CHAPTER 9.1. SECURED TRANSACTIONS
IC 26-1-9.1
Chapter 9.1. Secured Transactions
IC 26-1-9.1-101
Short title
Sec. 101. IC 26-1-9.1 may be cited as Uniform CommercialCode_Secured Transactions.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-102
Definitions and index of definitions
Sec. 102. (a) In IC 26-1-9.1:
(1) "Accession" means goods that are physically united withother goods in such a manner that the identity of the originalgoods is not lost.
(2) "Account", except as used in "account for", means a right topayment of a monetary obligation, whether or not earned byperformance:
(A) for property that has been or is to be sold, leased,licensed, assigned, or otherwise disposed of;
(B) for services rendered or to be rendered;
(C) for a policy of insurance issued or to be issued;
(D) for a secondary obligation incurred or to be incurred;
(E) for energy provided or to be provided;
(F) for the use or hire of a vessel under a charter or othercontract;
(G) arising out of the use of a credit or charge card orinformation contained on or for use with the card; or
(H) as winnings in a lottery or other game of chanceoperated or sponsored by a state other than Indiana, agovernmental unit of a state, or a person licensed orauthorized to operate the game by a state or governmentalunit of a state.
The term does not include a right to a payment of a prizeawarded by the state lottery commission in the Indiana statelottery established under IC 4-30. The term includeshealth-care-insurance receivables. The term does not include (i)rights to payment evidenced by chattel paper or an instrument,(ii) commercial tort claims, (iii) deposit accounts, (iv)investment property, (v) letter-of-credit rights or letters ofcredit, or (vi) rights to payment for money or funds advanced orsold, other than rights arising out of the use of a credit or chargecard or information contained on or for use with the card.
(3) "Account debtor" means a person obligated on an account,chattel paper, or general intangible. The term does not includepersons obligated to pay a negotiable instrument, even if theinstrument constitutes part of chattel paper.
(4) "Accounting", except as used in "accounting for", means arecord:
(A) authenticated by a secured party; (B) indicating the aggregate unpaid secured obligations as ofa date not more than thirty-five (35) days earlier orthirty-five (35) days later than the date of the record; and
(C) identifying the components of the obligations inreasonable detail.
(5) "Agricultural lien" means an interest, other than a securityinterest, in farm products:
(A) that secures payment or performance of an obligationfor:
(i) goods or services furnished in connection with adebtor's farming operation; or
(ii) rent on real property leased by a debtor in connectionwith the debtor's farming operation;
(B) that is created by statute in favor of a person that:
(i) in the ordinary course of its business furnished goodsor services to a debtor in connection with the debtor'sfarming operation; or
(ii) leased real property to a debtor in connection with thedebtor's farming operation; and
(C) whose effectiveness does not depend on the person'spossession of the personal property.
(6) "As-extracted collateral" means:
(A) oil, gas, or other minerals that are subject to a securityinterest that:
(i) is created by a debtor having an interest in the mineralsbefore extraction; and
(ii) attaches to the minerals as extracted; or
(B) accounts arising out of the sale at the wellhead orminehead of oil, gas, or other minerals in which the debtorhad an interest before extraction.
(7) "Authenticate" means:
(A) to sign; or
(B) to execute or otherwise adopt a symbol, or encrypt orsimilarly process a record in whole or in part, with thepresent intent of the authenticating person to identify theperson and adopt or accept a record.
(8) "Bank" means an organization that is engaged in thebusiness of banking. The term includes savings banks, savingsand loan associations, credit unions, and trust companies.
(9) "Cash proceeds" means proceeds that are money, checks,deposit accounts, or the like.
(10) "Certificate of title" means a certificate of title with respectto which a statute provides for the security interest in questionto be indicated on the certificate as a condition or result of thesecurity interest's obtaining priority over the rights of a liencreditor with respect to the collateral.
(11) "Chattel paper" means a record or records that evidenceboth a monetary obligation and a security interest in specificgoods, a security interest in specific goods and software used inthe goods, a security interest in specific goods and license of
software used in the goods, a lease of specific goods, or a leaseof specific goods and license of software used in the goods. Inthis subdivision, "monetary obligation" means a monetaryobligation secured by the goods or owed under a lease of thegoods and includes a monetary obligation with respect tosoftware used in the goods. The term "chattel paper" does notinclude: (i) charters or other contracts involving the use or hireof a vessel; or (ii) records that evidence a right to paymentarising out of the use of a credit or charge card or informationcontained on or for use with the card. If a transaction isevidenced by records that include an instrument or series ofinstruments, the group of records taken together constituteschattel paper.
