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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.
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12(9) Commodity contracts carried in commodity account. The attachment of
13a security interest in a commodity account is also attachment of a security interest
14in the commodity contracts carried in the commodity account.
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15409.204 After-acquired property; future advances. (1)
After-acquired
16collateral. Except as otherwise provided in sub. (2), a security agreement may
17create or provide for a security interest in after-acquired collateral.
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18(2) When after-acquired property clause not effective. A security interest
19does not attach under a term constituting an after-acquired property clause to:
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(a) Consumer goods, other than an accession when given as additional security,
21unless the debtor acquires rights in them within 10 days after the secured party gives
22value; or
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(b) A commercial tort claim.
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24(3) Future advances and other value. A security agreement may provide that
25collateral secures, or that accounts, chattel paper, payment intangibles, or
1promissory notes are sold in connection with, future advances or other value,
2whether or not the advances or value are given pursuant to commitment.
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3409.205 Use or disposition of collateral permissible. (1) When security
4interest not invalid or fraudulent. A security interest is not invalid or fraudulent
5against creditors solely because:
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(a) The debtor has the right or ability to:
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1. Use, commingle, or dispose of all or part of the collateral, including returned
8or repossessed goods;
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2. Collect, compromise, enforce, or otherwise deal with collateral;
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3. Accept the return of collateral or make repossessions; or
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4. Use, commingle, or dispose of proceeds; or
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(b) The secured party fails to require the debtor to account for proceeds or
13replace collateral.
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14(2) Requirements of possession not relaxed. This section does not relax the
15requirements of possession if attachment, perfection, or enforcement of a security
16interest depends upon possession of the collateral by the secured party.
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17409.206 Security interest arising in purchase or delivery of financial
18asset. (1) Security interest when person buys through securities intermediary. 19A security interest in favor of a securities intermediary attaches to a person's
20security entitlement if:
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(a) The person buys a financial asset through the securities intermediary in a
22transaction in which the person is obligated to pay the purchase price to the
23securities intermediary at the time of the purchase; and
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(b) The securities intermediary credits the financial asset to the buyer's
25securities account before the buyer pays the securities intermediary.
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1(2) Security interest secures obligation to pay for financial asset. The
2security interest described in sub. (1) secures the person's obligation to pay for the
3financial asset.
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4(3) Security interest in payment against delivery transaction. A security
5interest in favor of a person that delivers a certificated security or other financial
6asset represented by a writing attaches to the security or other financial asset if:
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(a) The security or other financial asset:
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1. In the ordinary course of business is transferred by delivery with any
9necessary endorsement or assignment; and
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2. Is delivered under an agreement between persons in the business of dealing
11with such securities or financial assets; and
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(b) The agreement calls for delivery against payment.
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13(4) Security interest secures obligation to pay for delivery. The security
14interest described in sub. (3) secures the obligation to make payment for the delivery.
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15409.207 Rights and duties of secured party having possession or
16control of collateral. (1) Duty of care when secured party in possession. Except
17as otherwise provided in sub. (4), a secured party shall use reasonable care in the
18custody and preservation of collateral in the secured party's possession. In the case
19of chattel paper or an instrument, reasonable care includes taking necessary steps
20to preserve rights against prior parties unless otherwise agreed.
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21(2) Expenses, risks, duties, and rights when secured party in possession. 22Except as otherwise provided in sub. (4), if a secured party has possession of
23collateral:
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1(a) Reasonable expenses, including the cost of insurance and payment of taxes
2or other charges, incurred in the custody, preservation, use, or operation of the
3collateral are chargeable to the debtor and are secured by the collateral;
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(b) The risk of accidental loss or damage is on the debtor to the extent of a
5deficiency in any effective insurance coverage;
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(c) The secured party shall keep the collateral identifiable, but fungible
7collateral may be commingled; and
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(d) The secured party may use or operate the collateral:
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1. For the purpose of preserving the collateral or its value;
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2. As permitted by an order of a court having competent jurisdiction; or
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3. Except in the case of consumer goods, in the manner and to the extent agreed
12by the debtor.
