8.9A-330 - A-330. Priority of purchaser of chattel paper or instrument.
§ 8.9A-330. Priority of purchaser of chattel paper or instrument.
(a) Purchaser's priority; security interest claimed merely as proceeds. Apurchaser of chattel paper has priority over a security interest in thechattel paper which is claimed merely as proceeds of inventory subject to asecurity interest if:
(1) in good faith and in the ordinary course of the purchaser's business, thepurchaser gives new value and takes possession of the chattel paper orobtains control of the chattel paper under § 8.9A-105; and
(2) the chattel paper does not indicate that it has been assigned to anidentified assignee other than the purchaser.
(b) Purchaser's priority; other security interests. A purchaser of chattelpaper has priority over a security interest in the chattel paper which isclaimed other than merely as proceeds of inventory subject to a securityinterest if the purchaser gives new value and takes possession of the chattelpaper or obtains control of the chattel paper under § 8.9A-105 in good faith,in the ordinary course of the purchaser's business, and without knowledgethat the purchase violates the rights of the secured party.
(c) Chattel paper purchaser's priority in proceeds. Except as otherwiseprovided in § 8.9A-327, a purchaser having priority in chattel paper undersubsection (a) or (b) also has priority in proceeds of the chattel paper tothe extent that:
(1) § 8.9A-322 provides for priority in the proceeds; or
(2) the proceeds consist of the specific goods covered by the chattel paperor cash proceeds of the specific goods, even if the purchaser's securityinterest in the proceeds is unperfected.
(d) Instrument purchaser's priority. Except as otherwise provided in §8.9A-331 (a), a purchaser of an instrument has priority over a securityinterest in the instrument perfected by a method other than possession if thepurchaser gives value and takes possession of the instrument in good faithand without knowledge that the purchase violates the rights of the securedparty.
(e) Holder of purchase-money security interest gives new value. For purposesof subsections (a) and (b), the holder of a purchase-money security interestin inventory gives new value for chattel paper constituting proceeds of theinventory.
(f) Indication of assignment gives knowledge. For purposes of subsections (b)and (d), if chattel paper or an instrument indicates that it has beenassigned to an identified secured party other than the purchaser, a purchaserof the chattel paper or instrument has knowledge that the purchase violatesthe rights of the secured party.
(Code 1950, §§ 6-558, 6-559; 1964, c. 219, § 8.9-308; 1973, c. 509; 2000, c.1007.)