(12) "Collateral" means the property subject to a securityinterest or agricultural lien. The term includes:
(A) proceeds to which a security interest attaches;
(B) accounts, chattel paper, payment intangibles, andpromissory notes that have been sold; and
(C) goods that are the subject of a consignment.
(13) "Commercial tort claim" means a claim arising in tort withrespect to which:
(A) the claimant is an organization; or
(B) the claimant is an individual and the claim:
(i) arose in the course of the claimant's business orprofession; and
(ii) does not include damages arising out of personal injuryto or the death of an individual.
(14) "Commodity account" means an account maintained by acommodity intermediary in which a commodity contract iscarried for a commodity customer.
(15) "Commodity contract" means a commodity futurescontract, an option on a commodity futures contract, acommodity option, or another contract if the contract or optionis:
(A) traded on or subject to the rules of a board of trade thathas been designated as a contract market for such a contractpursuant to federal commodities laws; or
(B) traded on a foreign commodity board of trade, exchange,or market, and is carried on the books of a commodityintermediary for a commodity customer.
(16) "Commodity customer" means a person for which acommodity intermediary carries a commodity contract on itsbooks.
(17) "Commodity intermediary" means a person that:
(A) is registered as a futures commission merchant underfederal commodities law; or
(B) in the ordinary course of its business provides clearanceor settlement services for a board of trade that has beendesignated as a contract market pursuant to federalcommodities law. (18) "Communicate" means:
(A) to send a written or other tangible record;
(B) to transmit a record by any means agreed upon by thepersons sending and receiving the record; or
(C) in the case of transmission of a record to or by a filingoffice, to transmit a record by any means prescribed byfiling-office rule.
(19) "Consignee" means a merchant to which goods aredelivered in a consignment.
(20) "Consignment" means a transaction, regardless of its form,in which a person delivers goods to a merchant for the purposeof sale and:
(A) the merchant:
(i) deals in goods of that kind under a name other than thename of the person making delivery;
(ii) is not an auctioneer; and
(iii) is not generally known by its creditors to besubstantially engaged in selling the goods of others;
(B) with respect to each delivery, the aggregate value of thegoods is one thousand dollars ($1,000) or more at the timeof delivery;
(C) the goods are not consumer goods immediately beforedelivery; and
(D) the transaction does not create a security interest thatsecures an obligation.
(21) "Consignor" means a person that delivers goods to aconsignee in a consignment.
(22) "Consumer debtor" means a debtor in a consumertransaction.
(23) "Consumer goods" means goods that are used or bought foruse primarily for personal, family, or household purposes.
(24) "Consumer-goods transaction" means a consumertransaction in which:
(A) an individual incurs an obligation primarily for personal,family, or household purposes; and
(B) a security interest in consumer goods secures theobligation.
(25) "Consumer obligor" means an obligor who is an individualand who incurred the obligation as part of a transaction enteredinto primarily for personal, family, or household purposes.
(26) "Consumer transaction" means a transaction in which (i) anindividual incurs an obligation primarily for personal, family,or household purposes, (ii) a security interest secures theobligation, and (iii) the collateral is held or acquired primarilyfor personal, family, or household purposes. The term includesconsumer-goods transactions.
(27) "Continuation statement" means an amendment of afinancing statement that:
(A) identifies, by its file number, the initial financingstatement to which it relates; and (B) indicates that it is a continuation statement for, or that itis filed to continue the effectiveness of, the identifiedfinancing statement.
(28) "Debtor" means:
(A) a person having an interest, other than a security interestor other lien, in the collateral, whether or not the person is anobligor;
(B) a seller of accounts, chattel paper, payment intangibles,or promissory notes; or
(C) a consignee.
(29) "Deposit account" means a demand, time, savings,passbook, or similar account maintained with a bank. The termdoes not include investment property or accounts evidenced byan instrument.
(30) "Document" means a document of title or a receipt of thetype described in IC 26-1-7-201(b).
(31) "Electronic chattel paper" means chattel paper evidencedby a record or records consisting of information stored in anelectronic medium.
(32) "Encumbrance" means a right, other than an ownershipinterest, in real property. The term includes mortgages and otherliens on real property.
(33) "Equipment" means goods other than inventory, farmproducts, or consumer goods.
(34) "Farm products" means goods, other than standing timber,with respect to which the debtor is engaged in a farmingoperation and which are:
(A) crops grown, growing, or to be grown, including:
(i) crops produced on trees, vines, and bushes; and
(ii) aquatic goods produced in aquacultural operations;
(B) livestock, born or unborn, including aquatic goodsproduced in aquacultural operations;
(C) supplies used or produced in a farming operation; or
(D) products of crops or livestock in their unmanufacturedstates.
