First Regular Session 115th General Assembly (2007)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
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NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in
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this style type reconciles conflicts
between statutes enacted by the 2006 Regular Session of the General Assembly.
SENATE ENROLLED ACT No. 419
AN ACT to amend the Indiana Code concerning commercial law.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 26-1-1-101; (07)SE0419.1.1. -->
SECTION 1. IC 26-1-1-101 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 101. (1) IC 26-1 shall
be known and may be cited as Uniform Commercial Code.
(2) IC 26-1 applies to a transaction to the extent that it is
governed by another article of the Uniform Commercial Code.
SOURCE: IC 26-1-1-108.2; (07)SE0419.1.2. -->
SECTION 2. IC 26-1-1-108.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2007]: Sec. 108.2. This article modifies,
limits, and supersedes the Electronic Signatures in Global and
National Commerce Act (15 U.S.C. 7001 et seq.). However, this
article does not:
(a) modify, limit, or supersede 15 U.S.C. 7001(c); or
(b) authorize the electronic delivery of a notice described in 15
U.S.C. 7003(b).
SOURCE: IC 26-1-1-201; (07)SE0419.1.3. -->
SECTION 3. IC 26-1-1-201 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 201. Subject to
additional definitions contained in IC 26-1-2 through IC 26-1-10 which
are applicable to specific provisions, and unless the context otherwise
requires, in IC 26-1:
(1) "Action" in the sense of a judicial proceeding includes
recoupment, counterclaim, setoff, suit in equity, and any other
proceedings in which rights are determined.
(2) "Aggrieved party" means a party entitled to resort to a remedy.
(3) "Agreement" means the bargain of the parties in fact as found
in their language or by implication from other circumstances
including course of dealing or usage of trade or course of
performance as provided in IC 26-1-1-205.
and IC 26-1-2-208.
Whether an agreement has legal consequences is determined by
the provisions of IC 26-1, if applicable; otherwise by the law of
contracts (IC 26-1-1-103). (Compare "Contract".)
(4) "Bank" means any person engaged in the business of banking.
(5) "Bearer" means the person:
(A) in control of a negotiable electronic document of title;
or
(B) in possession of
an a negotiable instrument,
a negotiable
tangible document of title, or
a certificated security payable
to bearer or endorsed in blank.
(6) "Bill of lading" means a document
of title evidencing the
receipt of goods for shipment issued by a person engaged in the
business of
directly or indirectly transporting or forwarding
goods.
and The term does not include a warehouse receipt. The
term includes an airbill. "Airbill" means a document serving for
air transportation as a bill of lading does for marine or rail
transportation, and includes an air consignment note or air
waybill.
(7) "Branch" includes a separately incorporated foreign branch of
a bank.
(8) "Burden of establishing" a fact means the burden of
persuading the triers of fact that the existence of the fact is more
probable than its nonexistence.
(9) "Buyer in ordinary course of business" means a person that
buys goods in good faith without knowledge that the sale violates
the rights of another person in the goods, and in the ordinary
course from a person, other than a pawnbroker, in the business of
selling goods of that kind. A person buys goods in the ordinary
course of business if the sale to the person comports with the
usual or customary practices in the kind of business in which the
seller is engaged or with the seller's own usual or customary
practices. A person that sells oil, gas, or other minerals at the
wellhead or minehead is a person in the business of selling goods
of that kind. A buyer in ordinary course of business may buy for
cash, by exchange of other property, or on secured or unsecured
credit, and may require goods or documents of title under a
preexisting contract for sale. Only a buyer that takes possession
of the goods or has a right to recover the goods from that seller
under IC 26-1-2 may be a buyer in ordinary course of business. A
person that acquires goods in a transfer in bulk or as security for
or total or partial satisfaction of a money debt is not a buyer in
ordinary course of business.
(10) "Conspicuous". A term or clause is conspicuous when it is so
written that a reasonable person against whom it is to operate
ought to have noticed it. A printed heading in capitals (as:
NONNEGOTIABLE BILL OF LADING) is conspicuous.
Language in the body of a form is conspicuous if it is in larger or
other contrasting type or color. But in a telegram any stated term
is conspicuous. Whether a term or clause is conspicuous or not is
for decision by the court.
(11) "Contract" means the total legal obligation which results
from the parties' agreement as affected by this Act and any other
applicable rules of law. (Compare "Agreement".)
(12) "Creditor" includes a general creditor, a secured creditor, a
lien creditor and any representative of creditors, including an
assignee for the benefit of creditors, a trustee in bankruptcy, a
receiver in equity, and an executor or administrator of an
insolvent debtor's or assignor's estate.
(13) "Defendant" includes a person in the position of defendant
in a cross-action or counterclaim.
(14) "Delivery" means the following:
(A) With respect to an electronic document of title,
voluntary transfer of control.
(B) With respect to instruments, tangible documents of title,
chattel paper, or certificated securities, means voluntary
transfer of possession.
(15) "Document of title" includes bill of lading, dock warrant,
dock receipt, warehouse receipt, or order for the delivery of goods
and also any other document, which means a record that:
(A) in the regular course of business or financing, is treated as
adequately evidencing that the person in possession or control
of it the record is entitled to receive, control, hold, and
dispose of the document record and the goods it covers; To be
a document of title, a document must purport and
(B) purports to be issued by or addressed to a bailee and
purport purports to cover goods in the bailee's possession
which are either identified or are fungible portions of an
identified mass.
The term includes a bill of lading, transport document, dock
warrant, dock receipt, warehouse receipt, or order for
delivery of goods. An electronic document of title means a
document of title evidenced by a record consisting of
information stored in an electronic medium. A tangible
document of title means a document of title evidenced by a
record consisting of information that is inscribed on a tangible
medium.
(16) "Fault" means wrongful act, omission, or breach.
(17) "Fungible" with respect to goods or securities means goods
or securities of which any unit is, by nature or usage of trade, the
equivalent of any other like unit. Goods which are not fungible
shall be deemed fungible for the purposes of IC 26-1 to the extent
that under a particular agreement or document unlike units are
treated as equivalents.
(18) "Genuine" means free of forgery or counterfeiting.
(19) "Good faith" means honesty in fact in the conduct or
transaction concerned.
(20) "Holder" with respect to means:
(A) the person in possession of a negotiable instrument
means the person in possession if the instrument that is
payable either to bearer or in the case of an instrument,
payable to an identified person if the identified person is in
possession of the instrument; "Holder" with respect to
(B) the person in possession of a negotiable tangible
document of title means the person in possession if the goods
are deliverable either to bearer or to the order of the person in
possession; or
(C) the person in control of a negotiable electronic
document of title.
(21) To "honor" is to pay or to accept and pay or where a credit so
engages to purchase or discount a draft complying with the terms
of the credit.
(22) "Insolvency proceedings" includes any assignment for the
benefit of creditors or other proceedings intended to liquidate or
rehabilitate the estate of the person involved.
(23) A person is "insolvent" who either has ceased to pay his the
person's debts in the ordinary course of business or cannot pay
his the person's debts as they become due or is insolvent within
the meaning of the federal bankruptcy law.
(24) "Money" means a medium of exchange authorized or
adopted by a domestic or foreign government and includes a
monetary unit of account established by an intergovernmental
organization or by agreement between two (2) or more nations.
(25) A person has "notice" of a fact when:
(a) he the person has actual knowledge of it;
(b) he the person has received a notice or notification of it; or
(c) from all the facts and circumstances known to him the
person at the time in question, he the person has reason to
know that it exists.
A person "knows" or has "knowledge" of a fact when he the
person has actual knowledge of it. "Discover" or "learn" or a
word or phrase of similar import refers to knowledge rather than
to reason to know. The time and circumstances under which a
notice or notification may cease to be effective are not determined
by IC 26-1.
(26) A person "notifies" or "gives" a notice or notification to
another by taking such steps as may be reasonably required to
inform the other in ordinary course whether or not such other
actually comes to know of it. A person "receives" a notice or
notification when:
(a) it comes to his the person's attention; or
(b) it is duly delivered at the place of business through which
the contract was made or at any other place held out by him
the person as the place for receipt of such communications.
(27) Notice, knowledge, or a notice of notification received by an
organization is effective for a particular transaction from the time
when it is brought to the attention of the individual conducting
that transaction and, in any event, from the time when it would
have been brought to his the person's attention if the organization
had exercised due diligence. An organization exercises due
diligence if it maintains reasonable routines for communicating
significant information to the person conducting the transaction
and there is reasonable compliance with the routines. Due
diligence does not require an individual acting for the
organization to communicate information unless such
communication is part of his the person's regular duties or unless
he the person has reason to know of the transaction and that the
transaction would be materially affected by the information.
(28) "Organization" includes a corporation, government or
governmental subdivision or agency, business trust, estate, trust,
partnership or association, two (2) or more persons having a joint
or common interest, or any other legal or commercial entity.
(29) "Party", as distinct from "third party", means a person who
has engaged in a transaction or made an agreement within
IC 26-1.
(30) "Person" includes an individual or an organization. (See
IC 26-1-1-102.)
(31) "Presumption" or "presumed" means that the trier of fact
must find the existence of the fact presumed unless and until
evidence is introduced which would support a finding of its
nonexistence.
(32) "Purchase" includes taking by sale, discount, negotiation,
mortgage, pledge, lien, security interest, issue or reissue, gift, or
any other voluntary transaction creating an interest in property.
(33) "Purchaser" means a person who takes by purchase.
(33a) "Registered mail" includes certified mail.
(34) "Remedy" means any remedial right to which an aggrieved
party is entitled with or without resort to a tribunal.
(35) "Representative" includes an agent, an officer of a
corporation or association, and a trustee, executor, or
administrator of an estate, or any other person empowered to act
for another.
(36) "Rights" includes remedies.
(37) "Security interest" means an interest in personal property or
fixtures which secures payment or performance of an obligation.
The term also includes any interest of a consignor and a buyer of
accounts, chattel paper, a payment intangible, or a promissory
note in a transaction that is subject to IC 26-1-9.1. The special
property interest of a buyer of goods on identification of such
goods to a contract for sale under IC 26-1-2-401 is not a security
interest, but a buyer may also acquire a security interest by
complying with IC 26-1-9.1. Except as otherwise provided in
IC 26-1-2-505, the right of a seller or lessor of goods under
IC 26-1-2 or IC 26-1-2.1 to retain or acquire possession of the
goods is not a "security interest", but a seller or lessor may also
acquire a "security interest" by complying with IC 26-1-9.1. The
retention or reservation of title by a seller of goods
notwithstanding shipment or delivery to the buyer
(IC 26-1-2-401) is limited in effect to a reservation of a "security
interest". Whether a transaction creates a lease or security interest
is determined by the facts of each case. However, a transaction
creates a security interest if the consideration the lessee is to pay
the lessor for the right to possession and use of the goods is an
obligation for the term of the lease not subject to termination by
the lessee and:
(a) the original term of the lease is equal to or greater than the
remaining economic life of the goods;
(b) the lessee is bound to renew the lease for the remaining
economic life of the goods or is bound to become the owner of
the goods;
(c) the lessee has an option to renew the lease for the
remaining economic life of the goods for no additional
consideration or nominal additional consideration upon
compliance with the lease agreement; or
(d) the lessee has an option to become the owner of the goods
for no additional consideration or nominal additional
consideration upon compliance with the lease agreement.
A transaction does not create a security interest merely because
it provides that:
(a) the present value of the consideration the lessee is
obligated to pay the lessor for the right to possession and use
of the goods is substantially equal to or is greater than the fair
market value of the goods at the time the lease is entered into;
(b) the lessee assumes risk of loss of the goods, or agrees to
pay taxes, insurance, filing, recording, or registration fees, or
service or maintenance costs with respect to the goods;
(c) the lessee has an option to renew the lease or to become the
owner of the goods;
(d) the lessee has an option to renew the lease for a fixed rent
that is equal to or greater than the reasonably predictable fair
market rent for the use of the goods for the term of the renewal
at the time the option is to be performed; or
(e) the lessee has an option to become the owner of the goods
for a fixed price that is equal to or greater than the reasonably
predictable fair market value of the goods at the time the
option is to be performed.
For purposes of this subsection:
(x) Additional consideration is not nominal if:
(i) when the option to renew the lease is granted to the lessee
the rent is stated to be the fair market rent for the use of the
goods for the term of the renewal determined at the time the
option is to be performed; or
(ii) when the option to become the owner of the goods is
granted to the lessee the price is stated to be the fair market
value of the goods determined at the time the option is to be
performed.
Additional consideration is nominal if it is less than the
lessee's reasonably predictable cost of performing under the
lease agreement if the option is not exercised.
(y) "Reasonably predictable" and "remaining economic life of
the goods" are to be determined with reference to the facts and
circumstances at the time the transaction is entered into.
(z) "Present value" means the amount as of a date certain of
one (1) or more sums payable in the future, discounted to the
date certain. The discount is determined by the interest rate
specified by the parties if the rate is not manifestly
unreasonable at the time the transaction is entered into.
Otherwise, the discount is determined by a commercially
reasonable rate that takes into account the facts and
circumstances of each case at the time the transaction was
entered into.
(38) "Send" in connection with any writing or notice means to
deposit in the mail or deliver for transmission by any other usual
means of communication with postage or cost of transmission
provided for and properly addressed and, in the case of an
instrument, to an address specified thereon or otherwise agreed
or, if there be none, to any address reasonable under the
circumstances. The receipt of any writing or notice within the
time at which it would have arrived if properly sent has the effect
of a proper sending.
(39) "Signed" includes any symbol executed or adopted by a party
with present intention to authenticate a writing.
(40) "Surety" includes guarantor.
(41) "Telegram" includes a message transmitted by radio,
teletype, cable, any mechanical method of transmission, or the
like.
(42) "Term" means that portion of an agreement which relates to
a particular matter.
(43) "Unauthorized" signature means one made without actual,
implied, or apparent authority and includes a forgery.
(44) "Value". Except as otherwise provided with respect to
negotiable instruments and bank collections (IC 26-1-3.1-303,
IC 26-1-4-208, and IC 26-1-4-209) a person gives value for rights
if he the person acquires them:
(a) in return for a binding commitment to extend credit or for
the extension of immediately available credit whether or not
drawn upon and whether or not a chargeback is provided for
in the event of difficulties in collection;
(b) as security for or in total or partial satisfaction of a
preexisting claim;
(c) by accepting delivery pursuant to a preexisting contract for
purchase; or
(d) generally, in return for any consideration sufficient to
support a simple contract.
(45) "Warehouse receipt" means a
receipt document of title
issued by a person engaged in the business of storing goods for
hire.
(46) "Written" or "writing" includes printing, typewriting, or any
other intentional reduction to tangible form.
SOURCE: IC 26-1-1-205; (07)SE0419.1.4. -->
SECTION 4. IC 26-1-1-205 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 205. (1) A course of
dealing is a sequence of previous conduct between the parties to a
particular transaction which is fairly to be regarded as establishing a
common basis of understanding for interpreting their expressions and
other conduct.
(2) A course of performance is a sequence of conduct between
the parties to a particular transaction that exists if the:
(a) agreement of the parties with respect to the transaction
involves repeated occasions for performance by a party; and
(b) other party, with knowledge of the nature of the
performance and opportunity for objection to it, accepts the
performance or acquiesces in it without objection.
(2) (3) A usage of trade is any practice or method of dealing having
such regularity of observance in a place, vocation or trade as to justify
an expectation that it will be observed with respect to the transaction
in question. The existence and scope of such a usage are to be proved
as facts. If it is established that such a usage is embodied in a written
trade code or similar writing the interpretation of the writing is for the
court.
(3) (4) A course of dealing or course of performance between
parties and any usage of trade in the vocation or trade in which they are
engaged or of which they are or should be aware give particular
meaning to and supplement or qualify terms of an agreement.
(4) (5) Except as provided in subsection (8), the express terms of
an agreement and an applicable course of dealing, course of
performance, or usage of trade shall be construed wherever reasonable
as consistent with each other. but when If such a construction is
unreasonable:
(a) express terms control both prevail over course of dealing and
course of performance;
(b) course of performance prevails over course of dealing and
usage of trade; and
(c) course of dealing controls prevails over usage of trade.
(5) (6) An applicable usage of trade in the place where any part of
performance is to occur shall be used in interpreting the agreement as
to that part of the performance.
(6) (7) Evidence of a relevant usage of trade offered by one party is
not admissible unless and until he the party has given the other party
such notice as the court finds sufficient to prevent unfair surprise to the
latter.
(8) Subject to IC 26-1-2-209, a course of performance is relevant
to show a waiver or modification of any term inconsistent with the
course of performance.
SOURCE: IC 26-1-1-301; (07)SE0419.1.5. -->
SECTION 5. IC 26-1-1-301 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2007]: Sec. 301. (1) Except as otherwise provided in this section,
if a transaction bears a reasonable relation to Indiana and also to
another state or nation, the parties may agree that the law either
of Indiana or of the other state or nation shall govern their rights
and duties.
(2) In the absence of an agreement under subsection (1), and
except as provided in subsection (3), IC 26-1 applies to transactions
bearing an appropriate relation to Indiana.
(3) If any of the following provisions specifies the applicable law,
that provision governs, and a contrary agreement is effective only
to the extent permitted by the law so specified:
(a) IC 26-1-2-402.
(b) IC 26-1-2.1-105 and IC 26-1-2.1-106.
(c) IC 26-1-4-102.
(d) IC 26-1-4.1-507.
(e) IC 26-1-5.1-116.
(f) IC 26-1-8.1-110.
(g) IC 26-1-9.1-301 through IC 26-1-9.1-307.
SOURCE: IC 26-1-1-302; (07)SE0419.1.6. -->
SECTION 6. IC 26-1-1-302 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2007]: Sec. 302. (1) An obligation may be issued as subordinated
to performance of another obligation of the person obligated, or a
creditor may subordinate the creditor's right to performance of an
obligation by agreement with either the person obligated or
another creditor of the person obligated.
