409.105(4)
(4) In addition
ch. 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.
409.106
409.106
Definitions: "account"; "general intangibles". "Account" means any right to payment for goods sold or leased or for services rendered which is not evidenced by an instrument or chattel paper, whether or not it has been earned by performance. "General intangibles" means any personal property (including things in action) other than goods, accounts, chattel paper, documents, instruments, investment property and money. All rights to payment earned or unearned under a charter or other contract involving the use or hire of a vessel and all rights incident to the charter or contract are accounts.
409.106 History
History: 1973 c. 215;
1997 a. 297.
409.107
409.107
Definitions: "purchase money security interest". A security interest is a "purchase money security interest" to the extent that it is:
409.107(1)
(1) Taken or retained by the seller of the collateral to secure all or part of its price; or
409.107(2)
(2) Taken by a person who by making advances or incurring an obligation gives value to enable the debtor to acquire rights in or the use of collateral if such value is in fact so used.
409.108
409.108
When after-acquired collateral not security for antecedent debt. Where a secured party makes an advance, incurs an obligation, releases a perfected security interest, or otherwise gives new value which is to be secured in whole or in part by after-acquired property the secured party's security interest in the after-acquired collateral shall be deemed to be taken for new value and not as security for an antecedent debt if the debtor acquires the debtor's rights in such collateral either in the ordinary course of the debtor's business or under a contract of purchase made pursuant to the security agreement within a reasonable time after new value is given.
409.108 History
History: 1991 a. 316.
409.108 Annotation
Security interests in after-acquired property under the uniform commercial code. Skilton, 1974 WLR 925.
409.109
409.109
Classification of goods; "consumer goods"; "equipment"; "farm products"; "inventory". Goods are:
409.109(1)
(1) "Consumer goods" if they are used or bought for use primarily for personal, family or household purposes;
409.109(2)
(2) "Equipment" if they are used or bought for use primarily in business (including farming or a profession) or by a debtor who is a nonprofit organization or a governmental subdivision or agency or if the goods are not included in the definitions of inventory, farm products or consumer goods;
409.109(3)
(3) "Farm products" if they are crops or livestock or supplies used or produced in farming operations or if they are products of crops or livestock in their unmanufactured states (such as ginned cotton, wool-clip, maple syrup, milk and eggs), and if they are in the possession of a debtor engaged in raising, fattening, grazing or other farming operations. If goods are farm products they are neither equipment nor inventory;
409.109(4)
(4) "Inventory" if they are held by a person who holds them for sale or lease or to be furnished under contracts of service or if the person has so furnished them, or if they are raw materials, work in process or materials used or consumed in a business. Inventory of a person is not to be classified as the person's equipment.
409.109 History
History: 1991 a. 316.
409.109 Annotation
A security interest in all of a trucking company's "equipment" reasonably identified trucks as collateral. Milwaukee Mack Sales v. First Wis. Nat. Bank,
93 Wis. 2d 589,
287 N.W.2d 708 (1980).
409.109 Annotation
Goods classified as "inventory" under sub. (4) while in the possession of a debtor remain "inventory" while on lease status in the possession of the lessee. In re Watertown Tractor & Equipment Company., Inc.
94 Wis. 2d 622,
289 N.W.2d 288 (1980).
409.110
409.110
Sufficiency of description. For the purposes of this chapter any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described.
409.110 Annotation
A wrong statement of section, township, range and county where crops were grown was not minor, and, without directing further inquiry, was insufficient. Whether a party is misled by the description is not part of the inquiry under s. 409.110 or 409.402. Smith & Spindahl Enterprises, Inc. v. Lee,
206 Wis. 2d 662,
557 N.W.2d 865 (Ct. App. 1996).
409.111
409.111
Applicability of bulk transfer laws. The creation of a security interest is not a bulk transfer under
ch. 406 (see
s. 406.103).
409.112
409.112
Where collateral is not owned by debtor. Unless otherwise agreed, when a secured party knows that collateral is owned by a person who is not the debtor, the owner of the collateral is entitled to receive from the secured party any surplus under
s. 409.502 (2) or under
s. 409.504 (1), and is not liable for the debt or for any deficiency after resale, and the owner of the collateral has the same right as the debtor:
409.112(2)
(2) To receive notice of and to object to a secured party's proposal to retain the collateral in satisfaction of the indebtedness under
s. 409.505;
409.112 History
History: 1991 a. 316.
409.113
409.113
Security interests arising under ch. 402 or 411. A security interest arising solely under
ch. 402 or
411 is subject to the provisions of this chapter except that, to the extent that and so long as the debtor does not have or does not lawfully obtain possession of the goods, all of the following apply:
409.113(1)
(1) No security agreement is necessary to make the security interest enforceable.
409.113(2)
(2) No filing is required to perfect the security interest.
409.113(3)
(3) The rights of the secured party on default by the debtor are governed by
ch. 402 if a security interest arises solely under that chapter or by
ch. 411 if a security interest arises solely under that chapter.
409.113 History
History: 1991 a. 148.
409.114(1)(1) A person who delivers goods under a consignment which is not a security interest and who would be required to file under this chapter by
s. 402.326 (3) (c) has priority over a secured party who is or becomes a creditor of the consignee and who would have a perfected security interest in the goods if they were the property of the consignee, and also has priority with respect to identifiable cash proceeds received on or before delivery of the goods to a buyer, if:
409.114(1)(a)
(a) The consignor complies with the filing provision on sales with respect to consignments (
s. 402.326 (3) (c)) before the consignee receives possession of the goods; and
409.114(1)(b)
(b) The consignor gives notification in writing to the holder of the security interest if the holder has filed a financing statement covering the same types of goods before the date of the filing made by the consignor; and
409.114(1)(c)
(c) The holder of the security interest receives the notification before the consignee receives possession of the goods; and
409.114(1)(d)
(d) The notification states that the consignor expects to deliver goods on consignment to the consignee, describing the goods by item or type.