(35) "Farming operation" means raising, cultivating,propagating, fattening, grazing, or any other farming, livestock,or aquacultural operation.
(36) "File number" means the number assigned to an initialfinancing statement pursuant to IC 26-1-9.1-519(a).
(37) "Filing office" means an office designated inIC 26-1-9.1-501 as the place to file a financing statement.
(38) "Filing-office rule" means a rule adopted pursuant toIC 26-1-9.1-526.
(39) "Financing statement" means a record or records composedof an initial financing statement and any filed record relating tothe initial financing statement.
(40) "Fixture filing" means the filing of a financing statementcovering goods that are or are to become fixtures and satisfyingIC 26-1-9.1-502(a) and IC 26-1-9.1-502(b). The term includes
the filing of a financing statement covering goods of atransmitting utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related toparticular real property that an interest in them arises under realproperty law.
(42) "General intangible" means any personal property,including things in action, other than accounts, chattel paper,commercial tort claims, deposit accounts, documents, goods,instruments, investment property, letter-of-credit rights, lettersof credit, money, and oil, gas, or other minerals beforeextraction. The term includes payment intangibles and software.
(43) "Good faith" means honesty in fact and the observance ofreasonable commercial standards of fair dealing.
(44) "Goods" means all things that are movable when a securityinterest attaches. The term includes (i) fixtures, (ii) standingtimber that is to be cut and removed under a conveyance orcontract for sale, (iii) the unborn young of animals, (iv) cropsgrown, growing, or to be grown, even if the crops are producedon trees, vines, or bushes, and (v) manufactured homes. Theterm also includes a computer program embedded in goods andany supporting information provided in connection with atransaction relating to the program if (i) the program isassociated with the goods in such a manner that it customarilyis considered part of the goods, or (ii) by becoming the ownerof the goods, a person acquires a right to use the program inconnection with the goods. The term does not include acomputer program embedded in goods that consist solely of themedium in which the program is embedded. The term also doesnot include accounts, chattel paper, commercial tort claims,deposit accounts, documents, general intangibles, instruments,investment property, letter-of-credit rights, letters of credit,money, or oil, gas, or other minerals before extraction.
(45) "Governmental unit" means a subdivision, agency,department, county, parish, municipality, or other unit of thegovernment of the United States, a state, or a foreign country.The term includes an organization having a separate corporateexistence if the organization is eligible to issue debt on whichinterest is exempt from income taxation under the laws of theUnited States.
(46) "Health-care-insurance receivable" means an interest in orclaim under a policy of insurance that is a right to payment ofa monetary obligation for health-care goods or servicesprovided.
(47) "Instrument" means a negotiable instrument or any otherwriting that evidences a right to the payment of a monetaryobligation, is not itself a security agreement or lease, and is ofa type that in the ordinary course of business is transferred bydelivery with any necessary endorsement or assignment. Theterm does not include (i) investment property, (ii) letters ofcredit, or (iii) writings that evidence a right to payment arising
out of the use of a credit or charge card or informationcontained on or for use with the card.
(48) "Inventory" means goods, other than farm products, that:
(A) are leased by a person as lessor;
(B) are held by a person for sale or lease or to be furnishedunder a contract of service;
(C) are furnished by a person under a contract of service; or
(D) consist of raw materials, work in process, or materialsused or consumed in a business.
(49) "Investment property" means a security, whethercertificated or uncertificated, security entitlement, securitiesaccount, commodity contract, or commodity account.
(50) "Jurisdiction of organization", with respect to a registeredorganization, means the jurisdiction under whose law theorganization is organized.
(51) "Letter-of-credit right" means a right to payment orperformance under a letter of credit, whether or not thebeneficiary has demanded or is at the time entitled to demandpayment or performance. The term does not include the right ofa beneficiary to demand payment or performance under a letterof credit.
(52) "Lien creditor" means:
(A) a creditor that has acquired a lien on the propertyinvolved by attachment, levy, or the like;
(B) an assignee for benefit of creditors from the time ofassignment;
(C) a trustee in bankruptcy from the date of the filing of thepetition; or
(D) a receiver in equity from the time of appointment.
(53) "Manufactured home" means a structure, transportable inone (1) or more sections, which, in the traveling mode, is eight(8) body feet or more in width or forty (40) body feet or morein length, or, when erected on site, is three hundred twenty(320) or more square feet, and which is built on a permanentchassis and designed to be used as a dwelling with or withouta permanent foundation when connected to the requiredutilities, and includes the plumbing, heating, air conditioning,and electrical systems contained therein. The term includes anystructure that meets all of the requirements of this subdivisionexcept the size requirements, and with respect to which themanufacturer voluntarily files a certification required by theUnited States Secretary of Housing and Urban Developmentand complies with the standards established under Title 42 ofthe United States Code.