(2) Subordination does not create a security interest as against
either the common debtor or a subordinated creditor.
SOURCE: IC 26-1-2-103; (07)SE0419.1.7. -->
SECTION 7. IC 26-1-2-103 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 103. (1) In IC 26-1-2,
unless the context otherwise requires:
(a) "Buyer" means a person who buys or contracts to buy goods.
(b) "Good faith" in the case of a merchant means honesty in fact
and observance of reasonable commercial standards of fair
dealing in the trade.
(c) "Receipt" of goods means taking physical possession of them.
(d) "Seller" means a person who sells or contracts to sell goods.
(2) Other definitions applying to IC 26-1-2, or to specified parts
thereof, and the sections in which they appear are:
"Acceptance". IC 26-1-2-606.
"Banker's credit". IC 26-1-2-325.
"Between merchants". IC 26-1-2-104.
"Cancellation". IC 26-1-2-106(4).
"Commercial unit". IC 26-1-2-105.
"Confirmed credit". IC 26-1-2-325.
"Conforming to contract". IC 26-1-2-106.
"Contract for sale". IC 26-1-2-106.
"Cover". IC 26-1-2-712.
"Entrusting". IC 26-1-2-403.
"Financing agency". IC 26-1-2-104.
"Future goods". IC 26-1-2-105.
"Goods". IC 26-1-2-105.
"Identification". IC 26-1-2-501.
"Installment contract". IC 26-1-2-612.
"Letter of credit". IC 26-1-2-325.
"Lot". IC 26-1-2-105.
"Merchant". IC 26-1-2-104.
"Overseas". IC 26-1-2-323.
"Person in the position of seller". IC 26-1-2-707.
"Present sale". IC 26-1-2-106.
"Sale". IC 26-1-2-106.
"Sale on approval". IC 26-1-2-326.
"Sale or return". IC 26-1-2-326.
"Termination". IC 26-1-2-106.
(3) "Control" as provided in IC 26-1-7-106 and the following
definitions apply to IC 26-1-2:
"Check". IC 26-1-3.1-104.
"Consignee". IC 26-1-7-102.
"Consignor". IC 26-1-7-102.
"Consumer goods". IC 26-1-9.1-102.
"Dishonor". IC 26-1-3.1-502.
"Draft". IC 26-1-3.1-104.
(4) In addition, IC 26-1-1 contains general definitions and principles
of construction and interpretation applicable throughout IC 26-1-2.
SOURCE: IC 26-1-2-104; (07)SE0419.1.8. -->
SECTION 8. IC 26-1-2-104 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 104. (1) "Merchant"
means a person who deals in goods of the kind or otherwise by his
occupation holds himself out as having knowledge or skill peculiar to
the practices or goods involved in the transaction or to whom such
knowledge or skill may be attributed by his employment of an agent or
broker or other intermediary who by his occupation holds himself out
as having such knowledge or skill.
(2) "Financing agency" means a bank, finance company, or other
person who in the ordinary course of business makes advances against
goods or documents of title or who by arrangement with either the
seller or the buyer intervenes in ordinary course to make or collect
payment due or claimed under the contract for sale, as by purchasing
or paying the seller's draft or making advances against it or by merely
taking it for collection whether or not documents of title accompany or
are associated with the draft. "Financing agency" includes also a bank
or other person who similarly intervenes between persons who are in
the position of seller and buyer in respect to the goods (IC 26-1-2-707).
(3) "Between merchants" means in any transaction with respect to
which both parties are chargeable with the knowledge or skill of
merchants.
SOURCE: IC 26-1-2-202; (07)SE0419.1.9. -->
SECTION 9. IC 26-1-2-202 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 202. Terms with
respect to which the confirmatory memoranda of the parties agree or
which are otherwise set forth in a writing intended by the parties as a
final expression of their agreement with respect to such terms as are
included therein may not be contradicted by evidence of any prior
agreement or of a contemporaneous oral agreement but may be
explained or supplemented:
(a) by course of dealing or usage of trade (IC 26-1-1-205) or by
course of performance (IC 26-1-2-208); (IC 26-1-1-205); and
(b) by evidence of consistent additional terms, unless the court
finds the writing to have been intended also as a complete and
exclusive statement of the terms of the agreement.
SOURCE: IC 26-1-2-310; (07)SE0419.1.10. -->
SECTION 10. IC 26-1-2-310 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 310. Unless otherwise
agreed:
(a) payment is due at the time and place at which the buyer is to
receive the goods, even though the place of shipment is the place
of delivery; and
(b) if the seller is authorized to send the goods, he may ship them
under reservation and may tender the documents of title, but the
buyer may inspect the goods after their arrival before payment is
due, unless such inspection is inconsistent with the terms of the
contract (IC 26-1-2-513); and
(c) if delivery is authorized and made by way of documents of
title otherwise than by subdivision (b), then payment is due,
regardless of where the goods are to be received:
(i) at the time and place at which the buyer is to receive
delivery of the tangible documents; regardless of where the
goods are to be received or
(ii) at the time the buyer is to receive delivery of the
electronic documents and at the seller's place of business
or, if none, the seller's residence; and
(d) where the seller is required or authorized to ship the goods on
credit, the credit period runs from the time of shipment, but
postdating the invoice or delaying its dispatch will
correspondingly delay the starting of the credit period.
SOURCE: IC 26-1-2-323; (07)SE0419.1.11. -->
SECTION 11. IC 26-1-2-323 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 323. (1) Where the
contract contemplates overseas shipment and contains a term C.I.F. or
C.&F. or F.O.B. vessel, the seller, unless otherwise agreed, must obtain
a negotiable bill of lading stating that the goods have been loaded on
board or, in the case of a term C.I.F. or C.&F., received for shipment.
(2) Where in a case within subsection (1) a tangible bill of lading
has been issued in a set of parts, unless otherwise agreed, if the
documents are not to be sent from abroad, the buyer may demand
tender of the full set. Otherwise, only one (1) part of the bill of lading
need be tendered. Even if the agreement expressly requires a full set:
(a) due tender of a single part is acceptable within the provisions
of IC 26-1-2-508(1) on cure of improper delivery; and
(b) even though the full set is demanded, if the documents are
sent from abroad, the person tendering an incomplete set may
nevertheless require payments upon furnishing an indemnity
which the buyer in good faith deems adequate.
(3) A shipment by water or by air or a contract contemplating such
shipment is "overseas" insofar as by usage of trade or agreement it is
subject to the commercial, financing, or shipping practices
characteristic of international deep water commerce.
SOURCE: IC 26-1-2-401; (07)SE0419.1.12. -->
SECTION 12. IC 26-1-2-401 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 401. Each provision of
IC 26-1-2 with regard to the rights, obligations, and remedies of the
seller, the buyer, purchasers, or other third parties applies irrespective
of title to the goods, except where the provision refers to such title.
Insofar as situations are not covered by the other provisions of
IC 26-1-2 and matters concerning title become material, the following
rules apply:
(1) Title to goods cannot pass under a contract for sale prior to
their identification to the contract (IC 26-1-2-501), and unless
otherwise explicitly agreed, the buyer acquires by their
identification a special property as limited by IC 26-1. Any
retention or reservation by the seller of the title (property) in
goods shipped or delivered to the buyer is limited in effect to a
reservation of a security interest. Subject to these provisions and
to the provisions of IC 26-1-9.1 on secured transactions, title to
goods passes from the seller to the buyer in any manner and on
any conditions explicitly agreed on by the parties.
(2) Unless otherwise explicitly agreed, title passes to the buyer at
the time and place at which the seller completes his performance
with reference to the physical delivery of the goods, despite any
reservation of a security interest and even though a document of
title is to be delivered at a different time or place, and in
particular despite any reservation of a security interest by the bill
of lading:
(a) if the contract requires or authorizes the seller to send the
goods to the buyer but does not require him to deliver them at
destination, title passes to the buyer at the time and place of
shipment; but
(b) if the contract requires delivery at destination, title passes
on tender there.
(3) Unless otherwise explicitly agreed, where delivery is to be
made without moving the goods:
(a) if the seller is to deliver a tangible document of title, title
passes at the time when and the place where he delivers such
documents and if the seller is to deliver an electronic
document of title, title passes when the seller delivers the
document; or
(b) if the goods are at the time of contracting already identified
and no documents of title are to be delivered, title passes at
the time and place of contracting.
(4) A rejection or other refusal by the buyer to receive or retain
the goods, whether or not justified, or a justified revocation of
acceptance revests title to the goods in the seller. Such revesting
occurs by operation of law and is not a "sale".
SOURCE: IC 26-1-2-503; (07)SE0419.1.13. -->
SECTION 13. IC 26-1-2-503 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 503. (1) Tender of
delivery requires that the seller put and hold conforming goods at the
buyer's disposition and give the buyer any notification reasonably
necessary to enable him to take delivery. The manner, time and place
for tender are determined by the agreement and IC 26-1-2, and in
particular:
(a) tender must be at a reasonable hour, and if it is of goods they
must be kept available for the period reasonably necessary to
enable the buyer to take possession; but
(b) unless otherwise agreed, the buyer must furnish facilities
reasonably suited to the receipt of the goods.
(2) Where the case is within IC 26-1-2-504 respecting shipment,
tender requires that the seller comply with its provisions.
(3) Where the seller is required to deliver at a particular destination,
tender requires that he comply with subsection (1) and also in any
appropriate case tender documents as described in subsections (4) and
(5).
(4) Where goods are in the possession of a bailee and are to be
delivered without being moved:
(a) tender requires that the seller either tender a negotiable
document of title covering such goods or procure
acknowledgement by the bailee of the buyer's right to possession
of the goods; but
(b) tender to the buyer of a nonnegotiable document of title or of
a written direction to record directing the bailee to deliver is
sufficient tender unless the buyer seasonably objects, and except
as otherwise provided in IC 26-1-9.1, receipt by the bailee of
notification of the buyer's rights fixes those rights as against the
bailee and all third persons; but risk of loss of the goods and of
any failure by the bailee to honor the nonnegotiable document of
title or to obey the direction remains on the seller until the buyer
has had a reasonable time to present the document or direction,
and a refusal by the bailee to honor the document or to obey the
direction defeats the tender.
(5) Where the contract requires the seller to deliver documents:
(a) he must tender all such documents in correct form, except as
provided in IC 26-1-2-323(2) with respect to bills of lading in a
set; and
(b) tender through customary banking channels is sufficient and
dishonor of a draft accompanying the documents constitutes
nonacceptance or rejection.
SOURCE: IC 26-1-2-505; (07)SE0419.1.14. -->
SECTION 14. IC 26-1-2-505 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 505. (1) Where the
seller has identified goods to the contract by or before shipment:
(a) His procurement of a negotiable bill of lading to his own order
or otherwise reserves in him a security interest in the goods. His
procurement of the bill to the order of a financing agency or of the
buyer indicates in addition only the seller's expectation of
transferring that interest to the person named.
(b) A nonnegotiable bill of lading to himself or his nominee
reserves possession of the goods as security, but except in a case
of conditional delivery (IC 26-1-2-507(2)), a nonnegotiable bill of
lading naming the buyer as consignee reserves no security interest
even though the seller retains possession or control of the bill of
lading.
(2) When shipment by the seller with reservation of a security
interest is in violation of the contract for sale, it constitutes an improper
contract for transportation within IC 26-1-2-504, but impairs neither
the rights given to the buyer by shipment and identification of the
goods to the contract nor the seller's powers as a holder of a negotiable
document of title.
SOURCE: IC 26-1-2-506; (07)SE0419.1.15. -->
SECTION 15. IC 26-1-2-506 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 506. (1) A financing
agency by paying or purchasing for value a draft which relates to a
shipment of goods acquires to the extent of the payment or purchase
and in addition to its own rights under the draft and any document of
title securing it any rights of the shipper in the goods including the
right to stop delivery and the shipper's right to have the draft honored
by the buyer.
(2) The right to reimbursement of a financing agency which has in
good faith honored or purchased the draft under commitment to or
authority from the buyer is not impaired by subsequent discovery of
defects with reference to any relevant document which was apparently
regular. on its face.
SOURCE: IC 26-1-2-509; (07)SE0419.1.16. -->
SECTION 16. IC 26-1-2-509 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 509. (1) Where the
contract requires or authorizes the seller to ship the goods by carrier:
(a) if it does not require him to deliver them at a particular
destination, the risk of loss passes to the buyer when the goods are
duly delivered to the carrier even though the shipment is under
reservation (IC 26-1-2-505); but
(b) if it does require him to deliver them at a particular destination
and the goods are there duly tendered while in the possession of
the carrier, the risk of loss passes to the buyer when the goods are
there duly so tendered as to enable the buyer to take delivery.
(2) Where the goods are held by a bailee to be delivered without
being moved, the risk of loss passes to the buyer:
(a) on his receipt of possession or control of a negotiable
document of title covering the goods; or
(b) on acknowledgment by the bailee of the buyer's right to
possession of the goods; or
(c) after his receipt of possession or control of a nonnegotiable
document of title or other written direction to deliver in a record,
as provided in IC 26-1-2-503(4)(b).
(3) In any case not within subsection (1) or (2), the risk of loss
passes to the buyer on his receipt of the goods if the seller is a
merchant. Otherwise the risk passes to the buyer on tender of delivery.
(4) The provisions of this section are subject to contrary agreement
of the parties and to the provisions of IC 26-1-2-327 on sale on
approval and IC 26-1-2-510 on effect of breach on risk of loss.
SOURCE: IC 26-1-2-605; (07)SE0419.1.17. -->
SECTION 17. IC 26-1-2-605 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 605. (1) The buyer's
failure to state in connection with rejection a particular defect which is
ascertainable by reasonable inspection precludes him from relying on
the unstated defect to justify rejection or to establish breach:
(a) where the seller could have cured it if stated seasonably; or
(b) between merchants when the seller has after rejection made a
request in writing for a full and final written statement of all
defects on which the buyer proposes to rely.
(2) Payment against documents made without reservation of rights
precludes recovery of the payment for defects apparent on the face of
in the documents.
SOURCE: IC 26-1-2-705; (07)SE0419.1.18. -->
SECTION 18. IC 26-1-2-705 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 705. (1) The seller may
stop delivery of goods in the possession of a carrier or other bailee
when he discovers the buyer to be insolvent (IC 26-1-2-702) and may
stop delivery of carload, truckload, planeload, or larger shipments of
express or freight when the buyer repudiates or fails to make a payment
due before delivery or if for any other reason the seller has a right to
withhold or reclaim the goods.
(2) As against such buyer the seller may stop delivery until:
(a) receipt of the goods by the buyer; or
(b) acknowledgment to the buyer by any bailee of the goods
except a carrier that the bailee holds the goods for the buyer; or
(c) such acknowledgment to the buyer by a carrier by reshipment
or as warehouseman a warehouse; or
(d) negotiation to the buyer of any negotiable document of title
covering the goods.
(3) (a) To stop delivery, the seller must so notify as to enable the
bailee by reasonable diligence to prevent delivery of the goods.
(b) After such notification, the bailee must hold and deliver the
goods according to the directions of the seller, but the seller is liable to
the bailee for any ensuing charges or damages.
(c) If a negotiable document of title has been issued for goods, the
bailee is not obliged to obey a notification to stop until surrender of
possession or control of the document.
(d) A carrier who has issued a nonnegotiable bill of lading is not
obliged to obey a notification to stop received from a person other than
the consignor.
SOURCE: IC 26-1-2.1-103; (07)SE0419.1.19. -->
SECTION 19. IC 26-1-2.1-103 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 103. (1) Unless the
context otherwise requires, in IC 26-1-2.1:
(a) "Buyer in ordinary course of business" means a person who in
good faith and without knowledge that the sale to the person is in
violation of the ownership rights or security interest or leasehold
interest of a third party in the goods, buys in ordinary course from
a person in the business of selling goods of that kind but does not
include a pawnbroker. "Buying" may be for cash or by exchange
of other property or on secured or unsecured credit and includes
receiving acquiring goods or documents of title under a
pre-existing contract for sale but does not include a transfer in
bulk or as security for or in total or partial satisfaction of a money
debt.
(b) "Cancellation" occurs when either party puts an end to the
lease contract for default by the other party.
(c) "Commercial unit" means such a unit of goods as by
commercial usage is a single whole for purposes of lease and
division of which materially impairs its character or value on the
market or in use. A commercial unit may be a single article, as a
machine, or a set of articles, as a suite of furniture or a line of
machinery, or a quantity, as a gross or carload, or any other unit
treated in use or in the relevant market as a single whole.
(d) "Conforming" goods or performance under a lease contract
means goods or performance that are in accordance with the
obligations under the lease contract.
(e) "Consumer lease" means a lease that a lessor regularly
engaged in the business of leasing or selling makes to a lessee
who is an individual and who takes under the lease primarily for
a personal, family, or household purpose if the total payments to
be made under the lease contract, excluding payments for options
to renew or buy, do not exceed twenty-five thousand dollars
($25,000).
(f) "Fault" means wrongful act, omission, breach, or default.
(g) "Finance lease" means a lease with respect to which:
(i) the lessor does not select, manufacture, or supply the goods;
(ii) the lessor acquires the goods or the right to possession and
use of the goods in connection with the lease; and
(iii) one (1) of the following occurs:
(A) the lessee receives a copy of the contract by which the
lessor acquired the goods or the right to possession and use
of the goods before signing the lease contract;
(B) the lessee's approval of the contract by which the lessor
acquired the goods or the right to possession and use of the
goods is a condition to effectiveness of the lease contract;
(C) the lessee, before signing the lease contract, receives an
accurate and complete statement designating the promises
and warranties, and any disclaimers of warranties,
limitations, or modifications of remedies, or liquidated
damages, including those of a third party, such as the
manufacturer of the goods, provided to the lessor by the
person supplying the goods in connection with or as part of
the contract by which the lessor acquired the goods or the
right to possession and use of the goods; or
(D) if the lease is not a consumer lease, the lessor, before the
lessee signs the lease contract, informs the lessee in writing:
(a) of the identity of the person supplying the goods to the
lessor, unless the lessee has selected that person and
directed the lessor to acquire the goods or the right to
possession and use of the goods from that person; (b) that
the lessee is entitled under IC 26-1-2.1 to the promises and
warranties, including those of any third party, provided to
the lessor by the person supplying the goods in connection
with or as part of the contract by which the lessor acquired
the goods or the right to possession and use of the goods;
and (c) that the lessee may communicate with the person
supplying the goods to the lessor and receive an accurate
and complete statement of those promises and warranties,
including any disclaimers and limitations of them or of
remedies.
