Wis. Stat. § 409.101 Short title
This chapter may be cited as uniform commercial code — secured transactions.
Uniform commercial code — secured transactions
Wis. Stat. ch. 409
in effectWis. Stat. § 409.102 Definitions and index of definitions
(1) Chapter 409 definitions. In this chapter:
(a) “Accession” means goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.
(ag) “Account,” except as used in “account for,” means a right to payment of a monetary obligation, whether or not earned by performance; for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of; for services rendered or to be rendered; for a policy of insurance issued or to be issued; for a secondary obligation incurred or to be incurred; for energy provided or to be provided; for the use or hire of a vessel under a charter or other contract; arising out of the use of a credit or charge card or information contained on or for use with the card; or 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 rights to payment evidenced by chattel paper or an instrument; commercial tort claims; deposit accounts; investment property; letter-of-credit rights or letters of credit; or 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.
(am) “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.
(as) “Accounting,” except as used in “accounting for,” means a record:
1. Authenticated by a secured party;
2. Indicating the aggregate unpaid secured obligations as of a date not more than 35 days earlier or 35 days later than the date of the record; and
3. Identifying the components of the obligations in reasonable detail.
(b) “Agricultural lien” means an interest, other than a security interest, in farm products:
1. Which secures payment or performance of an obligation for:
a. Goods or services furnished in connection with a debtor’s farming operation; or
b. Rent on real property leased by a debtor in connection with its farming operation;
2. Which is created by statute in favor of a person that:
a. In the ordinary course of its business furnished goods or services to a debtor in connection with a debtor’s farming operation; or
b. Leased real property to a debtor in connection with the debtor’s farming operation; and
3. Whose effectiveness does not depend on the person’s possession of the personal property.
(bcm) “Applicant” means a person at whose request or for whose account a letter of credit is issued. The term includes a person who requests an issuer to issue a letter of credit on behalf of another if the person making the request undertakes an obligation to reimburse the issuer.
(bg) “As-extracted collateral” means:
1. Oil, gas, or other minerals that are subject to a security interest that is created by a debtor having an interest in the minerals before extraction and which attaches to the minerals as extracted; or
2. 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.
(bm) “Authenticate” means:
1. To sign; or
2. With present intent to adopt or accept a record, to attach to or logically associate with the record an electronic sound, symbol, or process.
(bs) “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.
(btm) “Beneficiary” means a person who under the terms of a letter of credit is entitled to have its complying presentation honored. The term includes a person to whom drawing rights have been transferred under a transferable letter of credit.
(c) “Cash proceeds” means proceeds that are money, checks, deposit accounts, or the like.
(cg) “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. The term includes another record maintained as an alternative to a certificate of title by the governmental unit that issues certificates of title if a statute permits the security interest in question to be indicated on the record as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral.
(cm) “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. The term does not include charters or other contracts involving the use or hire of a vessel. The term does not include 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. In this paragraph, “monetary obligation” means a monetary obligation secured by the goods or owned under a lease of the goods and includes a monetary obligation with respect to software used in the goods.
(cs) “Collateral” means the property subject to a security interest or agricultural lien. The term includes:
1. Proceeds to which a security interest attaches;
2. Accounts, chattel paper, payment intangibles, and promissory notes that have been sold; and
3. Goods that are the subject of a consignment.
(d) “Commercial tort claim” means a claim arising in tort with respect to which:
1. The claimant is an organization; or
2. The claimant is an individual and the claim:
a. Arose in the course of the claimant’s business or profession; and
b. Does not include damages arising out of personal injury to or the death of an individual.
(dg) “Commodity account” means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer.
(dm) “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:
1. 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
2. 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.
(ds) “Commodity customer” means a person for which a commodity intermediary carries a commodity contract on its books.
(e) “Commodity intermediary” means a person that:
1. Is registered as a futures commission merchant under federal commodities law; or
2. 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.
(eg) “Communicate” means:
1. To send a written or other tangible record;
2. To transmit a record by any means agreed upon by the persons sending and receiving the record; or
3. 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.
