Home

Back to Table of Contents

Minnesota Chippewa Tribe - Leech Lake Band - Tribal Code

 

Title 9. Secured Transactions Ordinance
Chapter 3. Perfection and Priority

SUBCHAPTER 1. LAW GOVERNING PERFECTION AND PRIORITY
TITLE 9-301. LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS
TITLE 9-302. [RESERVED.]
TITLE 9-303. LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY A CERTIFICATE OF TITLE
TITLE 9-304. [RESERVED.]
TITLE 9-305. [RESERVED.]
TITLE 9-306. [RESERVED.]
TITLE 9-307. [RESERVED.]

SUBCHAPTER 2. PERFECTION
TITLE 9-308. WHEN SECURITY INTEREST IS PERFECTED; CONTINUITY OF PERFECTION
TITLE 9-309. SECURITY INTEREST PERFECTED UPON ATTACHMENT
TITLE 9-310. WHEN FILING REQUIRED TO PERFECT SECURITY INTEREST; SECURITY INTERESTS TO WHICH FILING PROVISIONS DO NOT APPLY
TITLE 9-311. PERFECTION OF SECURITY INTERESTS IN PROPERTY SUBJECT TO CERTAIN STATUTES, REGULATIONS, AND TREATIES
TITLE 9-312. PERFECTION OF SECURITY INTERESTS IN CHATTEL PAPER, DOCUMENTS, GOODS COVERED BY DOCUMENTS, INSTRUMENTS, AND MONEY; PERFECTION BY PERMISSIVE FILING; TEMPORARY PERFECTION WITHOUT FILING OR TRANSFER OF POSSESSION
TITLE 9-313. WHEN POSSESSION BY SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT FILING
TITLE 9-314. PERFECTION BY CONTROL
TITLE 9-315. SECURED PARTYS RIGHTS ON DISPOSITION OF COLLATERAL AND IN PROCEEDS
TITLE 9-316. CONTINUED PERFECTION OF SECURITY INTEREST FOLLOWING CHANGE IN GOVERNING LAW

SUBCHAPTER 3. PRIORITY
TITLE 9-317. INTERESTS THAT TAKE PRIORITY OVER SECURITY INTEREST
TITLE 9-318. PARTICULAR PRIORITY RULES
TITLE 9-319. PRIORITY OF SECURITY INTERESTS IN FIXTURES AND CROPS
TITLE 9-320. ACCESSIONS
TITLE 9-321. COMMINGLED GOODS
TITLE 9-322. PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY CERTIFICATE OF TITLE
TITLE 9-323. PRIORITY SUBJECT TO SUBORDINATION

SUBCHAPTER 1. LAW GOVERNING PERFECTION AND PRIORITY

LLOjibwe JCT9 STO § 9-301
9-301. Law Governing Perfection and Priority of Security Interests

Except as otherwise provided with respect to goods covered by a certificate of title (Title 9-303), the following rules determine the law governing perfection, the effect of perfection or non-perfection, and the priority of a security interest in collateral:

(1) Except as otherwise provided in this section, the local law of the Leech Lake Band of Ojibwe governs perfection, the effect of perfection or non-perfection, and the priority of a security interest in collateral

(A) if the security interest is created pursuant to this ordinance;

(B) from the time that the debtor becomes subject to the jurisdiction of the Leech Lake Band of Ojibwe (Title 9-316(d) and (e)); or

(C) from the time that the collateral is transferred to a person that thereby becomes a debtor and is subject to the jurisdiction of the Leech Lake Band of Ojibwe.

(2) Except as provided in paragraph (3), while goods are located in a jurisdiction, the local law of that jurisdiction governs

(A) perfection of a security interest in the goods by filing a fixture filing; and

(B) perfection of a security interest in timber to be cut.

(3) The local law of the jurisdiction in which the wellhead or mine head is located governs perfection, the effect of perfection or non-perfection, and the priority of a security interest in as-extracted collateral.

(4) This section does not determine the law governing matters not expressly referred to herein, including attachment, validity, characterization, and enforcement.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-301, LLOjibwe JCT9 STO § 9-301



LLOjibwe JCT9 STO § 9-302
9-302. [Reserved]

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-302, LLOjibwe JCT9 STO § 9-302




LLOjibwe JCT9 STO § 9-303
9-303. Law Governing Perfection and Priority of Security Interests in Goods Covered by a Certificate of Title

(a) Applicability of section. This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor.