(h) "Goods" means all things that are movable at the time of
identification to the lease contract, or are fixtures
(IC 26-1-2.1-309), but the term does not include money,
documents, instruments, accounts, chattel paper, general
intangibles, or minerals or the like, including oil and gas, before
extraction. The term also includes the unborn young of animals.
(i) "Installment lease contract" means a lease contract that
authorizes or requires the delivery of goods in separate lots to be
separately accepted, even though the lease contract contains a
clause "each delivery is a separate lease" or its equivalent.
(j) "Lease" means a transfer of the right to possession and use of
goods for a term in return for consideration, but a sale, including
a sale on approval or a sale or return, or retention or creation of a
security interest is not a lease. Unless the context clearly indicates
otherwise, the term includes a sublease.
(k) "Lease agreement" means the bargain, with respect to the
lease, of the lessor and the lessee in fact as found in their
language or by implication from other circumstances including
course of dealing or usage of trade or course of performance as
provided in IC 26-1-2.1. Unless the context clearly indicates
otherwise, the term includes a sublease agreement.
(l) "Lease contract" means the total legal obligation that results
from the lease agreement as affected by IC 26-1-2.1 and any other
applicable rules of law. Unless the context clearly indicates
otherwise, the term includes a sublease contract.
(m) "Leasehold interest" means the interest of the lessor or the
lessee under a lease contract.
(n) "Lessee" means a person who acquires the right to possession
and use of goods under a lease. Unless the context clearly
indicates otherwise, the term includes a sublessee.
(o) "Lessee in ordinary course of business" means a person who
in good faith and without knowledge that the lease to the person
is in violation of the ownership rights or security interest or
leasehold interest of a third party in the goods leases in ordinary
course from a person in the business of selling or leasing goods of
that kind but does not include a pawnbroker. "Leasing" may be for
cash or by exchange of other property or on secured or unsecured
credit and includes
receiving acquiring goods or documents of
title under a pre-existing lease contract but does not include a
transfer in bulk or as security for or in total or partial satisfaction
of a money debt.
(p) "Lessor" means a person who transfers the right to possession
and use of goods under a lease. Unless the context clearly
indicates otherwise, the term includes a sublessor.
(q) "Lessor's residual interest" means the lessor's interest in the
goods after expiration, termination, or cancellation of the lease
contract.
(r) "Lien" means a charge against or interest in goods to secure
payment of a debt or performance of an obligation, but the term
does not include a security interest.
(s) "Lot" means a parcel or a single article that is the subject
matter of a separate lease or delivery, whether or not it is
sufficient to perform the lease contract.
(t) "Merchant lessee" means a lessee that is a merchant with
respect to goods of the kind subject to the lease.
(u) "Present value" means the amount as of a date certain of one
(1) or more sums payable in the future, discounted to the date
certain. The discount is determined by the interest rate specified
by the parties if the rate was not manifestly unreasonable at the
time the transaction was entered into; otherwise, the discount is
determined by a commercially reasonable rate that takes into
account the facts and circumstances of each case at the time the
transaction was entered into.
(v) "Purchase" includes taking by sale, lease, mortgage, security
interest, pledge, gift, or any other voluntary transaction creating
an interest in goods.
(w) "Sublease" means a lease of goods the right to possession and
use of which was acquired by the lessor as a lessee under an
existing lease.
(x) "Supplier" means a person from whom a lessor buys or leases
goods to be leased under a finance lease.
(y) "Supply contract" means a contract under which a lessor buys
or leases goods to be leased.
(z) "Termination" occurs when either party pursuant to a power
created by agreement or law puts an end to the lease contract
otherwise than for default.
(2) Other definitions applying to IC 26-1-2.1 and the sections in
which they appear are:
"Accessions". IC 26-1-2.1-310(1).
"Construction mortgage". IC 26-1-2.1-309(1)(d).
"Encumbrance". IC 26-1-2.1-309(1)(e).
"Fixtures". IC 26-1-2.1-309(1)(a).
"Fixture filing". IC 26-1-2.1-309(1)(b).
"Purchase money lease". IC 26-1-2.1-309(1)(c).
(3) The following definitions in other chapters apply to IC 26-1-2.1:
"Account". IC 26-1-9.1-102(a)(2).
"Between merchants". IC 26-1-2-104(3).
"Buyer". IC 26-1-2-103(1)(a).
"Chattel paper". IC 26-1-9.1-102(a)(11).
"Consumer goods". IC 26-1-9.1-102(a)(23).
"Document". IC 26-1-9.1-102(a)(30).
"Entrusting". IC 26-1-2-403(3).
"General intangibles". IC 26-1-9.1-102(a)(42).
"Good faith". IC 26-1-2-103(1)(b).
"Instrument". IC 26-1-9.1-102(a)(47).
"Merchant". IC 26-1-2-104(1).
"Mortgage". IC 26-1-9.1-102(a)(55).
"Pursuant to commitment". IC 26-1-9.1-102(a)(68).
"Receipt". IC 26-1-2-103(1)(c).
"Sale". IC 26-1-2-106(1).
"Sale on approval". IC 26-1-2-326.
"Sale or return". IC 26-1-2-326.
"Seller". IC 26-1-2-103(1)(d).
(4) In addition, IC 26-1-1 contains general definitions and principles
of construction and interpretation applicable throughout IC 26-1-2.1.
SOURCE: IC 26-1-2.1-514; (07)SE0419.1.20. -->
SECTION 20. IC 26-1-2.1-514 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 514. (1) In rejecting
goods, a lessee's failure to state a particular defect that is ascertainable
by reasonable inspection precludes the lessee from relying on the
defect to justify rejection or to establish default:
(a) if, stated seasonably, the lessor or the supplier could have
cured it (IC 26-1-2.1-513); or
(b) between merchants if the lessor or the supplier after rejection
has made a request in writing for a full and final written statement
of all defects on which the lessee proposes to rely.
(2) A lessee's failure to reserve rights when paying rent or other
consideration against documents precludes recovery of the payment for
defects apparent on the face of in the documents.
SOURCE: IC 26-1-2.1-526; (07)SE0419.1.21. -->
SECTION 21. IC 26-1-2.1-526 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 526. (1) A lessor may
stop delivery of goods in the possession of a carrier or other bailee if
the lessor discovers the lessee to be insolvent and may stop delivery of
carload, truckload, planeload, or larger shipments of express or freight
if the lessee repudiates or fails to make a payment due before delivery,
whether for rent, security, or otherwise under the lease contract, or for
any other reason the lessor has a right to withhold or take possession of
the goods.
(2) In pursuing its remedies under subsection (1), the lessor may
stop delivery until:
(a) receipt of the goods by the lessee;
(b) acknowledgment to the lessee by any bailee of the goods,
except a carrier, that the bailee holds the goods for the lessee; or
(c) such an acknowledgment to the lessee by a carrier via
reshipment or as warehouseman a warehouse.
(3)(a) To stop delivery, a lessor shall so notify as to enable the
bailee by reasonable diligence to prevent delivery of the goods.
(b) After notification, the bailee shall hold and deliver the goods
according to the directions of the lessor, but the lessor is liable to
the bailee for any ensuing charges or damages.
(c) A carrier who has issued a nonnegotiable bill of lading is not
obliged to obey a notification to stop received from a person other
than the consignor.
SOURCE: IC 26-1-4-104; (07)SE0419.1.22. -->
SECTION 22. IC 26-1-4-104 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 104. (a) In IC 26-1-4,
unless the context otherwise requires:
(1) "Account" means any deposit or credit account with a bank,
including a demand, time, savings, passbook, share draft, or like
account, other than an account evidenced by a certificate of
deposit.
(2) "Afternoon" means the period of a day between noon and
midnight.
(3) "Banking day" means the part of a day on which a bank is
open to the public for carrying on substantially all of its banking
functions, but does not include Saturday, Sunday, or a legal
holiday.
(4) "Clearing house" means an association of banks or other
payors regularly clearing items.
(5) "Customer" means a person having an account with a bank or
for whom a bank has agreed to collect items, including a bank that
maintains an account at another bank.
(6) "Documentary draft" means a draft to be presented for
acceptance or payment if specified documents, certificated
securities (IC 26-1-8.1-102), or instructions for uncertificated
securities (IC 26-1-8.1-102) or other certificates, statements, or
the like are to be received by the drawee or other payor before
acceptance or payment of the draft.
(7) "Draft" means a draft (as defined in IC 26-1-3.1-104) or an
item, other than an instrument, that is an order.
(8) "Drawee" means a person ordered in a draft to make payment.
(9) "Item" means an instrument or a promise or order to pay
money handled by a bank for collection or payment. The term
does not include a payment order governed by IC 26-1-4.1 or a
credit or debit card slip.
(10) "Midnight deadline" with respect to a bank is midnight on its
next banking day following the banking day on which it receives
the relevant item or notice or from which the time for taking
action commences to run, whichever is later.
(11) "Settle" means to pay in cash, by clearing-house settlement,
in a charge or credit, or by remittance, or otherwise as instructed.
A settlement may be either provisional or final.
(12) "Suspends payments" with respect to a bank means that it has
been closed by order of the supervisory authorities, that a public
officer has been appointed to take it over, or that it ceases or
refuses to make payments in the ordinary course of business.
(b) Other definitions applying to IC 26-1-4 and the sections in which
they appear are:
"Agreement for electronic presentment". IC 26-1-4-110.
"Bank". IC 26-1-4-105.
"Collecting bank". IC 26-1-4-105.
"Depositary bank". IC 26-1-4-105.
"Intermediary bank". IC 26-1-4-105.
"Payor bank". IC 26-1-4-105.
"Presenting bank". IC 26-1-4-105.
"Presentment notice". IC 26-1-4-110.
(c) "Control" as provided in IC 26-1-7-106 and the following
definitions in IC 26-1-3.1 apply to IC 26-1-4:
"Acceptance". IC 26-1-3.1-409.
"Alteration". IC 26-1-3.1-407.
"Cashier's check". IC 26-1-3.1-104.
"Certificate of deposit". IC 26-1-3.1-104.
"Certified check". IC 26-1-3.1-409.
"Check". IC 26-1-3.1-104.
"Holder in due course". IC 26-1-3.1-302.
"Instrument". IC 26-1-3.1-104.
"Notice of dishonor". IC 26-1-3.1-503.
"Order". IC 26-1-3.1-103.
"Ordinary care". IC 26-1-3.1-103.
"Person entitled to enforce". IC 26-1-3.1-301.
"Presentment". IC 26-1-3.1-501.
"Promise". IC 26-1-3.1-103.
"Prove". IC 26-1-3.1-103.
"Teller's check". IC 26-1-3.1-104.
"Unauthorized signature". IC 26-1-3.1-403.
(d) In addition, IC 26-1-1 contains general definitions and principles
of construction and interpretation applicable throughout IC 26-1-4.
SOURCE: IC 26-1-4-210; (07)SE0419.1.23. -->
SECTION 23. IC 26-1-4-210 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 210. (a) A collecting
bank has a security interest in an item and any accompanying
documents or the proceeds of either:
(1) in the case of an item deposited in an account, to the extent to
which credit given for the item has been withdrawn or applied;
(2) in the case of an item for which it has given credit available
for withdrawal as of right, to the extent of the credit given,
whether or not the credit is drawn upon or there is a right of
charge-back; or
(3) if it makes an advance on or against the item.
(b) If credit given for several items received at one (1) time or under
a single agreement is withdrawn or applied in part, the security interest
remains upon all the items, any accompanying documents, or the
proceeds of either. For the purpose of this section, credits first given
are first withdrawn.
(c) Receipt by a collecting bank of a final settlement for an item is
a realization on its security interest in the item, accompanying
documents, and proceeds. So long as the bank does not receive final
settlement for the item or give up possession of the item or possession
or control of the accompanying documents for purposes other than
collection, the security interest continues to that extent and is subject
to IC 26-1-9.1, but:
(1) no security agreement is necessary to make the security
interest enforceable (IC 26-1-9.1-203(b)(3)(A));
(2) no filing is required to perfect the security interest; and
(3) the security interest has priority over conflicting perfected
security interests in the item, accompanying documents, or
proceeds.
SOURCE: IC 26-1-7-101; (07)SE0419.1.24. -->
SECTION 24. IC 26-1-7-101 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 101. IC 26-1-7 shall be
known and This chapter may be cited as Uniform Commercial Code
. Documents of Title.
SOURCE: IC 26-1-7-102; (07)SE0419.1.25. -->
SECTION 25. IC 26-1-7-102 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 102.
(1) (a) In
IC 26-1-7, this chapter unless the context otherwise requires:
(a) (1) "Bailee" means
the a person
who that by a warehouse
receipt, bill of lading, or other document of title acknowledges
possession of goods and contracts to deliver them.
(2) "Carrier" means a person that issues a bill of lading.
(b) (3) "Consignee" means the a person named in a bill of lading
to whom which or to whose order the bill promises delivery.
(c) (4) "Consignor" means the a person named in a bill of lading
as the person from whom which the goods have been received for
shipment.
(d) (5) "Delivery order" means a written record that contains an
order to deliver goods directed to a warehouseman, warehouse,
carrier, or other person who that in the ordinary course of
business issues warehouse receipts or bills of lading.
(e) "Document" means document of title as defined in the general
definitions in IC 26-1-1-201.
(6) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(f) (7) "Goods" means all things which that are treated as
movable for the purposes of a contract of for storage or
transportation.
(g) (8) "Issuer" means a bailee who that issues a document except
that of title or, in relation to the case of an unaccepted delivery
order, it means the person who that orders the possessor of goods
to deliver. Issuer The term includes any a person for whom
which an agent or employee purports to act in issuing a document
if the agent or employee has real or apparent authority to issue
documents, notwithstanding that even if the issuer received no
did not receive any goods, or that the goods were misdescribed,
or that in any other respect the agent or employees employee
violated his the issuer's instructions.
(9) "Person entitled under the document" means the holder,
in the case of a negotiable document of title, or the person to
which delivery of the goods is to be made by the terms of, or
pursuant to instructions in a record under, a nonnegotiable
document of title.
(10) "Record" means information that is inscribed on a
tangible medium or that is stored in an electronic or other
medium and is retrievable in perceivable form.
(11) "Shipper" means a person that enters into a contract of
transportation with a carrier.
(12) "Sign" means, with present intent to authenticate or
adopt a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record an
electronic sound, symbol, or process.
(h) "Warehouseman" is (13) "Warehouse" means a person
engaged in the business of storing goods for hire.
(2) (b) Other definitions applying to IC 26-1-7 this chapter and the
sections in which they appear are:
"Duly negotiate". IC 26-1-7-501.
"Person entitled under the document". IC 26-1-7-403(4).
(3) Definitions in IC 26-1-2 applying to IC 26-1-7 and the sections
in which they appear are:
"Contract for sale". IC 26-1-2-106.
"Overseas". IC 26-1-2-323.
"Lessee in the ordinary course of business".
IC 26-1-2.1-103(o).
"Receipt" of goods. IC 26-1-2-103.
(4) (c) In addition, IC 26-1-1 contains general definitions and
principles of construction and interpretation applicable throughout
IC 26-1-7. this chapter.
SOURCE: IC 26-1-7-103; (07)SE0419.1.26. -->
SECTION 26. IC 26-1-7-103 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 103. To the extent that
(a) This chapter is subject to any treaty or statute of the United States
or regulatory statute of this state or tariff, classification, rule, or
regulation filed or issued pursuant thereto is applicable, the provisions
of IC 26-1-7 are subject thereto. to the extent the treaty, statute, or
regulatory statute applies.
(b) This chapter does not modify or repeal any law prescribing
the form or content of a document of title or the services or
facilities to be afforded by a bailee, or otherwise regulating a
bailee's business in respects not specifically treated in this article.
However, violation of such a law does not affect the status of a
document of title that otherwise is within the definition of a
document of title.
(c) This chapter modifies, limits, and supersedes the federal
Electronic Signatures in Global and National Commerce Act (15
U.S.C. 7001 et seq.) but does not modify, limit, or supersede Section
101(c) of that act (15 U.S.C. 7001(c)) or authorize electronic
delivery of any of the notices described in section 103(b) of that act
(15 U.S.C. 7003(b)).
(d) To the extent there is a conflict between IC 26-2-8 and this
chapter, this chapter governs.
SOURCE: IC 26-1-7-104; (07)SE0419.1.27. -->
SECTION 27. IC 26-1-7-104 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 104.
(1) (a) Except as
otherwise provided in subsection (c), a warehouse receipt, bill of
lading or other document of title is negotiable
(a) if by its terms the goods are to be delivered to bearer or to the
order of a named person. or
(b) where recognized in overseas trade, if it runs to a named person
or assigns.
(2) Any other (b) A document of title other than one described in
subsection (a) is nonnegotiable. A bill of lading in which it is stated
that states that the goods are consigned to a named person is not made
negotiable by a provision that the goods are to be delivered only against
a written an order in a record signed by the same or another named
person.
(c) A document of title is nonnegotiable if, at the time it is issued,
the document has a conspicuous legend, however expressed, that it
is nonnegotiable.
SOURCE: IC 26-1-7-105; (07)SE0419.1.28. -->
SECTION 28. IC 26-1-7-105 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 105.