(em) “Consignee” means a merchant to which goods are delivered in a consignment.
(es) “Consignment” means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and:
1. The merchant:
a. Deals in goods of that kind under a name other than the name of the person making delivery;
b. Is not an auctioneer; and
c. Is not generally known by its creditors to be substantially engaged in selling the goods of others;
2. With respect to each delivery, the aggregate value of the goods is $1,000 or more at the time of delivery;
3. The goods are not consumer goods immediately before delivery; and
4. The transaction does not create a security interest that secures an obligation.
(f) “Consignor” means a person that delivers goods to a consignee in a consignment.
(fg) “Consumer debtor” means a debtor in a consumer transaction.
(fm) “Consumer goods” means goods that are used or bought for use primarily for personal, family, or household purposes.
(fs) “Consumer-goods transaction” means a consumer transaction in which:
1. An individual incurs an obligation primarily for personal, family, or household purposes; and
2. A security interest in consumer goods secures the obligation.
(g) “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.
(gg) “Consumer transaction” means a transaction in which an individual incurs an obligation primarily for personal, family, or household purposes; a security interest secures the obligation; and the collateral is held or acquired primarily for personal, family, or household purposes. The term includes consumer-goods transactions.
(gm) “Continuation statement” means an amendment of a financing statement which:
1. Identifies, by its file number, the initial financing statement to which it relates; and
2. Indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement.
(gs) “Debtor” means:
1. A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;
2. A seller of accounts, chattel paper, payment intangibles, or promissory notes; or
3. A consignee.
(h) “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.
(hg) “Document” means a document of title or a receipt of the type described in s. 407.201 (2).
(hm) “Electronic chattel paper” means chattel paper evidenced by a record or records consisting of information stored in an electronic medium.
(hs) “Encumbrance” means a right, other than an ownership interest, in real property. The term includes mortgages and other liens on real property.
(i) “Equipment” means goods other than inventory, farm products, or consumer goods.
(ig) “Farm products” means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are:
1. Crops grown, growing, or to be grown, including:
a. Crops produced on trees, vines, and bushes; and
b. Aquatic goods produced in aquacultural operations;
2. Livestock, born or unborn, including aquatic goods produced in aquacultural operations;
3. Supplies used or produced in a farming operation; or
4. Products of crops or livestock in their unmanufactured states.
(im) “Farming operation” means raising, cultivating, propagating, fattening, grazing, or any other farming, livestock, or aquacultural operation.
(is) “File number” means the number assigned to an initial financing statement pursuant to s. 409.519 (1).
(j) “Filing office” means an office designated in s. 409.501 as the place to file a financing statement.
(jg) “Filing-office rule” means a rule promulgated pursuant to s. 409.526.
(jm) “Financing statement” means a record or records composed of an initial financing statement and any filed record relating to the initial financing statement.
(js) “Fixture filing” means the filing of a financing statement covering goods that are or are to become fixtures and satisfying s. 409.502 (1) and (2). The term includes the filing of a financing statement covering goods of a transmitting utility which are or are to become fixtures.
(k) “Fixtures” means goods that have become so related to particular real property that an interest in them arises under real property law.
(kg) “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.
(km) “Good faith” means honesty in fact in the conduct or transaction concerned.
(ks) “Goods” means all things that are movable when a security interest attaches. The term includes fixtures; standing timber that is to be cut and removed under a conveyance or contract for sale; the unborn young of animals; crops grown, growing, or to be grown, even if the crops are produced on trees, vines, or bushes; and 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 the program is associated with the goods in such a manner that it customarily is considered part of the goods, or 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.
(L) “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.
(Lg) “Health-care-insurance receivable” means an interest in or claim under a policy of insurance which is a right to payment of a monetary obligation for health-care goods or services provided.
(Lm) “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 ordinary course of business is transferred by delivery with any necessary endorsement or assignment. The term does not include investment property; letters of credit; or 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.
