Chapter 79

NOTE: Subject sections (1999 Edition) all subsequently renumbered or repealed

NOTES OF DECISIONS

The requirements of this [former] chapter necessary to grant the petitioner a security interest in the first net proceeds were satisfied. Great W. Nat. Bank v. Hill, 27 Or App 893, 557 P2d 1367 (1976), Sup Ct review denied

This [former] chapter applies to the assignment of proceeds of a pending lawsuit. Great W. Nat. Bank v. Hill, 27 Or App 893, 557 P2d 1367 (1976), Sup Ct review denied

Where lease instrument covering farm tractor required lessee to be responsible for taxes and insurance, to bear risk of loss and excluded warranties of fitness and merchantability; at end of lease period fair market wholesale value of tractor would be substantially less than actual estimated value; and common practice was for lessees to purchase tractors for anticipated fair market wholesale value, instrument was security agreement governed by this [former] chapter. Appleway Leasing Inc., v. Wilken, 39 Or App 43, 591 P2d 382 (1979)

Clear and unequivocal actions manifesting party’s intent to waive may be proved by parol and circumstantial evidence as well as by direct testimony. Bank of Eastern Oregon v. Griffith, 101 Or App 528, 792 P2d 1210 (1990)

LAW REVIEW CITATIONS: 12 WLJ 207-264 (1976); 16 WLR 755 (1980); 75 OLR 493 (1996)

79.0103

NOTES OF DECISIONS

Liability for negative equity in goods traded-in by purchaser is not part of price of collateral or value given to enable debtor to acquire rights in collateral. In re Johnson, 380 B.R. 236 (Bkrtcy. D. Or. 2007)

79.0207

LAW REVIEW CITATIONS: 89 OLR 623 (2010)

79.0610

LAW REVIEW CITATIONS: 89 OLR 623 (2010)

79.1020

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Where debtor, agricultural cooperative, agreed to pay creditor out of moneys it was to receive from sale of its contracts to another cooperative, this was a payment out of a particular fund and not an assignment or sale of accounts. In the Matter of Mico, Inc. v. Wilbur-Ellis Co., 39 Or App 867, 593 P2d 1276 (1979)

Where vendor transferred security interest in land sale contract with interest in land subject to contract, security interest in contract was subject to article 9 filing requirement but security interest in land was not. Security Bank v. Chiapuzio, 304 Or 438, 747 P2d 335 (1987)

Sufficient connection exists between lien interest in land and lien interest in land sale contract that recordation of either lien is sufficient to give person viewing recordation constructive notice of other lien. Security Bank v. Chiapuzio, 304 Or 438, 747 P2d 335 (1987)

79.1040

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Plaintiff’s security interest prevailed over landlord’s lien. Briggs v. Thompson, 287 Or 223, 598 P2d 296 (1979)

LAW REVIEW CITATIONS: 69 OLR 850 (1990)

79.1060

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Transportation operating authorities were general intangibles under this section and were subject to creditor’s perfected security interest. Freightliner Market Development Corp. v. Silver Wheel Freightliner, Ins, 823 F2d 362 (1987)

79.1100

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Where serial number of tractor was incorrectly stated in financing statement, but tractor was otherwise correctly identified, defective serial number did not invalidate financing statement. Appleway Leasing Inc. v. Wilken, 39 Or App 43, 591 P2d 382 (1979)

79.1130

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Where seller alleged that it obtained security interest by retention of title to goods under ORS 72.4010 and it had given up possession to buyer, any security interest it might have obtained no longer existed and it could not revive and perfect security interest by merely retaking possession of goods. Bank of Wallowa v. Gary Mac, Inc., 49 Or App 403, 619 P2d 1310 (1980)

79.2010

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Where general creditor purchased from its debtor inventory subject to perfected security interest partly in satisfaction of a debt and partly for new value, portion which was transferred for new value was bought by a buyer in the ordinary course of business within the meaning of this section. Walter E. Heller Western, Inc. v. Bohemia, Inc., 61 Or App 57, 655 P2d 1073 (1982)