The omission from
either part 2 (IC 26-1-7-201 through IC 26-1-7-210) or part 3
(IC 26-1-7-301 through IC 26-1-7-309) of a provision corresponding
to a provision made in the other part does not imply that a
corresponding rule of law is not applicable. (a) Upon request of a
person entitled under an electronic document of title, the issuer of
the electronic document may issue a tangible document of title as
a substitute for the electronic document if:
(1) the person entitled under the electronic document
surrenders control of the document to the issuer; and
(2) the tangible document when issued contains a statement
that it is issued in substitution for the electronic document.
(b) Upon issuance of a tangible document of title in substitution
for an electronic document of title in accordance with subsection
(a):
(1) the electronic document ceases to have any effect or
validity; and
(2) the person that procured issuance of the tangible
document warrants to all subsequent persons entitled under
the tangible document that the warrantor was a person
entitled under the electronic document when the warrantor
surrendered control of the electronic document to the issuer.
(c) Upon request of a person entitled under a tangible document
of title, the issuer of the tangible document may issue an electronic
document of title as a substitute for the tangible document if:
(1) the person entitled under the tangible document
surrenders possession of the document to the issuer; and
(2) the electronic document when issued contains a statement
that it is issued in substitution for the tangible document.
(d) Upon issuance of an electronic document of title in
substitution for a tangible document of title in accordance with
subsection (c):
(1) the tangible document ceases to have any effect or validity;
and
(2) the person that procured issuance of the electronic
document warrants to all subsequent persons entitled under
the electronic document that the warrantor was a person
entitled under the tangible document when the warrantor
surrendered possession of the tangible document to the issuer.
SOURCE: IC 26-1-7-106; (07)SE0419.1.29. -->
SECTION 29. IC 26-1-7-106 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2007]: Sec. 106. (a) A person has control of
an electronic document of title if a system employed for evidencing
the transfer of interests in the electronic document reliably
establishes that person as the person to which the electronic
document was issued or transferred.
(b) A system satisfies subsection (a), and a person is deemed to
have control of an electronic document of title, if the document is
created, stored, and assigned in such a manner that:
(1) a single authoritative copy of the document exists that is
unique, identifiable, and, except as otherwise provided in
subdivisions (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the person asserting
control as:
(A) the person to which the document was issued; or
(B) if the authoritative copy indicates that the document
has been transferred, the person to which the document
was most recently transferred;
(3) the authoritative copy is communicated to and maintained
by the person asserting control or its designated custodian;
(4) copies or amendments that add or change an identified
assignee of the authoritative copy can be made only with the
consent of the person asserting control;
(5) each copy of the authoritative copy and any copy of a copy
is readily identifiable as a copy that is not the authoritative
copy; and
(6) any amendment of the authoritative copy is readily
identifiable as authorized or unauthorized.
SOURCE: IC 26-1-7-201; (07)SE0419.1.30. -->
SECTION 30. IC 26-1-7-201 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 201. (1) (a) A
warehouse receipt may be issued by any warehouseman. warehouse.
(2) Where (b) If goods, including distilled spirits and agricultural
commodities, are stored under a statute requiring a bond against
withdrawal or a license for the issuance of receipts in the nature of
warehouse receipts, a receipt issued for the goods has like effect as is
considered to be a warehouse receipt even though if issued by a
person who that is the owner of the goods and is not a warehouseman.
warehouse.
SOURCE: IC 26-1-7-202; (07)SE0419.1.31. -->
SECTION 31. IC 26-1-7-202 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 202.
(1) (a) A
warehouse receipt need not be in any particular form.
(2) (b) Unless a warehouse receipt
embodies within its written or
printed terms provides for each of the following, the
warehouseman
warehouse is liable for damages caused
by the omission to a person
injured
thereby: by its omission:
(a) (1) a statement of the location of the warehouse
facility
where the goods are stored;
(b) (2) the date of issue of the receipt;
(c) (3) the
consecutive number unique identification code of the
receipt;
(d) (4) a statement whether the goods received will be delivered
to the bearer, to a
specified named person, or to a
specified
named person or
his the person's order;
(e) (5) the rate of storage and handling charges,
except that where
unless goods are stored under a field warehousing arrangement,
in which case a statement of that fact is sufficient on a
nonnegotiable receipt;
(f) (6) a description of the goods or
of the packages containing
them;
(g) (7) the signature of the
warehouseman, which may be made by
his authorized warehouse or its agent;
(h) (8) if the receipt is issued for goods
of which that the
warehouseman is owner, warehouse owns, either solely,
or
jointly, or in common with others, the fact of
such that
ownership; and
(i) (9) a statement of the amount of advances made and of
liabilities incurred for which the
warehouseman warehouse
claims a lien or security interest
(IC 26-1-7-209). If unless the
precise amount of
such advances made or
of such liabilities
incurred
is, at the time of the issue of the receipt
is unknown to
the warehouseman warehouse or to his its agent who issues it,
that issued the receipt, in which case a statement of the fact that
advances have been made or liabilities incurred and the purpose
thereof of the advances or liabilities is sufficient.
(3) (c) A warehouseman warehouse may insert in his its receipt any
other terms which that are not contrary to the provisions of IC 26-1 and
do not impair his its obligation of delivery (IC 26-1-7-403) under
section 403 of this chapter or his its duty of care (IC 26-1-7-204).
under section 204 of this chapter. Any contrary provisions shall be
are ineffective.
SOURCE: IC 26-1-7-203; (07)SE0419.1.32. -->
SECTION 32. IC 26-1-7-203 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 203. A party to or
purchaser for value in good faith of a document of title, other than a bill
of lading, relying in either case that relies upon the description therein
of the goods in the document may recover from the issuer damages
caused by the nonreceipt or misdescription of the goods, except to the
extent that:
(1) the document conspicuously indicates that the issuer does not
know whether all or any part or all of the goods in fact were
received or conform to the description, such as where a case in
which the description is in terms of marks or labels or kind,
quantity, or condition, or the receipt or description is qualified by
"contents, condition, and quality unknown", "said to contain", or
the like, words of similar import, if such the indication be is
true; or
(2) the party or purchaser otherwise has notice of the nonreceipt
or misdescription.
SOURCE: IC 26-1-7-204; (07)SE0419.1.33. -->
SECTION 33. IC 26-1-7-204 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 204.
(1) (a) A
warehouseman warehouse is liable for damages for loss of or injury to
the goods caused by
his its failure to exercise
such care
in with regard
to
them as the goods that a reasonably careful
man person would
exercise under
like similar circumstances.
but Unless otherwise
agreed,
he the warehouse is not liable for damages
which that could
not have been avoided by the exercise of
such that care.
(2) (b) Damages may be limited by a term in the warehouse receipt
or storage agreement limiting the amount of liability in case of loss or
damage
and setting forth a specific liability per article or item, or value
per unit of weight, beyond which the
warehouseman shall warehouse
is not
be liable.
provided, however, that such liability may on written
Such a limitation is not effective with respect to the warehouse's
liability for conversion to its own use. On request of the bailor
in a
record at the time of signing such the storage agreement or within a
reasonable time after receipt of the warehouse receipt, the
warehouse's liability may be increased on part or all of the goods
thereunder, in which covered by the storage agreement or the
warehouse receipt. In this event, increased rates may be charged
based on such an increased valuation but that no such increase shall be
permitted contrary to a lawful limitation of liability contained in the
warehouseman's tariff, if any. No such limitation is effective with
respect to the warehouseman's liability for conversion to his own use.
of the goods.
(3) (c) Reasonable provisions as to the time and manner of
presenting claims and instituting commencing actions based on the
bailment may be included in the warehouse receipt or tariff. storage
agreement.
SOURCE: IC 26-1-7-205; (07)SE0419.1.34. -->
SECTION 34. IC 26-1-7-205 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 205. A buyer in the
ordinary course of business of fungible goods sold and delivered by a
warehouseman who warehouse that is also in the business of buying
and selling such goods takes the goods free of any claim under a
warehouse receipt even though it if the receipt is negotiable and has
been duly negotiated.
SOURCE: IC 26-1-7-206; (07)SE0419.1.35. -->
SECTION 35. IC 26-1-7-206 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 206.
(1) (a) A
warehouseman may on notifying warehouse, by giving notice to the
person on whose account the goods are held and any other person
known to claim an interest in the goods,
may require payment of any
charges and removal of the goods from the warehouse at the
termination of the period of storage fixed by the document
of title, or,
if
no a period is
not fixed, within a stated period not less than thirty
(30) days after the
notification. warehouse gives notice. If the goods
are not removed before the date specified in the
notification, notice, the
warehouseman warehouse may sell them
in accordance with the
provisions of the under section
210 of this chapter on enforcement of
a
warehouseman's warehouse's lien.
(IC 26-1-7-210).
(2) (b) If a
warehouseman warehouse in good faith believes that
the
goods are about to deteriorate or decline in value to less than the
amount of
his its lien within the time
prescribed provided in
subsection
(1) for notification, advertisement, and sale, (a) and section
210 of this chapter, the
warehouseman warehouse may specify in the
notification notice given under subsection (a) any reasonable shorter
time for removal of the goods and,
in case if the goods are not
removed, may sell them at public sale held not less than one (1) week
after a single advertisement or posting.
(3) (c) If, as a result of a quality or condition of the goods of which
the warehouseman had no warehouse did not have notice at the time
of deposit, the goods are a hazard to other property, or to the warehouse
facilities, or to other persons, the warehouseman warehouse may sell
the goods at public or private sale without advertisement or posting on
reasonable notification to all persons known to claim an interest in the
goods. If the warehouseman warehouse, after a reasonable effort, is
unable to sell the goods, he the warehouse may dispose of them in any
lawful manner and shall does not incur no liability by reason of such
the disposition.
(4) The warehouseman must (d) A warehouse shall deliver the
goods to any person entitled to them under IC 26-1-7 this chapter
upon due demand made at any time prior to before sale or other
disposition under this section.
(5) The warehouseman (e) A warehouse may satisfy his its lien
from the proceeds of any sale or disposition under this section but must
shall hold the balance for delivery on the demand of any person to
whom he which the warehouse would have been bound to deliver the
goods.
SOURCE: IC 26-1-7-207; (07)SE0419.1.36. -->
SECTION 36. IC 26-1-7-207 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 207. (1) (a) Unless the
warehouse receipt otherwise provides, a warehouseman must
warehouse shall keep separate the goods covered by each receipt so
as to permit at all times identification and delivery of those goods.
except that However, different lots of fungible goods may be
commingled.
(2) (b) If different lots of fungible goods so are commingled, the
goods are owned in common by the persons entitled thereto and the
warehouseman warehouse is severally liable to each owner for that
owner's share. Where If because of overissue, a mass of fungible goods
is insufficient to meet all the receipts which the warehouseman
warehouse has issued against it, the persons entitled include all
holders to whom which overissued receipts have been duly negotiated.
SOURCE: IC 26-1-7-208; (07)SE0419.1.37. -->
SECTION 37. IC 26-1-7-208 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 208. Where If a blank
in a negotiable tangible warehouse receipt has been filled in without
authority, a good faith purchaser for value and without notice of the
want lack of authority may treat the insertion as authorized. Any other
unauthorized alteration leaves any tangible or electronic warehouse
receipt enforceable against the issuer according to its original tenor.
SOURCE: IC 26-1-7-209; (07)SE0419.1.38. -->
SECTION 38. IC 26-1-7-209 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 209. (1) (a) A
warehouseman warehouse has a lien against the bailor on the goods
covered by a warehouse receipt or storage agreement or on the
proceeds thereof in his its possession for charges for storage or
transportation, including demurrage and terminal charges, insurance,
labor, or other charges, present or future, in relation to the goods, and
for expenses necessary for preservation of the goods or reasonably
incurred in their sale pursuant to law. If the person on whose account
the goods are held is liable for like similar charges or expenses in
relation to other goods whenever deposited and it is stated in the
warehouse's receipt or storage agreement that a lien is claimed for
charges and expenses in relation to other goods, the warehouseman
warehouse also has a lien against him for such the goods covered by
the warehouse receipt or storage agreement or on the proceeds
thereof in its possession for the charges and expenses, whether or not
the other goods have been delivered by the warehouseman. But
warehouse. However, as against a person to whom which a negotiable
warehouse receipt is duly negotiated, a warehouseman's warehouse's
lien is limited to charges in an amount or at a rate specified on in the
warehouse receipt or, if no charges are so specified, then to a
reasonable charge for storage of the specific goods covered by the
receipt subsequent to the date of the receipt.
(2) The warehouseman (b) A warehouse may also reserve a security
interest against the bailor for a the maximum amount specified on the
receipt for charges other than those specified in subsection (1), (a),
such as for money advanced and interest. Such a The security interest
is governed by IC 26-1-9.1 on secured transactions.
(3) A warehouseman's (c) A warehouse's lien for charges and
expenses under subsection (1) (a) or a security interest under
subsection (2) (b) is also effective against any person who so that
entrusted the bailor with possession of the goods that a pledge of them
by him the bailor to a good faith purchaser for value would have been
valid. but However, the lien or security interest is not effective
against a person as to whom the document confers no right in the goods
covered by it under IC 26-1-7-503. that before issuance of a
document of title had a legal interest or a perfected security
interest in the goods and that did not:
(1) deliver or entrust the goods or any document of title
covering the goods to the bailor or the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
(B) power to obtain delivery under section 403 of this
chapter; or
(C) power of disposition under IC 26-1-2-403,
IC 26-1-2.1-304(2), IC 26-1-2.1-305(2), IC 26-1-9.1-320, or
IC 26-1-9.1-321 or any other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee
of any document.
(d) For purposes of this subsection, "household goods" means
furniture, furnishings, or personal effects used by the depositor in
a dwelling. A warehouse's lien on household goods for charges and
expenses in relation to the goods under subsection (a) is also
effective against all persons if the depositor was the legal possessor
of the goods at the time of deposit.
(4) (e) A warehouseman warehouse loses his its lien on any goods
which he that the warehouse voluntarily delivers or which he
unjustifiably refuses to deliver.
SOURCE: IC 26-1-7-210; (07)SE0419.1.39. -->
SECTION 39. IC 26-1-7-210 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 210.
(1) (a) Except as
otherwise provided in subsection
(2), (b), a
warehouseman's
warehouse's lien may be enforced by public or private sale of the
goods, in
block bulk or in
parcels, packages, at any time or place and
on any terms
which that are commercially reasonable, after notifying
all persons known to claim an interest in the goods.
Such The
notification must include a statement of the amount due, the nature of
the proposed sale, and the time and place of any public sale. The fact
that a better price could have been obtained by a sale at a different time
or in a
method different
method from that selected by the
warehouseman warehouse is not of itself sufficient to establish that the
sale was not made in a commercially reasonable manner.
The
warehouse sells in a commercially reasonable manner if the
warehouseman either warehouse sells the goods in the usual manner
in any recognized market therefor,
or if he sells at the price current in
such that market at the time of
his the warehouse's sale, or
if he has
otherwise
sold sells in conformity with commercially reasonable
practices among dealers in the type of goods sold.
he has sold in a
commercially reasonable manner. A sale of more goods than apparently
necessary to be offered to
insure ensure satisfaction of the obligation
is not commercially reasonable except in cases covered by the
preceding sentence.
(2) (b) A
warehouseman's warehouse may enforce its lien on
goods other than goods stored by a merchant in the course of
his its
business
may be enforced only as follows: if the following
requirements are satisfied:
(a) (1) All persons known to claim an interest in the goods must
be notified.
(b) The notification must be delivered in person or sent by
registered letter to the last known address of any person to be
notified.
(c) (2) The notification must include an itemized statement of the
claim, a description of the goods subject to the lien, a demand for
payment within a specified time not less than ten (10) days after
receipt of the notification, and a conspicuous statement that
unless the claim is paid within that time the goods will be
advertised for sale and sold by auction at a specified time and
place.
(d) (3) The sale must conform to the terms of the notification.
(e) (4) The sale must be held at the nearest suitable place to that
where the goods are held or stored.
(f) (5) After the expiration of the time given in the notification, an
advertisement of the sale must be published once a week for two
(2) weeks consecutively in a newspaper of general circulation
where the sale is to be held. The advertisement must include a
description of the goods, the name of the person on whose
account they the goods are being held, and the time and place of
the sale. The sale must take place at least fifteen (15) days after
the first publication. If there is no newspaper of general
circulation where the sale is to be held, the advertisement must be
posted at least ten (10) days before the sale in not less fewer than
six (6) conspicuous places in the neighborhood of the proposed
sale.
(3) (c) Before any sale pursuant to this section, any person claiming
a right in the goods may pay the amount necessary to satisfy the lien
and the reasonable expenses incurred under in complying with this
section. In that event, the goods must may not be sold but must be
retained by the warehouseman warehouse subject to the terms of the
receipt and IC 26-1-7. this chapter.
(4) The warehouseman (d) A warehouse may buy at any public sale
held pursuant to this section.
(5) (e) A purchaser in good faith of goods sold to enforce a
warehouseman's warehouse's lien takes the goods free of any rights of
persons against whom which the lien was valid, despite noncompliance
by the warehouseman warehouse's noncompliance with the
requirements of this section.
(6) The warehouseman (f) A warehouse may satisfy his its lien
from the proceeds of any sale pursuant to this section but must shall
hold the balance, if any, for delivery on demand to any person to whom
he which the warehouse would have been bound to deliver the goods.
(7) (g) The rights provided by this section shall be are in addition
to all other rights allowed by law to a creditor against his a debtor.
(8) Where (h) If a lien is on goods stored by a merchant in the
course of his its business, the lien may be enforced in accordance with
either subsection (1) (a) or (2). (b).
(9) The warehouseman (i) A warehouse is liable for damages
caused by failure to comply with the requirements for sale under this
section and, in case of willful violation, is liable for conversion.