(b) When goods covered by certificate of title. Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered subsequently by a certificate of title issued by another jurisdiction.

(c) Applicable law. The local law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of perfection or non-perfection, and the priority of a security interest in goods covered by a certificate of title from the time the goods become covered by the certificate of title until the goods cease to be covered by the certificate of title.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-303, LLOjibwe JCT9 STO § 9-303




LLOjibwe JCT9 STO § 9-304
9-304. [Reserved]

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-304, LLOjibwe JCT9 STO § 9-304




LLOjibwe JCT9 STO § 9-305
9-305. [Reserved]

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-305, LLOjibwe JCT9 STO § 9-305




LLOjibwe JCT9 STO § 9-306
9-306. [Reserved]

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-306, LLOjibwe JCT9 STO § 9-306




LLOjibwe JCT9 STO § 9-307
9-307. [Reserved]

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-307, LLOjibwe JCT9 STO § 9-307

SUBCHAPTER 2. PERFECTION

LLOjibwe JCT9 STO § 9-308
9-308. When Security Interest is Perfected; Continuity of Perfection

(a) Perfection of security interest. Except as otherwise provided in this section and the next section dealing with security interests perfected upon attachment, a security interest is perfected if it has attached and all of the applicable requirements for perfection set forth in this ordinance have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches.

(b) Continuous perfection; perfection by different methods. A security interest is perfected continuously if it is originally perfected by one method under this ordinance and is later perfected by another method under this ordinance, without an intermediate period when it was unperfected.

(c) Lien securing right to payment. Perfection of a security interest in a right to payment or performance also perfects a security interest in a security interest, mortgage, or other lien on personal or real property securing the right.

(d) Certain items credited to investment account. Perfection of a security interest in an investment account also perfects a security interest in any securities or commodity contracts credited to the investment account.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-308, LLOjibwe JCT9 STO § 9-308



LLOjibwe JCT9 STO § 9-309
9-309. Security Interest Perfected Upon Attachment

The following security interests are perfected when they attach:

(1) a purchase-money security interest in consumer goods, except as otherwise provided in Title 9-311(b) regarding goods subject to certain statutes, regulations or treaties;

(2) a security interest created by an assignment of accounts which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor's outstanding accounts;

(3) a sale of a payment intangible or a promissory note;

(4) a security interest created by an assignment of a health-care-insurance receivable to the provider of the health-care goods or services;

(5) a security interest created by an assignment of a beneficial interest in a decedent's estate; and

(6) a security interest created by an assignment by an individual of an account that is a right to payment of winnings in a lottery or other game of chance.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-309, LLOjibwe JCT9 STO § 9-309




LLOjibwe JCT9 STO § 9-310
9-310. When Filing Required to Perfect Security Interest; Security Interests to Which Filing Provisions do not Apply

(a) General rule: perfection by filing. Except as otherwise provided in subsection (b) and the title of this ordinance dealing with perfection of a security interest in money, a financing statement must be filed to perfect all security interests.

(b) Exceptions: filing not necessary. The filing of a financing statement is not necessary to perfect a security interest:

(1) that is perfected under Title 9-308(c), dealing with liens securing rights to payment;

(2) that is perfected when it attaches under Title 9-309;

(3) in property subject to a statute, regulation, or treaty described in Title 9-311(a);

(4) in goods in possession of a bailee which is perfected under Title 9-312(d)(1) or (2);

(5) in certificated securities, negotiable documents, goods, or instruments which is perfected without filing or possession under Title 9-312(e), (f) or (g);

(6) in collateral in the secured party's possession under Title 9-313;

(7) in a security or an investment account perfected by control under Title 9-314;

(8) in proceeds which is perfected under Title 9-315; or

(9) that is perfected under Title 9-316 relating to continued perfection of security interests perfected under the law of another jurisdiction.

(c) Assignment of perfected security interest. If a secured party assigns a perfected security interest, a filing under this ordinance is not required to continue the perfected status of the security interest against creditors of and transferees from the original debtor.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-310, LLOjibwe JCT9 STO § 9-310




LLOjibwe JCT9 STO § 9-311
9-311. Perfection of Security Interests in Property Subject to Certain Statutes, Regulations, and Treaties

(a) Security interest subject to other law. Except as otherwise provided in subsection (d), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to:

(1) any law of the United States whose requirements for a security interest obtaining priority over the rights of a lien creditor with respect to the property preempt the provisions of this ordinance requiring that security interests be perfected by filing;

(2) any certificate-of-title statute covering automobiles, trailers, mobile homes, boats, farm tractors, or the like, which provides for a security interest to be indicated on the certificate as a condition or result of perfection, and any central filing statute other than the one provided by this ordinance; or

(3) a certificate-of-title statute of another jurisdiction which provides for a security interest to be indicated on the certificate as a condition or result of the security interest obtaining priority over the rights of a lien creditor with respect to the property.

