§ 409.207 — Rights and duties of secured party having possession or control of collateral.

Wisconsin § 409.207

• Jurisdiction: Wisconsin
• Ch. 409: Uniform commercial code — secured transactions
• Subch.: subch. II of ch. 409 SUBCHAPTER II

Text

409.207
409.207(1) (1) Duty of care when secured party in possession. Except as otherwise provided in sub. (4) , a secured party shall use reasonable care in the custody and preservation of collateral in the secured party’s possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.
409.207(2) (2) Expenses, risks, duties, and rights when secured party in possession. Except as otherwise provided in sub. (4) , if a secured party has possession of collateral:
409.207(2)(a) (a) Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral;
409.207(2)(b) (b) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;
409.207(2)(c) (c) The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and
409.207(2)(d) (d) The secured party may use or operate the collateral:
409.207(2)(d)1. 1. For the purpose of preserving the collateral or its value;
409.207(2)(d)2. 2. As permitted by an order of a court having competent jurisdiction; or
409.207(2)(d)3. 3. Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.
409.207(3) (3) Duties and rights when secured party in possession or control. Except as otherwise provided in sub. (4) , a secured party having possession of collateral or control of collateral under s. 407.106 , 409.104 , 409.105 , 409.106 , or 409.107 :
409.207(3)(a) (a) May hold as additional security any proceeds, except money or funds, received from the collateral;
409.207(3)(b) (b) Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and
409.207(3)(c) (c) May create a security interest in the collateral.
409.207(4) (4) Buyer of certain rights to payment. If the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor:
409.207(4)(a) (a) Subsection (1) does not apply unless the secured party is entitled under an agreement:
409.207(4)(a)1. 1. To charge back uncollected collateral; or
409.207(4)(a)2. 2. Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and
409.207(4)(b) (b) Subsections (1) and (2) do not apply.
[Note: 409.207 Note NOTE: The above annotations cite to the pre- 2001 Wis. Act 10 version of this section.]

Legislative History

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