SOURCE: IC 26-1-7-301; (07)SE0419.1.40. -->
SECTION 40. IC 26-1-7-301 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 301.
(1) (a) A
consignee of a nonnegotiable bill
who of lading that has given value
in good faith, or a holder to
whom which a negotiable bill has been
duly negotiated, relying
in either case upon the description
therein of
the goods
in the bill or upon the date
therein shown
in the bill, may
recover from the issuer damages caused by the misdating of the bill or
the nonreceipt or misdescription of the goods, except to the extent that
the
document bill indicates that the issuer does not know whether any
part or all of the goods in fact were received or conform to the
description,
such as
where in a case in which the description is in
terms of marks or labels or kind, quantity, or condition or the receipt or
description is qualified by "contents or condition of contents of
packages unknown", "said to contain", "shipper's weight, load, and
count" or
the like, words of similar import, if
such that indication
be
is true.
(2) When (b) If goods are loaded by
an the issuer
who is a common
carrier, of a bill of lading:
(1) the issuer
must shall count the packages of goods if
package
freight shipped in packages and ascertain the kind and quantity
if
shipped in bulk;
freight. In and
(2) words such
cases as "shipper's weight, load, and count" or
other words
of similar import indicating that the description was
made by the shipper are ineffective except as to
freight goods
concealed
by in packages.
(3) When (c) If bulk
freight is goods are loaded by a shipper
who
that makes available to the issuer
of a bill of lading adequate facilities
for weighing
such freight, an the goods, the issuer
who is a common
carrier must shall ascertain the kind and quantity within a reasonable
time after receiving the
written shipper's request
of the shipper in a
record to do so. In
such cases that case, "shipper's weight" or
other
words of
like purport similar import are ineffective.
(4) (d) The issuer
may of a bill of lading, by
inserting including in
the bill the words "shipper's weight, load, and count" or other words of
like purport similar import indicate that the goods were loaded by the
shipper, and if such the statement be is true, the issuer shall is not be
liable for damages caused by the improper loading. But their However,
omission of such words does not imply liability for such damages
caused by improper loading.
(5) The (e) A shipper shall be deemed to have guaranteed
guarantees to the an issuer the accuracy at the time of shipment of the
description, marks, labels, number, kind, quantity, condition, and
weight, as furnished by him; the shipper, and the shipper shall
indemnify the issuer against damage caused by inaccuracies in such
those particulars. The This right of the issuer to such indemnity shall
in no way does not limit his the issuer's responsibility and or liability
under the contract of carriage to any person other than the shipper.
SOURCE: IC 26-1-7-302; (07)SE0419.1.41. -->
SECTION 41. IC 26-1-7-302 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 302.
(1) (a) The issuer
of a through bill of lading or other document
of title embodying an
undertaking to be performed in part by
persons a person acting as its
agents agent or by
connecting carriers a performing carrier is liable
to
anyone any person entitled to recover on the
bill or other document
for any breach by
such the other
persons person or
by a connecting the
performing carrier of its obligation under the
bill or other document.
but However, to the extent that the bill
or other document covers an
undertaking to be performed overseas or in territory not contiguous to
the continental United States or an undertaking including matters other
than transportation, this liability
for breach by the other person or
the performing carrier may be varied by agreement of the parties.
(2) Where (b) If goods covered by a through bill of lading or other
document
of title embodying an undertaking to be performed in part by
persons a person other than the issuer are received by
any such that
person,
he the person is subject, with respect to
his its own
performance while the goods are in
his its possession, to the obligation
of the issuer.
His The person's obligation is discharged by delivery of
the goods to another
such person pursuant to the
bill or other
document and does not include liability for breach by any other
such
persons person or by the issuer.
(3) (c) The issuer of
such a through bill of lading or other document
shall be of title described in subsection (b) is entitled to recover from
the
connecting performing carrier or
such other person in possession
of the goods when the breach of the obligation under the
bill or other
document occurred:
(1) the amount it may be required to pay to
anyone any person
entitled to recover on the bill or other document therefor, for the
breach, as may be evidenced by any receipt, judgment, or
transcript thereof; of judgment; and
(2) the amount of any expense reasonably incurred by it the
issuer in defending any action brought commenced by any one
person entitled to recover on the bill or other document therefor.
for the breach.
SOURCE: IC 26-1-7-303; (07)SE0419.1.42. -->
SECTION 42. IC 26-1-7-303 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 303. (1) (a) Unless the
bill of lading otherwise provides, the a carrier may deliver the goods to
a person or destination other than that stated in the bill or may
otherwise dispose of the goods, without liability for misdelivery, on
instructions from:
(a) (1) the holder of a negotiable bill; or
(b) (2) the consignor on a nonnegotiable bill notwithstanding
even if the consignee has given contrary instruction from the
consignee; or instructions;
(c) (3) the consignee on a nonnegotiable bill in the absence of
contrary instructions from the consignor, if the goods have arrived
at the billed destination or if the consignee is in possession of the
tangible bill or in control of the electronic bill; or
(d) (4) the consignee on a nonnegotiable bill if he the consignee
is entitled as against the consignor to dispose of them. the goods.
(2) (b) Unless such instructions described in subsection (a) are
noted on included in a negotiable bill of lading, a person to whom
which the bill is duly negotiated can may hold the bailee according to
the original terms.
SOURCE: IC 26-1-7-304; (07)SE0419.1.43. -->
SECTION 43. IC 26-1-7-304 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 304.
(1) (a) Except
where as customary in
overseas international transportation, a
tangible bill of lading
must may not be issued in a set of parts. The
issuer is liable for damages caused by violation of this subsection.
(2) Where (b) If a
tangible bill of lading is lawfully
drawn issued
in a set of parts, each of which
is numbered contains an identification
code and
is expressed to be valid only if the goods have not been
delivered against any other part, the whole of the parts
constitute
constitutes one (1) bill.
(3) Where (c) If a
tangible negotiable bill of lading is lawfully
issued in a set of parts and different parts are negotiated to different
persons, the title of the holder to
whom which the first due negotiation
is made prevails as to both the document
of title and the goods even
though if any later holder may have received the goods from the carrier
in good faith and discharged the carrier's obligation by surrender of his
surrendering its part.
(4) Any (d) A person who that negotiates or transfers a single part
of a tangible bill of lading drawn issued in a set is liable to holders of
that part as if it were the whole set.
(5) (e) The bailee is obliged to shall deliver in accordance with
IC 26-1-7-401 through IC 26-1-7-404 sections 401 through 404 of this
chapter against the first presented part of a tangible bill of lading
lawfully drawn issued in a set. Such Delivery in this manner
discharges the bailee's obligation on the whole bill.
SOURCE: IC 26-1-7-305; (07)SE0419.1.44. -->
SECTION 44. IC 26-1-7-305 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 305. (1) (a) Instead of
issuing a bill of lading to the consignor at the place of shipment, a
carrier may at the request of the consignor procure the bill to be issued
at a destination or at any other place designated in the request.
(2) (b) Upon request of anyone any person entitled as against the
a carrier to control the goods while in transit and on surrender of
possession or control of any outstanding bill of lading or other receipt
covering such the goods, the issuer, subject to section 105 of this
chapter, may procure a substitute bill to be issued at any place
designated in the request.
SOURCE: IC 26-1-7-307; (07)SE0419.1.45. -->
SECTION 45. IC 26-1-7-307 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 307.
(1) (a) A carrier
has a lien on the goods covered by a bill of lading
or on the proceeds
from the goods for charges
subsequent to after the date of
its the
carrier's receipt of the goods for storage or transportation, including
demurrage and terminal charges, and for expenses necessary for
preservation of the goods incident to their transportation or reasonably
incurred in their sale pursuant to law.
But However, against a
purchaser for value of a negotiable bill of lading, a carrier's lien is
limited to charges stated in the bill or the applicable tariffs or, if no
charges are stated,
then to a reasonable charge.
(2) (b) A lien for charges and expenses under subsection
(1) (a) on
goods
which that the carrier was required by law to receive for
transportation is effective against the consignor or any person entitled
to the goods unless the carrier had notice that the consignor lacked
authority to subject the goods to
such those charges and expenses. Any
other lien under subsection
(1) (a) is effective against the consignor
and any person
who that permitted the bailor to have control or
possession of the goods unless the carrier had notice that the bailor
lacked
such authority.
(3) (c) A carrier loses
his its lien on any goods
which he that it
voluntarily delivers or which he unjustifiably refuses to deliver.
SOURCE: IC 26-1-7-308; (07)SE0419.1.46. -->
SECTION 46. IC 26-1-7-308 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 308.
(1) (a) A carrier's
lien
on goods may be enforced by public or private sale of the goods,
in
block bulk or in
parcels, packages, at any time or place, and on any
terms
which that are commercially reasonable, after notifying all
persons known to claim an interest in the goods.
Such The notification
must include a statement of the amount due, the nature of the proposed
sale, and the time and place of any public sale. The fact that a better
price could have been obtained by a sale at a different time or in a
method different
method from that selected by the carrier is not of
itself sufficient to establish that the sale was not made in a
commercially reasonable manner.
If The carrier
either sells
goods in
a commercially reasonable manner if the carrier sells the goods in
the usual manner in any recognized market therefor,
or if he sells at the
price current in
such that market at the time of
his the sale, or
if he has
otherwise
sold sells in conformity with commercially reasonable
practices among dealers in the type of goods sold.
he has sold in a
commercially reasonable manner. A sale of more goods than apparently
necessary to be offered to ensure satisfaction of the obligation is not
commercially reasonable, except in cases covered by the preceding
sentence.
(2) (b) Before any sale pursuant to this section, any person claiming
a right in the goods may pay the amount necessary to satisfy the lien
and the reasonable expenses incurred
under in complying with this
section. In that event, the goods
must may not be sold but must be
retained by the carrier, subject to the terms of the bill and
IC 26-1-7.
this chapter.
(3) The (c) A carrier may buy at any public sale pursuant to this
section.
(4) (d) A purchaser in good faith of goods sold to enforce a carrier's
lien takes the goods free of any rights of persons against
whom which
the lien was valid, despite
the carrier's noncompliance
by the carrier
with
the requirements of this section.
(5) The (e) A carrier may satisfy
his its lien from the proceeds of
any sale pursuant to this section but
must shall hold the balance, if any,
for delivery on demand to any person to
whom he which the carrier
would have been bound to deliver the goods.
(6) (f) The rights provided by this section
shall be are in addition to
all other rights allowed by law to a creditor against
his a debtor.
(7) (g) A carrier's lien may be enforced
in accordance with
pursuant to either subsection
(1) (a) or the procedure set forth in
IC 26-1-7-210(2). section 210(b) of this chapter.
(8) The (h) A carrier is liable for damages caused by failure to
comply with the requirements for sale under this section and, in case
of willful violation, is liable for conversion.
SOURCE: IC 26-1-7-309; (07)SE0419.1.47. -->
SECTION 47. IC 26-1-7-309 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 309. (1) (a) A carrier
who that issues a bill of lading, whether negotiable or nonnegotiable,
must shall exercise the degree of care in relation to the goods which a
reasonably careful man person would exercise under like similar
circumstances. This subsection does not repeal or change affect any
law, regulation, or rule of law which that imposes liability upon a
common carrier for damages not caused by its negligence.
(2) (b) Damages may be limited by a provision term in the bill of
lading or in a transportation agreement that the carrier's liability
shall may not exceed a value stated in the document bill or
transportation agreement if the carrier's rates are dependent upon
value and the consignor by the carrier's tariff is afforded an opportunity
to declare a higher value or a value as lawfully provided in the tariff,
or where no tariff is filed he and the consignor is otherwise advised of
such the opportunity. but no However, such a limitation is not
effective with respect to the carriers carrier's liability for conversion
to its own use.
(3) (c) Reasonable provisions as to the time and manner of
presenting claims and instituting commencing actions based on the
shipment may be included in a bill of lading or tariff. a transportation
agreement.
SOURCE: IC 26-1-7-401; (07)SE0419.1.48. -->
SECTION 48. IC 26-1-7-401 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 401. The obligations
imposed by IC 26-1-7 this chapter on an issuer apply to a document
of title regardless of the fact that: even if:
(a) (1) the document may does not comply with the requirements
of IC 26-1-7 this chapter or of any other law statute, rule, or
regulation regarding its issue, issuance, form, or content; or
(b) (2) the issuer may have violated laws regulating the conduct
of his its business; or
(c) (3) the goods covered by the document were owned by the
bailee at the time when the document was issued; or
(d) (4) the person issuing the document does not come within the
definition of warehouseman if it is not a warehouse but the
document purports to be a warehouse receipt.
SOURCE: IC 26-1-7-402; (07)SE0419.1.49. -->
SECTION 49. IC 26-1-7-402 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 402.
Neither A
duplicate nor or any other document of title purporting to cover goods
already represented by an outstanding document of the same issuer
confers does not confer any right in the goods, except as provided in
the case of tangible bills of lading in a set of parts, overissue of
documents for fungible goods, and substitutes for lost, stolen or
destroyed documents, or substitute documents issued under section
105 of this chapter. But The issuer is liable for damages caused by his
its overissue or failure to identify a duplicate document as such by a
conspicuous notation. on its face.
SOURCE: IC 26-1-7-403; (07)SE0419.1.50. -->
SECTION 50. IC 26-1-7-403 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 403.
(1) The (a) A
bailee
must shall deliver the goods to a person entitled under
the a
document
who of title if the person complies with subsections
(2) (b)
and
(3), (c), unless and to the extent that the bailee establishes any of
the following:
(a) (1) Delivery of the goods to a person whose receipt was
rightful as against the claimant.
(b) (2) Damage to or delay, loss, or destruction of the goods for
which the bailee is not liable.
but the burden of establishing
negligence in such cases is on the person entitled under the
document whenever the claimed loss or destruction resulted from
fire, and the amount of the claimed loss or destruction under the
document exceeds the sum of ten thousand dollars ($10,000).
(c) (3) Previous sale or other disposition of the goods in lawful
enforcement of a lien or on
warehouseman's a warehouse's
lawful termination of storage.
(d) (4) The exercise by a seller of
his its right to stop delivery
pursuant to the provisions of IC 26-1-2-705
or by a lessor of its
right to stop delivery under IC 26-1-2.1-526.
(e) (5) A diversion, reconsignment, or other disposition pursuant
to
the provisions of IC 26-1-7-303 or tariff regulating such right.
section 303 of this chapter.
(f) (6) Release, satisfaction, or any other
fact affording a personal
defense against the claimant.
(g) (7) Any other lawful excuse.
(2) (b) A person claiming goods covered by a document of title
must
shall satisfy the bailee's lien
where if the bailee so requests or
where if
the bailee is prohibited by law from delivering the goods until the
charges are paid.
(3) (c) Unless
the a person claiming
the goods is
one a person
against
whom which the document
confers no of title does not confer
a right under
IC 26-1-7-503(1), he must section 503(a) of this
chapter:
(1) the person claiming the goods under a document shall
surrender for cancellation possession or notation control of
partial deliveries any outstanding negotiable document covering
the goods for cancellation or indication of partial deliveries;
and
(2) the bailee must shall cancel the document or conspicuously
note indicate in the document the partial delivery thereon or be
the bailee is liable to any person to whom which the document is
duly negotiated.
(4) "Person entitled under the document" means holder in the case
of a negotiable document, or the person to whom delivery is to be made
by the terms of or pursuant to written instructions under a
nonnegotiable document.
SOURCE: IC 26-1-7-404; (07)SE0419.1.51. -->
SECTION 51. IC 26-1-7-404 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 404. A bailee who that
in good faith including observance of reasonable commercial
standards, has received goods and delivered or otherwise disposed of
them the goods according to the terms of the a document of title or
pursuant to IC 26-1-7 this chapter is not liable therefor. This rule
applies for the goods even though: if:
(1) the person from whom he which the bailee received the goods
had no did not have authority to procure the document or to
dispose of the goods; and even though or
(2) the person to whom he which the bailee delivered the goods
had no did not have authority to receive them. the goods.
SOURCE: IC 26-1-7-501; (07)SE0419.1.52. -->
SECTION 52. IC 26-1-7-501 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 501. (a) The following
rules apply to a negotiable tangible document of title:
(1) A negotiable document of title running If the document's
original terms run to the order of a named person, the document
is negotiated by his the named person's endorsement and
delivery. After his the named person's endorsement in blank or
to bearer, any person can may negotiate it the document by
delivery alone.
(2)(a) A (2) If the negotiable document of title document's
original terms run to bearer, it is also negotiated by delivery
alone. when by its original terms it runs to bearer.
(b) When a document running (3) If the document's original
terms run to the order of a named person and it is delivered to
him the named person, the effect is the same as if the document
had been negotiated.
(3) (4) Negotiation of a negotiable the document of title after it
has been endorsed to a specified named person requires
endorsement by the special endorsee as well as and delivery.
(4) (5) A negotiable document of title is "duly negotiated" when
it is negotiated in the manner stated in this section to a holder who
purchases it in good faith without notice of any defense against or
claim to it on the part of any person and for value, unless it is
established that the negotiation is not in the regular course of
business or financing or involves receiving the document in
settlement or payment of a money obligation.
(b) The following rules apply to a negotiable electronic
document of title:
(1) If the document's original terms run to the order of a
named person or to bearer, the document is negotiated by
delivery of the document to another person. Endorsement by
the named person is not required to negotiate the document.
(2) If the document's original terms run to the order of a
named person and the named person has control of the
document, the effect is the same as if the document had been
negotiated.
(3) A document is duly negotiated if it is negotiated in the
manner stated in this subsection to a holder that purchases it
in good faith, without notice of any defense against or claim
to it on the part of any person, and for value, unless it is
established that the negotiation is not in the regular course of
business or financing or involves taking delivery of the
document in settlement or payment of a monetary obligation.
(5) (c) Endorsement of a nonnegotiable document of title neither
makes it negotiable nor adds to the transferee's rights.
