MADAM PRESIDENT:
I move
that Senate Bill 419 be amended to read as follows:
SOURCE: Page 1, line 15; (07)MO041901.1. -->
Page 1, delete lines 15 through 17, begin a new paragraph and
insert:
SOURCE: IC 26-1-1-201; (07)MO041901.3. -->
"SECTION 3. IC 26-1-1-201 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 201. Subject to
additional definitions contained in IC 26-1-2 through IC 26-1-10 which
are applicable to specific provisions, and unless the context otherwise
requires, in IC 26-1:
(1) "Action" in the sense of a judicial proceeding includes
recoupment, counterclaim, setoff, suit in equity, and any other
proceedings in which rights are determined.
(2) "Aggrieved party" means a party entitled to resort to a
remedy.
(3) "Agreement" means the bargain of the parties in fact as found
in their language or by implication from other circumstances
including course of dealing or usage of trade or course of
performance as provided in IC 26-1-1-205. and IC 26-1-2-208.
Whether an agreement has legal consequences is determined by
the provisions of IC 26-1, if applicable; otherwise by the law of
contracts (IC 26-1-1-103). (Compare "Contract".)
(4) "Bank" means any person engaged in the business of
banking.
(5) "Bearer" means the person:
(A) in control of a negotiable electronic document of
title; or
(B) in possession of an a negotiable instrument, a
negotiable tangible document of title, or a certificated
security payable to bearer or endorsed in blank.
(6) "Bill of lading" means a document of title evidencing the
receipt of goods for shipment issued by a person engaged in the
business of directly or indirectly transporting or forwarding
goods. and The term does not include a warehouse receipt.
The term includes an airbill. "Airbill" means a document
serving for air transportation as a bill of lading does for marine
or rail transportation, and includes an air consignment note or air
waybill.
(7) "Branch" includes a separately incorporated foreign branch
of a bank.
(8) "Burden of establishing" a fact means the burden of
persuading the triers of fact that the existence of the fact is more
probable than its nonexistence.
(9) "Buyer in ordinary course of business" means a person that
buys goods in good faith without knowledge that the sale violates
the rights of another person in the goods, and in the ordinary
course from a person, other than a pawnbroker, in the business
of selling goods of that kind. A person buys goods in the
ordinary course of business if the sale to the person comports
with the usual or customary practices in the kind of business in
which the seller is engaged or with the seller's own usual or
customary practices. A person that sells oil, gas, or other
minerals at the wellhead or minehead is a person in the business
of selling goods of that kind. A buyer in ordinary course of
business may buy for cash, by exchange of other property, or on
secured or unsecured credit, and may require goods or
documents of title under a preexisting contract for sale. Only a
buyer that takes possession of the goods or has a right to recover
the goods from that seller under IC 26-1-2 may be a buyer in
ordinary course of business. A person that acquires goods in a
transfer in bulk or as security for or total or partial satisfaction of
a money debt is not a buyer in ordinary course of business.
(10) "Conspicuous". A term or clause is conspicuous when it is
so written that a reasonable person against whom it is to operate
ought to have noticed it. A printed heading in capitals (as:
NONNEGOTIABLE BILL OF LADING) is conspicuous.
Language in the body of a form is conspicuous if it is in larger or
other contrasting type or color. But in a telegram any stated term
is conspicuous. Whether a term or clause is conspicuous or not
is for decision by the court.
(11) "Contract" means the total legal obligation which results
from the parties' agreement as affected by this Act and any other
applicable rules of law. (Compare "Agreement".)
(12) "Creditor" includes a general creditor, a secured creditor, a
lien creditor and any representative of creditors, including an
assignee for the benefit of creditors, a trustee in bankruptcy, a
receiver in equity, and an executor or administrator of an
insolvent debtor's or assignor's estate.
(13) "Defendant" includes a person in the position of defendant
in a cross-action or counterclaim.
(14) "Delivery" means the following:
(A) With respect to an electronic document of title,
voluntary transfer of control.
(B) With respect to instruments, tangible documents of
title, chattel paper, or certificated securities, means
voluntary transfer of possession.
or common interest, or any other legal or commercial entity.
(29) "Party", as distinct from "third party", means a person who
has engaged in a transaction or made an agreement within
IC 26-1.
(30) "Person" includes an individual or an organization. (See
IC 26-1-1-102.)
(31) "Presumption" or "presumed" means that the trier of fact
must find the existence of the fact presumed unless and until
evidence is introduced which would support a finding of its
nonexistence.
(32) "Purchase" includes taking by sale, discount, negotiation,
mortgage, pledge, lien, security interest, issue or reissue, gift, or
any other voluntary transaction creating an interest in property.
(33) "Purchaser" means a person who takes by purchase.
(33a) "Registered mail" includes certified mail.
(34) "Remedy" means any remedial right to which an aggrieved
party is entitled with or without resort to a tribunal.
(35) "Representative" includes an agent, an officer of a
corporation or association, and a trustee, executor, or
administrator of an estate, or any other person empowered to act
for another.
(36) "Rights" includes remedies.
(37) "Security interest" means an interest in personal property or
fixtures which secures payment or performance of an obligation.
The term also includes any interest of a consignor and a buyer of
accounts, chattel paper, a payment intangible, or a promissory
note in a transaction that is subject to IC 26-1-9.1. The special
property interest of a buyer of goods on identification of such
goods to a contract for sale under IC 26-1-2-401 is not a security
interest, but a buyer may also acquire a security interest by
complying with IC 26-1-9.1. Except as otherwise provided in
IC 26-1-2-505, the right of a seller or lessor of goods under
IC 26-1-2 or IC 26-1-2.1 to retain or acquire possession of the
goods is not a "security interest", but a seller or lessor may also
acquire a "security interest" by complying with IC 26-1-9.1. The
retention or reservation of title by a seller of goods
notwithstanding shipment or delivery to the buyer
(IC 26-1-2-401) is limited in effect to a reservation of a "security
interest". Whether a transaction creates a lease or security
interest is determined by the facts of each case. However, a
transaction creates a security interest if the consideration the
lessee is to pay the lessor for the right to possession and use of
the goods is an obligation for the term of the lease not subject to
termination by the lessee and:
(a) the original term of the lease is equal to or greater than
the remaining economic life of the goods;
(b) the lessee is bound to renew the lease for the remaining
economic life of the goods or is bound to become the owner
of the goods;
(c) the lessee has an option to renew the lease for the
remaining economic life of the goods for no additional
consideration or nominal additional consideration upon
compliance with the lease agreement; or
(d) the lessee has an option to become the owner of the
goods for no additional consideration or nominal additional
consideration upon compliance with the lease agreement.
