409.403 Annotation
Legislative Council Note, 1973: In sub. (7), the Special Committee deleted the words "and any owner of record shown on the financing statement" which appear after the word "debtor" in the official text. This change is in conformity with changes made in ss. 409.402 (3) 3. and 409.402 (5). See the note to s. 409.402 (3) 3. (Bill 177-S)
409.403 Annotation
When creditor fails to file continuation statement under (2), perfection lapses and creditor may assume status of unperfected secured creditor as against prelapse purchaser. Hanley Implement v. Riesterer Equip. 150 W (2d) 161, 441 NW (2d) 304 (Ct. App. 1989).
409.403 Annotation
See note to 409.401, citing 63 Atty. Gen. 439.
409.403 Annotation
Filing of 2nd financing statement which did not refer to original filing does not bring creditor into substantial compliance with (3). Bostwick-Braun Co. v. Owens, 634 F Supp. 839 (1986).
409.404
409.404
Termination statement. 409.404(1)(a)(a)
Requirement for filing termination statement with the office of the register of deeds. If a financing statement covering consumer goods is filed on or after July 1, 1974, then within one month or within 10 days following written demand by the debtor after there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must file with each filing officer with whom the financing statement was filed, a termination statement to the effect that the secured party no longer claims a security interest under the financing statement, which shall be identified by file number. In other cases whenever there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must on written demand by the debtor send the debtor, for each filing officer with whom the financing statement was filed, a termination statement to the effect that the secured party no longer claims a security interest under the financing statement, which shall be identified by file number. A termination statement signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record complying with
s. 409.405 (2), including payment of the required fee.
409.404(1)(b)
(b) Requirement for filing termination statement with the department of financial institutions. Except as provided in
par. (c), if a financing statement is filed with the department, then within one month or within 10 days following written demand by the debtor after there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must file with the department a termination statement to the effect that the secured party no longer claims a security interest under the financing statement, which shall be identified by file number. A termination statement signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record complying with
s. 409.405 (2), including payment of the required fee.
409.404(1)(c)
(c)
Exceptions to requirement for filing termination statement with the department of financial institutions. No termination statement needs to be filed with the department pursuant to
par. (b) if:
409.404(1)(c)1.
1. The effectiveness of the financing statement or continuation statement has lapsed prior to the time when a termination statement is required to be filed under
par. (b).
409.404(1)(c)2.
2. The financing statement states that a continuing business relationship exists between the debtor and the secured party.
409.404(1)(c)3.
3. The financing statement was filed prior to January 1, 1978.
409.404(1)(d)
(d)
Failure to file a termination statement. If the affected secured party fails to file a termination statement as required by this subsection, or to send such a termination statement within 10 days after receipt of the debtor's written demand the secured party is liable to the debtor for $25, and in addition for any loss caused to the debtor by such failure.
409.404(2)
(2) On presentation to the filing officer of a termination statement the officer must note it in the index. If the officer has received the termination statement in duplicate, the officer shall return one copy of the termination statement to the secured party stamped to show the time of receipt. If the filing officer has a microfilm, other photographic record or optical disk or electronic copy of the financing statement, and of any related continuation statement, statement of assignment and statement of release, the officer may remove the originals from the files at any time after receipt of the termination statement, or if the officer has no such record, the officer may remove them from the files at any time after one year after receipt of the termination statement.
409.404(3)(a)(a)
Fees for filing a termination statement with the office of the register of deeds. There is no fee for a termination statement that is filed with the office of the register of deeds and there is no fee for indexing any name in connection with the termination process.
409.404(3)(b)
(b)
Fees for filing a termination statement with the department of financial institutions. There is no fee for a termination statement which is filed with the department and there is no fee for indexing any name in connection with the termination process.