(54) "Manufactured-home transaction" means a securedtransaction:
(A) that creates a purchase-money security interest in amanufactured home, other than a manufactured home heldas inventory; or
(B) in which a manufactured home, other than a
manufactured home held as inventory, is the primarycollateral.
(55) "Mortgage" means a consensual interest in real property,including fixtures, that secures payment or performance of anobligation.
(56) "New debtor" means a person that becomes bound asdebtor under IC 26-1-9.1-203(d) by a security agreementpreviously entered into by another person.
(57) "New value" means (i) money, (ii) money's worth inproperty, services, or new credit, or (iii) release by a transfereeof an interest in property previously transferred to thetransferee. The term does not include an obligation substitutedfor another obligation.
(58) "Noncash proceeds" means proceeds other than cashproceeds.
(59) "Obligor" means a person that, with respect to anobligation secured by a security interest in or an agriculturallien on the collateral, (i) owes payment or other performance ofthe obligation, (ii) has provided property other than thecollateral to secure payment or other performance of theobligation, or (iii) is otherwise accountable in whole or in partfor payment or other performance of the obligation. The termdoes not include issuers or nominated persons under a letter ofcredit.
(60) "Original debtor", except as used in IC 26-1-9.1-310(c),means a person that, as debtor, entered into a securityagreement to which a new debtor has become bound underIC 26-1-9.1-203(d).
(61) "Payment intangible" means a general intangible underwhich the account debtor's principal obligation is a monetaryobligation.
(62) "Person related to", with respect to an individual, means:
(A) the spouse of the individual;
(B) a brother, brother-in-law, sister, or sister-in-law of theindividual;
(C) an ancestor or lineal descendant of the individual or theindividual's spouse; or
(D) any other relative, by blood or marriage, of theindividual or the individual's spouse who shares the samehome with the individual.
(63) "Person related to", with respect to an organization, means:
(A) a person directly or indirectly controlling, controlled by,or under common control with the organization;
(B) an officer or director of, or a person performing similarfunctions with respect to, the organization;
(C) an officer or director of, or a person performing similarfunctions with respect to, a person described in clause (A);
(D) the spouse of an individual described in clause (A), (B),or (C); or
(E) an individual who is related by blood or marriage to an
individual described in clause (A), (B), (C), or (D) andshares the same home with the individual.
(64) "Proceeds", except as used in IC 26-1-9.1-609(b), meansthe following property:
(A) Whatever is acquired upon the sale, lease, license,exchange, or other disposition of collateral.
(B) Whatever is collected on, or distributed on account of,collateral.
(C) Rights arising out of collateral.
(D) To the extent of the value of collateral, claims arisingout of the loss, nonconformity, or interference with the useof, defects or infringement of rights in, or damage to, thecollateral.
(E) To the extent of the value of collateral and to the extentpayable to the debtor or the secured party, insurance payableby reason of the loss or nonconformity of, defects orinfringement of rights in, or damage to, the collateral.
(65) "Promissory note" means an instrument that evidences apromise to pay a monetary obligation, does not evidence anorder to pay, and does not contain an acknowledgment by abank that the bank has received for deposit a sum of money orfunds.
(66) "Proposal" means a record authenticated by a secured partythat includes the terms on which the secured party is willing toaccept collateral in full or partial satisfaction of the obligationit secures pursuant to IC 26-1-9.1-620, IC 26-1-9.1-621, andIC 26-1-9.1-622.
(67) "Public-finance transaction" means a secured transactionin connection with which:
(A) debt securities are issued;
(B) all or a portion of the securities issued have an initialstated maturity of at least twenty (20) years; and
(C) the debtor, obligor, secured party, account debtor, orother person obligated on collateral, assignor or assignee ofa secured obligation, or assignor or assignee of a securityinterest is a state or a governmental unit of a state.
(68) "Pursuant to commitment", with respect to an advancemade or other value given by a secured party, means pursuantto the secured party's obligation, whether or not a subsequentevent of default or other event not within the secured party'scontrol has relieved or may relieve the secured party from itsobligation.
(69) "Record", except as used in "for record", "of record","record or legal title", and "record owner", means informationthat is inscribed on a tangible medium or that is stored in anelectronic or other medium and is retrievable in perceivableform.
(70) "Registered organization" means an organization organizedsolely under the law of a single state or the United States and asto which the state or the United States must maintain a public
record showing the organization to have been organized.