A transaction does not create a security interest merely because
it provides that:
(a) the present value of the consideration the lessee is
obligated to pay the lessor for the right to possession and
use of the goods is substantially equal to or is greater than
the fair market value of the goods at the time the lease is
entered into;
(b) the lessee assumes risk of loss of the goods, or agrees to
pay taxes, insurance, filing, recording, or registration fees,
or service or maintenance costs with respect to the goods;
(c) the lessee has an option to renew the lease or to become
the owner of the goods;
(d) the lessee has an option to renew the lease for a fixed
rent that is equal to or greater than the reasonably
predictable fair market rent for the use of the goods for the
term of the renewal at the time the option is to be
performed; or
(e) the lessee has an option to become the owner of the
goods for a fixed price that is equal to or greater than the
reasonably predictable fair market value of the goods at the
time the option is to be performed.
For purposes of this subsection:
(x) Additional consideration is not nominal if:
(i) when the option to renew the lease is granted to the
lessee the rent is stated to be the fair market rent for
the use of the goods for the term of the renewal
determined at the time the option is to be performed; or
(ii) when the option to become the owner of the goods
is granted to the lessee the price is stated to be the fair
market value of the goods determined at the time the
option is to be performed.
Additional consideration is nominal if it is less than the
lessee's reasonably predictable cost of performing under the
lease agreement if the option is not exercised.
(y) "Reasonably predictable" and "remaining economic life
of the goods" are to be determined with reference to the
facts and circumstances at the time the transaction is
entered into.
(z) "Present value" means the amount as of a date certain of
one (1) or more sums payable in the future, discounted to
the date certain. The discount is determined by the interest
rate specified by the parties if the rate is not manifestly
unreasonable at the time the transaction is entered into.
Otherwise, the discount is determined by a commercially
reasonable rate that takes into account the facts and
circumstances of each case at the time the transaction was
entered into.
(38) "Send" in connection with any writing or notice means to
deposit in the mail or deliver for transmission by any other usual
means of communication with postage or cost of transmission
provided for and properly addressed and, in the case of an
instrument, to an address specified thereon or otherwise agreed
or, if there be none, to any address reasonable under the
circumstances. The receipt of any writing or notice within the
time at which it would have arrived if properly sent has the effect
of a proper sending.
(39) "Signed" includes any symbol executed or adopted by a
party with present intention to authenticate a writing.
(40) "Surety" includes guarantor.
(41) "Telegram" includes a message transmitted by radio,
teletype, cable, any mechanical method of transmission, or the
like.
(42) "Term" means that portion of an agreement which relates to
a particular matter.
(43) "Unauthorized" signature means one made without actual,
implied, or apparent authority and includes a forgery.
(44) "Value". Except as otherwise provided with respect to
negotiable instruments and bank collections (IC 26-1-3.1-303,
IC 26-1-4-208, and IC 26-1-4-209) a person gives value for
rights if he the person acquires them:
(a) in return for a binding commitment to extend credit or
for the extension of immediately available credit whether or
not drawn upon and whether or not a chargeback is
provided for in the event of difficulties in collection;
(b) as security for or in total or partial satisfaction of a
preexisting claim;
(c) by accepting delivery pursuant to a preexisting contract
for purchase; or
(d) generally, in return for any consideration sufficient to
support a simple contract.
(45) "Warehouse receipt" means a receipt document of title
issued by a person engaged in the business of storing goods for
hire.
(46) "Written" or "writing" includes printing, typewriting, or any
other intentional reduction to tangible form.".
Delete pages 2 through 7.
SOURCE: Page 8, line 1; (07)MO041901.8. -->
Page 8, delete lines 1 through 30.
Page 10, between lines 20 and 21, begin a new paragraph and
insert:
SOURCE: IC 26-1-2-103; (07)MO041901.8. -->
"SECTION 8. IC 26-1-2-103 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 103. (1) In IC 26-1-2,
unless the context otherwise requires:
(a) "Buyer" means a person who buys or contracts to buy goods.
(b) "Good faith" in the case of a merchant means honesty in fact
and observance of reasonable commercial standards of fair
dealing in the trade.
(c) "Receipt" of goods means taking physical possession of them.
(d) "Seller" means a person who sells or contracts to sell goods.
(2) Other definitions applying to IC 26-1-2, or to specified parts
thereof, and the sections in which they appear are:
"Acceptance". IC 26-1-2-606.
"Banker's credit". IC 26-1-2-325.
"Between merchants". IC 26-1-2-104.
"Cancellation". IC 26-1-2-106(4).
"Commercial unit". IC 26-1-2-105.
"Confirmed credit". IC 26-1-2-325.
"Conforming to contract". IC 26-1-2-106.
"Contract for sale". IC 26-1-2-106.
"Cover". IC 26-1-2-712.
"Entrusting". IC 26-1-2-403.
"Financing agency". IC 26-1-2-104.
"Future goods". IC 26-1-2-105.
"Goods". IC 26-1-2-105.
"Identification". IC 26-1-2-501.
"Installment contract". IC 26-1-2-612.
"Letter of credit". IC 26-1-2-325.
"Lot". IC 26-1-2-105.
"Merchant". IC 26-1-2-104.
"Overseas". IC 26-1-2-323.
"Person in the position of seller". IC 26-1-2-707.
"Present sale". IC 26-1-2-106.
"Sale". IC 26-1-2-106.
"Sale on approval". IC 26-1-2-326.
"Sale or return". IC 26-1-2-326.
"Termination". IC 26-1-2-106.
(3) "Control" as provided in IC 26-1-7-106 and the following
definitions apply to IC 26-1-2:
"Check". IC 26-1-3.1-104.
"Consignee". IC 26-1-7-102.
"Consignor". IC 26-1-7-102.
"Consumer goods". IC 26-1-9.1-102.
"Dishonor". IC 26-1-3.1-502.
"Draft". IC 26-1-3.1-104.
(4) In addition, IC 26-1-1 contains general definitions and
principles of construction and interpretation applicable throughout
IC 26-1-2.
SOURCE: IC 26-1-2-104; (07)MO041901.9. -->
SECTION 9. IC 26-1-2-104 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 104. (1) "Merchant"
means a person who deals in goods of the kind or otherwise by his
occupation holds himself out as having knowledge or skill peculiar to
the practices or goods involved in the transaction or to whom such
knowledge or skill may be attributed by his employment of an agent or
broker or other intermediary who by his occupation holds himself out
as having such knowledge or skill.
passes at the time and place of contracting.