Where third party owned truck engine rather than retaining security interest in it, security interest in truck predating installation of engine and applying to “additions, attachments and accessions” was not binding on third party and engine would become subject to security interest only if engine acceded to truck under common law doctrine of accession. Bancorp Leasing v. Stadeli Pump, 303 Or 545, 739 P2d 548 (1987)

79.2030

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

A security agreement describing collateral “Furniture as per attached listing” with no listing attached does not comply with this section. J.K. Gill Co. v. Fireside Realty, Inc., 262 Or 486, 499 P2d 813 (1972)

Change in business form of debtor does not cause security interest in after-acquired inventory of debtor to terminate. Fliegel v. Associates Capital Co. of Del., Inc., 272 Or 434, 537 P2d 1144 (1975)

Where the decedent granted a creditor a valid security interest in the form of an assignment of proceeds of a pending lawsuit, the interest was enforceable against the personal representative. Great W. Nat. Bank v. Hill, 27 Or App 893, 557 P2d 1367 (1976), Sup Ct review denied

A creditor cannot claim a perfected security interest in collateral unless it has an enforceable security agreement with the debtor which describes the collateral to be charged with the security interest. Community Bank v. Jones, 278 Or 647, 566 P2d 470 (1977)

Where stock pledge agreement provided that, in case of default of buyer, stock should be returned to seller after 30 days written notice, pledge agreement did not prevent attachment of security interest until 30 days after notice as it was not explicit agreement postponing time of attachment of security interest within meaning of this section. Smith v. Dean Vincent, Inc., 47 Or App 887, 615 P2d 1097 (1980)

Where seller signed agreement for sale of shop and office equipment which set forth the understanding that purchasers would transfer equipment to corporation in exchange for corporate stock and that if seller desired security such security would be in form of pledge of corporate stock, no security interest was present that could be perfected by merely taking possession of goods. Bank of Wallowa, v. Gary Mac, Inc., 49 Or App 403, 619 P2d 1310 (1980)

No security interest had attached to engine where engine was not in possession of person alleged to have such interest and there was no signed writing giving him a security interest in engine. Bancorp Leasing v. Stadeli Pump, 303 Or 545, 739 P2d 548 (1987)

79.2040

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Advances made by secured party’s assignee under security agreement containing future advance clause have priority over other creditors’ secured liens that arose after originally secured party’s rights were perfected but before future advances were made by assignee. In re Robert B. Lee Enterprises, Inc., 980 F2d 606 (1992)

“Advances” includes services rendered pursuant to binding commitment. Boers v. Payline Systems, Inc., 145 Or App 1, 928 P2d 1010 (1996), Sup Ct review denied

Security agreement stating that collateral for primary loan is also collateral for future advances is enforceable only if future advances are sufficiently related to primary loan that consumer consent may be inferred. In re Wollin, 249 B.R. 555 (Bkrtcy. D. Or. 2000)

79.2060

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

LAW REVIEW CITATIONS: 52 OLR 465, 466 (1973)

79.2070

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

It is not conversion for the secured party to assign its rights to a third party subject to the debtor’s right to redeem. McRae v. Volger, 272 Or 230, 536 P2d 509 (1975)

79.3010

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

LAW REVIEW CITATIONS: 17 WLR 836 (1981)

79.3015

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Where proceeds of consignment sales were acquired by consignee after consigned goods were delivered to buyers, this section did not apply. Belmont International v. American International, 313 Or 112, 831 P2d 15 (1992)

79.3020

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Where creditor perfected security interest in general intangibles by filing financing statement as required under this section, creditor was not required to receive approval of Public Utility Commission under [former] ORS 767.186 as condition to perfecting security interest. Freightliner Market Development Corp. v. Silver Wheel Freightliners, Inc., 823 F2d 362 (1987)

