(1) A person who delivers goods under a consignment which is not a security interest and who would be required to file under this article by section 28:2-326 (3) (c) has priority over a secured party who is or becomes a creditor of the consignee and who would have a perfected security interest in the goods if they were the property of the consignee, and also has priority with respect to identifiable cash proceeds received on or before delivery of the goods to a buyer, if:
(a) the consignor complies with the filing provision of the article on sales with respect to consignments (section 28:2-326 (3) (c)) before the consignee receives possession of the goods; and
(b) the consignor gives notification in writing to the holder of the security interest if the holder has filed a financing statement covering the same types of goods before the date of the filing made by the consignor; and
(c) the holder of the security interest receives the notification within five years before the consignee receives possession of the goods; and
(d) the notification states that the consignor expects to deliver goods on consignment to the consignee, describing the goods by item or type.
(2) In the case of a consignment which is not a security interest and in which the requirements of the preceding subsection have not been met, a person who delivers goods to another is subordinate to a person who would have a perfected security interest in the goods if they were the property of the debtor.
(3)(a) In this subsection, the following words have the meanings indicated:
(i) “Art dealer” means an individual, partnership, firm, association, or corporation, other than a public auctioneer, that undertakes to sell a work of fine art created by another.
(ii) “Artist” means the creator of a work of fine art.
(iii) “On consignment” means delivered to an art dealer for the purpose of sale or exhibition, or both, to the public by the art dealer other than at a public auction.
(iv) “Work of fine art” means an original art work which is:
(A) a visual rendition including a painting, drawing, sculpture, mosaic, or photograph;
(B) a work of calligraphy;
(C) a work of graphic art including an etching, lithograph, offset print, or silk screen;
(D) a craft work in materials including clay, textile, fiber, wood, metal, plastic, or glass; or
(E) a work in mixed media including a collage or a work consisting of any combination of works included in this subsection.
(b) If an art dealer accepts a work of fine art on a fee, commission, or other compensation basis on consignment from the artist, then the following shall apply:
(i) the art dealer is, with respect to that work of fine art, the agent of the artist;
(ii) the work of fine art is trust property and the art dealer is trustee for the benefit of the artist until the work of fine art is sold to a bona fide third party; and
(iii) the proceeds of the sale of the work of fine art are trust property and the art dealer is trustee for the benefit of the artist until the amount due the artist from the sale is paid.
(c) Notwithstanding the purchase of the work of fine art by the art dealer directly or indirectly for the art dealer's own account, a work of fine art that is trust property when initially accepted by the art dealer remains trust property until the purchase price is paid in full to the artist.
(d) Property that is trust property under this section is not subject to the claims, liens, or security interests of the creditors of an art dealer.
CREDIT(S)
(Apr. 9, 1997, D.C. Law 11-255, § 27(bbb), 44 DCR 1271.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 28:9-114.
1981 Ed., § 28:9-114.
Legislative History of Laws
For legislative history of D.C. Law 4-85, see Historical and Statutory Notes following § 28:9-102.
Law 5-167, the “Uniform Commercial Code Amendment Act of 1984,” was introduced in Council and assigned Bill No. 5-299, which was referred to the Committee on the Judiciary. The Bill was adopted on first and second readings on December 4, 1984, and December 18, 1984, respectively. Signed by the Mayor on January 11, 1985, it was assigned Act No. 5-232 and transmitted to both Houses of Congress for its review.
Law 11-255, the “Second Technical Amendments Act of 1996,” was introduced in Council and assigned Bill No. 11-905, which was referred to the Committee of the Whole. The Bill was adopted on first and second readings on November 7, 1996, and December 3, 1996, respectively. Signed by the Mayor on December 24, 1996, it was assigned Act No. 11-519 and transmitted to both Houses of Congress for its review. D.C. Law 11-255 became effective on April 9, 1997.
For Law 13-201, see notes following § 28:9-101.