(6) (d) The naming in a negotiable bill of lading of a person to be
notified of the arrival of the goods does not limit the negotiability of the
bill nor or constitute notice to a purchaser thereof of the bill of any
interest of such that person in the goods.
SOURCE: IC 26-1-7-502; (07)SE0419.1.53. -->
SECTION 53. IC 26-1-7-502 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 502.
(1) (a) Subject to
IC 26-1-7-503 and to the provisions of IC 26-1-7-205 on fungible
goods, sections 205 and 503 of this chapter, a holder to
whom which
a negotiable document of title has been duly negotiated acquires
thereby:
(a) (1) title to the document;
(b) (2) title to the goods;
(c) (3) all rights accruing under the law of agency or estoppel,
including rights to goods delivered to the bailee after the
document was issued; and
(d) (4) the direct obligation of the issuer to hold or deliver the
goods according to the terms of the document free of any defense
or claim by him the issuer except those arising under the terms
of the document or under IC 26-1-7. this chapter. In the case of
a delivery order, the bailee's obligation accrues only upon the
bailee's acceptance of the delivery order, and the obligation
acquired by the holder is that the issuer and any endorser will
procure the acceptance of the bailee.
(2) (b) Subject to IC 26-1-7-503, section 503 of this chapter, title
and rights so acquired by due negotiation are not defeated by any
stoppage of the goods represented by the document of title or by
surrender of such the goods by the bailee and are not impaired even
though: if:
(1) the due negotiation or any prior due negotiation constituted a
breach of duty; or even though
(2) any person has been deprived of possession of the a
negotiable tangible document or control of a negotiable
electronic document by misrepresentation, fraud, accident,
mistake, duress, loss, theft, or conversion; or even though
(3) a previous sale or other transfer of the goods or document has
been made to a third person.
SOURCE: IC 26-1-7-503; (07)SE0419.1.54. -->
SECTION 54. IC 26-1-7-503 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 503.
(1) (a) A
document of title confers no right in goods against a person
who that
before issuance of the document had a legal interest or a perfected
security interest in
them the goods and
who neither: that did not:
(a) delivered (1) deliver or
entrusted them entrust the goods or
any document of title covering
them the goods to the bailor or
his
the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
or with
(B) power to obtain delivery under
IC 26-1-7-403 section 403
of this chapter; or
with
(C) power of disposition under IC 26-1-2-403,
IC 26-1-9.1-320, or other statute or rule of law;
nor or
(b) acquiesced (2) acquiesce in the procurement by the bailor or
his its nominee of any document.
of title.
(2) (b) Title to goods based upon an unaccepted delivery order is
subject to the rights of
anyone any person to
whom which a negotiable
warehouse receipt or bill of lading covering the goods has been duly
negotiated.
Such a That title may be defeated under
IC 26-1-7-504
section 504 of this chapter to the same extent as the rights of the
issuer or a transferee from the issuer.
(3) (c) Title to goods based upon a bill of lading issued to a freight
forwarder is subject to the rights of anyone any person to whom which
a bill issued by the freight forwarder covering such goods has been is
duly negotiated. but However, delivery by the carrier in accordance
with IC 26-1-7-401 sections 401 through IC 26-1-7-404 404 of this
chapter pursuant to its own bill of lading discharges the carrier's
obligation to deliver.
SOURCE: IC 26-1-7-504; (07)SE0419.1.55. -->
SECTION 55. IC 26-1-7-504 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 504. (1) (a) A
transferee of a document of title, whether negotiable or nonnegotiable,
to whom which the document has been delivered but not duly
negotiated, acquires the title and rights which his that the transferor
had or had actual authority to convey.
(2) (b) In the case of a transfer of a nonnegotiable document of
title, until but not after the bailee receives notification notice of the
transfer, the rights of the transferee may be defeated:
(a) (1) by those creditors of the transferor who that could treat the
sale transfer as void under IC 26-1-2-402 or IC 26-1-2.1-308; or
(b) (2) by a buyer from the transferor in ordinary course of
business if the bailee has delivered the goods to the buyer or
received notification of his the buyer's rights; or
(3) by a lessee from the transferor in ordinary course of
business if the bailee has delivered the goods to the lessee or
received notification of the lessee's rights; or
(c) (4) as against the bailee by good faith dealings of the bailee
with the transferor.
(3) (c) A diversion or other change of shipping instructions by the
consignor in a nonnegotiable bill of lading which causes the bailee not
to deliver the goods to the consignee defeats the consignee's title to the
goods if they the goods have been delivered to a buyer in ordinary
course of business or a lessee in ordinary course of business, and, in
any event, defeats the consignee's rights against the bailee.
(4) (d) Delivery of the goods pursuant to a nonnegotiable document
of title may be stopped by a seller under IC 26-1-2-705 or a lessor
under IC 26-1-2.1-526 and subject to the requirement requirements
of due notification there provided in those sections. A bailee honoring
that honors the seller's or lessor's instructions is entitled to be
indemnified by the seller or the lessor against any resulting loss or
expense.
SOURCE: IC 26-1-7-505; (07)SE0419.1.56. -->
SECTION 56. IC 26-1-7-505 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 505. The endorsement
of a tangible document of title issued by a bailee does not make the
endorser liable for any default by the bailee or by previous endorsers.
SOURCE: IC 26-1-7-506; (07)SE0419.1.57. -->
SECTION 57. IC 26-1-7-506 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 506. The transferee of
a negotiable tangible document of title has a specifically enforceable
right to have his the transferor supply any necessary endorsement but
the transfer becomes a negotiation only as of the time the endorsement
is supplied.
SOURCE: IC 26-1-7-507; (07)SE0419.1.58. -->
SECTION 58. IC 26-1-7-507 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 507. Where If a person
negotiates or transfers delivers a document of title for value, otherwise
than as a mere intermediary under IC 26-1-7-508, then section 508 of
this chapter, unless otherwise agreed, he warrants to his immediate
purchaser only the transferor, in addition to any warranty made in
selling or leasing the goods, warrants to its immediate purchaser
only that:
(a) that (1) the document is genuine; and
(b) that he (2) the transferor has no knowledge of any fact which
that would impair its the document's validity or worth; and
(c) that his (3) the negotiation or transfer delivery is rightful and
fully effective with respect to the title to the document and the
goods it represents.
SOURCE: IC 26-1-7-508; (07)SE0419.1.59. -->
SECTION 59. IC 26-1-7-508 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 508. A collecting bank
or other intermediary known to be entrusted with documents of title on
behalf of another or with collection of a draft or other claim against
delivery of documents warrants by such delivery of the documents only
its own good faith and authority This rule applies even though if the
collecting bank or other intermediary has purchased or made
advances against the claim or draft to be collected.
SOURCE: IC 26-1-7-509; (07)SE0419.1.60. -->
SECTION 60. IC 26-1-7-509 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 509. The question
Whether a document of title is adequate to fulfill the obligations of a
contract for sale, a contract for lease, or the conditions of a letter of
credit is governed determined by IC 26-1-2, on sales and IC 26-1-2.1,
or IC 26-1-5.1. on letters of credit.
SOURCE: IC 26-1-7-601; (07)SE0419.1.61. -->
SECTION 61. IC 26-1-7-601 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 601.
(1) (a) If a
document
has been of title is lost, stolen, or destroyed, a court may
order delivery of the goods or issuance of a substitute document and
the bailee may without liability to any person comply with
such the
order. If the document was negotiable, a court may not order delivery
of the goods or issuance of a substitute document without the
claimant must post claimant's posting security approved by the court
to indemnify unless it finds that any person who that may suffer loss
as a result of nonsurrender of possession or control of the document
is adequately protected against the loss. If the document was not
negotiable, such security may be required at the discretion of
nonnegotiable, the court may require security. The court may also in
its discretion order payment of the bailee's reasonable costs and counsel
attorney's fees in an action under this subsection.
(2) (b) A bailee who that, without a court order, delivers goods to
a person claiming under a missing negotiable document of title is liable
to any person injured thereby. and If the delivery is not in good faith,
becomes the bailee is liable for conversion. Delivery in good faith is
not conversion if made in accordance with a filed classification or tariff
or, where no classification or tariff is filed, if the claimant posts
security with the bailee in an amount at least double the value of the
goods at the time of posting to indemnify any person injured by the
delivery who that files a notice of claim within one (1) year after the
delivery.
SOURCE: IC 26-1-7-602; (07)SE0419.1.62. -->
SECTION 62. IC 26-1-7-602 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 602. Except where the
Unless a document of title was originally issued upon delivery of the
goods by a person who had no that did not have power to dispose of
them, no a lien attaches does not attach by virtue of any judicial
process to goods in the possession of a bailee for which a negotiable
document of title is outstanding unless possession or control of the
document be is first surrendered to the bailee or its the document's
negotiation is enjoined. and The bailee shall may not be compelled to
deliver the goods pursuant to process until possession or control of the
document is surrendered to him the bailee or impounded by the court.
One who purchases A purchaser of the document for value without
notice of the process or injunction takes free of the lien imposed by
judicial process.
SOURCE: IC 26-1-7-603; (07)SE0419.1.63. -->
SECTION 63. IC 26-1-7-603 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 603. If more than one
(1) person claims title
to or possession of the goods, the bailee is
excused from
delivering delivery until
he the bailee has
had a
reasonable time to ascertain the validity of the adverse claims or to
bring commence an action
to compel all claimants to interplead and
may compel such for interpleader.
The bailee may assert an
interpleader either in defending an action for nondelivery of the goods
or by original action, whichever is appropriate.
SOURCE: IC 26-1-8.1-103; (07)SE0419.1.64. -->
SECTION 64. IC 26-1-8.1-103 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 103. (a) A share or
similar equity interest issued by a corporation, business trust, joint
stock company, or similar entity is a security.
(b) An "investment company security" is a security. "Investment
company security" means a share or similar equity interest issued by an
entity that is registered as an investment company under the federal
investment company laws, an interest in a unit investment trust that is
so registered, or a face amount certificate issued by a face amount
certificate company that is so registered. Investment company security
does not include an insurance policy or endowment policy or annuity
contract issued by an insurance company.
(c) An interest in a partnership or limited liability company is not a
security unless it is dealt in or traded on securities exchanges or in
securities markets, its terms expressly provide that it is a security
governed by IC 26-1-8.1, or it is an investment company security.
However, an interest in a partnership or limited liability company is a
financial asset if it is held in a securities account.
(d) A writing that is a security certificate is governed by IC 26-1-8.1
and not by IC 26-1-3.1, even though it also meets the requirements of
that article. However, a negotiable instrument governed by IC 26-1-3.1
is a financial asset if it is held in a securities account.
(e) An option or a similar obligation issued by a clearing corporation
to its participants is not a security, but it is a financial asset.
(f) A commodity contract (as defined in IC 26-1-9.1-102(a)(15)) is
not a security or a financial asset.
(g) A document of title is not a financial asset unless section
102(a)(9)(iii) of this chapter applies.
SOURCE: IC 26-1-9.1-102; (07)SE0419.1.65. -->
SECTION 65. IC 26-1-9.1-102 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 102. (a) In IC 26-1-9.1:
(1) "Accession" means goods that are physically united with other
goods in such a manner that the identity of the original goods is
not lost.
(2) "Account", except as used in "account for", means a right to
payment of a monetary obligation, whether or not earned by
performance (i) for property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of, (ii) for services
rendered or to be rendered, (iii) for a policy of insurance issued or
to be issued, (iv) for a secondary obligation incurred or to be
incurred, (v) for energy provided or to be provided, (vi) for the
use or hire of a vessel under a charter or other contract, (vii)
arising out of the use of a credit or charge card or information
contained on or for use with the card, or (viii) as winnings in a
lottery or other game of chance operated or sponsored by a state,
governmental unit of a state, or person licensed or authorized to
operate the game by a state or governmental unit of a state. The
term includes health-care-insurance receivables. The term does
not include (i) rights to payment evidenced by chattel paper or an
instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv)
investment property, (v) letter-of-credit rights or letters of credit,
or (vi) rights to payment for money or funds advanced or sold,
other than rights arising out of the use of a credit or charge card
or information contained on or for use with the card.
(3) "Account debtor" means a person obligated on an account,
chattel paper, or general intangible. The term does not include
persons obligated to pay a negotiable instrument, even if the
instrument constitutes part of chattel paper.
(4) "Accounting", except as used in "accounting for", means a
record:
(A) authenticated by a secured party;
(B) indicating the aggregate unpaid secured obligations as of
a date not more than thirty-five (35) days earlier or thirty-five
(35) days later than the date of the record; and
(C) identifying the components of the obligations in
reasonable detail.
(5) "Agricultural lien" means an interest, other than a security
interest, in farm products:
(A) that secures payment or performance of an obligation for:
(i) goods or services furnished in connection with a debtor's
farming operation; or
(ii) rent on real property leased by a debtor in connection
with the debtor's farming operation;
(B) that is created by statute in favor of a person that:
(i) in the ordinary course of its business furnished goods or
services to a debtor in connection with the debtor's farming
operation; or
(ii) leased real property to a debtor in connection with the
debtor's farming operation; and
(C) whose effectiveness does not depend on the person's
possession of the personal property.
(6) "As-extracted collateral" means:
(A) oil, gas, or other minerals that are subject to a security
interest that:
(i) is created by a debtor having an interest in the minerals
before extraction; and
(ii) attaches to the minerals as extracted; or
(B) accounts arising out of the sale at the wellhead or
minehead of oil, gas, or other minerals in which the debtor had
an interest before extraction.
(7) "Authenticate" means:
(A) to sign; or
(B) to execute or otherwise adopt a symbol, or encrypt or
similarly process a record in whole or in part, with the present
intent of the authenticating person to identify the person and
adopt or accept a record.
(8) "Bank" means an organization that is engaged in the business
of banking. The term includes savings banks, savings and loan
associations, credit unions, and trust companies.
(9) "Cash proceeds" means proceeds that are money, checks,
deposit accounts, or the like.
(10) "Certificate of title" means a certificate of title with respect
to which a statute provides for the security interest in question to
be indicated on the certificate as a condition or result of the
security interest's obtaining priority over the rights of a lien
creditor with respect to the collateral.
(11) "Chattel paper" means a record or records that evidence both
a monetary obligation and a security interest in specific goods, a
security interest in specific goods and software used in the goods,
a security interest in specific goods and license of software used
in the goods, a lease of specific goods, or a lease of specific goods
and license of software used in the goods. In this subdivision,
"monetary obligation" means a monetary obligation secured by
the goods or owed under a lease of the goods and includes a
monetary obligation with respect to software used in the goods.
The term "chattel paper" does not include: (i) charters or other
contracts involving the use or hire of a vessel; or (ii) records that
evidence a right to payment arising out of the use of a credit or
charge card or information contained on or for use with the card.
If a transaction is evidenced by records that include an instrument
or series of instruments, the group of records taken together
constitutes chattel paper.
(12) "Collateral" means the property subject to a security interest
or agricultural lien. The term includes:
(A) proceeds to which a security interest attaches;
(B) accounts, chattel paper, payment intangibles, and
promissory notes that have been sold; and
(C) goods that are the subject of a consignment.
(13) "Commercial tort claim" means a claim arising in tort with
respect to which:
(A) the claimant is an organization; or
(B) the claimant is an individual and the claim:
(i) arose in the course of the claimant's business or
profession; and
(ii) does not include damages arising out of personal injury
to or the death of an individual.
(14) "Commodity account" means an account maintained by a
commodity intermediary in which a commodity contract is carried
for a commodity customer.
(15) "Commodity contract" means a commodity futures contract,
an option on a commodity futures contract, a commodity option,
or another contract if the contract or option is:
(A) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract
pursuant to federal commodities laws; or
(B) traded on a foreign commodity board of trade, exchange,
or market, and is carried on the books of a commodity
intermediary for a commodity customer.
(16) "Commodity customer" means a person for which a
commodity intermediary carries a commodity contract on its
books.
(17) "Commodity intermediary" means a person that:
(A) is registered as a futures commission merchant under
federal commodities law; or
(B) in the ordinary course of its business provides clearance or
settlement services for a board of trade that has been
designated as a contract market pursuant to federal
commodities law.
(18) "Communicate" means:
(A) to send a written or other tangible record;
(B) to transmit a record by any means agreed upon by the
persons sending and receiving the record; or
(C) in the case of transmission of a record to or by a filing
office, to transmit a record by any means prescribed by
filing-office rule.
(19) "Consignee" means a merchant to which goods are delivered
in a consignment.
(20) "Consignment" means a transaction, regardless of its form,
in which a person delivers goods to a merchant for the purpose of
sale and:
(A) the merchant:
(i) deals in goods of that kind under a name other than the
name of the person making delivery;
(ii) is not an auctioneer; and
(iii) is not generally known by its creditors to be
substantially engaged in selling the goods of others;
(B) with respect to each delivery, the aggregate value of the
goods is one thousand dollars ($1,000) or more at the time of
delivery;
(C) the goods are not consumer goods immediately before
delivery; and
(D) the transaction does not create a security interest that
secures an obligation.
(21) "Consignor" means a person that delivers goods to a
consignee in a consignment.
(22) "Consumer debtor" means a debtor in a consumer
transaction.
(23) "Consumer goods" means goods that are used or bought for
use primarily for personal, family, or household purposes.
(24) "Consumer-goods transaction" means a consumer transaction
in which:
(A) an individual incurs an obligation primarily for personal,
family, or household purposes; and
(B) a security interest in consumer goods secures the
obligation.
(25) "Consumer obligor" means an obligor who is an individual
and who incurred the obligation as part of a transaction entered
into primarily for personal, family, or household purposes.
(26) "Consumer transaction" means a transaction in which (i) an
individual incurs an obligation primarily for personal, family, or
household purposes, (ii) a security interest secures the obligation,
and (iii) the collateral is held or acquired primarily for personal,
family, or household purposes. The term includes
consumer-goods transactions.
