400.9-203. Attachment and enforceability of security interest--proceeds--supporting obligations--formal requisites.
Attachment and enforceability of securityinterest--proceeds--supporting obligations--formal requisites.
400.9-203. (a) A security interest attaches to collateral when itbecomes enforceable against the debtor with respect to the collateral,unless an agreement expressly postpones the time of attachment.
(b) Except as otherwise provided in subsections (c) through (i), asecurity interest is enforceable against the debtor and third parties withrespect to the collateral only if:
(1) Value has been given;
(2) The debtor has rights in the collateral or the power to transferrights in the collateral to a secured party; and
(3) One of the following conditions is met:
(A) The debtor has authenticated a security agreement that provides adescription of the collateral and, if the security interest covers timberto be cut, a description of the land concerned;
(B) The collateral is not a certificated security and is in thepossession of the secured party under section 400.9-313 pursuant to thedebtor's security agreement;
(C) The collateral is a certificated security in registered form andthe security certificate has been delivered to the secured party undersection 400.8-301 pursuant to the debtor's security agreement; or
(D) The collateral is deposit accounts, electronic chattel paper,investment property, or letter-of-credit rights, and the secured party hascontrol under section 400.9-104, 400.9-105, 400.9-106 or 400.9-107 pursuantto the debtor's security agreement.
(c) Subsection (b) is subject to section 400.4-210 on the securityinterest of a collecting bank, section 400.5-118 on the security interestof a letter-of-credit issuer or nominated person, section 400.9-110 on asecurity interest arising under article 2 or 2A, and section 400.9-206 onsecurity interests in investment property.
(d) A person becomes bound as debtor by a security agreement enteredinto by another person if, by operation of law other than this article orby contract:
(1) The security agreement becomes effective to create a securityinterest in the person's property; or
(2) The person becomes generally obligated for the obligations of theother person, including the obligation secured under the securityagreement, and acquires or succeeds to all or substantially all of theassets of the other person.
(e) If a new debtor becomes bound as debtor by a security agreemententered into by another person:
(1) The agreement satisfies subsection (b)(3) with respect toexisting or after-acquired property of the new debtor to the extent theproperty is described in the agreement; and
(2) Another agreement is not necessary to make a security interest inthe property enforceable.
(f) The attachment of a security interest in collateral gives thesecured party the rights to proceeds provided by section 400.9-315 and isalso attachment of a security interest in a supporting obligation for thecollateral.
(g) The attachment of a security interest in a right to payment orperformance secured by a security interest or other lien on personal orreal property is also attachment of a security interest in the securityinterest, mortgage, or other lien.
(h) The attachment of a security interest in a securities account isalso attachment of a security interest in the security entitlements carriedin the securities account.
(i) The attachment of a security interest in a commodity account isalso attachment of a security interest in the commodity contracts carriedin the commodity account.
(L. 1963 p. 503 § 9-203, A.L. 1965 p. 595, A.L. 1988 S.B. 583, A.L. 1992 S.B. 448, A.L. 1997 S.B. 6, A.L. 2001 S.B. 288)Effective 7-01-01