§ 26-1-9.1-330 — Priority of purchases of chattel paper or instrument

Indiana § 26-1-9.1-330

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 9.1: Secured Transactions

Text

(a) A purchaser of chattel paper has
priority over a security interest in the chattel paper which is claimed
merely as proceeds of inventory subject to a security interest if:
(1) in good faith and in the ordinary course of the purchaser's
business, the purchaser gives new value, takes possession of each
authoritative tangible copy of the record evidencing the chattel
paper, and obtains control under section 105 of this chapter of
each authoritative electronic copy of the record evidencing the
chattel paper; and
(2) the authoritative copies of the record evidencing the chattel
paper do not indicate that the chattel paper has been assigned to
an identified assignee other than the purchaser.
(b) A purchaser of chattel paper has priority over a security interest
in the chattel paper which is claimed other than merely as proceeds of
inventory subject to a security interest if the purchaser gives new value,
takes possession of each authoritative tangible copy of the record
evidencing the chattel paper, and obtains control under section 105 of
this chapter of each authoritative electronic copy of the record
evidencing the chattel paper in good faith, in the ordinary course of the
purchaser's business, and without knowledge that the purchase violates
the rights of the secured party.
(c) Except as otherwise provided in IC 26-1-9.1-327, a purchaser
having priority in chattel paper under subsection (a) or (b) also has
priority in proceeds of the chattel paper to the extent that:
(1) IC 26-1-9.1-322 provides for priority in the proceeds; or
(2) the proceeds consist of the specific goods covered by the
chattel paper or cash proceeds of the specific goods, even if the
purchaser's security interest in the proceeds is unperfected.
(d) Except as otherwise provided in IC 26-1-9.1-331(a), a purchaser
of an instrument has priority over a security interest in the instrument
perfected by a method other than possession if the purchaser gives
value and takes possession of the instrument in good faith and without
knowledge that the purchase violates the rights of the secured party.
(e) For purposes of subsections (a) and (b), the holder of a
purchase-money security interest in inventory gives new value for
chattel paper constituting proceeds of the inventory.
(f) For purposes of subsections (b) and (d), if the authoritative
copies of the record evidencing chattel paper or an instrument indicates
that the chattel paper or instrument has been assigned to an identified
secured party other than the purchaser, a purchaser of the chattel paper
or instrument has knowledge that the purchase violates the rights of the
secured party.

Legislative History

As added by P.L.57-2000, SEC.45. Amended by P.L.199-2023, SEC.66.