(A) A purchaser of chattel paper has priority over a security interest in the chattel paper that is claimed merely as proceeds of inventory subject to a security interest if:
(1) In good faith and in the ordinary course of the purchaser's business, the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under section 1309.105 of the Revised Code; and
(2) The chattel paper does not indicate that it has been assigned to an identified assignee other than the purchaser.
(B) A purchaser of chattel paper has priority over a security interest in the chattel paper that is claimed other than merely as proceeds of inventory subject to a security interest if the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under section 1309.105 of the Revised Code in good faith, in the ordinary course of the purchaser's business, and without knowledge that the purchase violates the rights of the secured party.
(C) Except as otherwise provided in section 1309.327 of the Revised Code, a purchaser having priority in chattel paper under division (A) or (B) of this section also has priority in proceeds of the chattel paper to the extent that:
(1) Section 1309.322 of the Revised Code provides for priority in the proceeds; or
(2) The proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods, even if the purchaser's security interest in the proceeds is unperfected.
(D) Except as otherwise provided in division (A) of section 1309.331 of the Revised Code, a purchaser of an instrument has priority over a security interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party.
(E) For purposes of divisions (A) and (B) of this section, the holder of a purchase money security interest in inventory gives new value for chattel paper constituting proceeds of the inventory.
(F) For purposes of divisions (B) and (D) of this section, if chattel paper or an instrument indicates that it has been assigned to an identified secured party other than the purchaser, a purchaser of the chattel paper or instrument has knowledge that the purchase violates the rights of the secured party.
Effective Date: 07-01-2001
Section: Previous 1309.323 1309.324 1309.325 1309.326 1309.327 1309.328 1309.329 1309.330 1309.331 1309.332 1309.333 1309.334 1309.335 1309.336 1309.337 NextLast modified: October 10, 2016