(b) Compliance with other law. Compliance with the requirements of a statute, regulation, or treaty described in subsection (a) for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this ordinance. Except as otherwise provided in subsection (d) and the provisions of this ordinance providing for perfection by possession when goods covered by a certificate of title issued by one jurisdiction become covered by a certificate of title issued by another jurisdiction, a security interest in property subject to a statute, regulation, or treaty described in subsection (a) may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral.

(c) Duration and renewal of perfection. Except as otherwise provided in subsection (d) and the provisions of this ordinance providing for continued perfection when goods covered by a certificate of title issued by one jurisdiction become covered by a certificate of title issued by another jurisdiction, duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in subsection (a) are governed by the statute, regulation, or treaty. In other respects, the security interest is subject to this ordinance.

(d) Inapplicability to certain inventory. During any period in which collateral subject to a statute specified in subsection (a)(2) is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-311, LLOjibwe JCT9 STO § 9-311




LLOjibwe JCT9 STO § 9-312
9-312. Perfection of Security Interests in Chattel Paper, Documents, Goods Covered by Documents, Instruments, and Money; Perfection by Permissive Filing; Temporary Perfection Without Filing or Transfer of Possession

(a) Perfection by filing permitted. A security interest in chattel paper, negotiable documents, instruments, securities, or investment accounts may be perfected by filing.

(b) Possession of money. Except as otherwise provided in the provisions of this ordinance dealing with perfection with respect to proceeds, a security interest in money may be perfected only by the secured party taking possession under the provisions of this ordinance dealing with perfection by possession.

(c) Goods covered by negotiable document. While goods are in the possession of a bailee that has issued a negotiable document covering the goods:

(1) a security interest in the goods may be perfected by perfecting a security interest in the document; and

(2) a security interest perfected in the document has priority over any security interest in the goods that becomes perfected by another method during that time.

(d) Goods covered by nonnegotiable document. While goods are in the possession of a bailee that has issued a nonnegotiable document covering the goods, a security interest in the goods may be perfected by:

(1) issuance of a document in the name of the secured party;

(2) the bailee's receipt of notification of the secured party's interest; or

(3) filing as to the goods.

(e) Temporary perfection: new value. A security interest in certificated securities, negotiable documents, or instruments is perfected without filing or the taking of possession for a period of twenty (20) days from the time it attaches to the extent that it arises for new value given under a signed security agreement.

(f) Temporary perfection: goods or documents made available to debtor. A perfected security interest in a negotiable document or goods in possession of a bailee, other than one that has issued a negotiable document for the goods, remains perfected for twenty (20) days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of:

(1) ultimate sale or exchange; or

(2) loading, unloading, storing, shipping, transshipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange.

(g) Temporary perfection: delivery of security certificate or instrument to debtor. A perfected security interest in a certificated security or instrument remains perfected for twenty (20) days without filing if the secured party delivers the security certificate or instrument to the debtor for the purpose of:

(1) ultimate sale or exchange; or

(2) presentation, collection, enforcement, renewal, or registration of transfer.

(h) Expiration of temporary perfection. After the twenty (20)-day period specified in subsection (e), (f), or (g) expires, perfection depends upon compliance with this ordinance.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-312, LLOjibwe JCT9 STO § 9-312




LLOjibwe JCT9 STO § 9-313
9-313. When Possession by Secured Party Perfects Security Interest Without Filing

(a) Perfection by possession. Except as otherwise provided in subsection (b), a secured party may perfect a security interest in certificated securities, negotiable documents, goods, instruments, money, or chattel paper by taking possession of the collateral.

(b) Goods covered by certificate of title. With respect to goods covered by a certificate of title issued by the Leech Lake Band of Ojibwe or a state, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in Title 9-316(c), relating to continued perfection of goods covered by a certificate of title.