(4) A rejection or other refusal by the buyer to receive or retain
the goods, whether or not justified, or a justified revocation of
acceptance revests title to the goods in the seller. Such revesting
occurs by operation of law and is not a "sale".
SOURCE: IC 26-1-2-503; (07)MO041901.14. -->
SECTION 14. IC 26-1-2-503 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 503. (1) Tender of
delivery requires that the seller put and hold conforming goods at the
buyer's disposition and give the buyer any notification reasonably
necessary to enable him to take delivery. The manner, time and place
for tender are determined by the agreement and IC 26-1-2, and in
particular:
(a) tender must be at a reasonable hour, and if it is of goods they
must be kept available for the period reasonably necessary to
enable the buyer to take possession; but
(b) unless otherwise agreed, the buyer must furnish facilities
reasonably suited to the receipt of the goods.
(2) Where the case is within IC 26-1-2-504 respecting shipment,
tender requires that the seller comply with its provisions.
(3) Where the seller is required to deliver at a particular
destination, tender requires that he comply with subsection (1) and also
in any appropriate case tender documents as described in subsections
(4) and (5).
(4) Where goods are in the possession of a bailee and are to be
delivered without being moved:
(a) tender requires that the seller either tender a negotiable
document of title covering such goods or procure
acknowledgement by the bailee of the buyer's right to possession
of the goods; but
(b) tender to the buyer of a nonnegotiable document of title or of
a written direction to record directing the bailee to deliver is
sufficient tender unless the buyer seasonably objects, and except
as otherwise provided in IC 26-1-9.1, receipt by the bailee of
notification of the buyer's rights fixes those rights as against the
bailee and all third persons; but risk of loss of the goods and of
any failure by the bailee to honor the nonnegotiable document of
title or to obey the direction remains on the seller until the buyer
has had a reasonable time to present the document or direction,
and a refusal by the bailee to honor the document or to obey the
direction defeats the tender.
(5) Where the contract requires the seller to deliver documents:
(a) he must tender all such documents in correct form, except as
provided in IC 26-1-2-323(2) with respect to bills of lading in a
set; and
(b) tender through customary banking channels is sufficient and
dishonor of a draft accompanying the documents constitutes
nonacceptance or rejection.
SOURCE: IC 26-1-2-505; (07)MO041901.15. -->
SECTION 15. IC 26-1-2-505 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 505. (1) Where the
seller has identified goods to the contract by or before shipment:
record, as provided in IC 26-1-2-503(4)(b).
(3) In any case not within subsection (1) or (2), the risk of loss
passes to the buyer on his receipt of the goods if the seller is a
merchant. Otherwise the risk passes to the buyer on tender of delivery.
(4) The provisions of this section are subject to contrary agreement
of the parties and to the provisions of IC 26-1-2-327 on sale on
approval and IC 26-1-2-510 on effect of breach on risk of loss.
SOURCE: IC 26-1-2-605; (07)MO041901.18. -->
SECTION 18. IC 26-1-2-605 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 605. (1) The buyer's
failure to state in connection with rejection a particular defect which is
ascertainable by reasonable inspection precludes him from relying on
the unstated defect to justify rejection or to establish breach:
(a) where the seller could have cured it if stated seasonably; or
(b) between merchants when the seller has after rejection made
a request in writing for a full and final written statement of all
defects on which the buyer proposes to rely.
(2) Payment against documents made without reservation of rights
precludes recovery of the payment for defects apparent on the face of
in the documents.
SOURCE: IC 26-1-2-705; (07)MO041901.19. -->
SECTION 19. IC 26-1-2-705 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 705. (1) The seller may
stop delivery of goods in the possession of a carrier or other bailee
when he discovers the buyer to be insolvent (IC 26-1-2-702) and may
stop delivery of carload, truckload, planeload, or larger shipments of
express or freight when the buyer repudiates or fails to make a payment
due before delivery or if for any other reason the seller has a right to
withhold or reclaim the goods.
(2) As against such buyer the seller may stop delivery until:
(a) receipt of the goods by the buyer; or
(b) acknowledgment to the buyer by any bailee of the goods
except a carrier that the bailee holds the goods for the buyer; or
(c) such acknowledgment to the buyer by a carrier by reshipment
or as warehouseman a warehouse; or
(d) negotiation to the buyer of any negotiable document of title
covering the goods.
(3) (a) To stop delivery, the seller must so notify as to enable the
bailee by reasonable diligence to prevent delivery of the goods.
(b) After such notification, the bailee must hold and deliver the
goods according to the directions of the seller, but the seller is liable to
the bailee for any ensuing charges or damages.
(c) If a negotiable document of title has been issued for goods, the
bailee is not obliged to obey a notification to stop until surrender of
possession or control of the document.
(d) A carrier who has issued a nonnegotiable bill of lading is not
obliged to obey a notification to stop received from a person other than
the consignor.
SOURCE: IC 26-1-2.1-103; (07)MO041901.20. -->
SECTION 20. IC 26-1-2.1-103 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 103. (1) Unless the
context otherwise requires, in IC 26-1-2.1:
(a) "Buyer in ordinary course of business" means a person who
in good faith and without knowledge that the sale to the person
is in violation of the ownership rights or security interest or
leasehold interest of a third party in the goods, buys in ordinary
course from a person in the business of selling goods of that kind
but does not include a pawnbroker. "Buying" may be for cash or
by exchange of other property or on secured or unsecured credit
and includes receiving acquiring goods or documents of title
under a pre-existing contract for sale but does not include a
transfer in bulk or as security for or in total or partial satisfaction
of a money debt.
(b) "Cancellation" occurs when either party puts an end to the
lease contract for default by the other party.
(c) "Commercial unit" means such a unit of goods as by
commercial usage is a single whole for purposes of lease and
division of which materially impairs its character or value on the
market or in use. A commercial unit may be a single article, as
a machine, or a set of articles, as a suite of furniture or a line of
machinery, or a quantity, as a gross or carload, or any other unit
treated in use or in the relevant market as a single whole.
(d) "Conforming" goods or performance under a lease contract
means goods or performance that are in accordance with the
obligations under the lease contract.
(e) "Consumer lease" means a lease that a lessor regularly
engaged in the business of leasing or selling makes to a lessee
who is an individual and who takes under the lease primarily for
a personal, family, or household purpose if the total payments to
be made under the lease contract, excluding payments for
options to renew or buy, do not exceed twenty-five thousand
dollars ($25,000).