409.114(2)
(2) In the case of a consignment which is not a security interest and in which the requirements of
sub. (1) have not been met, a person who delivers goods to another is subordinate to a person who would have a perfected security interest in the goods if they were the property of the debtor.
409.114 History
History: 1973 c. 215;
1981 c. 390 s.
252.
409.114 Annotation
Legislative Council Note, 1973: Sub. (1) (c) was amended by the Special Committee to delete the words "within 5 years" which appear after "notification" in the official text. Under s. 409.403 (2), as amended by this proposal, the effectiveness of a filed financing statement lapses at the end of 5 years unless a continuation statement is filed prior to lapse. For this reason the official text requires that a new notice be made under this section and s. 409.312 (3) (c) every 5 years even though holders of conflicting security interests received notice when the financing statement was originally filed and will have constructive notice upon the filing of a continuation statement. The Special Committee felt this requirement of new notice every 5 years to be both unreasonable and unnecessary. (Bill 177-S)
409.115
409.115
Investment property. 409.115(1)(a)
(a) "Commodity account" means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer.
409.115(1)(b)
(b) "Commodity contract" means a commodity futures contract, an option on a commodity futures contract, a commodity option or other contract that, in each case, is:
409.115(1)(b)1.
1. Traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to the federal commodities laws; or
409.115(1)(b)2.
2. Traded on a foreign commodity board of trade, exchange or market, and is carried on the books of a commodity intermediary for a commodity customer.
409.115(1)(c)
(c) "Commodity customer" means a person for whom a commodity intermediary carries a commodity contract on its books.
409.115(1)(d)1.
1. A person who is registered as a futures commission merchant under the federal commodities laws; or
409.115(1)(d)2.
2. A person who in the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to the federal commodities laws.
409.115(1)(e)
(e) "Control" with respect to a certificated security, uncertificated security, or security entitlement has the meaning specified in
s. 408.106. A secured party has control over a commodity contract if, by agreement among the commodity customer, the commodity intermediary, and the secured party, the commodity intermediary has agreed that it will apply any value distributed on account of the commodity contract as directed by the secured party without further consent by the commodity customer. If a commodity customer grants a security interest in a commodity contract to its own commodity intermediary, the commodity intermediary as secured party has control. A secured party has control over a securities account or commodity account if the secured party has control over all security entitlements or commodity contracts carried in the securities account or commodity account.
409.115(2)
(2) Attachment or perfection of a security interest in a securities account is also attachment or perfection of a security interest in all security entitlements carried in the securities account. Attachment or perfection of a security interest in a commodity account is also attachment or perfection of a security interest in all commodity contracts carried in the commodity account.
409.115(3)
(3) A description of collateral in a security agreement or financing statement is sufficient to create or perfect a security interest in a certificated security, uncertificated security, security entitlement, securities account, commodity contract or commodity account whether it describes the collateral by those terms, or as investment property, or by description of the underlying security, financial asset or commodity contract. A description of investment property collateral in a security agreement or financing statement is sufficient if it identifies the collateral by specific listing, by category, by quantity, by a computational or allocational formula or procedure, or by any other method, if the identity of the collateral is objectively determinable.
409.115(4)
(4) Perfection of a security interest in investment property is governed by the following rules:
409.115(4)(a)
(a) A security interest in investment property may be perfected by control.
409.115(4)(b)
(b) Except as otherwise provided in
pars. (c) and
(d), a security interest in investment property may be perfected by filing.
409.115(4)(c)
(c) If the debtor is a broker or securities intermediary, a security interest in investment property is perfected when it attaches. The filing of a financing statement with respect to a security interest in investment property granted by a broker or securities intermediary has no effect for purposes of perfection or priority with respect to that security interest.
409.115(4)(d)
(d) If a debtor is a commodity intermediary, a security interest in a commodity contract or a commodity account is perfected when it attaches. The filing of a financing statement with respect to a security interest in a commodity contract or a commodity account granted by a commodity intermediary has no effect for purposes of perfection or priority with respect to that security interest.
409.115(5)
(5) Priority between conflicting security interests in the same investment property is governed by the following rules:
409.115(5)(a)
(a) A security interest of a secured party who has control over investment property has priority over a security interest of a secured party who does not have control over the investment property.
409.115(5)(b)
(b) Except as otherwise provided in
pars. (c) and
(d), conflicting security interests of secured parties each of whom has control rank equally.
409.115(5)(c)
(c) Except as otherwise agreed by the securities intermediary, a security interest in a security entitlement or a securities account granted to the debtor's own securities intermediary has priority over any security interest granted by the debtor to another secured party.
409.115(5)(d)
(d) Except as otherwise agreed by the commodity intermediary, a security interest in a commodity contract or a commodity account granted to the debtor's own commodity intermediary has priority over any security interest granted by the debtor to another secured party.
409.115(5)(e)
(e) Conflicting security interests granted by a broker, a securities intermediary or a commodity intermediary which are perfected without control rank equally.
409.115(5)(f)
(f) In all other cases, priority between conflicting security interests in investment property is governed by
s. 409.312 (5),
(6) and
(7).
Section 409.312 (4) does not apply to investment property.
409.115(6)
(6) If a security certificate in registered form is delivered to a secured party pursuant to agreement, a written security agreement is not required for attachment or enforceability of the security interest, delivery suffices for perfection of the security interest, and the security interest has priority over a conflicting security interest perfected by means other than control, even if a necessary endorsement is lacking.