79.3050

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Because delivery of the thing bailed is essential to bailment, the security interest of the party to whom the certificate had been assigned was not perfected by the issuing corporation’s possession of the certificate. Heinicke Instruments Co. v. Republic Corp., 543 F2d 700 (1976)

79.3060

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Security interest does not continue in collateral purchased by holder in due course. Citizens Valley Bank v. Pac. Materials Co., 263 Or 557, 503 P2d 491 (1972)

A secured party may attach conditions or limitations to its consent to sales of collateral. If conditions are imposed, a sale in violation of those conditions is unauthorized and the security interest continues in the collateral. Baker Prod. Cred. v. Long Creek Meat, 266 Or 643, 513 P2d 1129 (1973)

Proceeds include whatever is received by anyone, not merely whatever is received by the debtor. Baker Prod. Cred. v. Long Creek Meat, 266 Or 643, 513 P2d 1129 (1973)

Change in business form of debtor does not cause security interest in after-acquired inventory of debtor to terminate. Fliegel v. Associates Capital Co. of Del., Inc., 272 Or 434, 537 P2d 1144 (1975)

Under this section, security interest continues in identifiable cash proceeds from sale of collateral regardless of whether sale was authorized by secured party. Dry Canyon Farms v. U.S. National Bank of Oregon, 84 Or App 686, 735 P2d 620 (1987)

Although 1980 security agreement gave plaintiff perfected security interest in traded equipment, actions of plaintiff’s agents drawing line through all references to traded equipment on its security agreement, deleting equipment from 1981 security agreement less than six months after trade and later writing “traded” on 1980 security agreement next to each piece of equipment traded constitute strong circumstantial evidence that plaintiff intentionally relinquished its interest in those items. Bank of Eastern Oregon v. Griffith, 101 Or App 528, 792 P2d 1210 (1990)

Priority in distribution of proceeds from sale of judicially foreclosed property is determined by creditor’s priority in property at time of foreclosure. Commercial Bank v. Pride Furniture, Inc., 129 Or App 137, 877 P2d 1222 (1994), Sup Ct review denied

LAW REVIEW CITATIONS: 17 WLR 779 (1981)

79.3070

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

A purchaser who is the direct or indirect recipient of a transfer in bulk, and who has knowledge of the underlying transaction, takes subject to a prior perfected security interest created by the initial transferor. Community Bank v. Jones, 278 Or 647, 566 P2d 470 (1977)

Where general creditor purchased from its debtor inventory subject to perfected security interest partly in satisfaction of a debt and partly for new value, security interest continued in that portion of the inventory which was transferred in satisfaction of the debt. Walter E. Heller Western, Inc. v. Bohemia, Inc., 61 Or App 57, 655 P2d 1073 (1982)

“Seller” creating security interest is person whose title in property passed to buyer. Schultz v. Bank of the West, 325 Or 81, 934 P2d 421 (1997)

LAW REVIEW CITATIONS: 17 WLR 840 (1981)

79.3090

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

This section clearly provides that holders in due course take priority over earlier perfected security interests. Citizens Valley Bank v. Pac. Materials Co., 263 Or 557, 503 P2d 491 (1972)

79.3100

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

A possessory lien is not lost if the chattel is taken from the lienor without his consent. Finch v. Miller, Credithrift of America, Inc., 271 Or 271, 531 P2d 892 (1975)

By enacting this section, the legislature by implication amended [former] ORS 87.100; consequently, a perfected security interest has priority over a nonpossessory artisan’s lien. Balzer Mach. Co. v. Klineline Sand & Gravel Co., 271 Or 596, 533 P2d 321 (1975)

79.3120

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Unless covered by another specific provision of [former] ORS chapter 79, conflicting security interests rank according to priority in time of filing or perfection. Community Bank v. Jones, 278 Or 647, 566 P2d 470 (1977)

