Okla. Stat. tit. 12A § 1-9-617
Okla. Stat. tit. 12A, § 1-9-617
Oklahoma Code Comment
Old section 9-504(4) is replaced by new section 9-617 . Under old section 9- 504(4) , disposition of collateral to a purchaser, after default by a secured party for value, discharged the security interest under which the disposition was made and any other security interest or lien subordinate to such security interest. Under new section 9-617(a) the same result is reached, except that new section 9-617(a) refers to a transfer to a transferee as opposed to a purchaser. A transferee encompasses a third party other than the party providing value, while "purchaser" would only include the party giving value. Thus revised section 9-617 additionally protects the transferee when value is given by another party. Under old section 9-504 , the purchaser would take free of the competing rights and interests even though the secured party failed to comply with the requirements of Article 9 or any judicial proceedings, provided, in the event of a public sale, the purchaser had no knowledge of defects in the sale and did not buy in collusion with the secured party or other bidders. Under new section 9-617(b) the transferee must, in addition to the requirements provided in old section 9-504(4)(a) , also act in good faith. Good faith is defined in revised section 9-102(a)(43) as, "... honesty in fact and the observance of reasonable commercial standards of fair dealing." Possibly the new good faith requirement under revised section 9-617(b) is not necessary in light of the obligation of good faith imposed in section 1-203 . New section 9-615(c) reinforces the rule that the transferee does not take free of the rights of the debtor and subordinate security interest or other security interest or agricultural lien holders, but takes subject to those rights, if the transferee does not act in accordance with section 9-615(b) . The transferee, however, receives the implied warranty of title (and, depending on the circumstances, perhaps other warranties) unless it is disclaimed. See revised section 9-610(e) . In addition, section 9-617(c) reinforces the rule that a transferee not in good faith in a disposition that is not in compliance with section 9-615(b) does not take free of any security interest or other lien. The same results would have been obtained under old section 9-504(4) .