(71) "Secondary obligor" means an obligor to the extent that:
(A) the obligor's obligation is secondary; or
(B) the obligor has a right of recourse with respect to anobligation secured by collateral against the debtor, anotherobligor, or property of either.
(72) "Secured party" means:
(A) a person in whose favor a security interest is created orprovided for under a security agreement, whether or not anyobligation to be secured is outstanding;
(B) a person that holds an agricultural lien;
(C) a consignor;
(D) a person to which accounts, chattel paper, paymentintangibles, or promissory notes have been sold;
(E) a trustee, indenture trustee, agent, collateral agent, orother representative in whose favor a security interest oragricultural lien is created or provided for; or
(F) a person that holds a security interest arising underIC 26-1-2-401, IC 26-1-2-505, IC 26-1-2-711(3),IC 26-1-2.1-508(5), IC 26-1-4-210, or IC 26-1-5.1-118.
(73) "Security agreement" means an agreement that creates orprovides for a security interest.
(74) "Send", in connection with a record or notification, means:
(A) to deposit in the mail, deliver for transmission, ortransmit by any other usual means of communication, withpostage or cost of transmission provided for, addressed toany address reasonable under the circumstances; or
(B) to cause the record or notification to be received withinthe time that it would have been received if properly sentunder clause (A).
(75) "Software" means a computer program and any supportinginformation provided in connection with a transaction relatingto the program. The term does not include a computer programthat is included in the definition of goods.
(76) "State" means a state of the United States, the District ofColumbia, Puerto Rico, the United States Virgin Islands, or anyterritory or insular possession subject to the jurisdiction of theUnited States.
(77) "Supporting obligation" means a letter-of-credit right orsecondary obligation that supports the payment or performanceof an account, chattel paper, a document, a general intangible,an instrument, or investment property.
(78) "Tangible chattel paper" means chattel paper evidenced bya record or records consisting of information that is inscribed ona tangible medium.
(79) "Termination statement" means an amendment of afinancing statement that:
(A) identifies, by its file number, the initial financingstatement to which it relates; and
(B) indicates either that it is a termination statement or that
the identified financing statement is no longer effective.
(80) "Transmitting utility" means a person primarily engaged inthe business of:
(A) operating a railroad, subway, street railway, or trolleybus;
(B) transmitting communications electrically,electromagnetically, or by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting electricity,steam, gas, or water.
(b) "Control" as provided in IC 26-1-7-106 and the followingdefinitions outside IC 26-1-9.1 apply to IC 26-1-9.1:
"Applicant" IC 26-1-5.1-102.
"Beneficiary" IC 26-1-5.1-102.
"Broker" IC 26-1-8.1-102.
"Certificated security" IC 26-1-8.1-102.
"Check" IC 26-1-3.1-104.
"Clearing corporation" IC 26-1-8.1-102.
"Contract for sale" IC 26-1-2-106.
"Customer" IC 26-1-4-104.
"Entitlement holder" IC 26-1-8.1-102.
"Financial asset" IC 26-1-8.1-102.
"Holder in due course" IC 26-1-3.1-302.
"Issuer" (with respect to a letter of credit or letter-of-creditright) IC 26-1-5.1-102.
"Issuer" (with respect to a security) IC 26-1-8.1-201.
"Issuer" (with respect to documents of title) IC 26-1-7-102.
"Lease" IC 26-1-2.1-103.
"Lease agreement" IC 26-1-2.1-103.
"Lease contract" IC 26-1-2.1-103.
"Leasehold interest" IC 26-1-2.1-103.
"Lessee" IC 26-1-2.1-103.
"Lessee in ordinary course of business" IC 26-1-2.1-103.
"Lessor" IC 26-1-2.1-103.
"Lessor's residual interest" IC 26-1-2.1-103.
"Letter of credit" IC 26-1-5.1-102.
"Merchant" IC 26-1-2-104.
"Negotiable instrument" IC 26-1-3.1-104.
"Nominated person" IC 26-1-5.1-102.
"Note" IC 26-1-3.1-104.
"Proceeds of a letter of credit" IC 26-1-5.1-114.
"Prove" IC 26-1-3.1-103.
"Sale" IC 26-1-2-106.
"Securities account" IC 26-1-8.1-501.
"Securities intermediary" IC 26-1-8.1-102.
"Security" IC 26-1-8.1-102.
"Security certificate" IC 26-1-8.1-102.
"Security entitlement" IC 26-1-8.1-102.
"Uncertificated security" IC 26-1-8.1-102.
(c) IC 26-1-1 contains general definitions and principles of
construction and interpretation applicable throughout IC 26-1-9.1.