(Ls) “Inventory” means goods, other than farm products, which:
1. Are leased by a person as lessor;
2. Are held by a person for sale or lease or to be furnished under a contract of service;
3. Are furnished by a person under a contract of service; or
4. Consist of raw materials, work in process, or materials used or consumed in a business.
(m) “Investment property” means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract, or commodity account.
(mcm) “Issuer” means a bank or other person that issues a letter of credit, but does not include an individual who makes an engagement for personal, family, or household purposes.
(mg) “Jurisdiction of organization,” with respect to a registered organization, means the jurisdiction under whose law the organization is formed or organized.
(mkm) “Letter of credit” means a definite undertaking that satisfies the requirements of s. 405.104 by an issuer to a beneficiary at the request or for the account of an applicant or, in the case of a financial institution, to itself or for its own account, to honor a documentary presentation by payment or delivery of an item of value.
(mm) “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.
(ms) “Lien creditor” means:
1. A creditor that has acquired a lien on the property involved by attachment, levy, or the like;
2. An assignee for benefit of creditors from the time of assignment;
3. A trustee in bankruptcy from the date of the filing of the petition; or
4. A receiver in equity from the time of appointment.
(n) “Manufactured home” means a structure, transportable in one or more sections, which, in the traveling mode, is 8 body feet or more in width or 40 body feet or more in length, or, when erected on site, is 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 paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the U.S. secretary of housing and urban development and complies with the standards established under title 42 of the U.S. code.
(ng) “Manufactured-home transaction” means a secured transaction:
1. That creates a purchase-money security interest in a manufactured home, other than a manufactured home held as inventory; or
2. In which a manufactured home, other than a manufactured home held as inventory, is the primary collateral.
(nm) “Mortgage” means a consensual interest in real property, including fixtures, which secures payment or performance of an obligation.
(ns) “New debtor” means a person that becomes bound as a debtor under s. 409.203 (4) by a security agreement previously entered into by another person.
(o) “New value” means money; money’s worth in property, services, or new credit; or 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.
(odm) “Nominated person” means a person whom the issuer:
1. Designates or authorizes to pay, accept, negotiate, or otherwise give value under a letter of credit; and
2. Undertakes by agreement or custom and practice to reimburse.
(og) “Noncash proceeds” means proceeds other than cash proceeds.
(om) “Obligor” means a person that, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral, owes payment or other performance of the obligation; has provided property other than the collateral to secure payment or other performance of the obligation; or 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.
(os) “Original debtor,” except as used in s. 409.310 (3), means a person that, as a debtor, entered into a security agreement to which a new debtor has become bound under s. 409.203 (4).
(p) “Payment intangible” means a general intangible under which the account debtor’s principal obligation is a monetary obligation.
(pg) “Person related to,” with respect to an individual, means:
1. The spouse of the individual;
2. A brother, brother-in-law, sister, or sister-in-law of the individual;
3. An ancestor or lineal descendant of the individual or the individual’s spouse; or
4. Any other relative, by blood or marriage, of the individual or the individual’s spouse who shares the same home with the individual.
(pm) “Person related to,” with respect to an organization, means:
1. A person directly or indirectly controlling, controlled by, or under common control with the organization;
2. An officer or director of, or a person performing similar functions with respect to, the organization;
3. An officer or director of, or a person performing similar functions with respect to, a person described in subd. 1.;
4. The spouse of an individual described in subd. 1., 2., or 3.; or
5. An individual who is related by blood or marriage to an individual described in subd. 1., 2., 3., or 4. and shares the same home with the individual.
(ps) “Proceeds,” except as used in s. 409.609 (2), means the following property:
1. Whatever is acquired upon the sale, lease, license, exchange, or other disposition of collateral;
2. Whatever is collected on, or distributed on account of, collateral;
3. Rights arising out of collateral;
4. 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; or
5. 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.
