Missouri Revised Statutes













Chapter 400

Uniform Commercial Code

←400.09-607

Section 400.9-608.1

400.09-609→

August 28, 2015

Application of proceeds of collection or enforcement--liability for deficiency and right to surplus.

400.9-608. (a) If a security interest or agricultural lien secures

payment or performance of an obligation, the following rules apply:



(1) A secured party shall apply or pay over for application the cash

proceeds of collection or enforcement under section 400.9-607 in the

following order to:



(A) The reasonable expenses of collection and enforcement and, to the

extent provided for by agreement and not prohibited by law, reasonable

attorney's fees and legal expenses incurred by the secured party;



(B) The satisfaction of obligations secured by the security interest or

agricultural lien under which the collection or enforcement is made; and



(C) The satisfaction of obligations secured by any subordinate security

interest in or other lien on the collateral subject to the security interest

or agricultural lien under which the collection or enforcement is made if the

secured party receives an authenticated demand for proceeds before

distribution of the proceeds is completed;



(2) If requested by a secured party, a holder of a subordinate security

interest or other lien shall furnish reasonable proof of the interest or lien

within a reasonable time. Unless the holder complies, the secured party need

not comply with the holder's demand under paragraph (1)(C);



(3) A secured party need not apply or pay over for application noncash

proceeds of collection and enforcement under section 400.9-607 unless the

failure to do so would be commercially unreasonable. A secured party that

applies or pays over for application noncash proceeds shall do so in a

commercially reasonable manner;



(4) A secured party shall account to and pay a debtor for any surplus,

and the obligor is liable for any deficiency.



(b) If the underlying transaction is a sale of accounts, chattel paper,

payment intangibles, or promissory notes, the debtor is not entitled to any

surplus, and the obligor is not liable for any deficiency.



(L. 2001 S.B. 288, A.L. 2002 S.B. 895)





2001



2001



400.9-608. (a) If a security interest or agricultural lien secures

payment or performance of an obligation, the following rules apply:



(1) A secured party shall apply or pay over for application the cash

proceeds of collection or enforcement under this section in the following

order to:



(A) The reasonable expenses of collection and enforcement and, to the

extent provided for by agreement and not prohibited by law, reasonable

attorney's fees and legal expenses incurred by the secured party;



(B) The satisfaction of obligations secured by the security interest

or agricultural lien under which the collection or enforcement is made; and



(C) The satisfaction of obligations secured by any subordinate

security interest in or other lien on the collateral subject to the

security interest or agricultural lien under which the collection or

enforcement is made if the secured party receives an authenticated demand

for proceeds before distribution of the proceeds is completed;



(2) If requested by a secured party, a holder of a subordinate

security interest or other lien shall furnish reasonable proof of the

interest or lien within a reasonable time. Unless the holder complies, the

secured party need not comply with the holder's demand under paragraph

(1)(C);



(3) A secured party need not apply or pay over for application

noncash proceeds of collection and enforcement under this section unless

the failure to do so would be commercially unreasonable. A secured party

that applies or pays over for application noncash proceeds shall do so in a

commercially reasonable manner;



(4) A secured party shall account to and pay a debtor for any

surplus, and the obligor is liable for any deficiency.



(b) If the underlying transaction is a sale of accounts, chattel

paper, payment intangibles, or promissory notes, the debtor is not entitled

to any surplus, and the obligor is not liable for any deficiency.



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