(c) Collateral in possession of person other than debtor. With respect to collateral other than certificated securities and goods covered by a document, a secured party takes possession of collateral in the possession of a person other than the debtor, the secured party, or a lessee of the collateral from the debtor in the ordinary course of the debtor's business, when:

(1) the person in possession signs a record acknowledging that it holds possession of the collateral for the secured party's benefit; or

(2) the person takes possession of the collateral after having signed a record acknowledging that it will hold possession of collateral for the secured party's benefit.

(d) Time of perfection by possession; continuation of perfection. If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no earlier than the time the secured party takes possession and continues only while the secured party retains possession.

(e) Acknowledgment not required. A person in possession of collateral is not required to acknowledge that it holds possession for a secured party's benefit.

(f) Effectiveness of acknowledgment; no duties or confirmation. If a person acknowledges that it holds possession for the secured party's benefit:

(1) the acknowledgment is effective under subsection (c), even if the acknowledgment violates the rights of a debtor; and

(2) unless the person otherwise agrees or law other than this ordinance otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-313, LLOjibwe JCT9 STO § 9-313




LLOjibwe JCT9 STO § 9-314
9-314. Perfection by Control

A security interest in a security or an investment account may be perfected by control.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-314, LLOjibwe JCT9 STO § 9-314




LLOjibwe JCT9 STO § 9-315
9-315. Secured Party's Rights on Disposition of Collateral and in Proceeds

(a) Disposition of collateral: continuation of security interest; proceeds. Except as otherwise provided in this ordinance and in any applicable law dealing with entrustment of goods:

(1) a security interest continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest; and

(2) a security interest attaches to any identifiable proceeds of collateral.

(b) When commingled proceeds identifiable. Proceeds that are commingled with other property are identifiable proceeds:

(1) if the proceeds are goods, to the extent provided by the provisions of this ordinance dealing with commingled goods; and

(2) if the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this ordinance with respect to commingled property of the type involved.

(c) Perfection of security interest in proceeds. A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.

(d) Continuation of perfection. A perfected security interest in proceeds becomes unperfected on the 21st day after the security interest attaches to the proceeds unless:

(1) the following conditions are satisfied:

(A) a filed financing statement covers the original collateral;

(B) the proceeds are collateral in which a security interest may be perfected by filing in the office in which the financing statement has been filed; and

(C) the proceeds are not acquired with cash proceeds;

(2) the proceeds arc identifiable cash proceeds; or

(3) the security interest in the proceeds is perfected other than under subsection (c) when the security interest attaches to the proceeds or within twenty (20) days thereafter.

(e) When perfected security interest in proceeds becomes unperfected. If a filed financing statement covers the original collateral, a security interest in proceeds which remains perfected under subsection (d)(1) becomes unperfected at the later of:

(1) when the effectiveness of the filed financing statement lapses or is terminated under the provisions of this ordinance dealing with lapse or termination; or

(2) the 21st day after the security interest attaches to the proceeds.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-315, LLOjibwe JCT9 STO § 9-315




LLOjibwe JCT9 STO § 9-316
9-316. Continued Perfection of Security Interest Following Change in Governing Law

(a) General rule: effect on perfection of change in governing law. A security interest to which this ordinance becomes applicable that is perfected pursuant to the law of another jurisdiction remains perfected until the earliest of:

(1) the time perfection would have ceased under the law of that jurisdiction;

(2) the expiration of four months after the debtor becomes subject to the jurisdiction of the Leech Lake Band of Ojibwe (subsections (d) and (e)); or

(3) the expiration of one year after a transfer of collateral to a person that thereby becomes a debtor and is subject to the jurisdiction of the Leech Lake Band of Ojibwe.

(b) Security interest perfected or unperfected under law of the Leech Lake Band of Ojibwe. If a security interest described in subsection (a) becomes perfected under the law of the Leech Lake Band of Ojibwe before the end of the applicable period described in that subsection, it remains perfected thereafter until perfection lapses in accordance with this ordinance. Otherwise, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

(c) Goods covered by certificate of title from the Leech Lake Band of Ojibwe. A security interest to which this ordinance becomes applicable which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from the Leech Lake Band of Ojibwe remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered. However, the security interest becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value, if the applicable requirements for perfection under Title 9-311(b) or 9-313, dealing with perfection by compliance with other law or by possession, are not satisfied before the earlier of:

(1) the time the security interest would have become unperfected under the law of the other jurisdiction had the goods not become covered by a certificate of title from the Leech Lake Band of Ojibwe; or

(2) the expiration of four months after the goods had become so covered.