(f) "Fault" means wrongful act, omission, breach, or default.
(g) "Finance lease" means a lease with respect to which:
(i) the lessor does not select, manufacture, or supply the
goods;
(ii) the lessor acquires the goods or the right to possession
and use of the goods in connection with the lease; and
(iii) one (1) of the following occurs:
(A) the lessee receives a copy of the contract by which
the lessor acquired the goods or the right to possession
and use of the goods before signing the lease contract;
(B) the lessee's approval of the contract by which the
lessor acquired the goods or the right to possession and
use of the goods is a condition to effectiveness of the
lease contract;
(C) the lessee, before signing the lease contract,
receives an accurate and complete statement
designating the promises and warranties, and any
disclaimers of warranties, limitations, or modifications
of remedies, or liquidated damages, including those of
a third party, such as the manufacturer of the goods,
provided to the lessor by the person supplying the
goods in connection with or as part of the contract by
which the lessor acquired the goods or the right to
possession and use of the goods; or
(D) if the lease is not a consumer lease, the lessor,
before the lessee signs the lease contract, informs the
lessee in writing: (a) of the identity of the person
supplying the goods to the lessor, unless the lessee has
selected that person and directed the lessor to acquire
the goods or the right to possession and use of the
goods from that person; (b) that the lessee is entitled
under IC 26-1-2.1 to the promises and warranties,
including those of any third party, provided to the
lessor by the person supplying the goods in connection
with or as part of the contract by which the lessor
acquired the goods or the right to possession and use of
the goods; and (c) that the lessee may communicate
with the person supplying the goods to the lessor and
receive an accurate and complete statement of those
promises and warranties, including any disclaimers and
limitations of them or of remedies.
(h) "Goods" means all things that are movable at the time of
identification to the lease contract, or are fixtures
(IC 26-1-2.1-309), but the term does not include money,
documents, instruments, accounts, chattel paper, general
intangibles, or minerals or the like, including oil and gas, before
extraction. The term also includes the unborn young of animals.
(i) "Installment lease contract" means a lease contract that
authorizes or requires the delivery of goods in separate lots to be
separately accepted, even though the lease contract contains a
clause "each delivery is a separate lease" or its equivalent.
(j) "Lease" means a transfer of the right to possession and use of
goods for a term in return for consideration, but a sale, including
a sale on approval or a sale or return, or retention or creation of
a security interest is not a lease. Unless the context clearly
indicates otherwise, the term includes a sublease.
(k) "Lease agreement" means the bargain, with respect to the
lease, of the lessor and the lessee in fact as found in their
language or by implication from other circumstances including
course of dealing or usage of trade or course of performance as
provided in IC 26-1-2.1. Unless the context clearly indicates
otherwise, the term includes a sublease agreement.
(l) "Lease contract" means the total legal obligation that results
from the lease agreement as affected by IC 26-1-2.1 and any
other applicable rules of law. Unless the context clearly indicates
otherwise, the term includes a sublease contract.
(m) "Leasehold interest" means the interest of the lessor or the
lessee under a lease contract.
(n) "Lessee" means a person who acquires the right to possession
and use of goods under a lease. Unless the context clearly
indicates otherwise, the term includes a sublessee.
stop delivery until:
(a) receipt of the goods by the lessee;
(b) acknowledgment to the lessee by any bailee of the goods,
except a carrier, that the bailee holds the goods for the lessee; or
(c) such an acknowledgment to the lessee by a carrier via
reshipment or as warehouseman a warehouse.
(3)(a) To stop delivery, a lessor shall so notify as to enable the
bailee by reasonable diligence to prevent delivery of the goods.
(b) After notification, the bailee shall hold and deliver the goods
according to the directions of the lessor, but the lessor is liable
to the bailee for any ensuing charges or damages.
(c) A carrier who has issued a nonnegotiable bill of lading is not
obliged to obey a notification to stop received from a person
other than the consignor.
SOURCE: IC 26-1-4-104; (07)MO041901.23. -->
SECTION 23. IC 26-1-4-104 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 104. (a) In IC 26-1-4,
unless the context otherwise requires:
(1) "Account" means any deposit or credit account with a bank,
including a demand, time, savings, passbook, share draft, or like
account, other than an account evidenced by a certificate of
deposit.
(2) "Afternoon" means the period of a day between noon and
midnight.
(3) "Banking day" means the part of a day on which a bank is
open to the public for carrying on substantially all of its banking
functions, but does not include Saturday, Sunday, or a legal
holiday.
(4) "Clearing house" means an association of banks or other
payors regularly clearing items.
(5) "Customer" means a person having an account with a bank
or for whom a bank has agreed to collect items, including a bank
that maintains an account at another bank.
(6) "Documentary draft" means a draft to be presented for
acceptance or payment if specified documents, certificated
securities (IC 26-1-8.1-102), or instructions for uncertificated
securities (IC 26-1-8.1-102) or other certificates, statements, or
the like are to be received by the drawee or other payor before
acceptance or payment of the draft.
(7) "Draft" means a draft (as defined in IC 26-1-3.1-104) or an
item, other than an instrument, that is an order.
(8) "Drawee" means a person ordered in a draft to make
payment.
(9) "Item" means an instrument or a promise or order to pay
money handled by a bank for collection or payment. The term
does not include a payment order governed by IC 26-1-4.1 or a
credit or debit card slip.
(10) "Midnight deadline" with respect to a bank is midnight on
its next banking day following the banking day on which it
receives the relevant item or notice or from which the time for
taking action commences to run, whichever is later.
or agricultural lien. The term includes:
(A) proceeds to which a security interest attaches;
(B) accounts, chattel paper, payment intangibles, and
promissory notes that have been sold; and
(C) goods that are the subject of a consignment.
(13) "Commercial tort claim" means a claim arising in tort with
respect to which:
(A) the claimant is an organization; or
(B) the claimant is an individual and the claim:
(i) arose in the course of the claimant's business or
profession; and
(ii) does not include damages arising out of personal
injury to or the death of an individual.
(14) "Commodity account" means an account maintained by a
commodity intermediary in which a commodity contract is
carried for a commodity customer.
(15) "Commodity contract" means a commodity futures contract,
an option on a commodity futures contract, a commodity option,
or another contract if the contract or option is:
(A) 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 federal commodities laws; or
(B) 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.
(16) "Commodity customer" means a person for which a
commodity intermediary carries a commodity contract on its
books.