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13(3) Duties and rights when secured party in possession or control. Except
14as otherwise provided in sub. (4), a secured party having possession of collateral or
15control of collateral under s. 409.104, 409.105, 409.106, or 409.107:
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(a) May hold as additional security any proceeds, except money or funds,
17received from the collateral;
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(b) Shall apply money or funds received from the collateral to reduce the
19secured obligation, unless remitted to the debtor; and
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(c) May create a security interest in the collateral.
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21(4) Buyer of certain rights to payment. If the secured party is a buyer of
22accounts, chattel paper, payment intangibles, or promissory notes or a consignor:
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(a) Subsection (1) does not apply unless the secured party is entitled under an
24agreement:
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1. To charge back uncollected collateral; or
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12. Otherwise to full or limited recourse against the debtor or a secondary obligor
2based on the nonpayment or other default of an account debtor or other obligor on
3the collateral; and
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(b) Subsections (1) and (2) do not apply.
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5409.208 Additional duties of secured party having control of collateral.
6(1) Applicability of section. This section applies to cases in which there is no
7outstanding secured obligation and the secured party is not committed to make
8advances, incur obligations, or otherwise give value.
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9(2) Duties of secured party after receiving demand from debtor. Within 10
10days after receiving an authenticated demand by the debtor:
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(a) A secured party having control of a deposit account under s. 409.104 (1) (b)
12shall send to the bank with which the deposit account is maintained an
13authenticated statement that releases the bank from any further obligation to
14comply with instructions originated by the secured party;
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(b) A secured party having control of a deposit account under s. 409.104 (1) (c)
16shall:
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1. Pay the debtor the balance on deposit in the deposit account; or
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2. Transfer the balance on deposit into a deposit account in the debtor's name;
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(c) A secured party, other than a buyer, having control of electronic chattel
20paper under s. 409.105 shall:
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1. Communicate the authoritative copy of the electronic chattel paper to the
22debtor or its designated custodian;
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2. If the debtor designates a custodian that is the designated custodian with
24which the authoritative copy of the electronic chattel paper is maintained for the
25secured party, communicate to the custodian an authenticated record releasing the
1designated custodian from any further obligation to comply with instructions
2originated by the secured party and instructing the custodian to comply with
3instructions originated by the debtor; and
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3. Take appropriate action to enable the debtor or its designated custodian to
5make copies of or revisions to the authoritative copy which add or change an
6identified assignee of the authoritative copy without the consent of the secured party;
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(d) A secured party having control of investment property under s. 408.106 (4)
8(b) or 409.106 (2) shall send to the securities intermediary or commodity
9intermediary with which the security entitlement or commodity contract is
10maintained an authenticated record that releases the securities intermediary or
11commodity intermediary from any further obligation to comply with entitlement
12orders or directions originated by the secured party; and
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(e) A secured party having control of a letter-of-credit right under s. 409.107
14shall send to each person having an unfulfilled obligation to pay or deliver proceeds
15of the letter of credit to the secured party an authenticated release from any further
16obligation to pay or deliver proceeds of the letter of credit to the secured party.
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17409.209 Duties of secured party if account debtor has been notified of
18assignment.
(1) Applicability of section. Except as otherwise provided in sub. (3),
19this section applies if:
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(a) There is no outstanding secured obligation; and
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(b) The secured party is not committed to make advances, incur obligations, or
22otherwise give value.
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23(2) Duties of secured party after receiving demand from debtor. Within 10
24days after receiving an authenticated demand by the debtor, a secured party shall
25send to an account debtor that has received notification of an assignment to the
1secured party as assignee under s. 409.406 (1) an authenticated record that releases
2the account debtor from any further obligation to the secured party.
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3(3) Inapplicability to sales. This section does not apply to an assignment
4constituting the sale of an account, chattel paper, or payment intangible.
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5409.210 Request for accounting; request regarding list of collateral or
6statement of account. (1) Definitions. In this section:
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(a) "Request" means a record of a type described in par. (b), (c), or (d).
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(b) "Request for an accounting" means a record authenticated by a debtor
9requesting that the recipient provide an accounting of the unpaid obligations secured
10by collateral and reasonably identifying the transaction or relationship that is the
11subject of the request.
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(c) "Request regarding a list of collateral" means a record authenticated by a
13debtor requesting that the recipient approve or correct a list of what the debtor
14believes to be the collateral securing an obligation and reasonably identifying the
15transaction or relationship that is the subject of the request.