(27) "Continuation statement" means an amendment of a
financing statement that:
(A) identifies, by its file number, the initial financing
statement to which it relates; and
(B) indicates that it is a continuation statement for, or that it is
filed to continue the effectiveness of, the identified financing
statement.
(28) "Debtor" means:
(A) a person having an interest, other than a security interest
or other lien, in the collateral, whether or not the person is an
obligor;
(B) a seller of accounts, chattel paper, payment intangibles, or
promissory notes; or
(C) a consignee.
(29) "Deposit account" means a demand, time, savings, passbook,
or similar account maintained with a bank. The term does not
include investment property or accounts evidenced by an
instrument.
(30) "Document" means a document of title or a receipt of the
type described in IC 26-1-7-201(2) IC 26-1-7-201(b).
(31) "Electronic chattel paper" means chattel paper evidenced by
a record or records consisting of information stored in an
electronic medium.
(32) "Encumbrance" means a right, other than an ownership
interest, in real property. The term includes mortgages and other
liens on real property.
(33) "Equipment" means goods other than inventory, farm
products, or consumer goods.
(34) "Farm products" means goods, other than standing timber,
with respect to which the debtor is engaged in a farming operation
and which are:
(A) crops grown, growing, or to be grown, including:
(i) crops produced on trees, vines, and bushes; and
(ii) aquatic goods produced in aquacultural operations;
(B) livestock, born or unborn, including aquatic goods
produced in aquacultural operations;
(C) supplies used or produced in a farming operation; or
(D) products of crops or livestock in their unmanufactured
states.
(35) "Farming operation" means raising, cultivating, propagating,
fattening, grazing, or any other farming, livestock, or aquacultural
operation.
(36) "File number" means the number assigned to an initial
financing statement pursuant to IC 26-1-9.1-519(a).
(37) "Filing office" means an office designated in IC 26-1-9.1-501
as the place to file a financing statement.
(38) "Filing-office rule" means a rule adopted pursuant to
IC 26-1-9.1-526.
(39) "Financing statement" means a record or records composed
of an initial financing statement and any filed record relating to
the initial financing statement.
(40) "Fixture filing" means the filing of a financing statement
covering goods that are or are to become fixtures and satisfying
IC 26-1-9.1-502(a) and IC 26-1-9.1-502(b). The term includes the
filing of a financing statement covering goods of a transmitting
utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related to
particular real property that an interest in them arises under real
property law.
(42) "General intangible" means any personal property, including
things in action, other than accounts, chattel paper, commercial
tort claims, deposit accounts, documents, goods, instruments,
investment property, letter-of-credit rights, letters of credit,
money, and oil, gas, or other minerals before extraction. The term
includes payment intangibles and software.
(43) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(44) "Goods" means all things that are movable when a security
interest attaches. The term includes (i) fixtures, (ii) standing
timber that is to be cut and removed under a conveyance or
contract for sale, (iii) the unborn young of animals, (iv) crops
grown, growing, or to be grown, even if the crops are produced on
trees, vines, or bushes, and (v) manufactured homes. The term
also includes a computer program embedded in goods and any
supporting information provided in connection with a transaction
relating to the program if (i) the program is associated with the
goods in such a manner that it customarily is considered part of
the goods, or (ii) by becoming the owner of the goods, a person
acquires a right to use the program in connection with the goods.
The term does not include a computer program embedded in
goods that consist solely of the medium in which the program is
embedded. The term also does not include accounts, chattel
paper, commercial tort claims, deposit accounts, documents,
general intangibles, instruments, investment property,
letter-of-credit rights, letters of credit, money, or oil, gas, or other
minerals before extraction.
(45) "Governmental unit" means a subdivision, agency,
department, county, parish, municipality, or other unit of the
government of the United States, a state, or a foreign country. The
term includes an organization having a separate corporate
existence if the organization is eligible to issue debt on which
interest is exempt from income taxation under the laws of the
United States.
(46) "Health-care-insurance receivable" means an interest in or
claim under a policy of insurance that is a right to payment of a
monetary obligation for health-care goods or services provided.
(47) "Instrument" means a negotiable instrument or any other
writing that evidences a right to the payment of a monetary
obligation, is not itself a security agreement or lease, and is of a
type that in the ordinary course of business is transferred by
delivery with any necessary endorsement or assignment. The term
does not include (i) investment property, (ii) letters of credit, or
(iii) writings that evidence a right to payment arising out of the
use of a credit or charge card or information contained on or for
use with the card.
(48) "Inventory" means goods, other than farm products, that:
(A) are leased by a person as lessor;
(B) are held by a person for sale or lease or to be furnished
under a contract of service;
(C) are furnished by a person under a contract of service; or
(D) consist of raw materials, work in process, or materials
used or consumed in a business.
(49) "Investment property" means a security, whether certificated
or uncertificated, security entitlement, securities account,
commodity contract, or commodity account.
(50) "Jurisdiction of organization", with respect to a registered
organization, means the jurisdiction under whose law the
organization is organized.
(51) "Letter-of-credit right" means a right to payment or
performance under a letter of credit, whether or not the
beneficiary has demanded or is at the time entitled to demand
payment or performance. The term does not include the right of
a beneficiary to demand payment or performance under a letter of
credit.
(52) "Lien creditor" means:
(A) a creditor that has acquired a lien on the property involved
by attachment, levy, or the like;
(B) an assignee for benefit of creditors from the time of
assignment;
(C) a trustee in bankruptcy from the date of the filing of the
petition; or
(D) a receiver in equity from the time of appointment.
(53) "Manufactured home" means a structure, transportable in one
(1) or more sections, which, in the traveling mode, is eight (8)
body feet or more in width or forty (40) body feet or more in
length, or, when erected on site, is three hundred twenty (320) or
more square feet, and which is built on a permanent chassis and
designed to be used as a dwelling with or without a permanent
foundation when connected to the required utilities, and includes
the plumbing, heating, air conditioning, and electrical systems
contained therein. The term includes any structure that meets all
of the requirements of this subdivision except the size
requirements, and with respect to which the manufacturer
voluntarily files a certification required by the United States
Secretary of Housing and Urban Development and complies with
the standards established under Title 42 of the United States
Code.
(54) "Manufactured-home transaction" means a secured
transaction:
(A) that creates a purchase-money security interest in a
manufactured home, other than a manufactured home held as
inventory; or
(B) in which a manufactured home, other than a manufactured
home held as inventory, is the primary collateral.
(55) "Mortgage" means a consensual interest in real property,
including fixtures, that secures payment or performance of an
obligation.
(56) "New debtor" means a person that becomes bound as debtor
under IC 26-1-9.1-203(d) by a security agreement previously
entered into by another person.
(57) "New value" means (i) money, (ii) money's worth in
property, services, or new credit, or (iii) release by a transferee of
an interest in property previously transferred to the transferee.
The term does not include an obligation substituted for another
obligation.
(58) "Noncash proceeds" means proceeds other than cash
proceeds.
(59) "Obligor" means a person that, with respect to an obligation
secured by a security interest in or an agricultural lien on the
collateral, (i) owes payment or other performance of the
obligation, (ii) has provided property other than the collateral to
secure payment or other performance of the obligation, or (iii) is
otherwise accountable in whole or in part for payment or other
performance of the obligation. The term does not include issuers
or nominated persons under a letter of credit.
(60) "Original debtor", except as used in IC 26-1-9.1-310(c),
means a person that, as debtor, entered into a security agreement
to which a new debtor has become bound under
IC 26-1-9.1-203(d).
(61) "Payment intangible" means a general intangible under
which the account debtor's principal obligation is a monetary
obligation.
(62) "Person related to", with respect to an individual, means:
(A) the spouse of the individual;
(B) a brother, brother-in-law, sister, or sister-in-law of the
individual;
(C) an ancestor or lineal descendant of the individual or the
individual's spouse; or
(D) any other relative, by blood or marriage, of the individual
or the individual's spouse who shares the same home with the
individual.
(63) "Person related to", with respect to an organization, means:
(A) a person directly or indirectly controlling, controlled by,
or under common control with the organization;
(B) an officer or director of, or a person performing similar
functions with respect to, the organization;
(C) an officer or director of, or a person performing similar
functions with respect to, a person described in clause (A);
(D) the spouse of an individual described in clause (A), (B), or
(C); or
(E) an individual who is related by blood or marriage to an
individual described in clause (A), (B), (C), or (D) and shares
the same home with the individual.
(64) "Proceeds", except as used in IC 26-1-9.1-609(b), means the
following property:
(A) Whatever is acquired upon the sale, lease, license,
exchange, or other disposition of collateral.
(B) Whatever is collected on, or distributed on account of,
collateral.
(C) Rights arising out of collateral.
(D) To the extent of the value of collateral, claims arising out
of the loss, nonconformity, or interference with the use of,
defects or infringement of rights in, or damage to, the
collateral.
(E) To the extent of the value of collateral and to the extent
payable to the debtor or the secured party, insurance payable
by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to, the collateral.
(65) "Promissory note" means an instrument that evidences a
promise to pay a monetary obligation, does not evidence an order
to pay, and does not contain an acknowledgment by a bank that
the bank has received for deposit a sum of money or funds.
(66) "Proposal" means a record authenticated by a secured party
that includes the terms on which the secured party is willing to
accept collateral in full or partial satisfaction of the obligation it
secures pursuant to IC 26-1-9.1-620, IC 26-1-9.1-621, and
IC 26-1-9.1-622.
(67) "Public-finance transaction" means a secured transaction in
connection with which:
(A) debt securities are issued;
(B) all or a portion of the securities issued have an initial
stated maturity of at least twenty (20) years; and
(C) the debtor, obligor, secured party, account debtor, or other
person obligated on collateral, assignor or assignee of a
secured obligation, or assignor or assignee of a security
interest is a state or a governmental unit of a state.
(68) "Pursuant to commitment", with respect to an advance made
or other value given by a secured party, means pursuant to the
secured party's obligation, whether or not a subsequent event of
default or other event not within the secured party's control has
relieved or may relieve the secured party from its obligation.
(69) "Record", except as used in "for record", "of record", "record
or legal title", and "record owner", means information that is
inscribed on a tangible medium or that is stored in an electronic
or other medium and is retrievable in perceivable form.
(70) "Registered organization" means an organization organized
solely under the law of a single state or the United States and as
to which the state or the United States must maintain a public
record showing the organization to have been organized.
(71) "Secondary obligor" means an obligor to the extent that:
(A) the obligor's obligation is secondary; or
(B) the obligor has a right of recourse with respect to an
obligation secured by collateral against the debtor, another
obligor, or property of either.
(72) "Secured party" means:
(A) a person in whose favor a security interest is created or
provided for under a security agreement, whether or not any
obligation to be secured is outstanding;
(B) a person that holds an agricultural lien;
(C) a consignor;
(D) a person to which accounts, chattel paper, payment
intangibles, or promissory notes have been sold;
(E) a trustee, indenture trustee, agent, collateral agent, or other
representative in whose favor a security interest or agricultural
lien is created or provided for; or
(F) a person that holds a security interest arising under
IC 26-1-2-401, IC 26-1-2-505, IC 26-1-2-711(3),
IC 26-1-2.1-508(5), IC 26-1-4-210, or IC 26-1-5.1-118.
(73) "Security agreement" means an agreement that creates or
provides for a security interest.
(74) "Send", in connection with a record or notification, means:
(A) to deposit in the mail, deliver for transmission, or transmit
by any other usual means of communication, with postage or
cost of transmission provided for, addressed to any address
reasonable under the circumstances; or
(B) to cause the record or notification to be received within the
time that it would have been received if properly sent under
clause (A).
(75) "Software" means a computer program and any supporting
information provided in connection with a transaction relating to
the program. The term does not include a computer program that
is included in the definition of goods.
(76) "State" means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(77) "Supporting obligation" means a letter-of-credit right or
secondary obligation that supports the payment or performance of
an account, chattel paper, a document, a general intangible, an
instrument, or investment property.
(78) "Tangible chattel paper" means chattel paper evidenced by
a record or records consisting of information that is inscribed on
a tangible medium.
(79) "Termination statement" means an amendment of a financing
statement that:
(A) identifies, by its file number, the initial financing
statement to which it relates; and
(B) indicates either that it is a termination statement or that the
identified financing statement is no longer effective.
(80) "Transmitting utility" means a person primarily engaged in
the business of:
(A) operating a railroad, subway, street railway, or trolley bus;
(B) transmitting communications electrically,
electromagnetically, or by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting electricity,
steam, gas, or water.
(b) "Control" as provided in IC 26-1-7-106 and the following
definitions outside IC 26-1-9.1 apply to IC 26-1-9.1:
"Applicant" IC 26-1-5.1-102.
"Beneficiary" IC 26-1-5.1-102.
"Broker" IC 26-1-8.1-102.
"Certificated security" IC 26-1-8.1-102.
"Check" IC 26-1-3.1-104.
"Clearing corporation" IC 26-1-8.1-102.
"Contract for sale" IC 26-1-2-106.
"Customer" IC 26-1-4-104.
"Entitlement holder" IC 26-1-8.1-102.
"Financial asset" IC 26-1-8.1-102.
"Holder in due course" IC 26-1-3.1-302.
"Issuer" (with respect to a letter of credit or letter-of-credit right)
IC 26-1-5.1-102.
"Issuer" (with respect to a security) IC 26-1-8.1-201.
"Issuer" (with respect to documents of title) IC 26-1-7-102.
"Lease" IC 26-1-2.1-103.
"Lease agreement" IC 26-1-2.1-103.
"Lease contract" IC 26-1-2.1-103.
"Leasehold interest" IC 26-1-2.1-103.
"Lessee" IC 26-1-2.1-103.
"Lessee in ordinary course of business" IC 26-1-2.1-103.
"Lessor" IC 26-1-2.1-103.
"Lessor's residual interest" IC 26-1-2.1-103.
"Letter of credit" IC 26-1-5.1-102.
"Merchant" IC 26-1-2-104.
"Negotiable instrument" IC 26-1-3.1-104.
"Nominated person" IC 26-1-5.1-102.
"Note" IC 26-1-3.1-104.
"Proceeds of a letter of credit" IC 26-1-5.1-114.
"Prove" IC 26-1-3.1-103.
"Sale" IC 26-1-2-106.
"Securities account" IC 26-1-8.1-501.
"Securities intermediary" IC 26-1-8.1-102.
"Security" IC 26-1-8.1-102.
"Security certificate" IC 26-1-8.1-102.
"Security entitlement" IC 26-1-8.1-102.
"Uncertificated security" IC 26-1-8.1-102.
(c) IC 26-1-1 contains general definitions and principles of
construction and interpretation applicable throughout IC 26-1-9.1.
SOURCE: IC 26-1-9.1-203; (07)SE0419.1.66. -->
SECTION 66. IC 26-1-9.1-203 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 203. (a) A security
interest attaches to collateral when it becomes 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), a
security interest is enforceable against the debtor and third parties with
respect to the collateral only if:
(1) value has been given;
(2) the debtor has rights in the collateral or the power to transfer
rights in the collateral to a secured party; and
(3) one (1) of the following conditions is met:
(A) The debtor has authenticated a security agreement that
provides a description of the collateral and, if the security
interest covers timber to be cut, a description of the land
concerned.
(B) The collateral is not a certificated security and is in the
possession of the secured party under IC 26-1-9.1-313
pursuant to the debtor's security agreement.
(C) The collateral is a certificated security in registered form
and the security certificate has been delivered to the secured
party under IC 26-1-8.1-301 pursuant to the debtor's security
agreement.
(D) The collateral is deposit accounts, electronic chattel paper,
investment property,
or letter-of-credit rights,
or electronic
documents, and the secured party has control under
IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
IC 26-1-9.1-106, or IC 26-1-9.1-107 pursuant to the debtor's
security agreement.
(c) Subsection (b) is subject to IC 26-1-4-210 on the security
interest of a collecting bank, IC 26-1-5.1-118 on the security interest of
a letter-of-credit issuer or nominated person, IC 26-1-9.1-110 on a
security interest arising under IC 26-1-2 or IC 26-1-2.1, and
IC 26-1-9.1-206 on security interests in investment property.
(d) A person becomes bound as debtor by a security agreement
entered into by another person if, by operation of law other than
IC 26-1-9.1 or by contract:
(1) the security agreement becomes effective to create a security
interest in the person's property; or
(2) the person becomes generally obligated for the obligations of
the other person, including the obligation secured under the
security agreement, and acquires or succeeds to all or
substantially all of the assets of the other person.
(e) If a new debtor becomes bound as debtor by a security
agreement entered into by another person:
(1) the agreement satisfies subsection (b)(3) with respect to
existing or after-acquired property of the new debtor to the extent
the property is described in the agreement; and
(2) another agreement is not necessary to make a security interest
in the property enforceable.
(f) The attachment of a security interest in collateral gives the
secured party the rights to proceeds provided by IC 26-1-9-315 and is
also attachment of a security interest in a supporting obligation for the
collateral.
(g) The attachment of a security interest in a right to payment or
performance secured by a security interest or other lien on personal or
real property is also attachment of a security interest in the security
interest, mortgage, or other lien.
(h) The attachment of a security interest in a securities account is
also attachment of a security interest in the security entitlements
carried in the securities account.
(i) The attachment of a security interest in a commodity account is
also attachment of a security interest in the commodity contracts
carried in the commodity account.
SOURCE: IC 26-1-9.1-207; (07)SE0419.1.67. -->
SECTION 67. IC 26-1-9.1-207 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 207. (a) Except as
otherwise provided in subsection (d), a secured party shall use
reasonable care in the custody and preservation of collateral in the
secured party's possession. In the case of chattel paper or an
instrument, reasonable care includes taking necessary steps to preserve
rights against prior parties unless otherwise agreed.
