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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;
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(L) An assignment of a claim arising in tort, other than a commercial tort claim,
13but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds;
14or
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(m) An assignment of a deposit account in a consumer transaction, but ss.
16409.315 and 409.322 apply with respect to proceeds and priorities in proceeds.
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17409.110 Security interests arising under ch. 402 or 411. A security
18interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508 (5) is subject to this
19chapter. However, until the debtor obtains possession of the goods:
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20(1) The security interest is enforceable, even if s. 409.203 (2) (c) has not been
21satisfied;
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22(2) Filing is not required to perfect the security interest;
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23(3) The rights of the secured party after default by the debtor are governed by
24ch. 402 or 411; and
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1(4) The security interest has priority over a conflicting security interest created
2by the debtor.
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Subchapter II
4EFFECTIVENESS OF SECURITY
5
AGREEMENT; ATTACHMENT OF
6
SECURITY INTEREST; RIGHTS OF
7
PARTIES TO SECURITY AGREEMENT
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8409.201 General effectiveness of security agreement. (1) General
9effectiveness. Except as otherwise provided in chs. 401 to 411, a security agreement
10is effective according to its terms between the parties, against purchasers of the
11collateral, and against creditors.
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12(2) Applicable consumer laws and other law. A transaction subject to this
13chapter is subject to any applicable rule of law which establishes a different rule for
14consumers and to chs. 138, 421 to 427, and 429 and s. 182.025.
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15(3) Other applicable law controls. In case of conflict between this chapter
16and a rule of law, statute, or rule described in sub. (2), the rule of law, statute, or rule
17controls. Failure to comply with a statute or rule described in sub. (2) has only the
18effect the statute or rule specifies.
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19(4) Further deference to other applicable law. This chapter does not:
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(a) Validate any rate, charge, agreement, or practice that violates a rule of law,
21statute, or rule described in sub. (2); or
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(b) Extend the application of the rule of law, statute, or rule to a transaction
23not otherwise subject to the rule of law, statute, or rule.
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24409.202 Title to collateral immaterial. Except as otherwise provided with
25respect to consignments or sales of accounts, chattel paper, payment intangibles, or
1promissory notes, the provisions of this chapter with regard to rights and obligations
2apply whether title to collateral is in the secured party or the debtor.
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3409.203 Attachment and enforceability of security interest; proceeds;
4supporting obligations; formal requisites. (1) Attachment. A security interest
5attaches to collateral when it becomes enforceable against the debtor with respect
6to the collateral, unless an agreement expressly postpones the time of attachment.
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7(2) Enforceability. Except as otherwise provided in subs. (3) to (9), a security
8interest is enforceable against the debtor and 3rd parties with respect to the
9collateral only if:
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(a) Value has been given;
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(b) The debtor has rights in the collateral or the power to transfer rights in the
12collateral to a secured party; and
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(c) One of the following conditions is met:
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1. The debtor has authenticated a security agreement that provides a
15description of the collateral and, if the security interest covers timber to be cut, a
16description of the land concerned;
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2. The collateral is not a certificated security and is in the possession of the
18secured party under s. 409.313 pursuant to the debtor's security agreement;
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3. The collateral is a certificated security in registered form and the security
20certificate has been delivered to the secured party under s. 408.301 pursuant to the
21debtor's security agreement; or
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4. The collateral is deposit accounts, electronic chattel paper, investment
23property, or letter-of-credit rights, and the secured party has control under s.
24409.104, 409.105, 409.106, or 409.107 pursuant to the debtor's security agreement.
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1(3) Other uniform commercial code provisions. Subsection (2) is subject to s.
2404.210 on the security interest of a collecting bank, s. 405.118 on the security
3interest of a letter-of-credit issuer or nominated person, s. 409.110 on a security
4interest arising under ch. 402 or 411, and s. 409.206 on security interests in
5investment property.
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6(4) When person becomes bound by another person's security agreement. (a)
7A person becomes bound as debtor by a security agreement entered into by another
8person if, by operation of law other than this chapter or by contract:
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1. The security agreement becomes effective to create a security interest in the
10person's property; or
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2. The person becomes generally obligated for the obligations of the other
12person, including the obligation secured under the security agreement, and acquires
13or succeeds to all or substantially all of the assets of the other person.
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(b) A security agreement authenticated by one spouse is authenticated by the
15debtor under this section if that spouse acting alone has the right under s. 766.51 to
16manage and control the collateral, unless a marital property agreement or court
17decree that is binding on the secured party under s. 766.55 (4m) or 766.56 (2) (c)
18provides otherwise.
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19(5) Effect of new debtor becoming bound. If a new debtor becomes bound as
20debtor by a security agreement entered into by another person:
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(a) The agreement satisfies sub. (2) (c) with respect to existing or
22after-acquired property of the new debtor to the extent that the property is described
23in the agreement; and
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(b) Another agreement is not necessary to make a security interest in the
25property enforceable.
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1(6) Proceeds and supporting obligations. The attachment of a security
2interest in collateral gives the secured party the rights to proceeds provided by s.
3409.315 and is also attachment of a security interest in a supporting obligation for
4the collateral.
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5(7) Lien securing right to payment. The attachment of a security interest in
6a right to payment or performance secured by a security interest or other lien on
7personal or real property is also attachment of a security interest in the security
8interest, mortgage, or other lien.
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9(8) Security entitlement carried in securities account. The attachment of
10a security interest in a securities account is also attachment of a security interest in
11the security entitlements carried in the securities account.