Sec. 42a-9-324. Priority of purchase-money security interests.
Sec. 42a-9-324. Priority of purchase-money security interests. (a) Except as
otherwise provided in subsection (g), a perfected purchase-money security interest in
goods other than inventory or livestock has priority over a conflicting security interest
in the same goods, and, except as otherwise provided in section 42a-9-327, a perfected
security interest in its identifiable proceeds also has priority, if the purchase-money
security interest is perfected when the debtor receives possession of the collateral or
within twenty days thereafter.
(b) Subject to subsection (c) and except as otherwise provided in subsection (g), a
perfected purchase-money security interest in inventory has priority over a conflicting
security interest in the same inventory, has priority over a conflicting security interest
in chattel paper or an instrument constituting proceeds of the inventory and in proceeds
of the chattel paper, if so provided in section 42a-9-330, and, except as otherwise provided in section 42a-9-327, also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the delivery
of the inventory to a buyer, if:
(1) The purchase-money security interest is perfected when the debtor receives possession of the inventory;
(2) The purchase-money secured party sends an authenticated notification to the
holder of the conflicting security interest;
(3) The holder of the conflicting security interest receives the notification within
five years before the debtor receives possession of the inventory; and
(4) The notification states that the person sending the notification has or expects to
acquire a purchase-money security interest in inventory of the debtor and describes the
inventory.
(c) Subdivisions (2) to (4), inclusive, of subsection (b) apply only if the holder of
the conflicting security interest had filed a financing statement covering the same types
of inventory:
(1) If the purchase-money security interest is perfected by filing, before the date of
the filing; or
(2) If the purchase-money security interest is temporarily perfected without filing
or possession under subsection (f) of section 42a-9-312, before the beginning of the
twenty-day period thereunder.
(d) Subject to subsection (e) and except as otherwise provided in subsection (g), a
perfected purchase-money security interest in livestock that are farm products has priority over a conflicting security interest in the same livestock, and, except as otherwise
provided in section 42a-9-327, a perfected security interest in their identifiable proceeds
and identifiable products in their unmanufactured states also has priority, if:
(1) The purchase-money security interest is perfected when the debtor receives possession of the livestock;
(2) The purchase-money secured party sends an authenticated notification to the
holder of the conflicting security interest;
(3) The holder of the conflicting security interest receives the notification within
six months before the debtor receives possession of the livestock; and
(4) The notification states that the person sending the notification has or expects to
acquire a purchase-money security interest in livestock of the debtor and describes the
livestock.
(e) Subdivisions (2) to (4), inclusive, of subsection (d) apply only if the holder of
the conflicting security interest had filed a financing statement covering the same types
of livestock:
(1) If the purchase-money security interest is perfected by filing, before the date of
the filing; or
(2) If the purchase-money security interest is temporarily perfected without filing
or possession under subsection (f) of section 42a-9-312, before the beginning of the
twenty-day period thereunder.
(f) Except as otherwise provided in subsection (g), a perfected purchase-money
security interest in software has priority over a conflicting security interest in the same
collateral, and, except as otherwise provided in section 42a-9-327, 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 under this section.
(g) If more than one security interest qualifies for priority in the same collateral
under subsection (a), (b), (d) or (f):
(1) A security interest securing an obligation incurred as all or part of the price of
the collateral has priority over a security interest securing an obligation incurred for
value given to enable the debtor to acquire rights in or the use of collateral; and
(2) In all other cases, subsection (a) of section 42a-9-322 applies to the qualifying
security interests.
(P.A. 01-132, S. 44.)