(d) When debtor subject to jurisdiction of the Leech Lake Band of Ojibwe for purposes of this section. For purposes of this section only, a debtor becomes subject to the jurisdiction of the Leech Lake Band of Ojibwe if:

(1) the debtor is an individual whose principal residence comes to be within this jurisdiction or who becomes a member of the Leech Lake Band of Ojibwe;

(2) the debtor is an organization, other than a registered organization, and its sole place of business or, if it has more than one place of business, its chief executive office, comes to be within this jurisdiction; or

(3) the debtor comes to be

(A) a registered organization that is organized solely under the law of the Leech Lake Band of Ojibwe; or

(B) incorporated under a charter issued to a tribe by the United States Secretary of the Interior pursuant to 25 U.S.C. § 477, as the same may be amended from time to time.

The term “registered organization” means an organization organized solely under the law of the Leech Lake Band of Ojibwe, a single State, or the United States and as to which the Leech Lake Band of Ojibwe, the state, or the United States must maintain a public record showing the organization to have been organized. The term “place of business” means a place where a debtor conducts its affairs.

(e) Continuation of jurisdiction: cessation of existence, etc. For purposes of subsection (d),

(1) a person other than a registered organization continues to be subject to the jurisdiction of the Leech Lake Band of Ojibwe notwithstanding the fact that it ceases to exist, have a residence, or have a place of business; and

(2) a registered organization continues to be subject to the jurisdiction of the Leech Lake Band of Ojibwe notwithstanding

(A) the suspension, revocation, forfeiture, or lapse of the registered organization's status as such; or

(B) the dissolution, winding up, or cancellation of the existence of the registered organization.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-316, LLOjibwe JCT9 STO § 9-316

SUBCHAPTER 3. PRIORITY

LLOjibwe JCT9 STO § 9-317
9-317. Interests That Take Priority Over Security Interest

(a) Subordination to certain lien creditors and purchasers. A security interest is subordinate to the rights of:

(1) a person that becomes a lien creditor before the security interest is perfected;

(2) a buyer of tangible personal property (including instruments and tangible documents or chattel paper), a lessee of goods, a licensee of a general intangible, or a buyer of accounts or general intangibles or securities that

(A) gives value; and

(B) in the case of a buyer of tangible personal property, a lessee of goods, or a buyer of a security certificate, acquires possession;

(C) in all cases to which this subsection (a)(2) applies, without knowledge of the security interest and before it is perfected;

(3) a secured party entitled to priority under subsection (c).

(b) Purchase-money grace period. Notwithstanding subsection (a), a purchase money secured party that files a financing statement before or within 20 days after the debtor acquires possession of the collateral has priority over the rights of a buyer, lessee or lien creditor which arise between the time the security interest attaches and the time of filing.

(c) General rule for priority among conflicting secured parties. Priority among conflicting security interests in the same collateral is determined as follows:

(1) Conflicting perfected security interests in the same collateral rank according to priority in time of filing or perfection. Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest is first perfected, if there is no period thereafter when there is neither filing nor perfection.

(2) A perfected security interest has priority over a conflicting unperfected security interest.

(3) The first security interest to attach has priority if conflicting security interests are unperfected.

(d) Time of perfection for proceeds. The time of filing or perfection as to a security interest in collateral is also the time of filing or perfection as to a security interest in proceeds, except as provided in Title 9-318.

(e) Priority in proceeds. Except as provided elsewhere in this part, a security interest that has priority under Title 9-318(e), (f) or (j) also has priority over a conflicting security interest in proceeds if

(1) the security interest in proceeds is perfected;

(2) the proceeds are cash proceeds or of the same type as the collateral; and

(3) in the case of proceeds of proceeds, all intervening proceeds are cash proceeds, proceeds of the same type as the collateral, or an account relating to the collateral.

(f) First-to-file rule for certain collateral. If a security interest in chattel paper, negotiable documents, instruments, securities or investment accounts is perfected by a method other than filing, and if the proceeds are not cash proceeds, chattel paper, negotiable documents, instruments, securities, investment accounts or letter of credit rights, then priority in the proceeds is determined by the order of any filing.

