§ 25-9-336. Commingled goods. - North Carolina Statutes

§25‑9‑336.  Commingled goods.

(a)        "Commingledgoods." – In this section, "commingled goods" means goods thatare physically united with other goods in such a manner that their identity islost in a product or mass.

(b)        No securityinterest in commingled goods as such. – A security interest does not exist incommingled goods as such. However, a security interest may attach to a productor mass that results when goods become commingled goods.

(c)        Attachment ofsecurity interest to product or mass. – If collateral becomes commingled goods,a security interest attaches to the product or mass.

(d)        Perfection ofsecurity interest. – If a security interest in collateral is perfected beforethe collateral becomes commingled goods, the security interest that attaches tothe product or mass under subsection (c) of this section is perfected.

(e)        Priority ofsecurity interest. – Except as otherwise provided in subsection (f) of thissection, the other provisions of this Part determine the priority of a securityinterest that attaches to the product or mass under subsection (c) of thissection.

(f)         Conflictingsecurity interests in product or mass. – If more than one security interestattaches to the product or mass under subsection (c) of this section, thefollowing rules determine priority:

(1)        A security interestthat is perfected under subsection (d) of this section has priority over asecurity interest that is unperfected at the time the collateral becomescommingled goods.

(2)        If more than onesecurity interest is perfected under subsection (d) of this section, thesecurity interests rank equally in proportion to the value of the collateral atthe time it became commingled goods. (1965, c. 700, s. 1; 1975, c.862, s. 7; 2000‑169, s. 1.)