4(2) Examples of reasonable identification. Except as otherwise provided in
5sub. (4), a description of collateral reasonably identifies the collateral if it identifies
6the collateral by:
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(a) Specific listing;
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(c) Except as otherwise provided in sub. (5), a type of collateral defined in chs.
10401 to 411;
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(d) Quantity;
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(e) Computational or allocational formula or procedure; or
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(f) Except as otherwise provided in sub. (3), any other method, if the identity
14of the collateral is objectively determinable.
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15(3) Supergeneric description not sufficient. A description of collateral as "all
16the debtor's assets" or "all the debtor's personal property" or using words of similar
17import does not reasonably identify the collateral.
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18(4) Investment property. Except as otherwise provided in sub. (5), a
19description of a security entitlement, securities account, or commodity account is
20sufficient if it describes:
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(a) The collateral by those terms or as investment property; or
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(b) The underlying financial asset or commodity contract.
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23(5) When description by type insufficient. A description only by type of
24collateral defined in chs. 401 to 411 is an insufficient description of:
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(a) A commercial tort claim; or
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1(b) In a consumer transaction, consumer goods, a security entitlement, a
2securities account, or a commodity account.
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3409.109 Scope. (1) General scope of chapter. Except as otherwise provided
4in subs. (3) and (4), this chapter applies to:
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(a) A transaction, regardless of its form, that creates a security interest in
6personal property or fixtures by contract;
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(b) An agricultural lien;
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(c) A sale of accounts, chattel paper, payment intangibles, or promissory notes;
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(d) A consignment;
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(e) A security interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508
11(5), as provided in s. 409.110; and
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(f) A security interest arising under s. 404.210 or 405.118.
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13(2) Security interest in secured obligation. The application of this chapter
14to a security interest in a secured obligation is not affected by the fact that the
15obligation is itself secured by a transaction or interest to which this chapter does not
16apply.
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17(3) Extent to which chapter does not apply. This chapter does not apply to
18the extent that:
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(a) A statute, regulation, or treaty of the United States preempts this chapter;
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(b) Another statute of this state expressly governs the creation, perfection,
21priority, or enforcement of a security interest created by this state or a governmental
22unit of this state;
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(c) A statute of another state, a foreign country, or a governmental unit of
24another state or a foreign country, other than a statute generally applicable to
1security interests, expressly governs creation, perfection, priority, or enforcement of
2a security interest created by the state, country, or governmental unit; or
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(d) The rights of a transferee beneficiary or nominated person under a letter
4of credit are independent and superior under ch.405.
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5(4) Inapplicability of chapter. This chapter does not apply to:
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(a) A landlord's lien, other than an agricultural lien;
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(b) A lien, other than an agricultural lien, given by statute or other rule of law
8for services or materials, but s. 409.333 applies with respect to priority of the lien;
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(c) An assignment of a claim for wages, salary, or other compensation of an
10employee;
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(d) A sale of accounts, chattel paper, payment intangibles, or promissory notes
12as part of a sale of the business out of which they arose;
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(e) An assignment of accounts, chattel paper, payment intangibles, or
14promissory notes which is for the purpose of collection only;
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(f) An assignment of a right to payment under a contract to an assignee that
16is also obligated to perform under the contract;
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(g) An assignment of a single account, payment intangible, or promissory note
18to an assignee in full or partial satisfaction of a preexisting indebtedness;
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(h) A transfer of an interest in or an assignment of a claim under a policy of
20insurance, other than an assignment by or to a health-care provider of a
21health-care-insurance receivable and any subsequent assignment of the right to
22payment, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities
23in proceeds;
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(i) An assignment of a right represented by a judgment, other than a judgment
25taken on a right to payment that was collateral;
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1(j) A right of recoupment or setoff, but:
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1. Section 409.340 applies with respect to the effectiveness of rights of
3recoupment or setoff against deposit accounts; and
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2. Section 409.404 applies with respect to defenses or claims of an account
5debtor;
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(k) The creation or transfer of an interest in or lien on real property, including
7a lease or rents thereunder, except to the extent that provision is made for:
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1. Liens on real property in ss. 409.203 and 409.308;
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2. Fixtures in s. 409.334;
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3. Fixture filings in ss. 409.501, 409.502, 409.512, 409.516, and 409.519; and
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4. Security agreements covering personal and real property in s. 409.604;