As added by P.L.57-2000, SEC.45. Amended by P.L.143-2007,SEC.65; P.L.108-2009, SEC.3.
IC 26-1-9.1-102.5
"Take free"; "takes free"; "takes the money free"; "takes thefunds free"
Sec. 102.5. As used in this chapter, "take free", "takes free","takes the money free", and "takes the funds free", when used inconjunction with a security interest in collateral which is transferred,means that following the transfer the collateral is no longerencumbered by the security interest and the security interest isterminated with respect to the transferred collateral.
As added by P.L.192-2003, SEC.1.
IC 26-1-9.1-103
Purchase-money security interest; application of payment; burdenof establishing
Sec. 103. (a) In this section:
(1) "Purchase-money collateral" means goods or software thatsecures a purchase-money obligation incurred with respect tothat collateral.
(2) "Purchase-money obligation" means an obligation of anobligor incurred as all or part of the price of the collateral or forvalue given to enable the debtor to acquire rights in, or the useof the collateral if the value is in fact so used.
(b) A security interest in goods is a purchase-money securityinterest:
(1) to the extent that the goods are purchase-money collateralwith respect to that security interest;
(2) if the security interest is in inventory that is or waspurchase-money collateral, also to the extent that the securityinterest secures a purchase-money obligation incurred withrespect to other inventory in which the secured party holds orheld a purchase-money security interest; and
(3) also to the extent that the security interest secures apurchase-money obligation incurred with respect to software inwhich the secured party holds or held a purchase-moneysecurity interest.
(c) A security interest in software is a purchase-money securityinterest to the extent that the security interest also secures apurchase-money obligation incurred with respect to goods in whichthe secured party holds or held a purchase-money security interest if:
(1) the debtor acquired its interest in the software in anintegrated transaction in which it acquired an interest in thegoods; and
(2) the debtor acquired its interest in the software for theprincipal purpose of using the software in the goods.
(d) The security interest of a consignor in goods that are thesubject of a consignment is a purchase-money security interest in
inventory.
(e) If the extent to which a security interest is a purchase-moneysecurity interest depends on the application of a payment to aparticular obligation, the payment must be applied:
(1) in accordance with any reasonable method of application towhich the parties agree;
(2) in the absence of the parties' agreement to a reasonablemethod, in accordance with any intention of the obligormanifested at or before the time of payment; or
(3) in the absence of an agreement to a reasonable method anda timely manifestation of the obligor's intention, in thefollowing order:
(A) To obligations that are not secured.
(B) If more than one (1) obligation is secured, to obligationssecured by purchase-money security interests in the order inwhich those obligations were incurred.
(f) A purchase-money security interest does not lose its status assuch, even if:
(1) the purchase-money collateral also secures an obligationthat is not a purchase-money obligation;
(2) collateral that is not purchase-money collateral also securesthe purchase-money obligation; or
(3) the purchase-money obligation has been renewed,refinanced, consolidated, or restructured.
(g) A secured party claiming a purchase-money security interesthas the burden of establishing the extent to which the securityinterest is a purchase-money security interest.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-104
Control of deposit account
Sec. 104. (a) A secured party has control of a deposit account if:
(1) the secured party is the bank with which the deposit accountis maintained;
(2) the debtor, secured party, and bank have agreed in anauthenticated record that the bank will comply with instructionsoriginated by the secured party directing disposition of thefunds in the account without further consent by the debtor; or
(3) the secured party becomes the bank's customer with respectto the deposit account.
(b) A secured party that has satisfied subsection (a) has control,even if the debtor retains the right to direct the disposition of fundsfrom the deposit account.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-105
Control of electronic chattel paper
Sec. 105. A secured party has control of electronic chattel paperif the record or records comprising the chattel paper are created,stored, and assigned in such a manner that: (1) a single authoritative copy of the record or records existswhich is unique, identifiable and, except as otherwise providedin subdivisions (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the secured party as theassignee of the record or records;
(3) the authoritative copy is communicated to and maintainedby the secured party or its designated custodian;
(4) copies or revisions that add or change an identified assigneeof the authoritative copy can be made only with theparticipation of the secured party;
(5) each copy of the authoritative copy and any copy of a copyis readily identifiable as a copy that is not the authoritativecopy; and
(6) any revision of the authoritative copy is readily identifiableas an authorized or unauthorized revision.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-106
Control of investment property
Sec. 106. (a) A person has control of a certificated security,uncertificated security, or security entitlement as provided inIC 26-1-8.1-106.