(g) Deferral to other applicable law. If applicable law other than this ordinance gives a security interest or right of set-off to a collecting bank, an issuer or nominated person with respect to a letter of credit, a buyer [or seller] or lessee of goods, or in personal property that is not subject to this ordinance, that law governs in the event of conflict with the provisions of this ordinance.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-317, LLOjibwe JCT9 STO § 9-317



LLOjibwe JCT9 STO § 9-318
9-318. Particular Priority Rules

(a) Relationship to preceding Title. This Title creates exceptions to the general priority rules of Title 9-317.

(b) Consignee deemed to have rights of consignor. For the purpose of this ordinance, while goods are in the possession of a consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer. If Chapter 3 of this ordinance results in the consignor having priority over a creditor of the consignee, law other than this ordinance determines the rights and title of the consignee with regard to that creditor.

(c) Ordinary course buyers, licensees and lessees take free. Except as otherwise provided in this subsection, a buyer in ordinary course of business, a person that takes a non-exclusive license of a general intangible in ordinary course of business, or a person that takes a lease of goods in ordinary course of business, takes its interest in the collateral free of a security interest in the collateral created by the seller, licensor, or lessor, even if the security interest is perfected and the buyer, licensee or lessee knows of its existence. Whether a licensee or lessee takes its interest in ordinary course of business is to be determined by criteria parallel to those for a buyer in ordinary course of business (Title 9-106(a)(7)). This subsection does not apply to

(1) a buyer of farm products from a person engaged in farming operations, unless the buyer

(A) obtains from the seller a notarized statement setting forth the name and address of any person that has a security interest in the farm products; and

(B) either (i) obtains a consent to the sale free of the security interest from the secured party or (ii) makes payment for the farm products jointly to the seller and the secured party;

(2) a buyer of goods in the possession of the secured party (Title 9-313).

(d) Buyer of consumer goods takes free. A buyer of goods from a person who used or bought the goods for use primarily for personal, family or household purposes takes free of a security interest, even if perfected, if the buyer buys

(1) without knowledge of the security interest;

(2) for value;

(3) primarily for the buyer's personal, family, or household purposes; and

(4) in the case of goods having a value of $5,000 or more, before the filing of a financing statement covering the goods. However, this subsection does not apply to a buyer of goods in the possession of the secured party (Title 9-313).

(e) Purchaser of chattel paper or instrument.

(1) A purchaser of chattel paper or an instrument has priority over a security interest if

(A) the purchaser, in good faith and in the ordinary course of the purchaser's business, gives new value and takes possession of the collateral;

(B) the collateral does not indicate that it has been previously assigned to an identified person other than the purchaser; and

(C) the purchaser is otherwise without knowledge that the purchase violates the rights of the secured party.

(2) A purchaser with priority in chattel paper under subsection (e)(1) also has priority in proceeds of the chattel paper to the extent that

(A) the proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods, even if the security interest in the proceeds is unperfected; or

(B) Title 9-317(c), (d) or (c) so provides.

(f) Holder in due course and others protected. This ordinance does not limit the rights of, or impose liability on, a holder in due course of a negotiable instrument, a holder to which a negotiable document has been duly negotiated, or a person protected against the assertion of a claim to investment property under other applicable law. Filing under this ordinance is not notice of a claim or defense to the holder or protected person.

(g) Priority of future advances. (1) With respect to a conflicting security interest, the priority of an advance under a security agreement is determined under Title 9-317(b), except that perfection dates from the time the advance is made if the security interest securing it is perfected only by attachment (Title 9-309) or temporarily by law (Title 9-312(e), (f) or (g)) and is not made pursuant to a commitment entered into before or while the security interest is perfected by another means.

(2) With respect to a lien creditor, the security interest securing an advance is subordinate if the advance is made more than forty-five (45) days after the person becomes a lien creditor, unless the advance is made without knowledge of the lien or pursuant to a commitment entered into without knowledge of the lien.

(3) With respect to a buyer of goods other than a buyer in ordinary course of business (Title 9-106(a)(7)), and with respect to a lessee of goods that does not take its lease in ordinary course of business (Title 9-318(c)), the security interest securing an advance is subordinate if the advance is made after the earlier of the time the secured party acquires knowledge of the purchase or 45 days after the purchase, unless the advance is made pursuant to a commitment entered into without knowledge of the purchase and before the expiration of the 45-day period.

(4) Paragraphs (1) and (2) of this subsection do not apply to a security interest held by a person that is a consignor or a buyer of accounts, chattel paper, payment intangibles or promissory notes.

