Section 1-9-330 - [Effective Until 11/1/2024] Priority of purchaser of chattel paper or instrument(a) A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds of inventory subject to a security interest if: (1) in good faith and in the ordinary course of the purchaser's business, the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under Section 1-9-105 of this title; and(2) the chattel paper does not indicate that it has been assigned to an identified assignee other than the purchaser.(b) A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed other than merely as proceeds of inventory subject to a security interest if the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under Section 1-9-105 of this title in good faith, in the ordinary course of the purchaser's business, and without knowledge that the purchase violates the rights of the secured party.(c) Except as otherwise provided in Section 1-9-327 of this title, a purchaser having priority in chattel paper under subsection(b) of this section also has priority in proceeds of the chattel paper to the extent that: (1) Section 1-9-322 of this title provides for priority in the proceeds; or(2) the proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods, even if the purchaser's security interest in the proceeds is unperfected.(d) Except as otherwise provided in subsection (a) of Section 1-9-331 of this title, a purchaser of an instrument has priority over a security interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party.(e) For purposes of subsections (a) and (b) of this section, the holder of a purchase-money security interest in inventory gives new value for chattel paper constituting proceeds of the inventory.(f) For purposes of subsections (b) and (d) of this section, if chattel paper or an instrument indicates that it has been assigned to an identified secured party other than the purchaser, a purchaser of the chattel paper or instrument has knowledge that the purchase violates the rights of the secured party.Okla. Stat. tit. 12A, § 1-9-330
Added by Laws 2000 , SB 1519, c. 371, § 57, eff. 7/1/2001.Oklahoma Code Comment
Section 9-330 is the successor to former section 9-308 . As under former section 9-308 , differing priority rules apply to purchasers of chattel paper who give new value and take possession (or, in the case of electronic chattel paper, obtain control) of the collateral depending on whether a conflicting security interest in the collateral is claimed merely as proceeds. The principal difference relates to the role of knowledge and the effect of an indication of a previous assignment on the collateral.
Section 9-330 also affords priority to purchasers of instruments who take possession in good faith and without knowledge that the purchase violates the rights of the competing secured party. Thus, a secured party who perfects a security interest in a promissory note by possession (even if not a holder in due course under Article 3) has priority over a secured party who perfects only by filing if the secured party in possession took possession in good faith and without knowledge that the transaction violates the rights of the other secured party. A holder in due course clearly defeats a secured party who perfects only by filing under section 9-331 and sections 3-305 and 3-306 .
In addition, to qualify for priority, purchasers of chattel paper, but not of instruments, must purchase in the ordinary course of their business. And a nonpossessory secured party also may defeat a competing possessory claim by inserting a notation on the instrument or tangible chattel paper indicating the security interest and giving notice that a sale would violate the rights of the secured party. See section 9-330(b), (d) , and (f) . These issues are replicated to the extent possible in the context of electronic chattel paper. See, e.g., James M. Swartz, Electronic Commerce and Issues in Buying Chattel Paper, 53 Consumer Fin. L.Q. Rep. 91 (1999).
This section is set out more than once due to postponed, multiple, or conflicting amendments.