Holder of perfected purchase money security interest who did not give required notice to holder of conflicting interest was not entitled to priority, even if holder of conflicting security interest had actual notice and was not prejudiced by lack of notice. Credit Alliance v. Amhoist Credit, 74 Or App 257, 702 P2d 1121 (1985)

Defendant, nonseller creditor, did not acquire purchase money security interest in two tractors, advanced to debtor by plaintiff, when it advanced money to debtor which debtor in turn remitted to plaintiff in payment for tractors, because money did not enable debtor to acquire either rights in or use of tractor. Wade Credit Corp. v. Borg-Warner Acceptance Corp., 83 Or App 479, 732 P2d 76 (1987), Sup Ct review denied

LAW REVIEW CITATIONS: 17 WLR 811 (1981)

79.3150

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

LAW REVIEW CITATIONS: 17 WLR 815 (1981)

79.3180

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

An assignee of a contract is subject to any setoff the account debtor might have against the assignor. Investment Serv. Co. v. No. Pac. Lbr. Co., 261 Or 43, 492 P2d 470 (1972)

Precode defenses are not available unless they are expressly provided for in the Code. Seattle-First Nat. Bank v. Ore. Pac. Ind., Inc., 262 Or 578, 500 P2d 1033 (1972)

A claim or setoff “accrues” when a cause of action exists. Seattle-First Nat. Bank v. Ore. Pac. Ind., Inc., 262 Or 578, 500 P2d 1033 (1972)

79.4010

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Where plaintiff had actual knowledge of defendant’s erroneous filing of security interest in wrong state, filing was effective as against plaintiff. NW Acceptance Corp. v. McClellan Equip. Co., 79 Or App 405, 719 P2d 887 (1986)

79.4020

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

ATTY. GEN. OPINIONS: Filing fees for financial statement, (1974) Vol 36, p 777

79.4030

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

ATTY. GEN. OPINIONS: Filing for record of financing statement, (1974) Vol 36, p 777; construing “continuation statement,” (1976) Vol 38, p 189

79.4050

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

LAW REVIEW CITATIONS: 17 WLR 831 (1981)

79.5030

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

State authorization under this section of private self-help repossessions is not sufficient state involvement to constitute the “state action” necessary to invoke the Due Process Clause of U.S. Const., Am. 14. Brown v. U.S. Nat. Bank, 265 Or 234, 509 P2d 442 (1973)

Where contract contained security agreement providing for immediate possession of collateral in event of default and default was admitted, trial court was required by this section to order creditor put in immediate possession of collateral. State ex rel Aetna Business Credit, Inc. v. Davis, 291 Or 369, 631 P2d 337 (1981)

Language permitting creditor to require debtor to assemble collateral does not place limitations on creditor’s right to take possession; it merely provides for additional means by which creditor may require debtor to assist in assembling the collateral. Oregon Bank v. Fox, 73 Or App 612, 699 P2d 1147 (1985)

When contract provided seller with right to demand interest on payment defaults, but not with right to accelerate payment of principle or repossess motor vehicle, parties had “otherwise agreed” to specific, limited remedy and seller was not entitled to proceed under this section. Herrera v. Quijano, 114 Or App 287, 835 P2d 140 (1992)

Potential damage to realty does not affect ability of secured party to repossess manufactured structure titled as vehicle. BankAmerica Housing Services v. P.D.N. and Associates, 159 Or App 264, 977 P2d 396 (1999)

LAW REVIEW CITATIONS: 52 OLR 463 (1973); 17 WLR 792 (1981)

79.5040

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

The statute of limitations applicable to rights created under this section is ORS 12.080. Chaney v. Fields Chev. Co., 264 Or 21, 503 P2d 1239 (1972)

The fact that notice of a nonpossessory lien had been filed did not constitute knowledge thereof with respect to one who did not have actual knowledge. Balzer Mach. Co. v. Klineline Sand & Gravel Co., 271 Or 596, 533 P2d 321 (1975)