(h) Purchase money super-priority. The following rules govern the priority of a purchase money security interest and a conflicting security interest in collateral and its proceeds:

(1) Goods other than inventory and livestock. A perfected purchase-money security interest in goods other than inventory or livestock that are farm products has priority over a conflicting security interest, and a perfected security interest in identifiable proceeds also has priority, if the purchase-money security interest is perfected when the debtor receives possession of the collateral or within twenty (20) days thereafter.

(2) Inventory and livestock. A perfected purchase-money security interest in inventory or livestock that are farm products has priority over a conflicting security interest if the purchase-money security interest is perfected when the debtor acquires possession of the goods and the purchase-money secured party sends timely and appropriate notice to the holder of the conflicting security interest, provided that no such notice is required unless the holder of the conflicting security interest has filed a financing statement covering the same types of goods:

(A) before the purchase-money security interest is perfected by filing; or

(B) if the purchase-money security interest is temporarily perfected under Title 9-312(f), before the beginning of the applicable 20-day period. If a purchase-money secured party has priority in inventory under this paragraph (2), it also has priority in chattel paper or an instrument constituting proceeds, in proceeds of the chattel paper except as otherwise provided in this section, and in identifiable cash proceeds received on or before delivery of the goods to a buyer. If a purchase-money secured party has priority in livestock that are farm products under this paragraph (2), it also has priority in their identifiable proceeds and products in their unmanufactured states.

(3) Software. A perfected purchase-money security interest in software has priority over a conflicting security interest, and a perfected security interest in its identifiable proceeds also has priority, to the extent that the purchase-money security interest in the goods in which the software was acquired for use has priority in the goods and proceeds of the goods.

(4) Priority among PMSIs. Notwithstanding the rest of this subsection, if two or more purchase-money security interests are perfected in the same collateral, the security interest securing an obligation for the price has priority, and otherwise priority is determined by the rule of Title 9-317(b).

(i) Transferee of money or funds takes free. A transferee of money or of funds from a deposit account takes the money or funds free of a security interest unless the transferee acts in collusion with the debtor in violating the rights of the secured party.

(j) Priority of interest perfected by control; possession of certificated security in registered form. A security interest in a security or an investment account perfected by control (Title 9-314) has priority over a security interested perfected in another way. Multiple security interests perfected by control rank according to time of acquiring control; however, a security interest held by an investment intermediary in the investment account that it maintains has priority regardless of time of acquiring control. A security interest in a certificated security in registered form that is perfected by possession (Title 9-313) and not by control has priority over a conflicting security interest perfected by a method other than control.

(k) Possessory liens. A lien created by statute or rule of law which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person's business and whose effectiveness depends on the person's possession of the goods has priority over a security interest in the goods unless the lien is created by a statute that expressly provides otherwise

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-318, LLOjibwe JCT9 STO § 9-318




LLOjibwe JCT9 STO § 9-319
9-319. Priority of Security Interests in Fixtures and Crops

(a) Security interest in fixtures under this ordinance. A security interest under this ordinance may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this ordinance in ordinary building materials incorporated into an improvement on land.

(b) Security interest in fixtures under real-property law. This ordinance does not prevent creation of an encumbrance upon fixtures under real property law.

(c) General rule: subordination of security interest in fixtures. In cases not governed by subsections (d) through (h), a security interest in fixtures is subordinate to a conflicting interest of an encumbrancer or owner of the related real property other than the debtor.

(d) Fixtures purchase-money priority. Except as otherwise provided in subsection (h), a perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property and:

(1) the security interest is a purchase-money security interest;

(2) the interest of the encumbrancer or owner arises before the goods become fixtures; and

(3) the security interest is perfected by an appropriate tiling before the goods become fixtures or within twenty (20) days thereafter.

(e) Priority of security interest in fixtures over interests in real property. A perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if:

(1) the debtor has an interest of record in the real property or is in possession of the real property and the security interest:

(A) is perfected by an appropriate filing before the interest of the encumbrancer or owner is of record; and

(B) has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner;

(2) before the goods become fixtures, the security interest is perfected by any method permitted by this ordinance and the fixtures are readily removable:

(A) factory or office machines;

(B) equipment that is not primarily used or leased for use in the operation of the real property; or

(C) replacements of domestic appliances that are consumer goods;

(3) the conflicting interest is a lien on the real property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this ordinance; or

(4) the security interest is:

(A) created in a manufactured home in a manufactured-home transaction; and

(B) perfected pursuant to a statute described in Title 9-311(a)(2).