(17) "Commodity intermediary" means a person that:
(A) is registered as a futures commission merchant under
federal commodities law; or
(B) 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 federal
commodities law.
(18) "Communicate" means:
(A) to send a written or other tangible record;
(B) to transmit a record by any means agreed upon by the
persons sending and receiving the record; or
(C) in the case of transmission of a record to or by a filing
office, to transmit a record by any means prescribed by
filing-office rule.
(19) "Consignee" means a merchant to which goods are
delivered in a consignment.
(20) "Consignment" means a transaction, regardless of its form,
in which a person delivers goods to a merchant for the purpose
of sale and:
(A) the merchant:
(i) deals in goods of that kind under a name other than
the name of the person making delivery;
type described in IC 26-1-7-201(2) IC 26-1-7-201(b).
(31) "Electronic chattel paper" means chattel paper evidenced by
a record or records consisting of information stored in an
electronic medium.
(32) "Encumbrance" means a right, other than an ownership
interest, in real property. The term includes mortgages and other
liens on real property.
(33) "Equipment" means goods other than inventory, farm
products, or consumer goods.
(34) "Farm products" means goods, other than standing timber,
with respect to which the debtor is engaged in a farming
operation and which are:
(A) crops grown, growing, or to be grown, including:
(i) crops produced on trees, vines, and bushes; and
(ii) aquatic goods produced in aquacultural operations;
(B) livestock, born or unborn, including aquatic goods
produced in aquacultural operations;
(C) supplies used or produced in a farming operation; or
(D) products of crops or livestock in their unmanufactured
states.
(35) "Farming operation" means raising, cultivating,
propagating, fattening, grazing, or any other farming, livestock,
or aquacultural operation.
(36) "File number" means the number assigned to an initial
financing statement pursuant to IC 26-1-9.1-519(a).
(37) "Filing office" means an office designated in
IC 26-1-9.1-501 as the place to file a financing statement.
(38) "Filing-office rule" means a rule adopted pursuant to
IC 26-1-9.1-526.
(39) "Financing statement" means a record or records composed
of an initial financing statement and any filed record relating to
the initial financing statement.
(40) "Fixture filing" means the filing of a financing statement
covering goods that are or are to become fixtures and satisfying
IC 26-1-9.1-502(a) and IC 26-1-9.1-502(b). The term includes
the filing of a financing statement covering goods of a
transmitting utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related to
particular real property that an interest in them arises under real
property law.
(42) "General intangible" means any personal property,
including things in action, other than accounts, chattel paper,
commercial tort claims, deposit accounts, documents, goods,
instruments, investment property, letter-of-credit rights, letters
of credit, money, and oil, gas, or other minerals before
extraction. The term includes payment intangibles and software.
(43) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(44) "Goods" means all things that are movable when a security
interest attaches. The term includes (i) fixtures, (ii) standing
timber that is to be cut and removed under a conveyance or
contract for sale, (iii) the unborn young of animals, (iv) crops
grown, growing, or to be grown, even if the crops are produced
on trees, vines, or bushes, and (v) manufactured homes. The
term also includes a computer program embedded in goods and
any supporting information provided in connection with a
transaction relating to the program if (i) the program is
associated with the goods in such a manner that it customarily is
considered part of the goods, or (ii) by becoming the owner of
the goods, a person acquires a right to use the program in
connection with the goods. The term does not include a
computer program embedded in goods that consist solely of the
medium in which the program is embedded. The term also does
not include accounts, chattel paper, commercial tort claims,
deposit accounts, documents, general intangibles, instruments,
investment property, letter-of-credit rights, letters of credit,
money, or oil, gas, or other minerals before extraction.
(45) "Governmental unit" means a subdivision, agency,
department, county, parish, municipality, or other unit of the
government of the United States, a state, or a foreign country.
The term includes an organization having a separate corporate
existence if the organization is eligible to issue debt on which
interest is exempt from income taxation under the laws of the
United States.
(46) "Health-care-insurance receivable" means an interest in or
claim under a policy of insurance that is a right to payment of a
monetary obligation for health-care goods or services provided.
(47) "Instrument" means a negotiable instrument or any other
writing that evidences a right to the payment of a monetary
obligation, is not itself a security agreement or lease, and is of a
type that in the ordinary course of business is transferred by
delivery with any necessary endorsement or assignment. The
term does not include (i) investment property, (ii) letters of
credit, or (iii) writings that evidence a right to payment arising
out of the use of a credit or charge card or information contained
on or for use with the card.
(48) "Inventory" means goods, other than farm products, that:
(A) are leased by a person as lessor;
(B) are held by a person for sale or lease or to be furnished
under a contract of service;
(C) are furnished by a person under a contract of service; or
(D) consist of raw materials, work in process, or materials
used or consumed in a business.
(49) "Investment property" means a security, whether
certificated or uncertificated, security entitlement, securities
account, commodity contract, or commodity account.
(50) "Jurisdiction of organization", with respect to a registered
organization, means the jurisdiction under whose law the
organization is organized.
(51) "Letter-of-credit right" means a right to payment or
performance under a letter of credit, whether or not the
beneficiary has demanded or is at the time entitled to demand
payment or performance. The term does not include the right of
a beneficiary to demand payment or performance under a letter
of credit.
(52) "Lien creditor" means:
(A) a creditor that has acquired a lien on the property
involved by attachment, levy, or the like;
(B) an assignee for benefit of creditors from the time of
assignment;
(C) a trustee in bankruptcy from the date of the filing of the
petition; or
(D) a receiver in equity from the time of appointment.
(53) "Manufactured home" means a structure, transportable in
one (1) or more sections, which, in the traveling mode, is eight
(8) body feet or more in width or forty (40) body feet or more in
length, or, when erected on site, is three hundred twenty (320) or
more square feet, and which is built on a permanent chassis and
designed to be used as a dwelling with or without a permanent
foundation when connected to the required utilities, and includes
the plumbing, heating, air conditioning, and electrical systems
contained therein. The term includes any structure that meets all
of the requirements of this subdivision except the size
requirements, and with respect to which the manufacturer
voluntarily files a certification required by the United States
Secretary of Housing and Urban Development and complies with
the standards established under Title 42 of the United States
Code.
(54) "Manufactured-home transaction" means a secured
transaction:
(A) that creates a purchase-money security interest in a
manufactured home, other than a manufactured home held
as inventory; or
(B) in which a manufactured home, other than a
manufactured home held as inventory, is the primary
collateral.