409.404 Annotation
Legislative Council Note, 1973: Sub. (1) presently provides that a termination statement must be filed in all cases. This is not a part of the official text. The Special Committee decided to delete the mandatory requirement, except in the case of termination statements relating to security interests in consumer goods. It should be noted that the Wisconsin Consumer Act, ch. 239, laws of 1971, has additional requirements with respect to consumer credit transactions. (Bill 177-S)
409.405
409.405
Assignment of security interest; duties of filing officer; fees. 409.405(1)(1) An original financing statement may disclose an assignment of a security interest in the collateral described in the financing statement by indication in the financing statement of the name and address of the assignee or by an assignment itself or a copy thereof on the face or back of the statement. On presentation to the filing officer of such a financing statement the filing officer shall mark the same as provided in
s. 409.403 (4). The fee for filing, indexing and stamping a copy furnished by the secured party to show the date and place of filing for an original financing statement so indicating an assignment is $8 if the statement is on the standard form prescribed by the department and is $16 if the statement is not on the standard form or if additional pages are attached to the standard form. The fee for filing an original financing statement indicating an assignment and subject to
s. 409.402 (5) is $10 if the statement is on the standard form and is $20 if the statement is not on the standard form or if additional pages are attached to the standard form. A register of deeds shall forward $3 to the department for each original financing statement indicating an assignment of a security interest that is filed with the office of the register of deeds.
409.405(1m)
(1m) There is no fee for processing the termination statement.
409.405(2)
(2) A secured party may assign of record all or part of his or her rights under a financing statement by the filing in the place where the original financing statement was filed of a separate written statement of assignment signed by the secured party of record and setting forth the name of the secured party of record and the debtor, the file number and the date of filing of the financing statement and the name and address of the assignee and containing a description of the collateral assigned. A copy of the assignment is sufficient as a separate statement if it complies with the preceding sentence. On presentation to the filing officer of such a separate statement, the filing officer shall mark such separate statement with the date and hour of the filing. The officer shall note the assignment on the index of the financing statement, or in the case of a fixture filing, or a filing covering timber to be cut, or covering minerals or the like, including oil and gas, or accounts subject to
s. 409.103 (5), the officer shall index the assignment under the name of the assignor as grantor and, to the extent that the law of this state provides for indexing the assignment of a mortgage under the name of the assignee, the officer shall index the assignment of the financing statement under the name of the assignee. The fee for filing, indexing and furnishing filing data about such a separate statement of assignment is $5 if the statement is on the standard form prescribed by the department and is $10 if the statement is not on the standard form or if additional pages are attached to the standard form. A register of deeds shall forward $3 to the department for each statement of assignment filed with the office of the register of deeds. Notwithstanding this subsection, an assignment of record of a security interest in a fixture contained in a mortgage effective as a fixture filing under
s. 409.402 (6) may be made only by an assignment of the mortgage in the manner provided by the law of this state other than
chs. 401 to
411.
409.405(3)
(3) After the disclosure or filing of an assignment under this section, the assignee is the secured party of record.
409.406
409.406
Release of collateral; duties of filing officer; fees. A secured party of record may by his or her signed statement release all or a part of any collateral described in a filed financing statement. The statement of release is sufficient if it contains a description of the collateral being released, the name and address of the debtor, the name and address of the secured party, and the file number of the financing statement. A statement of release signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record and complying with
s. 409.405 (2), including payment of the required fee. Upon presentation of such a statement of release to the filing officer, the officer shall mark the statement with the hour and date of filing and shall note the same upon the margin of the index of the filing of the financing statement. The fee for filing and noting such a statement of release is $5 if the statement is on the standard form prescribed by the department and is $10 if the statement is not on the standard form or if additional pages are attached to the standard form. A register of deeds shall forward $3 to the department for each statement of release filed with the office of the register of deeds.
409.407
409.407
Duties and liability of filing officer. 409.407(1)
(1)
Information from filing officer. If the person filing any financing statement, termination statement, statement of assignment, or statement of release, furnishes the filing officer a copy thereof, the filing officer shall upon request note upon the copy the file number and date and hour of the filing of the original and deliver or send the copy to such person.
409.407(2)
(2) Oral request for information from filing officer; issuance of certificate; fees. 409.407(2)(a)(a) Upon the oral request of any person, the filing officer shall disclose orally at the time of the request or as soon thereafter as possible any presently effective statement naming a particular debtor and if there is such a statement, giving the date and hour of filing of each such statement and the names and addresses of each secured party therein. The fee for the information is $10. Upon the request for a copy of a statement, the filing officer shall furnish copies for a fee of $1 per page.