(b) A secured party has control of a commodity contract if:
(1) the secured party is the commodity intermediary with whichthe commodity contract is carried; or
(2) the commodity customer, secured party, and commodityintermediary have agreed that the commodity intermediary willapply any value distributed on account of the commoditycontract as directed by the secured party without further consentby the commodity customer.
(c) A secured party having control of all security entitlements orcommodity contracts carried in a securities account or commodityaccount has control over the securities account or commodityaccount.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-107
Control of letter-of-credit right
Sec. 107. A secured party has control of a letter-of-credit right tothe extent of any right to payment or performance by the issuer orany nominated person if the issuer or nominated person hasconsented to an assignment of proceeds of the letter of credit underIC 26-1-5.1-114(c) or otherwise applicable law or practice.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-108
Sufficiency of description
Sec. 108. (a) Except as otherwise provided in subsections (c), (d),and (e), a description of personal or real property is sufficient,whether or not it is specific, if it reasonably identifies what is
described.
(b) Except as otherwise provided in subsection (d), a descriptionof collateral reasonably identifies the collateral if it identifies thecollateral by:
(1) specific listing;
(2) category;
(3) except as otherwise provided in subsection (e), a type ofcollateral defined in IC 26-1;
(4) quantity;
(5) computational or allocational formula or procedure; or
(6) except as otherwise provided in subsection (c), any othermethod, if the identity of the collateral is objectivelydeterminable.
(c) A description of collateral as "all the debtor's assets" or "allthe debtor's personal property" or using words of similar import doesnot reasonably identify the collateral.
(d) Except as otherwise provided in subsection (e), a descriptionof a security entitlement, securities account, or commodity accountis sufficient if it describes:
(1) the collateral by those terms or as investment property; or
(2) the underlying financial asset or commodity contract.
(e) A description only by type of collateral defined in IC 26-1 isan insufficient description of:
(1) a commercial tort claim; or
(2) in a consumer transaction, consumer goods, a securityentitlement, a securities account, or a commodity account.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-109
Scope
Sec. 109. (a) Except as otherwise provided in subsections (c) and(d), IC 26-1-9.1 applies to:
(1) a transaction, regardless of its form, that creates a securityinterest in personal property or fixtures by contract;
(2) an agricultural lien;
(3) a sale of accounts, chattel paper, payment intangibles, orpromissory notes;
(4) a consignment;
(5) a security interest arising under IC 26-1-2-401,IC 26-1-2-505, IC 26-1-2-711(3), or IC 26-1-2.1-508(5), asprovided in IC 26-1-9.1-110;
(6) a security interest arising under IC 26-1-4-210 orIC 26-1-5.1-118; and
(7) a transfer of an interest or a claim in a contractual right ofa person to receive commissions or other compensation payableby an insurer (as defined in IC 27-1-2-3).
(b) The application of IC 26-1-9.1 to a security interest in asecured obligation is not affected by the fact that the obligation isitself secured by a transaction or interest to which IC 26-1-9.1 doesnot apply. (c) IC 26-1-9.1 does not apply to the extent that:
(1) a statute, regulation, or treaty of the United States preemptsIC 26-1-9.1; or
(2) the rights of a transferee beneficiary or nominated personunder a letter of credit are independent and superior underIC 26-1-5.1-114.
(d) IC 26-1-9.1 does not apply to:
(1) a landlord's lien, other than an agricultural lien;
(2) a lien, other than an agricultural lien, given by statute orother rule of law for services or materials, but IC 26-1-9.1-333applies with respect to priority of the lien;
(3) an assignment of a claim for wages, salary, or othercompensation of an employee;
(4) a sale of accounts, chattel paper, payment intangibles, orpromissory notes as part of a sale of the business out of whichthey arose;
(5) an assignment of accounts, chattel paper, paymentintangibles, or promissory notes that is for the purpose ofcollection only;
(6) an assignment of a right to payment under a contract to anassignee that is also obligated to perform under the contract;
(7) an assignment of a single account, payment intangible, orpromissory note to an assignee in full or partial satisfaction ofa preexisting indebtedness;
(8) a transfer of an interest in or an assignment of a claim undera policy of insurance, other than a transfer described insubsection (a)(7), or an assignment by or to a health-careprovider of a health-care-insurance receivable and anysubsequent assignment of the right to payment, butIC 26-1-9.1-315 and IC 26-1-9.1-322 apply with respect toproceeds and priorities in proceeds;
(9) an assignment of a right represented by a judgment, otherthan a judgment taken on a right to payment that was collateral;
(10) a right of recoupment or set-off, but:
