400.9-330. Priority of purchaser of chattel paper or instrument. - Missouri Statutes

Priority of purchaser of chattel paper or instrument.

400.9-330. (a) A purchaser of chattel paper has priority over asecurity interest in the chattel paper which is claimed merely as proceedsof inventory subject to a security interest if:

(1) In good faith and in the ordinary course of the purchaser'sbusiness, the purchaser gives new value and takes possession of the chattelpaper or obtains control of the chattel paper under section 400.9-105; and

(2) The chattel paper does not indicate that it has been assigned toan identified assignee other than the purchaser.

(b) A purchaser of chattel paper has priority over a securityinterest in the chattel paper which is claimed other than merely asproceeds of inventory subject to a security interest if the purchaser givesnew value and takes possession of the chattel paper or obtains control ofthe chattel paper under section 400.9-105 in good faith, in the ordinarycourse of the purchaser's business, and without knowledge that the purchaseviolates the rights of the secured party.

(c) Except as otherwise provided in section 400.9-327, a purchaserhaving priority in chattel paper under subsection (a) or (b) also haspriority in proceeds of the chattel paper to the extent that:

(1) Section 400.9-322 provides for priority in the proceeds; or

(2) The proceeds consist of the specific goods covered by the chattelpaper or cash proceeds of the specific goods, even if the purchaser'ssecurity interest in the proceeds is unperfected.

(d) Except as otherwise provided in section 400.9-331(a), a purchaserof an instrument has priority over a security interest in the instrumentperfected by a method other than possession if the purchaser gives valueand takes possession of the instrument in good faith and without knowledgethat the purchase violates the rights of the secured party.

(e) For purposes of subsections (a) and (b), the holder of apurchase-money security interest in inventory gives new value for chattelpaper constituting proceeds of the inventory.

(f) For purposes of subsections (b) and (d), if chattel paper or aninstrument indicates that it has been assigned to an identified securedparty other than the purchaser, a purchaser of the chattel paper orinstrument has knowledge that the purchase violates the rights of thesecured party.

(L. 2001 S.B. 288)

Effective 7-01-01