Okla. Stat. tit. 12A § 1-9-601
Okla. Stat. tit. 12A, § 1-9-601
Oklahoma Code Comment
New section 9-601 expands upon the provisions of former section 9-501(1), (2) and (5) . Specifically, new section 9-601(a), (b), and (c) derive from former section 9-501(1) , while new section 9-601(d) derives from former section 9- 501(2) and new section 9-601(e) derives from former section 9-501(5) .
Consistent with the definition of "rights" as including remedies under section 1-201 , new section 9-601 deals very explicitly with a secured party's enforcement options and limitations in respect to collateral. The new section makes clear the right of parties, with only slight limitations, to enter into their own terms by agreement and to have such agreements enforced. Notably, the new section protects not only the defaulting debtor, but also other obligors. Under the new section, notices and protections given to debtors by enforcing secured parties must also be given to guarantors and other secured parties of record. Like former section 9-501(1) , new section 9-601(a)(1) permits a secured party to exercise non-Article 9 rights, such as sale under a writ of execution. Such a remedy might be employed where the collateral is worth less than the secured debt and the debtor has other marketable, non-exempt assets worth pursuing.
New section 9-601(a)(1) excepts Article 9 enforcement actions from the deficiency limitations imposed by the provisions of 12 Okla. Stat. section 686 , unless the enforcing party has elected under new section 9-604(a)(2) to proceed against both personal and real property using the real property provisions in lieu of Article 9 procedures. The revised Article 9 remedies set up new guidelines governing the delineation between Article 9 and non-Article 9 procedures, perhaps overruling Farmers State Bank in Afton v. Ballew, 626 P.2d. 337 (Okla. App. 1981), which had unfortunately suggested that a creditor places itself at some risk by employing sequential, and not simultaneously exercised, remedies including self-help. New Article 9 specifically addresses the secured creditor's simultaneous remedies and proceedings when intersections of real property, fixtures, or personal property are concerned, and is more in line with the authority of O'Dell v. Kunkel's, Inc., 581 P.2d 878 (Okla. 1978). See also, John P. Roberts, Remedies Under Revised Article 9: Impact of Mixed Real and Personal Property Collateral and the Public, Private and Judicial Sale of Collateral, 55 Consumer Fin. L.Q. Rep.___ (2001) (forthcoming). The clear exclusion of purely Article 9 enforcement actions from the scope of 12 Okla. Stat. section 686 deficiency limitations codifies the results in Hunter v. Nesmith, 358 P.2d 841 (Okla. 1961) and Mediatech Inc. v. Bank IV Oklahoma, N.A., 68 Okla. B. J. 2961 (Okla. App. 1997), which held 12 Okla. Stat. section 686 had no application to personal property security interest foreclosures.
New section 9-601(a)(1), (e) and (f) expressly refer to the impact of the provision upon agricultural liens. Agricultural liens were not governed by former Article 9; these revisions make clear the parallel treatment to be afforded in the previously murky area of enforcement between security interests and agricultural liens. For a broader discussion of agricultural liens under revised Article 9, see Drew L. Kershen and Alvin C. Harrell, Agricultural Finance-Comparing the Current and Revised Article 9, 33 U.C.C. L.J. 169 (2000).
As in former section 9-501(1) , if the collateral consists of one or more bills of lading, warehouse receipts or other documents of title, revised section 9- 601(2) expressly allows the creditor to proceed either against the documents themselves or against the goods described in the documents. Thus, the document itself can be sold, or the document may be surrendered to obtain possession of the goods and then the goods may be sold.
The rule permitting a levied-upon judgment lien to relate back in time to the time of perfection of the security interest is made explicit by new section 9- 601(e) , expounding upon the provisions of former section 9-501(5) . If a secured party has reduced its claim to judgment, the lien of any levy relates back to the earliest of: (I) the date of perfection of the security interest in the collateral; or (II) the date of filing a financing statement covering the collateral. This mirrors the "first to file or perfect" doctrine of new section 9-322(a)(1) . A secured party may purchase at such a judicial sale under section 9-601(f) . Finally, new section 9-601(g) makes it clear that section 9-601 imposes no duties on a secured party who is a consignor nor one who is a buyer of accounts, chattel paper, payment intangibles and promissory notes. Such secured parties are dealt with under other provisions, including the enforcement limits in new section section 9-607(c) .