(55) "Mortgage" means a consensual interest in real property,
including fixtures, that secures payment or performance of an
obligation.
(56) "New debtor" means a person that becomes bound as debtor
under IC 26-1-9.1-203(d) by a security agreement previously
entered into by another person.
(57) "New value" means (i) money, (ii) money's worth in
property, services, or new credit, or (iii) release by a transferee
of an interest in property previously transferred to the transferee.
The term does not include an obligation substituted for another
obligation.
(58) "Noncash proceeds" means proceeds other than cash
proceeds.
(59) "Obligor" means a person that, with respect to an obligation
secured by a security interest in or an agricultural lien on the
collateral, (i) owes payment or other performance of the
obligation, (ii) has provided property other than the collateral to
secure payment or other performance of the obligation, or (iii) is
otherwise accountable in whole or in part for payment or other
performance of the obligation. The term does not include issuers
or nominated persons under a letter of credit.
(60) "Original debtor", except as used in IC 26-1-9.1-310(c),
means a person that, as debtor, entered into a security agreement
to which a new debtor has become bound under
IC 26-1-9.1-203(d).
(61) "Payment intangible" means a general intangible under
which the account debtor's principal obligation is a monetary
obligation.
(62) "Person related to", with respect to an individual, means:
(A) the spouse of the individual;
(B) a brother, brother-in-law, sister, or sister-in-law of the
individual;
(C) an ancestor or lineal descendant of the individual or the
individual's spouse; or
(D) any other relative, by blood or marriage, of the
individual or the individual's spouse who shares the same
home with the individual.
(63) "Person related to", with respect to an organization, means:
(A) a person directly or indirectly controlling, controlled by,
or under common control with the organization;
(B) an officer or director of, or a person performing similar
functions with respect to, the organization;
(C) an officer or director of, or a person performing similar
functions with respect to, a person described in clause (A);
(D) the spouse of an individual described in clause (A), (B),
or (C); or
(E) an individual who is related by blood or marriage to an
individual described in clause (A), (B), (C), or (D) and
shares the same home with the individual.
(64) "Proceeds", except as used in IC 26-1-9.1-609(b), means the
following property:
(A) Whatever is acquired upon the sale, lease, license,
exchange, or other disposition of collateral.
(B) Whatever is collected on, or distributed on account of,
collateral.
(C) Rights arising out of collateral.
(D) To the extent of the value of collateral, claims arising
out of the loss, nonconformity, or interference with the use
of, defects or infringement of rights in, or damage to, the
collateral.
(E) To the extent of the value of collateral and to the extent
payable to the debtor or the secured party, insurance
payable by reason of the loss or nonconformity of, defects
or infringement of rights in, or damage to, the collateral.
IC 26-1-2.1-508(5), IC 26-1-4-210, or IC 26-1-5.1-118.
(73) "Security agreement" means an agreement that creates or
provides for a security interest.
(74) "Send", in connection with a record or notification, means:
(A) to deposit in the mail, deliver for transmission, or
transmit by any other usual means of communication, with
postage or cost of transmission provided for, addressed to
any address reasonable under the circumstances; or
(B) to cause the record or notification to be received within
the time that it would have been received if properly sent
under clause (A).
(75) "Software" means a computer program and any supporting
information provided in connection with a transaction relating to
the program. The term does not include a computer program that
is included in the definition of goods.
(76) "State" means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(77) "Supporting obligation" means a letter-of-credit right or
secondary obligation that supports the payment or performance
of an account, chattel paper, a document, a general intangible, an
instrument, or investment property.
(78) "Tangible chattel paper" means chattel paper evidenced by
a record or records consisting of information that is inscribed on
a tangible medium.
(79) "Termination statement" means an amendment of a
financing statement that:
(A) identifies, by its file number, the initial financing
statement to which it relates; and
(B) indicates either that it is a termination statement or that
the identified financing statement is no longer effective.
(80) "Transmitting utility" means a person primarily engaged in
the business of:
(A) operating a railroad, subway, street railway, or trolley
bus;
(B) transmitting communications electrically,
electromagnetically, or by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting electricity,
steam, gas, or water.
(b) "Control" as provided in IC 26-1-7-106 and the following
definitions outside IC 26-1-9.1 apply to IC 26-1-9.1:
"Applicant" IC 26-1-5.1-102.
"Beneficiary" IC 26-1-5.1-102.
"Broker" IC 26-1-8.1-102.
"Certificated security" IC 26-1-8.1-102.
"Check" IC 26-1-3.1-104.
"Clearing corporation" IC 26-1-8.1-102.
"Contract for sale" IC 26-1-2-106.
pursuant to the debtor's security agreement.
(C) The collateral is a certificated security in registered
form and the security certificate has been delivered to the
secured party under IC 26-1-8.1-301 pursuant to the debtor's
security agreement.
(D) The collateral is deposit accounts, electronic chattel
paper, investment property, or letter-of-credit rights, or
electronic documents, and the secured party has control
under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
IC 26-1-9.1-106, or IC 26-1-9.1-107 pursuant to the debtor's
security agreement.
(c) Subsection (b) is subject to IC 26-1-4-210 on the security
interest of a collecting bank, IC 26-1-5.1-118 on the security interest of
a letter-of-credit issuer or nominated person, IC 26-1-9.1-110 on a
security interest arising under IC 26-1-2 or IC 26-1-2.1, and
IC 26-1-9.1-206 on security interests in investment property.
(d) A person becomes bound as debtor by a security agreement
entered into by another person if, by operation of law other than
IC 26-1-9.1 or by contract:
(1) the security agreement becomes effective to create a security
interest in the person's property; or
(2) the person becomes generally obligated for the obligations of
the other person, including the obligation secured under the
security agreement, and acquires or succeeds to all or
substantially all of the assets of the other person.
(e) If a new debtor becomes bound as debtor by a security
agreement entered into by another person:
(1) the agreement satisfies subsection (b)(3) with respect to
existing or after-acquired property of the new debtor to the
extent the property is described in the agreement; and
(2) another agreement is not necessary to make a security
interest in the property enforceable.
(f) The attachment of a security interest in collateral gives the
secured party the rights to proceeds provided by IC 26-1-9-315 and is
also attachment of a security interest in a supporting obligation for the
collateral.
(g) The attachment of a security interest in a right to payment or
performance secured by a security interest or other lien on personal or
real property is also attachment of a security interest in the security
interest, mortgage, or other lien.
(h) The attachment of a security interest in a securities account is
also attachment of a security interest in the security entitlements
carried in the securities account.
