409.315(4)(a)1.
1. A filed financing statement covers the original collateral;
409.315(4)(a)2.
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
409.315(4)(b)
(b) The proceeds are identifiable cash proceeds; or
409.315(4)(c)
(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.
409.315(5)
(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:
409.315(5)(a)
(a) When the effectiveness of the filed financing statement lapses under
s. 409.515 or is terminated under
s. 409.513; or
409.315(5)(b)
(b) The 21st day after the security interest attaches to the proceeds.
409.315 History
History: 2001 a. 10.
409.315 Annotation
If a security agreement does not explicitly provide that transfer of collateral constitutes default and the secured party is not entitled to immediate possession, sale of collateral is not a conversion. Production Credit Association of Chippewa Falls v. Equity Coop Livestock,
82 Wis. 2d 5,
261 N.W.2d 127 (1978).
409.315 Annotation
The rights of a security holder in collateral survive the transfer of the collateral under s. 409.311 made without the secured party's consent. Production Credit Association of Madison v. Nowatzski,
90 Wis. 2d 344,
280 N.W.2d 118 (1979).
409.315 Annotation
A condition imposed by a secured party on authorization to sell collateral is ineffective unless performance of the condition is within the buyer's control. Production Credit Association of Baraboo v. Pillsbury Co.
132 Wis. 2d 243, 392 N.W.2d (Ct. App. 1986).
409.315 Note
NOTE: The above annotated materials cite to the pre-
2001 Wis. Act 10 version of ch. 409.
409.316
409.316
Continued perfection of security interest following change in governing law. 409.316(1)
(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:
409.316(1)(a)
(a) The time perfection would have ceased under the law of that jurisdiction;
409.316(1)(b)
(b) The expiration of 4 months after a change of the debtor's location to another jurisdiction; or
409.316(1)(c)
(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.
409.316(2)
(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.
409.316(3)
(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:
409.316(3)(a)
(a) The collateral is located in one jurisdiction and subject to a security interest perfected under the law of that jurisdiction;
409.316(3)(b)
(b) Thereafter the collateral is brought into another jurisdiction; and
409.316(3)(c)
(c) Upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction.
409.316(4)
(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.
409.316(5)
(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:
409.316(5)(a)
(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
409.316(5)(b)
(b) The expiration of 4 months after the goods had become so covered.
409.316(6)
(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:
409.316(6)(a)
(a) The time the security interest would have become unperfected under the law of that jurisdiction; or
409.316(6)(b)
(b) The expiration of 4 months after a change of the applicable jurisdiction to another jurisdiction.
409.316(7)
(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.
409.316 History
History: 2001 a. 10.
409.316 Annotation
The 4-month period for reperfection provided by sub. (1) (b) does not apply to titled goods due to the applicability of ss. 409.301 (1) and 409.303. In re Baker,
430 F.3d 858 (2005).
409.317
409.317
Interests that take priority over or take free of security interest or agricultural lien. 409.317(1)
(1)
Conflicting security interests and rights of lien creditors. A security interest or agricultural lien is subordinate to the rights of:
409.317(1)(b)
(b) Except as otherwise provided in
sub. (5), a person that becomes a lien creditor before the earlier of the time:
409.317(1)(b)1.
1. The security interest or agricultural lien is perfected; or
409.317(2)
(2) Buyers that receive delivery. Except as otherwise provided in
sub. (5), a buyer, other than a secured party, of tangible chattel paper, tangible 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.
409.317(3)
(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.
409.317(4)
(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, electronic documents, 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.
409.317(5)
(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.
409.317 History
History: 2001 a. 10;
2009 a. 322.
409.318
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. 409.318(1)
(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.
409.318(2)
(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.
409.318 History
History: 2001 a. 10.
409.319
409.319
Rights and title of consignee with respect to creditors and purchasers. 409.319(1)
(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.
409.319(2)
(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.
409.319 History
History: 2001 a. 10.
409.320(1)(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.
409.320(2)
(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:
409.320(2)(c)
(c) Primarily for the buyer's personal, family, or household purposes; and
409.320(2)(d)
(d) Before the filing of a financing statement covering the goods.
409.320(3)
(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).
409.320(4)
(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.
409.320(5)
(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.
409.320 History
History: 2001 a. 10.
409.321
409.321
Licensee of general intangible and lessee of goods in ordinary course of business. 409.321(1)
(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.
409.321(2)
(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.
409.321(3)
(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.
409.321 History
History: 2001 a. 10.
409.322
409.322
Priorities among conflicting security interests in and agricultural liens on same collateral. 409.322(1)(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:
409.322(1)(a)
(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.
409.322(1)(b)
(b) A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien.
409.322(1)(c)
(c) The first security interest or agricultural lien to attach or become effective has priority if conflicting security interests and agricultural liens are unperfected.
409.322(2)
(2) Time of perfection: proceeds and supporting obligations. For the purposes of
sub. (1) (a):
409.322(2)(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
409.322(2)(b)
(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.
409.322(3)
(3) Special priority rules: proceeds and supporting obligations. Except as otherwise provided in
sub. (6), a security interest in collateral which qualifies for priority over a conflicting security interest under
s. 409.327,
409.328,
409.329,
409.330, or
409.331 also has priority over a conflicting security interest in:
409.322(3)(a)
(a) Any supporting obligation for the collateral; and
409.322(3)(b)2.
2. The proceeds are cash proceeds or of the same type as the collateral; and
409.322(3)(b)3.
3. In the case of proceeds that are proceeds of proceeds, all intervening proceeds are cash proceeds, proceeds of the same type as the collateral, or an account relating to the collateral.
409.322(4)
(4) First-to-file priority rule for certain collateral. Subject to
sub. (5) and except as otherwise provided in
sub. (6), if a security interest in chattel paper, deposit accounts, negotiable documents, instruments, investment property, or letter-of-credit rights is perfected by a method other than filing, conflicting perfected security interests in proceeds of the collateral rank according to priority in time of filing.
409.322(5)
(5) Applicability of sub. (4). Subsection (4) applies only if the proceeds of the collateral are not cash proceeds, chattel paper, negotiable documents, instruments, investment property, or letter-of-credit rights.
409.322(6)
(6) Limitations on subs. (1) to (5). Subsections (1) to
(5) are subject to:
409.322(6)(c)
(c) Section 405.118 with respect to a security interest of an issuer or nominated person; and