409.407(2)(b)
(b) Upon request of any person, the filing officer shall issue a certificate showing whether there is on file on the date and hour stated therein, any presently effective statement naming a particular debtor and if there is, giving the date and hour of filing of each such statement and the names and addresses of each secured party therein. The fee for such a certificate is $10. Upon request the filing officer shall furnish a certificate and copies of any filed statement for a fee of $1 for each page of the copied statement.
409.407(2)(c)
(c) For providing any service under
par. (a) or
(b) in an expeditious manner, the department may charge and collect an expedited service fee of $25 in addition to any fee required under
par. (a) or
(b). Only one expedited service fee may be charged for multiple identical certificates if the certificates are requested at the same time and issued at the same time.
409.407(3)
(3) Liability of filing officer. No filing officer nor any of the filing officer's employes or agents shall be subject to personal liability by reason of any error or omission in the performance of any duty under
ch. 409 except in case of misconduct as defined in
s. 946.12.
409.408
409.408
Financing statements covering consigned or leased goods. A consignor or lessor of goods may file a financing statement using the terms "consignor", "consignee", "lessor", "lessee" or the like instead of the terms specified in
s. 409.402.
Sections 409.401 to
409.409 apply as appropriate to such a financing statement but its filing shall not of itself be a factor in determining whether or not the consignment or lease is intended as security (
s. 401.201 (37)). However, if it is determined for other reasons that the consignment or lease is so intended, a security interest of the consignor or lessor which attaches to the consigned or leased goods is perfected by such filing.
409.408 History
History: 1973 c. 215.
409.409
409.409
Storage of records. Whenever in this chapter a filing officer is required to mark, index or file any financing statement, termination statement, continuation statement, statement of assignment or statement of release, the officer may destroy the original statement after a microfilm or other photographic copy or an optical disk or electronic copy has been prepared and filed for retention.
409.410
409.410
Statewide lien system. 409.410(1)
(1) The department and the office of each register of deeds in this state shall establish and maintain at least one computer terminal allowing the direct entry into permanent computer storage and the direct retrieval from permanent computer storage of information under
sub. (2).
409.410(2)
(2) Beginning 30 days after notification by the department, each filing officer shall enter all information contained in all financing statements, amendments, termination statements, continuation statements, statements of assignment and statements of release submitted for filing, indexing or marking under
ss. 409.401 to
409.408, including the date and time of filing these statements or amendments, into permanent computer storage by means of a computer terminal established and maintained under
sub. (1).
409.410 History
History: 1985 a. 29;
1995 a. 27.
409.411
409.411
Uniform commercial code statewide lien system council. 409.411(1)(1) The uniform commercial code statewide lien system council shall advise the department of financial institutions on the uniform commercial code statewide lien system under
s. 409.410.
409.411(2)
(2) The department shall establish and maintain, in consultation with the uniform commercial code statewide lien system council, computer and any other services necessary to support the uniform commercial code statewide lien system under
s. 409.410 but may not maintain a central filing system, as defined in
7 USC 1631 (c) (2), for farm products, as defined in
7 USC 1631 (c) (5).
409.411 History
History: 1995 a. 216 ss.
6,
59,
68.
DEFAULT
409.501
409.501
Default; procedure when security agreement covers both real and personal property. 409.501(1)
(1) When a debtor is in default under a security agreement, a secured party has the rights and remedies provided in
ss. 409.501 to
409.507 and except as limited by
sub. (3) those provided in the security agreement. The secured party may reduce the claim to judgment, foreclose or otherwise enforce the security interest by any available judicial procedure. If the collateral is documents the secured party may proceed either as to the documents or as to the goods covered thereby. A secured party in possession has the rights, remedies and duties provided in
s. 409.207. The rights and remedies referred to in this subsection are cumulative.
409.501(2)
(2) After default, the debtor has the rights and remedies provided in
ss. 409.501 to
409.507, those provided in the security agreement and those provided in
s. 409.207.