(b) Except as otherwise provided in subsection (d), if a secured
party has possession of collateral:
(1) reasonable expenses, including the cost of insurance and
payment of taxes or other charges, incurred in the custody,
preservation, use, or operation of the collateral are chargeable to
the debtor and are secured by the collateral;
(2) the risk of accidental loss or damage is on the debtor to the
extent of a deficiency in any effective insurance coverage;
(3) the secured party shall keep the collateral identifiable, but
fungible collateral may be commingled; and
(4) the secured party may use or operate the collateral:
(A) for the purpose of preserving the collateral or its value;
(B) as permitted by an order of a court having competent
jurisdiction; or
(C) except in the case of consumer goods, in the manner and
to the extent agreed by the debtor.
(c) Except as otherwise provided in subsection (d), a secured party
having possession of collateral or control of collateral under
IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105, IC 26-1-9.1-106, or
IC 26-1-9.1-107:
(1) may hold as additional security any proceeds, except money
or funds, received from the collateral;
(2) shall apply money or funds received from the collateral to
reduce the secured obligation, unless remitted to the debtor; and
(3) may create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper,
payment intangibles, or promissory notes or a consignor:
(1) subsection (a) does not apply unless the secured party is
entitled under an agreement:
(A) to charge back uncollected collateral; or
(B) otherwise to full or limited recourse against the debtor or
a secondary obligor based on the nonpayment or other default
of an account debtor or other obligor on the collateral; and
(2) subsections (b) and (c) do not apply.
SOURCE: IC 26-1-9.1-208; (07)SE0419.1.68. -->
SECTION 68. IC 26-1-9.1-208 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 208. (a) This section
applies to cases in which there is no outstanding secured obligation,
and the secured party is not committed to make advances, incur
obligations, or otherwise give value.
(b) Within ten (10) days after receiving an authenticated demand by
the debtor:
(1) a secured party having control of a deposit account under
IC 26-1-9.1-104(a)(2) shall send to the bank with which the
deposit account is maintained an authenticated statement that
releases the bank from any further obligation to comply with
instructions originated by the secured party;
(2) a secured party having control of a deposit account under
IC 26-1-9.1-104(a)(3) shall:
(A) pay the debtor the balance on deposit in the deposit
account; or
(B) transfer the balance on deposit into a deposit account in
the debtor's name;
(3) a secured party, other than a buyer, having control of
electronic chattel paper under IC 26-1-9.1-105 shall:
(A) communicate the authoritative copy of the electronic
chattel paper to the debtor or its designated custodian;
(B) if the debtor designates a custodian that is the designated
custodian with which the authoritative copy of the electronic
chattel paper is maintained for the secured party, communicate
to the custodian an authenticated record releasing the
designated custodian from any further obligation to comply
with instructions originated by the secured party and
instructing the custodian to comply with instructions
originated by the debtor; and
(C) take appropriate action to enable the debtor or its
designated custodian to make copies of or revisions to the
authoritative copy that add or change an identified assignee of
the authoritative copy without the consent of the secured party;
(4) a secured party having control of investment property under
IC 26-1-8.1-106(d)(2) or IC 26-1-9.1-106(b) shall send to the
securities intermediary or commodity intermediary with which the
security entitlement or commodity contract is maintained an
authenticated record that releases the securities intermediary or
commodity intermediary from any further obligation to comply
with entitlement orders or directions originated by the secured
party; and
(5) a secured party having control of a letter-of-credit right under
IC 26-1-9.1-107 shall send to each person having an unfulfilled
obligation to pay or deliver proceeds of the letter of credit to the
secured party an authenticated release from any further obligation
to pay or deliver proceeds of the letter of credit to the secured
party; and
(6) a secured party having control of an electronic document
shall:
(A) give control of the electronic document to the debtor or
its designated custodian;
(B) if the debtor designates a custodian that is the
designated custodian with which the authoritative copy of
the electronic document is maintained for the secured
party, communicate to the custodian an authenticated
record releasing the designated custodian from any further
obligation to comply with instructions originated by the
secured party and instructing the custodian to comply with
instructions originated by the debtor; and
(C) take appropriate action to enable the debtor or its
designated custodian to make copies of or revisions to the
authoritative copy that add or change an identified
assignee of the authoritative copy without the consent of
the secured party.
SOURCE: IC 26-1-9.1-301; (07)SE0419.1.69. -->
SECTION 69. IC 26-1-9.1-301 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 301. Except as
otherwise provided in IC 26-1-9.1-303 through IC 26-1-9.1-306, the
following rules determine the law governing perfection, the effect of
perfection or nonperfection, and the priority of a security interest in
collateral:
(1) Except as otherwise provided in this section, while a debtor is
located in a jurisdiction, the local law of that jurisdiction governs
perfection, the effect of perfection or nonperfection, and the
priority of a security interest in collateral.
(2) While collateral is located in a jurisdiction, the local law of
that jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a possessory security interest in
that collateral.
(3) Except as otherwise provided in subdivision (4), while
tangible negotiable documents, goods, instruments, money, or
tangible chattel paper is located in a jurisdiction, the local law of
that jurisdiction governs:
(A) perfection of a security interest in the goods by filing a
fixture filing;
(B) perfection of a security interest in timber to be cut; and
(C) the effect of perfection or nonperfection and the priority of
a nonpossessory security interest in the collateral.
(4) The local law of the jurisdiction in which the wellhead or
minehead is located governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in
as-extracted collateral.
SOURCE: IC 26-1-9.1-310; (07)SE0419.1.70. -->
SECTION 70. IC 26-1-9.1-310 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 310. (a) Except as
otherwise provided in subsection (b) and IC 26-1-9.1-312(b), a
financing statement must be filed to perfect all security interests and
agricultural liens.
(b) The filing of a financing statement is not necessary to perfect a
security interest:
(1) that is perfected under IC 26-1-9.1-308(d),
IC 26-1-9.1-308(e), IC 26-1-9.1-308(f), or IC 26-1-9.1-308(g);
(2) that is perfected under IC 26-1-9.1-309 when it attaches;
(3) in property subject to a statute, regulation, or treaty described
in IC 26-1-9.1-311(a);
(4) in goods in possession of a bailee that are perfected under
IC 26-1-9.1-312(d)(1) or IC 26-1-9.1-312(d)(2);
(5) in certificated securities, documents, goods, or instruments
which is perfected without filing, control, or possession under
IC 26-1-9.1-312(e), IC 26-1-9.1-312(f), or IC 26-1-9.1-312(g);
(6) in collateral in the secured party's possession under
IC 26-1-9.1-313;
(7) in a certificated security which is perfected by delivery of the
security certificate to the secured party under IC 26-1-9.1-313;
(8) in deposit accounts, electronic chattel paper, electronic
documents, investment property, or letter-of-credit rights which
is perfected by control under IC 26-1-9.1-314;
(9) in proceeds which is perfected under IC 26-1-9.1-315; or
(10) that is perfected under IC 26-1-9.1-316.
(c) If a secured party assigns a perfected security interest or
agricultural lien, a filing under IC 26-1-9.1 is not required to continue
the perfected status of the security interest against creditors of and
transferees from the original debtor.
SOURCE: IC 26-1-9.1-312; (07)SE0419.1.71. -->
SECTION 71. IC 26-1-9.1-312 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 312. (a) A security
interest in chattel paper, negotiable documents, instruments, or
investment property may be perfected by filing.
(b) Except as otherwise provided in IC 26-1-9.1-315(c) and
IC 26-1-9.1-315(d), for proceeds:
(1) a security interest in a deposit account may be perfected only
by control under IC 26-1-9.1-314;
(2) and except as otherwise provided in IC 26-1-9.1-308(d), a
security interest in a letter-of-credit right may be perfected only
by control under IC 26-1-9.1-314; and
(3) a security interest in money may be perfected only by the
secured party's taking possession under IC 26-1-9.1-313.
(c) While goods are in the possession of a bailee that has issued a
negotiable document covering the goods:
(1) a security interest in the goods may be perfected by perfecting
a security interest in the document; and
(2) a security interest perfected in the document has priority over
any security interest that becomes perfected in the goods by
another method during that time.
(d) While goods are in the possession of a bailee that has issued a
nonnegotiable document covering the goods, a security interest in the
goods may be perfected by:
(1) issuance of a document in the name of the secured party;
(2) the bailee's receipt of notification of the secured party's
interest; or
(3) filing as to the goods.
(e) A security interest in certificated securities, negotiable
documents, or instruments is perfected without filing or the taking of
possession or control for a period of twenty (20) days from the time it
attaches to the extent that it arises for new value given under an
authenticated security agreement.
(f) A perfected security interest in a negotiable document or goods
in possession of a bailee, other than one that has issued a negotiable
document for the goods, remains perfected for twenty (20) days without
filing if the secured party makes available to the debtor the goods or
documents representing the goods for the purpose of:
(1) ultimate sale or exchange; or
(2) loading, unloading, storing, shipping, transshipping,
manufacturing, processing, or otherwise dealing with them in a
manner preliminary to their sale or exchange.
(g) A perfected security interest in a certificated security or
instrument remains perfected for twenty (20) days without filing if the
secured party delivers the security certificate or instrument to the
debtor for the purpose of:
(1) ultimate sale or exchange; or
(2) presentation, collection, enforcement, renewal, or registration
of transfer.
(h) After the twenty (20) day period specified in subsection (e), (f),
or (g) expires, perfection depends upon compliance with IC 26-1-9.1.
SOURCE: IC 26-1-9.1-313; (07)SE0419.1.72. -->
SECTION 72. IC 26-1-9.1-313 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 313. (a) Except as
otherwise provided in subsection (b), a secured party may perfect a
security interest in
tangible negotiable documents, goods, instruments,
money, or tangible chattel paper by taking possession of the collateral.
A secured party may perfect a security interest in certificated securities
by taking delivery of the certificated securities under IC 26-1-8.1-301.
(b) With respect to goods covered by a certificate of title issued by
this state, a secured party may perfect a security interest in the goods
by taking possession of the goods only in the circumstances described
in IC 26-1-9.1-316(e).
(c) With respect to collateral other than certificated securities and
goods covered by a document, a secured party takes possession of
collateral in the possession of a person other than the debtor, the
secured party, or a lessee of the collateral from the debtor in the
ordinary course of the debtor's business, when:
(1) the person in possession authenticates a record acknowledging
that it holds possession of the collateral for the secured party's
benefit; or
(2) the person takes possession of the collateral after having
authenticated a record acknowledging that it will hold possession
of collateral for the secured party's benefit.
(d) If perfection of a security interest depends upon possession of
the collateral by a secured party, perfection occurs not earlier than the
time the secured party takes possession and continues only while the
secured party retains possession.
(e) A security interest in a certificated security in registered form is
perfected by delivery when delivery of the certificated security occurs
under IC 26-1-8.1-301 and remains perfected by delivery until the
debtor obtains possession of the security certificate.
(f) A person in possession of collateral is not required to
acknowledge that it holds possession for a secured party's benefit.
(g) If a person acknowledges that it holds possession for the secured
party's benefit:
(1) the acknowledgment is effective under subsection (c) or
IC 26-1-8.1-301(a), even if the acknowledgment violates the
rights of a debtor; and
(2) unless the person otherwise agrees or a law other than
IC 26-1-9.1 otherwise provides, the person does not owe any duty
to the secured party and is not required to confirm the
acknowledgment to another person.
(h) A secured party having possession of collateral does not
relinquish possession by delivering the collateral to a person other than
the debtor or a lessee of the collateral from the debtor in the ordinary
course of the debtor's business if the person was instructed before the
delivery or is instructed contemporaneously with the delivery:
(1) to hold possession of the collateral for the secured party's
benefit; or
(2) to redeliver the collateral to the secured party.
(i) A secured party does not relinquish possession, even if a delivery
under subsection (h) violates the rights of a debtor. A person to which
collateral is delivered under subsection (h) does not owe any duty to
the secured party and is not required to confirm the delivery to another
person unless the person otherwise agrees or law other than IC 26-1-9.1
otherwise provides.
SOURCE: IC 26-1-9.1-314; (07)SE0419.1.73. -->
SECTION 73. IC 26-1-9.1-314 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 314. (a) A security
interest in investment property, deposit accounts, letter-of-credit rights,
or electronic chattel paper, or electronic documents may be perfected
by control of the collateral under IC 26-1-7-106, IC 26-1-9.1-104,
IC 26-1-9.1-105, IC 26-1-9.1-106, or IC 26-1-9.1-107.
(b) A security interest in deposit accounts, electronic chattel paper,
or letter-of-credit rights, or electronic documents is perfected by
control under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105, or
IC 26-1-9.1-107 when the secured party obtains control and remains
perfected by control only while the secured party retains control.
(c) A security interest in investment property is perfected by control
under IC 26-1-9.1-106 from the time the secured party obtains control
and remains perfected by control until:
(1) the secured party does not have control; and
(2) one of the following occurs:
(A) if the collateral is a certificated security, the debtor has or
acquires possession of the security certificate;
(B) if the collateral is an uncertificated security, the issuer has
registered or registers the debtor as the registered owner; or
(C) if the collateral is a security entitlement, the debtor is or
becomes the entitlement holder.
SOURCE: IC 26-1-9.1-317; (07)SE0419.1.74. -->
SECTION 74. IC 26-1-9.1-317 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 317. (a) A security
interest or agricultural lien is subordinate to the rights of:
(1) a person entitled to priority under IC 26-1-9.1-322; and
(2) except as provided in subsection (e), a person that becomes a
lien creditor before the earlier of the time:
(A) the security interest or agricultural lien is perfected; or
(B) one (1) of the conditions specified in
IC 26-1-9.1-203(b)(3) is met;
and a financing statement covering the collateral is filed.
(b) Except as otherwise provided in subsection (e), a buyer, other
than a secured party, of tangible chattel paper,
tangible documents,
goods, instruments, or a security certificate takes free of a security
interest or agricultural lien if the buyer gives value and receives
delivery of the collateral without knowledge of the security interest or
agricultural lien and before it is perfected.
(c) Except as otherwise provided in subsection (e), a lessee of goods
takes free of a security interest or agricultural lien if the lessee gives
value and receives delivery of the collateral without knowledge of the
security interest or agricultural lien and before it is perfected.
(d) A licensee of a general intangible or a buyer, other than a
secured party, of accounts, electronic chattel paper, electronic
documents, general intangibles, or investment property other than a
certificated security takes free of a security interest if the licensee or
buyer gives value without knowledge of the security interest and before
it is perfected.
(e) Except as otherwise provided in IC 26-1-9.1-320 and
IC 26-1-9.1-321, if a person files a financing statement with respect to
a purchase-money security interest before or within twenty (20) days
after the debtor receives delivery of the collateral, the security interest
takes priority over the rights of a buyer, lessee, or lien creditor that
arise between the time the security interest attaches and the time of
filing.
SOURCE: IC 26-1-9.1-338; (07)SE0419.1.75. -->
SECTION 75. IC 26-1-9.1-338 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 338. If a security
interest or agricultural lien is perfected by a filed financing statement
providing information described in IC 26-1-9.1-516(b)(5) that is
incorrect at the time the financing statement is filed:
(1) the security interest or agricultural lien is subordinate to a
conflicting perfected security interest in the collateral to the
extent that the holder of the conflicting security interest gives
value in reasonable reliance upon the incorrect information; and
(2) a purchaser, other than a secured party, of the collateral takes
free of the security interest or agricultural lien to the extent that,
in reasonable reliance upon the incorrect information, the
purchaser gives value and, in the case of tangible chattel paper,
tangible documents, goods, instruments, or a security certificate,
receives delivery of the collateral.
SOURCE: IC 26-1-9.1-601; (07)SE0419.1.76. -->
SECTION 76. IC 26-1-9.1-601 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 601. (a) After default,
a secured party has the rights provided in this section through
IC 26-1-9.1-628 and, except as otherwise provided in IC 26-1-9.1-602,
those provided by agreement of the parties. A secured party:
(1) may reduce a claim to judgment, foreclose, or otherwise
enforce the claim, security interest, or agricultural lien by any
available judicial procedure; and
(2) if the collateral is documents, may proceed either as to the
documents or as to the goods they cover.
(b) A secured party in possession of collateral or control of
collateral under
IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
IC 26-1-9.1-106, or IC 26-1-9.1-107 has the rights and duties provided
in IC 26-1-9.1-207.
(c) The rights under subsections (a) and (b) are cumulative and may
be exercised simultaneously.
(d) Except as otherwise provided in subsection (g) and
IC 26-1-9.1-605, after default, a debtor and an obligor have the rights
provided in IC 26-1-9.1-601 through IC 26-1-9.1-628 and by agreement
of the parties.
(e) If a secured party has reduced its claim to judgment, the lien of
any levy that may be made upon the collateral by virtue of an execution
based upon the judgment relates back to the earliest of:
(1) the date of perfection of the security interest or agricultural
lien in the collateral;
(2) the date of filing a financing statement covering the collateral;
or
(3) any date specified in a statute under which the agricultural lien
was created.
(f) A sale pursuant to an execution is a foreclosure of the security
interest or agricultural lien by judicial procedure within the meaning of
this section. A secured party may purchase at the sale and thereafter
hold the collateral free of any other requirements of IC 26-1-9.1.
(g) Except as otherwise provided in IC 26-1-9.1-607(c),
IC 26-1-9.1-601 through IC 26-1-9.1-628 impose no duties upon a
secured party that is a consignor or is a buyer of accounts, chattel
paper, payment intangibles, or promissory notes.
SOURCE: IC 32-31-4-5; (07)SE0419.1.77. -->
SECTION 77. IC 32-31-4-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 5. If a tenant does not
claim the tenant's property within ninety (90) days after receiving
notice under section 3 of this chapter, a warehouseman may sell the
property received under this chapter under IC 26-1-7-210(2).
IC 26-1-7-210(b).
SOURCE: IC 26-1-1-105; IC 26-1-2-208; IC 26-1-2.1-207.
; (07)SE0419.1.78. -->
SECTION 78. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2007]: IC 26-1-1-105; IC 26-1-2-208; IC 26-1-2.1-207.
SEA 419
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