Chapter 409

409.311 409.311 Perfection of security interests in property subject to certain statutes, regulations, and treaties.

409.311(1) (1) Security interest subject to other law. Except as otherwise provided in sub. (4), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to:

409.311(1)(a) (a) A statute, regulation, or treaty of the United States whose requirements for a security interest’s obtaining priority over the rights of a lien creditor with respect to the property preempt s. 409.310 (1).

409.311(1)(b) (b) The following vehicle title statutes: ss. 342.19 and 342.20.

409.311(1)(bm) (bm) The following boat title statutes: ss. 30.57, 30.572, and 30.573.

409.311(1)(c) (c) A statute of another jurisdiction which provides for a security interest to be indicated on a certificate of title as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the property.

409.311(1)(d) (d) Sections 182.025 and 190.11 and other statutes providing for central filing.

409.311(1)(e) (e) A master lease entered into by the state under s. 16.76 (4).

409.311(1)(f) (f) The manufactured home security interest provisions under subch. V of ch. 101.

409.311(2) (2) Compliance with other law. Compliance with the requirements of a statute, regulation, or treaty described in sub. (1) for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this chapter. Except as otherwise provided in sub. (4) and ss. 409.313 and 409.316 (4) and (5) for goods covered by a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in sub. (1) may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral.

409.311(3) (3) Duration and renewal of perfection. Except as otherwise provided in sub. (4) and s. 409.316 (4) and (5), duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in sub. (1) are governed by the statute, regulation, or treaty. In other respects, the security interest is subject to this chapter.

409.311(4) (4) Inapplicability to certain inventory. During any period in which collateral subject to a statute specified in sub. (1) (b), (bm), or (f) is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person.

409.311 History History: 2001 a. 10; 2011 a. 206.

409.312 409.312 Perfection of security interests in chattel paper, deposit accounts, documents, goods covered by documents, instruments, investment property, letter-of-credit rights, and money; perfection by permissive filing; temporary perfection without filing or transfer of possession.

409.312(1) (1) Perfection by filing permitted. A security interest in chattel paper, negotiable documents, instruments, or investment property may be perfected by filing.

409.312(2) (2) Control or possession of certain collateral. Except as otherwise provided in s. 409.315 (3) and (4) for proceeds:

409.312(2)(a) (a) A security interest in a deposit account may be perfected only by control under s. 409.314;

409.312(2)(b) (b) And except as otherwise provided in s. 409.308 (4), a security interest in a letter-of-credit right may be perfected only by control under s. 409.314; and

409.312(2)(c) (c) A security interest in money may be perfected only by the secured party’s taking possession under s. 409.313.

409.312(3) (3) Goods covered by negotiable document. While goods are in the possession of a bailee that has issued a negotiable document covering the goods:

409.312(3)(a) (a) A security interest in the goods may be perfected by perfecting a security interest in the document; and

409.312(3)(b) (b) A security interest perfected in the document has priority over any security interest that becomes perfected in the goods by another method during that time.

409.312(4) (4) Goods covered by nonnegotiable document. While goods are in the possession of a bailee that has issued a nonnegotiable document covering the goods, a security interest in the goods may be perfected by:

409.312(4)(a) (a) Issuance of a document in the name of the secured party;

409.312(4)(b) (b) The bailee’s receipt of notification of the secured party’s interest; or

409.312(4)(c) (c) Filing as to the goods.

409.312(5) (5) Temporary perfection: new value. A security interest in certificated securities, negotiable documents, or instruments is perfected without filing or the taking of possession or control for a period of 20 days from the time it attaches to the extent that it arises for new value given under an authenticated security agreement.

409.312(6) (6) Temporary perfection: goods or documents made available to debtor. A perfected security interest in a negotiable document or goods in possession of a bailee, other than one that has issued a negotiable document for the goods, remains perfected for 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of:

409.312(6)(a) (a) Ultimate sale or exchange; or

409.312(6)(b) (b) Loading, unloading, storing, shipping, transshipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange.

409.312(7) (7) Temporary perfection: delivery of security certificate or instrument to debtor. A perfected security interest in a certificated security or instrument remains perfected for 20 days without filing if the secured party delivers the security certificate or instrument to the debtor for the purpose of:

409.312(7)(a) (a) Ultimate sale or exchange; or

409.312(7)(b) (b) Presentation, collection, enforcement, renewal, or registration of transfer.

409.312(8) (8) Expiration of temporary perfection. After the 20-day period specified in sub. (5), (6), or (7) expires, perfection depends upon compliance with this chapter.

409.312 History History: 2001 a. 10; 2009 a. 322.

409.313 409.313 When possession by or delivery to secured party perfects security interest without filing.