(ptm) “Proceeds of a letter of credit” means the cash, check, accepted draft, or other item of value paid or delivered upon honor or giving of value by the issuer or any nominated person under the letter of credit. The term does not include a beneficiary’s drawing rights or documents presented by the beneficiary.
(pu) “Production-money crops” means crops that secure a production-money obligation incurred with respect to the production of those crops.
(pv) “Production-money obligation” means an obligation of an obligor incurred for new value given to enable the debtor to produce crops if the value is in fact used for the production of the crops.
(pw) “Production of crops” means the use of seed, fertilizer, or chemicals for growing crops or protecting them from damage or disease.
(q) “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.
(qg) “Proposal” means a record authenticated by a secured party which 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 ss. 409.620, 409.621, and 409.622.
(qm) “Public-finance transaction” means a secured transaction in connection with which:
1. Debt securities are issued;
2. All or a portion of the securities issued have an initial stated maturity of at least 20 years; and
3. 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.
(qp) “Public organic record” means a record that is available to the public for inspection and is:
1. A record consisting of the record initially filed with or issued by a state or the United States to form or organize an organization and any record filed with or issued by the state or the United States which amends or restates the initial record;
2. An organic record of a business trust consisting of the record initially filed with a state and any record filed with the state which amends or restates the initial record, if a statute of the state governing business trusts requires that the record be filed with the state; or
3. A record consisting of legislation enacted by the legislature of a state or the Congress of the United States which forms or organizes an organization, any record amending the legislation, and any record filed with or issued by the state or the United States which amends or restates the name of the organization.
(qs) “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.
(r) “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.
(rg) “Registered organization” means an organization formed or organized solely under the law of a single state or the United States by the filing of a public organic record with, the issuance of a public organic record by, or the enactment of legislation by the state or the United States. The term includes a business trust that is formed or organized under the law of a single state if a statute of the state governing business trusts requires that the business trust’s organic record be filed with the state.
(rm) “Secondary obligor” means an obligor to the extent that:
1. The obligor’s obligation is secondary; or
2. The obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another obligor, or property of either.
(rs) “Secured party” means:
1. 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;
2. A person that holds an agricultural lien;
3. A consignor;
4. A person to which accounts, chattel paper, payment intangibles, or promissory notes have been sold;
5. 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
6. A person that holds a security interest arising under s. 402.401, 402.505, 402.711 (3), 404.210, 405.118, or 411.508 (5).
(s) “Security agreement” means an agreement that creates or provides for a security interest.
(sg) “Send,” in connection with a record or notification, means:
1. 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
2. To cause the record or notification to be received within the time that it would have been received if properly sent under subd. 1.
(sm) “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.
(ss) “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.
(t) “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.
(tg) “Tangible chattel paper” means chattel paper evidenced by a record or records consisting of information that is inscribed on a tangible medium.
(tm) “Termination statement” means an amendment of a financing statement which:
1. Identifies, by its file number, the initial financing statement to which it relates; and
2. Indicates either that it is a termination statement or that the identified financing statement is no longer effective.
(ts) “Transmitting utility” means a person primarily engaged in the business of:
1. Operating a railroad, subway, street railway, or trolley bus;
2. Transmitting communications electrically, electromagnetically, or by light;
3. Transmitting goods by pipeline or sewer; or
4. Transmitting or producing and transmitting electricity, steam, gas, or water.
(2) Definitions in other chapters. The following definitions in other chapters apply to this chapter:
(b) “Broker” — s. 408.102.
(bm) “Certificated security” — s. 408.102.
(c) “Check” — s. 403.104.
(cm) “Clearing corporation” — s. 408.102.
(d) “Contract for sale” — s. 402.106.
(df) “Control” (with respect to a document of title) — s. 407.106.
(dm) “Customer” — s. 404.104.
(e) “Entitlement holder” — s. 408.102.
(em) “Financial asset” — s. 408.102.
(f) “Holder in due course” — s. 403.302.
(g) “Issuer” (with respect to a security) — s. 408.201.
(gm) “Lease” — s. 411.103.
(h) “Lease agreement” — s. 411.103.