409.501(3)
(3) To the extent that they give rights to the debtor and impose duties on the secured party, the rules stated in the sections and subsections referred to in
pars. (a) to
(e) may not be waived or varied except as provided with respect to compulsory disposition of collateral (
ss. 409.504 (3) and
409.505 (1)) and with respect to redemption of collateral (
s. 409.506) but the parties may by agreement determine the standards by which the fulfillment of these rights and duties is to be measured if such standards are not manifestly unreasonable:
409.501(4)
(4) If the security agreement covers both real and personal property, the secured party may proceed under
ss. 409.501 to
409.507 as to the personal property or the secured party may proceed as to both the real and the personal property in accordance with the secured party's rights and remedies in respect of the real property in which case the provisions of
ss. 409.501 to
409.507 do not apply.
409.501(5)
(5) When a secured party has reduced a claim to judgment the lien of any levy which may be made upon the secured party's collateral by virtue of any execution based upon the judgment shall relate back to the date of the perfection of the security interest in such collateral. A judicial sale, pursuant to such execution, is a foreclosure of the security interest by judicial procedure within the meaning of this section, and the secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this chapter.
409.501 Annotation
A secured creditor can retain a debtor's collateral while seeking an independent action for a money judgment. Dorman v. Morris, 185 W (2d) 845, 519 NW (2d) 685 (Ct. App. 1994).
409.502
409.502
Collection rights of secured party. 409.502(1)
(1) When so agreed and in any event on default the secured party is entitled to notify an account debtor or the obligor on an instrument to make payment to the secured party whether or not the assignor was theretofore making collections on the collateral, and also to take control of any proceeds to which the secured party is entitled under
s. 409.306.
409.502(2)
(2) A secured party who by agreement is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor and who undertakes to collect from the account debtors or obligors must proceed in a commercially reasonable manner and may deduct his or her reasonable expenses of realization from the collections. If the security agreement secures an indebtedness, the secured party must account to the debtor for any surplus, and unless otherwise agreed, the debtor is liable for any deficiency. But, if the underlying transaction was a sale of accounts or chattel paper, the debtor is entitled to any surplus or is liable for any deficiency only if the security agreement so provides.
409.502 History
History: 1973 c. 215;
1991 a. 316.
409.503
409.503
Secured party's right to take possession after default. Unless otherwise agreed a secured party has on default the right to take possession of the collateral. In taking possession a secured party may proceed without judicial process if this can be done without breach of the peace or may proceed by action. If the security agreement so provides the secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties. Without removal a secured party may render equipment unusable, and may dispose of collateral on the debtor's premises under
s. 409.504.
409.503 Annotation
A "breach of the peace" under this section has the same meaning as in s. 425.206. Repossession in disregard of the debtor's oral protest is a breach of the peace. Punitive damages may be appropriate as the result of the breach of the peace. Hollibush v. Ford Motor Company, 179 W (2d) 799, 508 NW (2d) 449 (Ct. App. 1993).
409.503 Annotation
A secured creditor who unequivocally takes possession of collateral has a duty to exercise due care in regard to the collateral. Nischke v. Farmers & Merchants Bank, 187 W (2d) 96, 522 NW (2d) 542 (Ct. App. 1994).
409.503 Annotation
Under either state or federal law, auctioneer selling livestock covered by security agreement would be liable for full purchase price. United States v. Midwest Livestock Producers Coop. 493 F Supp. 1001 (1980).
409.503 Annotation
"Proceed by action" refers to replevin proceeding under ch. 810. Del's Big Saver Foods v. Carpenter Cook, Inc. 603 F Supp. 1071 (1985).
409.503 Annotation
The debtor's duty to deliver collateral upon default. Gilmer, 53 MLR 33.
409.503 Annotation
The state action conundrum reexamined: a new approach and its application to the constitutionality of creditor self-help remedies. 62 MLR 414 (1979).
409.503 Annotation
The impact of denying self-help repossession of automobiles: a case study of the Wisconsin consumer act. Whitford, Laufer, 1975 WLR 607.