409.313(1) (1) Perfection by possession or delivery. Except as otherwise provided in sub. (2), a secured party may perfect a security interest in tangible negotiable documents, goods, instruments, money, or tangible chattel paper by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery of the certificated securities under s. 408.301.

409.313(2) (2) Goods covered by certificate of title. With respect to goods covered by a certificate of title issued by this state, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in s. 409.316 (4).

409.313(3) (3) Collateral in possession of person other than debtor. With respect to collateral other than certificated securities and goods covered by a document, a secured party takes possession of collateral in the possession of a person other than the debtor, the secured party, or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business, when:

409.313(3)(a) (a) The person in possession authenticates a record acknowledging that the person holds possession of the collateral for the secured party’s benefit; or

409.313(3)(b) (b) The person takes possession of the collateral after having authenticated a record acknowledging that the person will hold possession of collateral for the secured party’s benefit.

409.313(4) (4) Time of perfection by possession; continuation of perfection. If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no earlier than the time the secured party takes possession and continues only while the secured party retains possession.

409.313(5) (5) Time of perfection by delivery; continuation of perfection. A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under s. 408.301 and remains perfected by delivery until the debtor obtains possession of the security certificate.

409.313(6) (6) Acknowledgment not required. A person in possession of collateral is not required to acknowledge that it holds possession for a secured party’s benefit.

409.313(7) (7) Effectiveness of acknowledgment; no duties or confirmation. If a person acknowledges that it holds possession for the secured party’s benefit:

409.313(7)(a) (a) The acknowledgment is effective under sub. (3) or s. 408.301 (1), even if the acknowledgment violates the rights of a debtor; and

409.313(7)(b) (b) Unless the person otherwise agrees or law other than this chapter otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.

409.313(8) (8) Secured party’s delivery to person other than debtor. A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business if the person was instructed before the delivery or is instructed contemporaneously with the delivery:

409.313(8)(a) (a) To hold possession of the collateral for the secured party’s benefit; or

409.313(8)(b) (b) To redeliver the collateral to the secured party.

409.313(9) (9) Effect of delivery under sub. (8); no duties or confirmation. A secured party does not relinquish possession, even if a delivery under sub. (8) violates the rights of a debtor. A person to which collateral is delivered under sub. (8) does not owe any duty to the secured party and is not required to confirm the delivery to another person unless the person otherwise agrees or law other than this chapter otherwise provides.

409.313 History History: 2001 a. 10; 2009 a. 322.

409.314 409.314 Perfection by control.

409.314(1) (1) Perfection by control. A security interest in investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, or electronic documents may be perfected by control of the collateral under s. 407.106, 409.104, 409.105, 409.106, or 409.107.

409.314(2) (2) Specified collateral: time of perfection by control; continuation of perfection. A security interest in deposit accounts, electronic chattel paper, letter-of-credit rights, or electronic documents is perfected by control under s. 407.106, 409.104, 409.105, or 409.107 when the secured party obtains control and remains perfected by control only while the secured party retains control.

409.314(3) (3) Investment property: time of perfection by control; continuation of perfection. A security interest in investment property is perfected by control under s. 409.106 from the time the secured party obtains control and remains perfected by control until:

409.314(3)(a) (a) The secured party does not have control; and

409.314(3)(b) (b) One of the following occurs:

409.314(3)(b)1. 1. If the collateral is a certificated security, the debtor has or acquires possession of the security certificate;

409.314(3)(b)2. 2. If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner; or

409.314(3)(b)3. 3. If the collateral is a security entitlement, the debtor is or becomes the entitlement holder.

409.314 History History: 2001 a. 10; 2009 a. 322.

409.315 409.315 Secured party’s rights on disposition of collateral and in proceeds.

409.315(1) (1) Disposition of collateral: continuation of security interest or agricultural lien; proceeds. Except as otherwise provided in this chapter and in s. 402.403 (2):

409.315(1)(a) (a) A security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and

409.315(1)(b) (b) A security interest attaches to any identifiable proceeds of collateral.

409.315(2) (2) When commingled proceeds identifiable. Proceeds that are commingled with other property are identifiable proceeds:

409.315(2)(a) (a) If the proceeds are goods, to the extent provided by s. 409.336; and

409.315(2)(b) (b) If the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this chapter with respect to commingled property of the type involved.

409.315(3) (3) Perfection of security interest in proceeds. A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.

409.315(4) (4) Continuation of perfection. A perfected security interest in proceeds becomes unperfected on the 21st day after the security interest attaches to the proceeds unless:

409.315(4)(a) (a) The following conditions are satisfied:

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)(a)3. 3. The proceeds are not acquired with cash proceeds;

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 Effect of 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