(hm) “Lease contract” — s. 411.103.
(i) “Leasehold interest” — s. 411.103.
(im) “Lessee” — s. 411.103.
(j) “Lessee in ordinary course of business” — s. 411.103.
(jm) “Lessor” — s. 411.103.
(k) “Lessor’s residual interest” — s. 411.103.
(L) “Merchant” — s. 402.104.
(Lm) “Negotiable instrument” — s. 403.104.
(mm) “Note” — s. 403.104.
(nm) “Prove” — s. 403.103.
(o) “Sale” — s. 402.106.
(om) “Securities account” — s. 408.501.
(p) “Securities intermediary” — s. 408.102.
(pm) “Security” — s. 408.102.
(q) “Security certificate” — s. 408.102.
(qm) “Security entitlement” — s. 408.102.
(r) “Uncertificated security” — s. 408.102.
(3) Chapter 401 definitions and principles. Chapter 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.
Wis. Stat. § 409.103 Purchase-money security interest; application of payments; burden of establishing
(1) Definitions. In this section:
(a) “Purchase-money collateral” means goods or software that secures a purchase-money obligation incurred with respect to that collateral.
(b) “Purchase-money obligation” means an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used.
(2) Purchase-money security interest in goods. A security interest in goods is a purchase-money security interest:
(a) To the extent that the goods are purchase-money collateral with respect to that security interest;
(b) If the security interest is in inventory that is or was purchase-money collateral, also to the extent that the security interest secures a purchase-money obligation incurred with respect to other inventory in which the secured party holds or held a purchase-money security interest; and
(c) Also to the extent that the security interest secures a purchase-money obligation incurred with respect to software in which the secured party holds or held a purchase-money security interest.
(3) Purchase-money security interest in software. A security interest in software is a purchase-money security interest to the extent that the security interest also secures a purchase-money obligation incurred with respect to goods in which the secured party holds or held a purchase-money security interest if:
(a) The debtor acquired its interest in the software in an integrated transaction in which it acquired an interest in the goods; and
(b) The debtor acquired its interest in the software for the principal purpose of using the software in the goods.
(4) Consignor’s inventory purchase-money security interest. The security interest of a consignor in goods that are the subject of a consignment is a purchase-money security interest in inventory.
(5) Application of payment in nonconsumer-goods transaction. In a transaction other than a consumer-goods transaction, if the extent to which a security interest is a purchase-money security interest depends on the application of a payment to a particular obligation, the payment must be applied:
(a) In accordance with any reasonable method of application to which the parties agree;
(b) In the absence of the parties’ agreement to a reasonable method, in accordance with any intention of the obligor manifested at or before the time of payment; or
(c) In the absence of an agreement to a reasonable method and a timely manifestation of the obligor’s intention, in the following order:
1. To obligations that are not secured; and
2. If more than one obligation is secured, to obligations secured by purchase-money security interests in the order in which those obligations were incurred.
(6) No loss of status of purchase-money security interest in nonconsumer-goods transaction. In a transaction other than a consumer-goods transaction, a purchase-money security interest does not lose its status as such, even if:
(a) The purchase-money collateral also secures an obligation that is not a purchase-money obligation;
(b) Collateral that is not purchase-money collateral also secures the purchase-money obligation; or
(c) The purchase-money obligation has been renewed, refinanced, consolidated, or restructured.
(7) Burden of proof in nonconsumer-goods transaction. In a transaction other than a consumer-goods transaction, a secured party claiming a purchase-money security interest has the burden of establishing the extent to which the security interest is a purchase-money security interest.
(8) Nonconsumer-goods transactions; no inference. The limitation of the rules in subs. (5) to (7) to transactions other than consumer-goods transactions is intended to leave to the court the determination of the proper rules in consumer-goods transactions. The court may not infer from that limitation the nature of the proper rule in consumer-goods transactions and may continue to apply established approaches.
