Chapter 409

PERFECTION AND PRIORITY

409.301 409.301 Law governing perfection and priority of security interests. Except as otherwise provided in ss. 409.303 to 409.306, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:

409.301(1) (1) Location of debtor. 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.

409.301(2) (2) Location of collateral. 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.

409.301(3) (3) Location of property. Except as otherwise provided in sub. (4), while tangible negotiable documents, goods, instruments, money, or tangible chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:

409.301(3)(a) (a) Perfection of a security interest in the goods by filing a fixture filing;

409.301(3)(b) (b) Perfection of a security interest in timber to be cut; and

409.301(3)(c) (c) The effect of perfection or nonperfection and the priority of a nonpossessory security interest in the collateral.

409.301(4) (4) Location of wellhead or minehead. 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.

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

409.302 409.302 Law governing perfection and priority of agricultural liens. While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of an agricultural lien on the farm products.

409.302 History History: 2001 a. 10.

409.303 409.303 Law governing perfection and priority of security interests in goods covered by a certificate of title.

409.303(1) (1) Applicability of section. This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor.

409.303(2) (2) When goods covered by certificate of title. Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered subsequently by a certificate of title issued by another jurisdiction.

409.303(3) (3) Applicable law. The local law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in goods covered by a certificate of title from the time the goods become covered by the certificate of title until the goods cease to be covered by the certificate of title.

409.303 History History: 2001 a. 10.

409.304 409.304 Law governing perfection and priority of security interests in deposit accounts.

409.304(1) (1) Law of bank’s jurisdiction governs. The local law of a bank’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a deposit account maintained with that bank.

409.304(2) (2) Bank’s jurisdiction. The following rules determine a bank’s jurisdiction for purposes of this subchapter:

409.304(2)(a) (a) If an agreement between the bank and the debtor governing the deposit account expressly provides that a particular jurisdiction is the bank’s jurisdiction for purposes of this subchapter, this chapter, or chs. 401 to 411, that jurisdiction is the bank’s jurisdiction.

409.304(2)(b) (b) If par. (a) does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

409.304(2)(c) (c) If neither par. (a) nor par. (b) applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

409.304(2)(d) (d) If none of pars. (a) to (c) applies, the bank’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer’s account is located.

409.304(2)(e) (e) If none of pars. (a) to (d) applies, the bank’s jurisdiction is the jurisdiction in which the chief executive office of the bank is located.

409.304 History History: 2001 a. 10.

409.305 409.305 Law governing perfection and priority of security interests in investment property.

409.305(1) (1) Governing law: general rules. Except as otherwise provided in sub. (3), the following rules apply:

409.305(1)(a) (a) While a security certificate 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 the certificated security represented thereby.

409.305(1)(b) (b) The local law of the issuer’s jurisdiction as specified in s. 408.110 (4) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.

409.305(1)(c) (c) The local law of the securities intermediary’s jurisdiction as specified in s. 408.110 (5) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.

409.305(1)(d) (d) The local law of the commodity intermediary’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account.

409.305(2) (2) Commodity intermediary’s jurisdiction. The following rules determine a commodity intermediary’s jurisdiction for purposes of this subchapter:

409.305(2)(a) (a) If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary’s jurisdiction for purposes of this subchapter, this chapter, or chs. 401 to 411, that jurisdiction is the commodity intermediary’s jurisdiction.

409.305(2)(b) (b) If par. (a) does not apply and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.

409.305(2)(c) (c) If neither par. (a) nor par. (b) applies and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.

409.305(2)(d) (d) If none of pars. (a) to (c) applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer’s account is located.

409.305(2)(e) (e) If none of pars. (a) to (d) applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located.

409.305(3) (3) When perfection governed by law of jurisdiction where debtor located. The local law of the jurisdiction in which the debtor is located governs:

409.305(3)(a) (a) Perfection of a security interest in investment property by filing;

409.305(3)(b) (b) Automatic perfection of a security interest in investment property created by a broker or securities intermediary; and

409.305(3)(c) (c) Automatic perfection of a security interest in a commodity contract or commodity account created by a commodity intermediary.

409.305 History History: 2001 a. 10.

409.306 409.306 Law governing perfection and priority of security interests in letter-of-credit rights.

409.306(1) (1) Governing law: issuer’s or nominated person’s jurisdiction. Subject to sub. (3), the local law of the issuer’s jurisdiction or a nominated person’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer’s jurisdiction or nominated person’s jurisdiction is a state.

409.306(2) (2) Issuer’s or nominated person’s jurisdiction. For purposes of this subchapter, an issuer’s jurisdiction or nominated person’s jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in ch. 405.

409.306(3) (3) When section not applicable. This section does not apply to a security interest that is perfected only under s. 409.308 (4).

409.306 History History: 2001 a. 10.

409.307 409.307 Location of debtor.