(f) Priority based on consent, disclaimer, or right to remove. A security interest in fixtures, whether or not perfected, has priority over a conflicting interest of an encumbrancer or owner of the real property if:

(1) the encumbrancer or owner has, in a signed record, consented to the security interest or disclaimed an interest in the goods as fixtures; or

(2) the debtor has a right to remove the goods as against the encumbrancer or owner.

(g) Continuation of paragraph (f)(2) priority. The priority of the security interest under paragraph (f)(2) continues for a reasonable time if the debtor right to remove the goods as against the encumbrancer or owner terminates.

(h) Priority of construction mortgage. A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land, including the acquisition cost of the land, if a recorded record of the mortgage so indicates. Except as otherwise provided in subsections (e) and (f), a security interest in fixtures is subordinate to a construction mortgage if a record of the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction. A mortgage has this priority to the same extent as a construction mortgage to the extent that it is given to refinance a construction mortgage.

(i) Priority of security interest in crops. A perfected security interest in crops growing on real property has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property.

(j) Subsection (i) prevails. Subsection (i) prevails over any inconsistent statutory provisions.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-319, LLOjibwe JCT9 STO § 9-319




LLOjibwe JCT9 STO § 9-320
9-320. Accessions

(a) Creation of security interest in accession. A security interest may be created in an accession and continues in collateral that becomes an accession.

(b) Perfection of security interest. If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral.

(c) Priority of security interest. Except as otherwise provided in subsection (d), the other provisions of this part determine the priority of a security interest in an accession.

(d) Compliance with certificate-of-title statute. A security interest in an accession is subordinate to a security interest in the whole which is perfected by compliance with the requirements of a certificate-of-title statute under Title 9-311(b).

(e) Removal of accession after default. After default, subject to Chapter 6, a secured party may remove an accession from other goods if the security interest in the accession has priority over the claims of every person having an interest in the whole.

(f) Reimbursement following removal. A secured party that removes an accession from other goods under subsection (e) shall promptly reimburse any holder of a security interest or other lien on, or owner of, the whole or of the other goods, other than the debtor, for the cost of repair of any physical injury to the whole or the other goods. The secured party need not reimburse the holder or owner for any diminution in value of the whole or the other goods caused by the absence of the accession removed or by any necessity for replacing it. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-320, LLOjibwe JCT9 STO § 9-320




LLOjibwe JCT9 STO § 9-321
9-321. Commingled Goods

(a) “Commingled Goods.” In this section, “commingled goods” means goods that are physically united with other goods in such a manner that their identity is lost in a product or mass.

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

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

(d) Perfection of security interest. If a security interest in collateral is perfected before the collateral becomes commingled goods, the security interest that attaches to the product or mass under subsection (c) is perfected.

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

(f) Conflicting security interests in product or mass. If more than one security interest attaches to the product or mass under subsection (c), the following rules determine priority:

(1) A security interest that is perfected under subsection (d) has priority over a security interest that is unperfected at the time the collateral becomes commingled goods.

(2) If more than one security interest is perfected under subsection (d), the security interests rank equally in proportion to the value of the collateral at the time it became commingled goods.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-321, LLOjibwe JCT9 STO § 9-321




LLOjibwe JCT9 STO § 9-322
9-322. Priority of Security Interests in Goods Covered by Certificate of Title

If, while a security interest in goods is perfected by any method under the law of another jurisdiction, this jurisdiction issues a certificate of title (Title 9-106(a)(11)) that does not show that the goods are subject to the security interest or contain a statement that they may be subject to security interests not shown on the certificate:

(1) a buyer of the goods, other than a person in the business of selling goods of that kind, takes free of the security interest if the buyer gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security interest; and

(2) the security interest is subordinate to a conflicting security interest in the goods that attaches, and is perfected under Title 9-311(b), after issuance of the certificate and without the conflicting secured party's knowledge of the security interest.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-322, LLOjibwe JCT9 STO § 9-322




LLOjibwe JCT9 STO § 9-323
9-323. Priority Subject to Subordination

This ordinance does not preclude subordination by agreement by a person entitled to priority.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-323, LLOjibwe JCT9 STO § 9-323


 

Home  |   Search  |   Disclaimer  |   Privacy Statement  |   Site Map