The security holder may sell the collateral in the condition it is in when the security holder gains possession or may have to prepare it for sale, whatever is commercially reasonable. Weiss v. NW Accept. Corp., 274 Or 343, 546 P2d 1065 (1976)

“Commercially reasonable” transaction does not require expenditure of all possible effort to obtain best sale result. Vetter v. Bank of Oregon, 39 Or App 181, 591 P2d 768 (1979), Sup Ct review denied

Secured party’s failure to comply with requirements of this section does not preclude recovery of deficiency from debtor. All-States Leasing v. Ochs, 42 Or App 319, 600 P2d 899 (1979)

Under this section, bank (secured party) did not have right to sell more of brokerage company’s (debtor’s) collateral than required to cover debt, and sale of stock beyond amount necessary was not “commercially reasonable.” Lamb Brothers, Inc. v. First State Bank of Oregon, 285 Or 39, 589 P2d 1094 (1979)

Notice given by secured party to debtor which merely informed debtor of secured party’s rights under sales contract and that secured party intended to apply for certificate of title to repossessed vehicle was insufficient to meet requirements of this section. Benton-Lincoln Credit Service v. Giffin, 48 Or App 559, 617 P2d 662 (1980)

In action by farm equipment owner for alleged failure of defendant, holding security interest, to conduct public auction in commercially reasonable manner, evidence was sufficient for jury to determine damages where no dispute existed as to price actually obtained at forced auction sale and testimony created reasonable inference of price which could have been obtained had auction been conducted in commercially reasonable manner. Schrock v. Citizens Valley Bank, 49 Or App 1083, 621 P2d 96 (1980), Sup Ct review denied

Failure to dispose of perishables and proceeds left in cash register in commercially reasonable manner under this section precluded recovery of deficiency judgment for breach of secured sale and lease agreement. Ruchaber v. Short, 53 Or App 58, 630 P2d 915 (1981)

Sale of collateral was not unreasonable although notice was sent to defendants almost one year after collateral was returned by defendants and defendants were notified that collateral would be sold in Santa Clara, California, only 10 days after defendants received the notice. FMC Finance Corp. v. Craig, 65 Or App 459, 671 P2d 731 (1983)

It was reversible error for instruction and verdict form to eliminate determination by jury of commercial reasonableness of expenses for preparation and sale of collateral. Ferrous Financial Services v. Self Loader Service, 70 Or App 285, 689 P2d 974 (1984), Sup Ct review denied

Creditor’s failure to sell collateral in commercially reasonable manner gives rise to presumption that collateral was worth amount of outstanding debt at time of default. CIT Corporation v. Nielson Logging Co., 75 Or App 267, 706 P2d 967 (1985)

Application of foreclosure proceeds in “satisfaction of indebtedness” is first to satisfaction of accumulated interest, then to principal. Magee v. All Terrain Contractors, Inc., 144 Or App 279, 926 P2d 323 (1996)

79.5070

NOTE: Repealed as of July 1, 2001; but see sec. 188 to 195, c. 445, Oregon Laws 2001

NOTES OF DECISIONS

Under this section, secured party-bank was not liable for obtaining inadequate price where collateral-stock was sold on New York Stock Exchange. Lamb Brothers, Inc. v. First State Bank of Oregon, 285 Or 39, 589 P2d 1094 (1979)

In action by farm equipment owner for alleged failure of defendant, holder of security interest, to conduct public auction in commercially reasonable manner, evidence was sufficient for jury to determine damages where no dispute existed as to price actually obtained at forced auction sale and testimony created reasonable inference of price which could have been obtained had auction been conducted in commercially reasonable manner. Schrock v. Citizens Valley Bank, 49 Or App 1083, 621 P2d 96 (1980), Sup Ct review denied

Sale of surrendered vehicle to wholesale buyer instead of through retail lot did not make sale commercially unreasonable as matter of law. Toy Co. Salem, Inc. v. Wood, 109 Or App 265, 819 P2d 312 (1991)