(i) The attachment of a security interest in a commodity account
is also attachment of a security interest in the commodity contracts
carried in the commodity account.
SOURCE: IC 26-1-9.1-207; (07)MO041901.68. -->
SECTION 68. IC 26-1-9.1-207 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 207. (a) Except as
otherwise provided in subsection (d), 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.
(b) Except as otherwise provided in subsection (d), if a secured
party has possession of collateral:
(1) 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;
(2) the risk of accidental loss or damage is on the debtor to the
extent of a deficiency in any effective insurance coverage;
(3) the secured party shall keep the collateral identifiable, but
fungible collateral may be commingled; and
(4) the secured party may use or operate the collateral:
(A) for the purpose of preserving the collateral or its value;
(B) as permitted by an order of a court having competent
jurisdiction; or
(C) except in the case of consumer goods, in the manner
and to the extent agreed by the debtor.
(c) Except as otherwise provided in subsection (d), a secured party
having possession of collateral or control of collateral under
IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105, IC 26-1-9.1-106, or
IC 26-1-9.1-107:
(1) may hold as additional security any proceeds, except money
or funds, received from the collateral;
(2) shall apply money or funds received from the collateral to
reduce the secured obligation, unless remitted to the debtor; and
(3) may create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper,
payment intangibles, or promissory notes or a consignor:
(1) subsection (a) does not apply unless the secured party is
entitled under an agreement:
(A) to charge back uncollected collateral; or
(B) 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
(2) subsections (b) and (c) do not apply.
SOURCE: IC 26-1-9.1-208; (07)MO041901.69. -->
SECTION 69. IC 26-1-9.1-208 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 208. (a) This section
applies to cases in which there is no outstanding secured obligation,
and the secured party is not committed to make advances, incur
obligations, or otherwise give value.
(b) Within ten (10) days after receiving an authenticated demand
by the debtor:
(1) a secured party having control of a deposit account under
IC 26-1-9.1-104(a)(2) shall send to the bank with which the
deposit account is maintained an authenticated statement that
releases the bank from any further obligation to comply with
instructions originated by the secured party;
designated custodian to make copies of or revisions to
the authoritative copy that add or change an identified
assignee of the authoritative copy without the consent of
the secured party.
SOURCE: IC 26-1-9.1-301; (07)MO041901.70. -->
SECTION 70. IC 26-1-9.1-301 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 301. Except as
otherwise provided in IC 26-1-9.1-303 through IC 26-1-9.1-306, the
following rules determine the law governing perfection, the effect of
perfection or nonperfection, and the priority of a security interest in
collateral:
(1) Except as otherwise provided in this section, while a debtor
is located in a jurisdiction, the local law of that jurisdiction
governs perfection, the effect of perfection or nonperfection, and
the priority of a security interest in collateral.
(2) While collateral is located in a jurisdiction, the local law of
that jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a possessory security interest
in that collateral.
(3) Except as otherwise provided in subdivision (4), while
tangible negotiable documents, goods, instruments, money, or
tangible chattel paper is located in a jurisdiction, the local law of
that jurisdiction governs:
(A) perfection of a security interest in the goods by filing a
fixture filing;
(B) perfection of a security interest in timber to be cut; and
(C) the effect of perfection or nonperfection and the priority
of a nonpossessory security interest in the collateral.
(4) The local law of the jurisdiction in which the wellhead or
minehead is located governs perfection, the effect of perfection
or nonperfection, and the priority of a security interest in
as-extracted collateral.
SOURCE: IC 26-1-9.1-310; (07)MO041901.71. -->
SECTION 71. IC 26-1-9.1-310 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 310. (a) Except as
otherwise provided in subsection (b) and IC 26-1-9.1-312(b), a
financing statement must be filed to perfect all security interests and
agricultural liens.
(b) The filing of a financing statement is not necessary to perfect
a security interest:
(1) that is perfected under IC 26-1-9.1-308(d),
IC 26-1-9.1-308(e), IC 26-1-9.1-308(f), or IC 26-1-9.1-308(g);
(2) that is perfected under IC 26-1-9.1-309 when it attaches;
(3) in property subject to a statute, regulation, or treaty described
in IC 26-1-9.1-311(a);
(4) in goods in possession of a bailee that are perfected under
IC 26-1-9.1-312(d)(1) or IC 26-1-9.1-312(d)(2);
(5) in certificated securities, documents, goods, or instruments
which is perfected without filing, control, or possession under
IC 26-1-9.1-312(e), IC 26-1-9.1-312(f), or IC 26-1-9.1-312(g);
(6) in collateral in the secured party's possession under
IC 26-1-9.1-313;
manufacturing, processing, or otherwise dealing with them in a
manner preliminary to their sale or exchange.
(g) A perfected security interest in a certificated security or
instrument remains perfected for twenty (20) days without filing if the
secured party delivers the security certificate or instrument to the
debtor for the purpose of:
(1) ultimate sale or exchange; or
(2) presentation, collection, enforcement, renewal, or registration
of transfer.
(h) After the twenty (20) day period specified in subsection (e), (f),
or (g) expires, perfection depends upon compliance with IC 26-1-9.1.
SOURCE: IC 26-1-9.1-313; (07)MO041901.73. -->
SECTION 73. IC 26-1-9.1-313 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 313. (a) Except as
otherwise provided in subsection (b), 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 IC 26-1-8.1-301.
(b) 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 IC 26-1-9.1-316(e).
(c) 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:
(1) the person in possession authenticates a record
acknowledging that it holds possession of the collateral for the
secured party's benefit; or
(2) the person takes possession of the collateral after having
authenticated a record acknowledging that it will hold possession
of collateral for the secured party's benefit.
(d) If perfection of a security interest depends upon possession of
the collateral by a secured party, perfection occurs not earlier than the
time the secured party takes possession and continues only while the
secured party retains possession.
(e) A security interest in a certificated security in registered form
is perfected by delivery when delivery of the certificated security
occurs under IC 26-1-8.1-301 and remains perfected by delivery until
the debtor obtains possession of the security certificate.
(f) A person in possession of collateral is not required to
acknowledge that it holds possession for a secured party's benefit.
(g) If a person acknowledges that it holds possession for the
secured party's benefit:
(1) the acknowledgment is effective under subsection (c) or
IC 26-1-8.1-301(a), even if the acknowledgment violates the
rights of a debtor; and
(2) unless the person otherwise agrees or a law other than
IC 26-1-9.1 otherwise provides, the person does not owe any
duty to the secured party and is not required to confirm the
acknowledgment to another person.