409.504
409.504
Secured party's right to dispose of collateral after default; effect of disposition. 409.504(1)
(1) A secured party after default may sell, lease or otherwise dispose of any or all of the collateral in its then condition or following any commercially reasonable preparation or processing. Any sale of goods is subject to
ch. 402. The proceeds of disposition shall be applied in the order following to:
409.504(1)(a)
(a) The reasonable expenses of retaking, holding, preparing for sale or lease, selling, leasing and the like and, to the extent provided for in the agreement and not prohibited by law, the reasonable attorneys' fees and legal expenses incurred by the secured party;
409.504(1)(b)
(b) The satisfaction of indebtedness secured by the security interest under which the disposition is made;
409.504(1)(c)
(c) The satisfaction of indebtedness secured by any subordinate security interest in the collateral if written notification of demand therefor is received before distribution of the proceeds is completed. If requested by the secured party, the holder of a subordinate security interest must seasonably furnish reasonable proof of the holder's interest, and unless the holder does so, the secured party need not comply with the holder's demand.
409.504(2)
(2) If the security interest secures an indebtedness, the secured party must account to the debtor for any surplus, and, unless otherwise agreed, the debtor is liable for any deficiency. But if the underlying transaction was a sale of accounts or chattel paper, the debtor is entitled to any surplus or is liable for any deficiency only if the security agreement so provides.
409.504(3)
(3) Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if the debtor has not signed after default a statement renouncing or modifying the debtor's right to notification of sale and except in the case of consumer goods to any other person who has a security interest in the collateral and who has duly filed a financing statement indexed in the name of the debtor in this state. The secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations the secured party may buy at private sale.
409.504(4)
(4) When collateral is disposed of by a secured party after default, the disposition transfers to a purchaser for value all of the debtor's rights therein, discharges the security interest under which it is made and any security interest or lien subordinate thereto. The purchaser takes free of all such rights and interests even though the secured party fails to comply with the requirements of
ss. 409.501 to
409.507 or of any judicial proceedings:
409.504(4)(a)
(a) In the case of a public sale, if the purchaser has no knowledge of any defects in the sale and if the purchaser does not buy in collusion with the secured party, other bidders or the person conducting the sale; or
409.504(4)(b)
(b) In any other case, if the purchaser acts in good faith.
409.504(5)
(5) A person who is liable to a secured party under a guaranty, indorsement, repurchase agreement or the like and who receives a transfer of collateral from the secured party or is subrogated to the secured party's rights has thereafter the rights and duties of the secured party. Such a transfer of collateral is not a sale or disposition of the collateral under this chapter.
409.504 History
History: 1973 c. 215;
1991 a. 316.
409.504 Annotation
Legislative Council Note, 1973: The official text amended sub. (3) to require the secured party to notify only persons, other than the debtor, who had notified the secured party in writing of their claim of an interest in the collateral to be sold at public or private sale. Presently, notification must be given to every person who has duly filed a financing statement indexed in the name of the debtor and every person known by the secured party to have an interest in the collateral; this requirement necessitates a complete record search in case of any sale. The official text also expressly provides the debtor with the right to default. The Special Committee rejected the substantial lessening of the notification requirement and decided to retain present language with the exception of the addition of the right to renounce notice and the deletion of the requirement of giving notice to persons "known" by the secured party to have a security interest in the collateral. (Bill 177-S)
409.504 Annotation
The burden of proving that a private sale was commercially reasonable is on the seller. Proof that the sale was made at the wholesale price does not establish reasonableness. Vic Hansen & Sons, Inc. v. Crowley, 57 W (2d) 106, 203 NW (2d) 728.
409.504 Annotation
Sub. (1) (a) relates to attorney's fees incurred in liquidating collateral, not in suit on promissory note. Kohlenberg v. American Plumbing Supply Co. 82 W (2d) 384, 263 NW (2d) 496.
409.504 Annotation
Primary focus of commercial reasonableness under (3) is not proceeds from sale, but procedures employed for sale. Appleton State Bank v. Van Dyke Ford, Inc. 90 W (2d) 200, 279 NW (2d) 443 (1979).