409.307(1) (1) Place of business. In this section, “place of business” means a place where a debtor conducts its affairs.

409.307(2) (2) Debtor’s location: general rules. Except as otherwise provided in this section, the following rules determine a debtor’s location:

409.307(2)(a) (a) A debtor who is an individual is located at the individual’s principal residence.

409.307(2)(b) (b) A debtor that is an organization and has only one place of business is located at its place of business.

409.307(2)(c) (c) A debtor that is an organization and has more than one place of business is located at its chief executive office.

409.307(3) (3) Limitation of applicability of sub. (2). Subsection (2) applies only if a debtor’s residence, place of business, or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording, or registration system as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral. If sub. (2) does not apply, the debtor is located in the District of Columbia.

409.307(4) (4) Continuation of location: cessation of existence. A person that ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction specified by subs. (2) and (3).

409.307(5) (5) Location of registered organization organized under state law. A registered organization that is organized under the law of a state is located in that state.

409.307(6) (6) Location of registered organization organized under federal law; bank branches and agencies. Except as otherwise provided in sub. (9), a registered organization that is organized under the law of the United States and a branch or agency of a bank that is not organized under the law of the United States or a state are located:

409.307(6)(a) (a) In the state that the law of the United States designates, if the law designates a state of location;

409.307(6)(b) (b) In the state that the registered organization, branch, or agency designates, if the law of the United States authorizes the registered organization, branch, or agency to designate its state of location, including by designating its main office, home office, or other comparable office; or

409.307(6)(c) (c) In the District of Columbia, if neither par. (a) nor par. (b) applies.

409.307(7) (7) Continuation of location: change in status of registered organization. A registered organization continues to be located in the jurisdiction specified by sub. (5) or (6) notwithstanding:

409.307(7)(a) (a) The suspension, revocation, forfeiture, or lapse of the registered organization’s status as such in its jurisdiction of organization; or

409.307(7)(b) (b) The dissolution, winding up, or cancellation of the existence of the registered organization.

409.307(8) (8) Location of United States. The United States is located in the District of Columbia.

409.307(9) (9) Location of foreign bank branch or agency if licensed in only one state. A branch or agency of a bank that is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed, if all branches and agencies of the bank are licensed in only one state.

409.307(10) (10) Location of foreign air carrier. A foreign air carrier under the Federal Aviation Act of 1958, as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier.

409.307(11) (11) Section applies only to this subchapter. This section applies only for purposes of this subchapter.

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

409.308 409.308 When security interest or agricultural lien is perfected; continuity of perfection.

409.308(1) (1) Perfection of security interest. Except as otherwise provided in this section and s. 409.309, a security interest is perfected if it has attached and all of the applicable requirements for perfection in ss. 409.310 to 409.316 have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches.

409.308(2) (2) Perfection of agricultural lien. An agricultural lien is perfected if it has become effective and all of the applicable requirements for perfection in s. 409.310 have been satisfied. An agricultural lien is perfected when it becomes effective if the applicable requirements are satisfied before the agricultural lien becomes effective.

409.308(3) (3) Continuous perfection; perfection by different methods. A security interest or agricultural lien is perfected continuously if it is originally perfected by one method under this chapter and is later perfected by another method under this chapter, without an intermediate period when it was unperfected.

409.308(4) (4) Supporting obligation. Perfection of a security interest in collateral also perfects a security interest in a supporting obligation for the collateral.

409.308(5) (5) Lien securing right to payment. Perfection of a security interest in a right to payment or performance also perfects a security interest in a security interest, mortgage, or other lien on personal or real property securing the right.

409.308(6) (6) Security entitlement carried in securities account. Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account.

409.308(7) (7) Commodity contract carried in commodity account. Perfection of a security interest in a commodity account also perfects a security interest in the commodity contracts carried in the commodity account.

409.308 History History: 2001 a. 10.

409.309 409.309 Security interest perfected upon attachment. The following security interests are perfected when they attach:

409.309(1) (1) A purchase-money security interest in consumer goods, except as otherwise provided in s. 409.311 (2) with respect to consumer goods that are subject to a statute or treaty described in s. 409.311 (1);

409.309(2) (2) An assignment of accounts or payment intangibles which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor’s outstanding accounts or payment intangibles;

409.309(3) (3) A sale of a payment intangible;

409.309(4) (4) A sale of a promissory note;

409.309(5) (5) A security interest created by the assignment of a health-care-insurance receivable to the provider of the health-care goods or services;

409.309(6) (6) A security interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508 (5), until the debtor obtains possession of the collateral;

409.309(7) (7) A security interest of a collecting bank arising under s. 404.210;

409.309(8) (8) A security interest of an issuer or nominated person arising under s. 405.118;

409.309(9) (9) A security interest arising in the delivery of a financial asset under s. 409.206 (3);

409.309(10) (10) A security interest in investment property created by a broker or securities intermediary;