400.9-324. Priority of purchase-money security interests. - Missouri Statutes

Priority of purchase-money security interests.

400.9-324. (a) Except as otherwise provided in subsection (g), aperfected purchase-money security interest in goods other than inventory orlivestock has priority over a conflicting security interest in the samegoods, and, except as otherwise provided in section 400.9-327, a perfectedsecurity interest in its identifiable proceeds also has priority, if thepurchase-money security interest is perfected when the debtor receivespossession of the collateral or within twenty days thereafter.

(b) Subject to subsection (c) and except as otherwise provided insubsection (g), a perfected purchase-money security interest in inventoryhas priority over a conflicting security interest in the same inventory,has priority over a conflicting security interest in chattel paper or aninstrument constituting proceeds of the inventory and in proceeds of thechattel paper, if so provided in section 400.9-330, and, except asotherwise provided in section 400.9-327, also has priority in identifiablecash proceeds of the inventory to the extent the identifiable cash proceedsare received on or before the delivery of the inventory to a buyer, if:

(1) The purchase-money security interest is perfected when the debtorreceives possession of the inventory;

(2) The purchase-money secured party sends an authenticatednotification to the holder of the conflicting security interest;

(3) The holder of the conflicting security interest receives thenotification within five years before the debtor receives possession of theinventory; and

(4) The notification states that the person sending the notificationhas or expects to acquire a purchase-money security interest in inventoryof the debtor and describes the inventory.

(c) Subsections (b)(2) through (4) apply only if the holder of theconflicting security interest had filed a financing statement covering thesame types of inventory:

(1) If the purchase-money security interest is perfected by filing,before the date of the filing; or

(2) If the purchase-money security interest is temporarily perfectedwithout filing or possession under section 400.9-312(f), before thebeginning of the twenty-day period thereunder.

(d) Subject to subsection (e) and except as otherwise provided insubsection (g), a perfected purchase-money security interest in livestockthat are farm products has priority over a conflicting security interest inthe same livestock, and, except as otherwise provided in section 400.9-327,a perfected security interest in their identifiable proceeds andidentifiable products in their unmanufactured states also has priority, if:

(1) The purchase-money security interest is perfected when the debtorreceives possession of the livestock;

(2) The purchase-money secured party sends an authenticatednotification to the holder of the conflicting security interest;

(3) The holder of the conflicting security interest receives thenotification within six months before the debtor receives possession of thelivestock; and

(4) The notification states that the person sending the notificationhas or expects to acquire a purchase-money security interest in livestockof the debtor and describes the livestock.

(e) Subsections (d)(2) through (4) apply only if the holder of theconflicting security interest had filed a financing statement covering thesame types of livestock:

(1) If the purchase-money security interest is perfected by filing,before the date of the filing; or

(2) If the purchase-money security interest is temporarily perfectedwithout filing or possession under section 400.9-312(f), before thebeginning of the twenty-day period thereunder.

(f) Except as otherwise provided in subsection (g), a perfectedpurchase-money security interest in software has priority over aconflicting security interest in the same collateral, and, except asotherwise provided in section 400.9-327, a perfected security interest inits identifiable proceeds also has priority, to the extent that thepurchase-money security interest in the goods in which the software wasacquired for use has priority in the goods and proceeds of the goods underthis section.

(g) If more than one security interest qualifies for priority in thesame collateral under subsection (a), (b), (d), or (f):

(1) A security interest securing an obligation incurred as all orpart of the price of the collateral has priority over a security interestsecuring an obligation incurred for value given to enable the debtor toacquire rights in or the use of collateral; and

(2) In all other cases, section 400.9-322(a) applies to thequalifying security interests.

(L. 2001 S.B. 288)

Effective 7-01-01