Wis. Stat. § 409.104 Control of deposit account
(1) Requirements for control. A secured party has control of a deposit account if:
(a) The secured party is the bank with which the deposit account is maintained;
(b) The debtor, secured party, and bank have agreed in an authenticated record that the bank will comply with instructions originated by the secured party directing disposition of the funds in the deposit account without further consent by the debtor; or
(c) The secured party becomes the bank’s customer with respect to the deposit account.
(2) Debtor’s right to direct disposition. A secured party that has satisfied sub. (1) has control, even if the debtor retains the right to direct the disposition of funds from the deposit account.
Wis. Stat. § 409.105 Control of electronic chattel paper
(1m) General rule: control of electronic chattel paper. A secured party has control of electronic chattel paper if a system employed for evidencing the transfer of interests in the chattel paper reliably establishes the secured party as the person to which the chattel paper was assigned.
(2m) Specific facts giving control. Without limiting the generality of sub. (1m), a system satisfies sub. (1m) if the record or records comprising the chattel paper are created, stored, and assigned in such a manner that:
(a) A single authoritative copy of the record or records exists which is unique, identifiable, and, except as otherwise provided in pars. (d) to (f), unalterable;
(b) The authoritative copy identifies the secured party as the assignee of the record or records;
(c) The authoritative copy is communicated to and maintained by the secured party or its designated custodian;
(d) Copies or amendments that add or change an identified assignee of the authoritative copy can be made only with the consent of the secured party;
(e) 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
(f) Any amendment of the authoritative copy is readily identifiable as authorized or unauthorized.
Wis. Stat. § 409.106 Control of investment property
(1) Control under s. 408.106. A person has control of a certificated security, uncertificated security, or security entitlement as provided in s. 408.106.
(2) Control of commodity contract. A secured party has control of a commodity contract if:
(a) The secured party is the commodity intermediary with which the commodity contract is carried; or
(b) The commodity customer, secured party, and commodity intermediary have agreed that the commodity intermediary will apply any value distributed on account of the commodity contract as directed by the secured party without further consent by the commodity customer.
(3) Effect of control of securities account or commodity account. A secured party having control of all security entitlements or commodity contracts carried in a securities account or commodity account has control over the securities account or commodity account.
Wis. Stat. § 409.107 Control of letter-of-credit right
A secured party has control of a letter-of-credit right to the extent of any right to payment or performance by the issuer or any nominated person if the issuer or nominated person has consented to an assignment of proceeds of the letter of credit under ch. 405 or otherwise applicable law or practice.
Wis. Stat. § 409.108 Sufficiency of description
(1) Sufficiency of description. Except as otherwise provided in subs. (3) to (5), a description of personal or real property is sufficient, whether or not it is specific, if it reasonably identifies what is described.
(2) Examples of reasonable identification. Except as otherwise provided in sub. (4), a description of collateral reasonably identifies the collateral if it identifies the collateral by:
(a) Specific listing;
(b) Category;
(c) Except as otherwise provided in sub. (5), a type of collateral defined in chs. 401 to 411;
(d) Quantity;
(e) Computational or allocational formula or procedure; or
(f) Except as otherwise provided in sub. (3), any other method, if the identity of the collateral is objectively determinable.
(3) Supergeneric description not sufficient. A description of collateral as “all the debtor’s assets” or “all the debtor’s personal property” or using words of similar import does not reasonably identify the collateral.
(4) Investment property. Except as otherwise provided in sub. (5), a description of a security entitlement, securities account, or commodity account is sufficient if it describes:
(a) The collateral by those terms or as investment property; or
(b) The underlying financial asset or commodity contract.
(5) When description by type insufficient. A description only by type of collateral defined in chs. 401 to 411 is an insufficient description of:
(a) A commercial tort claim; or
(b) In a consumer transaction, consumer goods, a security entitlement, a securities account, or a commodity account.
