Missouri Revised Statutes













Chapter 400

Uniform Commercial Code

←400.09-305

Section 400.9-306.1

400.09-307→

August 28, 2015

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

400.9-306. (a) Subject to subsection (c), 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.



(b) For purposes of this part, 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 section 400.5-116.



(c) This section does not apply to a security interest that is perfected

only under section 400.9-308(c).



(L. 1963 p. 503 § 9-306, A.L. 1988 S.B. 583, A.L. 1995 S.B. 178,

A.L. 1997 S.B. 6, A.L. 2001 S.B. 288)



Effective 7-01-01





1997



1997



400.009.306. (1) "Proceeds" includes whatever is received upon the

sale, exchange, collection or other disposition of collateral or proceeds.

Insurance payable by reason of loss or damage to the collateral is

proceeds, except to the extent that it is payable to a person other than a

party to the security agreement. Any payments or distributions made with

respect to investment property collateral are proceeds. Money, checks,

deposit accounts and the like are "cash proceeds". All other proceeds are

"non-cash proceeds".



(2) Except where this article otherwise provides, a security interest

continues in collateral notwithstanding sale, exchange or other disposition

thereof unless the disposition was authorized by the secured party in the

security agreement or otherwise provided the creditor agrees in writing,

and also continues in any identifiable proceeds including collections

received by the debtor.



(3) The security interest in proceeds is a continuously perfected

security interest if the interest in the original collateral was perfected

but it ceases to be a perfected security interest and becomes unperfected

ten days after receipt of the proceeds by the debtor unless



(a) a filed financing statement covers the original collateral and

the proceeds are collateral in which a security interest may be perfected

by filing in the office or offices where the financing statement has been

filed and, if the proceeds are acquired with cash proceeds, the description

of collateral in the financing statement indicates the types of property

constituting the proceeds;



(b) a filed financing statement covers the original collateral and

the proceeds are identifiable cash proceeds;



(c) the original collateral was investment property and the proceeds

are identifiable cash proceeds; or



(d) the security interest in the proceeds is perfected before the

expiration of the ten-day period. Except as provided in this section, a

security interest in proceeds can be perfected only by the methods or under

the circumstances permitted in this article for original collateral of the

same type.



(4) In the event of insolvency proceedings instituted by or against a

debtor, a secured party with a perfected security interest in proceeds has

a perfected security interest only in the following proceeds:



(a) in identifiable non-cash proceeds and in separate deposit

accounts containing only proceeds;



(b) in identifiable cash proceeds in the form of money which is

neither commingled with other money nor deposited in a deposit account

prior to the insolvency proceedings;



(c) in identifiable cash proceeds in the form of checks and the like

which are not deposited in a deposit account prior to the insolvency

proceedings; and



(d) in all cash and deposit accounts of the debtor in which proceeds

have been commingled with other funds, but the perfected security interest

under this paragraph (d) is



(i) subject to any right of setoff; and



(ii) limited to an amount not greater than the amount of any cash

proceeds received by the debtor within ten days before the institution of

the insolvency proceedings less the sum of (I) the payments to the secured

party on account of cash proceeds received by the debtor during such period

and (II) the cash proceeds received by the debtor during such period to

which the secured party is entitled under paragraphs (a) through (c) of

this subsection (4).



(5) If a sale of goods results in an account or chattel paper which

is transferred by the seller to a secured party, and if the goods are

returned to or are repossessed by the seller or the secured party, the

following rules determine priorities:



(a) If the goods were collateral at the time of sale, for an

indebtedness of the seller which is still unpaid, the original security

interest attaches again to the goods and continues as a perfected security

interest if it was perfected at the time when the goods were sold. If the

security interest was originally perfected by a filing which is still

effective, nothing further is required to continue the perfected status; in

any other case, the secured party must take possession of the returned or

repossessed goods or must file.



(b) An unpaid transferee of the chattel paper has a security interest

in the goods against the transferor. Such security interest is prior to a

security interest asserted under paragraph (a) to the extent that the

transferee of the chattel paper was entitled to priority under section

400.9-308.



(c) An unpaid transferee of the account has a security interest in

the goods against the transferor. Such security interest is subordinate to

a security interest asserted under paragraph (a).



(d) A security interest of an unpaid transferee asserted under

paragraph (b) or (c) must be perfected for protection against creditors of

the transferor and purchasers of the returned or repossessed goods.



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