(A) IC 26-1-9.1-340 applies with respect to the effectivenessof rights of recoupment or set-off against deposit accounts;and
(B) IC 26-1-9.1-404 applies with respect to defenses orclaims of an account debtor;
(11) the creation or transfer of an interest in or lien on realproperty, including a lease or rents thereunder, except to theextent that provision is made for:
(A) liens on real property in IC 26-1-9.1-203 andIC 26-1-9.1-308;
(B) fixtures in IC 26-1-9.1-334;
(C) fixture filings in IC 26-1-9.1-501, IC 26-1-9.1-502,IC 26-1-9.1-512, IC 26-1-9.1-516, and IC 26-1-9.1-519; and
(D) security agreements covering personal and real propertyin IC 26-1-9.1-604;
(12) an assignment of a claim arising in tort, other than a
commercial tort claim, but IC 26-1-9.1-315 and IC 26-1-9.1-322apply with respect to proceeds and priorities in proceeds;
(13) an assignment of a deposit account in a consumertransaction, but IC 26-1-9.1-315 and IC 26-1-9.1-322 apply withrespect to proceeds and priorities in proceeds;
(14) the creation, perfection, priority, or enforcement of asecurity interest created by the state, another state, or a foreigncountry, or a governmental unit of the state, another state or aforeign country;
(15) a pledge of revenues, other money, or property made underIC 5-1-14-4;
(16) a claim or right to receive compensation for injuries orsickness as described in 26 U.S.C. 104(a)(1) or (a)(2); or
(17) a claim or right to receive benefits under a special needtrust as described in 42 U.S.C. 1396p(d)(4).
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,SEC.1.
IC 26-1-9.1-110
Security interests arising under IC 26-1-2 or IC 26-1-2.1
Sec. 110. A security interest arising under IC 26-1-2-401,IC 26-1-2-505, IC 26-1-2-711(3), or IC 26-1-2.1-508(5) is subject toIC 26-1-9.1. However, until the debtor obtains possession of thegoods:
(1) the security interest is enforceable, even ifIC 26-1-9.1-203(b)(3) has not been satisfied;
(2) filing is not required to perfect the security interest;
(3) the rights of the secured party after default by the debtor aregoverned by IC 26-1-2 or IC 26-1-2.1; and
(4) the security interest has priority over a conflicting securityinterest created by the debtor.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-201
General effectiveness of security agreement
Sec. 201. (a) Except as otherwise provided in IC 26-1, a securityagreement is effective according to its terms between the parties,against purchasers of the collateral, and against creditors.
(b) A transaction subject to this article is subject to any applicablerule of law that establishes a different rule for consumers.
(c) In case of conflict between IC 26-1-9.1 and a rule of law,statute, or regulation described in subsection (b), the rule of law,statute, or regulation controls. Failure to comply with a statute orregulation described in subsection (b) has only the effect the statuteor regulation specifies.
(d) IC 26-1-9.1 does not:
(1) validate any rate, charge, agreement, or practice that violatesa rule of law, statute, or regulation described in subsection (b);or
(2) extend the application of the rule of law, statute, or
regulation to a transaction not otherwise subject to it.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-202
Title to collateral immaterial
Sec. 202. Except as otherwise provided with respect toconsignments or sales of accounts, chattel paper, paymentintangibles, or promissory notes, the provisions of this article withregard to rights and obligations apply whether title to collateral is inthe secured party or the debtor.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-203
Attachment and enforceability of security interest; proceeds;supporting obligations; formal requisites
Sec. 203. (a) A security interest attaches to collateral when itbecomes enforceable against the debtor with respect to the collateral,unless an agreement expressly postpones the time of attachment.
(b) Except as otherwise provided in subsections (c) through (i), asecurity interest is enforceable against the debtor and third partieswith respect to the collateral only if:
(1) value has been given;
(2) the debtor has rights in the collateral or the power to transferrights in the collateral to a secured party; and
(3) one (1) of the following conditions is met:
(A) The debtor has authenticated a security agreement thatprovides a description of the collateral and, if the securityinterest covers timber to be cut, a description of the landconcerned.
(B) The collateral is not a certificated security and is in thepossession of the secured party under IC 26-1-9.1-313pursuant to the debtor's security agreement.
(C) The collateral is a certificated security in registered formand the security certificate has been delivered to the securedparty under IC 26-1-8.1-301 pursuant to the debtor's securityagreement.
(D) The collateral is deposit accounts, electronic chattelpaper, investment property, letter-of-credit rights, orelectronic documents, and the secured party has controlunder IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,IC 26-1-9.1-106, or IC 26-1-9.1-107 pursuant to the debtor'ssecurity agreement.
(c) Subsection (b) is subject to IC 26-1-4