(h) 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:
(1) to hold possession of the collateral for the secured party's
benefit; or
(2) to redeliver the collateral to the secured party.
(i) A secured party does not relinquish possession, even if a
delivery under subsection (h) violates the rights of a debtor. A person
to which collateral is delivered under subsection (h) 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
IC 26-1-9.1 otherwise provides.
SOURCE: IC 26-1-9.1-314; (07)MO041901.74. -->
SECTION 74. IC 26-1-9.1-314 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 314. (a) A security
interest in investment property, deposit accounts, letter-of-credit rights,
or electronic chattel paper, or electronic documents may be perfected
by control of the collateral under IC 26-1-7-106, IC 26-1-9.1-104,
IC 26-1-9.1-105, IC 26-1-9.1-106, or IC 26-1-9.1-107.
(b) A security interest in deposit accounts, electronic chattel paper,
or letter-of-credit rights, or electronic documents is perfected by
control under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105, or
IC 26-1-9.1-107 when the secured party obtains control and remains
perfected by control only while the secured party retains control.
(c) A security interest in investment property is perfected by
control under IC 26-1-9.1-106 from the time the secured party obtains
control and remains perfected by control until:
(1) the secured party does not have control; and
(2) one of the following occurs:
(A) if the collateral is a certificated security, the debtor has
or acquires possession of the security certificate;
(B) if the collateral is an uncertificated security, the issuer
has registered or registers the debtor as the registered
owner; or
(C) if the collateral is a security entitlement, the debtor is or
becomes the entitlement holder.
SOURCE: IC 26-1-9.1-317; (07)MO041901.75. -->
SECTION 75. IC 26-1-9.1-317 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 317. (a) A security
interest or agricultural lien is subordinate to the rights of:
(1) a person entitled to priority under IC 26-1-9.1-322; and
(2) except as provided in subsection (e), a person that becomes
a lien creditor before the earlier of the time:
(A) the security interest or agricultural lien is perfected; or
(B) one (1) of the conditions specified in
IC 26-1-9.1-203(b)(3) is met;
and a financing statement covering the collateral is filed.
(b) Except as otherwise provided in subsection (e), a buyer, other
than a secured party, of tangible chattel paper, tangible documents,
goods, instruments, or a security certificate takes free of a security
interest or agricultural lien if the buyer gives value and receives
delivery of the collateral without knowledge of the security interest or
agricultural lien and before it is perfected.
(c) Except as otherwise provided in subsection (e), a lessee of
goods takes free of a security interest or agricultural lien if the lessee
gives value and receives delivery of the collateral without knowledge
of the security interest or agricultural lien and before it is perfected.
(d) A licensee of a general intangible or a buyer, other than a
secured party, of accounts, electronic chattel paper, electronic
documents, general intangibles, or investment property other than a
certificated security takes free of a security interest if the licensee or
buyer gives value without knowledge of the security interest and before
it is perfected.
(e) Except as otherwise provided in IC 26-1-9.1-320 and
IC 26-1-9.1-321, if a person files a financing statement with respect to
a purchase-money security interest before or within twenty (20) days
after the debtor receives delivery of the collateral, the security interest
takes priority over the rights of a buyer, lessee, or lien creditor that
arise between the time the security interest attaches and the time of
filing.
SOURCE: IC 26-1-9.1-338; (07)MO041901.76. -->
SECTION 76. IC 26-1-9.1-338 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 338. If a security
interest or agricultural lien is perfected by a filed financing statement
providing information described in IC 26-1-9.1-516(b)(5) that is
incorrect at the time the financing statement is filed:
(1) the security interest or agricultural lien is subordinate to a
conflicting perfected security interest in the collateral to the
extent that the holder of the conflicting security interest gives
value in reasonable reliance upon the incorrect information; and
(2) a purchaser, other than a secured party, of the collateral takes
free of the security interest or agricultural lien to the extent that,
in reasonable reliance upon the incorrect information, the
purchaser gives value and, in the case of tangible chattel paper,
tangible documents, goods, instruments, or a security certificate,
receives delivery of the collateral.
SOURCE: IC 26-1-9.1-601; (07)MO041901.77. -->
SECTION 77. IC 26-1-9.1-601 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 601. (a) After default,
a secured party has the rights provided in this section through
IC 26-1-9.1-628 and, except as otherwise provided in IC 26-1-9.1-602,
those provided by agreement of the parties. A secured party:
(1) may reduce a claim to judgment, foreclose, or otherwise
enforce the claim, security interest, or agricultural lien by any
available judicial procedure; and
(2) if the collateral is documents, may proceed either as to the
documents or as to the goods they cover.
(b) A secured party in possession of collateral or control of
collateral under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
IC 26-1-9.1-106, or IC 26-1-9.1-107 has the rights and duties provided
in IC 26-1-9.1-207.
(c) The rights under subsections (a) and (b) are cumulative and
may be exercised simultaneously.
(d) Except as otherwise provided in subsection (g) and
IC 26-1-9.1-605, after default, a debtor and an obligor have the rights
provided in IC 26-1-9.1-601 through IC 26-1-9.1-628 and by agreement
of the parties.
(e) If a secured party has reduced its claim to judgment, the lien of
any levy that may be made upon the collateral by virtue of an execution
based upon the judgment relates back to the earliest of:
(1) the date of perfection of the security interest or agricultural
lien in the collateral;
(2) the date of filing a financing statement covering the
collateral; or
(3) any date specified in a statute under which the agricultural
lien was created.
(f) A sale pursuant to an execution is a foreclosure of the security
interest or agricultural lien by judicial procedure within the meaning of
this section. A secured party may purchase at the sale and thereafter
hold the collateral free of any other requirements of IC 26-1-9.1.
(g) Except as otherwise provided in IC 26-1-9.1-607(c),
IC 26-1-9.1-601 through IC 26-1-9.1-628 impose no duties upon a
secured party that is a consignor or is a buyer of accounts, chattel
paper, payment intangibles, or promissory notes.
SOURCE: IC 32-31-4-5; (07)MO041901.78. -->
SECTION 78. IC 32-31-4-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 5. If a tenant does not
claim the tenant's property within ninety (90) days after receiving
notice under section 3 of this chapter, a warehouseman may sell the
property received under this chapter under IC 26-1-7-210(2).
IC 26-1-7-210(b).
".
Renumber all SECTIONS consecutively.
(Reference is to SB 419 as printed February 7, 2007.)