Wis. Stat. § 409.109 Scope
(1) General scope of chapter. Except as otherwise provided in subs. (3) and (4), and s. 16.63 (4) on transactions involving tobacco settlement revenues, this chapter applies to:
(a) A transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract;
(b) An agricultural lien;
(c) A sale of accounts, chattel paper, payment intangibles, or promissory notes;
(d) A consignment;
(e) A security interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508 (5), as provided in s. 409.110; and
(f) A security interest arising under s. 404.210 or 405.118.
(2) Security interest in secured obligation. The application of this chapter to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this chapter does not apply.
(3) Extent to which chapter does not apply. This chapter does not apply to the extent that:
(a) A statute, regulation, or treaty of the United States preempts this chapter;
(b) Another statute of this state expressly governs the creation, perfection, priority, or enforcement of a security interest created by this state or a governmental unit of this state;
(c) A statute of another state, a foreign country, or a governmental unit of another state or a foreign country, other than a statute generally applicable to security interests, expressly governs creation, perfection, priority, or enforcement of a security interest created by the state, country, or governmental unit; or
(d) The rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under ch. 405.
(4) Inapplicability of chapter. This chapter does not apply to:
(a) A landlord’s lien, other than an agricultural lien;
(b) A lien, other than an agricultural lien, given by statute or other rule of law for services or materials, but s. 409.333 applies with respect to priority of the lien;
(c) An assignment of a claim for wages, salary, or other compensation of an employee;
(cm) An assignment of a claim or right to receive compensation for injuries or sickness under a worker’s compensation or worker’s disability statute of any state;
(d) A sale of accounts, chattel paper, payment intangibles, or promissory notes as part of a sale of the business out of which they arose;
(e) An assignment of accounts, chattel paper, payment intangibles, or promissory notes which is for the purpose of collection only;
(f) An assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract;
(g) An assignment of a single account, payment intangible, or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness;
(h) A transfer of an interest in or an assignment of a claim under a policy of insurance, other than an assignment by or to a health-care provider of a health-care-insurance receivable and any subsequent assignment of the right to payment, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds;
(i) An assignment of a right represented by a judgment, other than a judgment taken on a right to payment that was collateral;
(j) A right of recoupment or setoff, but:
1. Section 409.340 applies with respect to the effectiveness of rights of recoupment or setoff against deposit accounts; and
2. Section 409.404 applies with respect to defenses or claims of an account debtor;
(k) The creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, except to the extent that provision is made for:
1. Liens on real property in ss. 409.203 and 409.308;
2. Fixtures in s. 409.334;
3. Fixture filings in ss. 409.501, 409.502, 409.512, 409.516, and 409.519; and
4. Security agreements covering personal and real property in s. 409.604;
(L) An assignment of a claim arising in tort, other than a commercial tort claim, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds; or
(m) An assignment of a deposit account in a consumer transaction, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds.
Wis. Stat. § 409.110 Security interests arising under ch. 402 or 411
A security interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508 (5) is subject to this chapter. However, until the debtor obtains possession of the goods:
(1) The security interest is enforceable, even if s. 409.203 (2) (c) has not been satisfied;
(2) Filing is not required to perfect the security interest;
(3) The rights of the secured party after default by the debtor are governed by ch. 402 or 411; and
(4) The security interest has priority over a conflicting security interest created by the debtor.
Wis. Stat. § 409.201 General effectiveness of security agreement
(1) General effectiveness. Except as otherwise provided in chs. 401 to 411, a security agreement is effective according to its terms between the parties, against purchasers of the collateral, and against creditors.
(2) Applicable consumer laws and other law. A transaction subject to this chapter is subject to any applicable rule of law which establishes a different rule for consumers and to chs. 138, 421 to 427, and 429 and s. 182.025.
(3) Other applicable law controls. In case of conflict between this chapter and a rule of law, statute, or rule described in sub. (2), the rule of law, statute, or rule controls. Failure to comply with a statute or rule described in sub. (2) has only the effect the statute or rule specifies.
(4) Further deference to other applicable law. This chapter does not:
(a) Validate any rate, charge, agreement, or practice that violates a rule of law, statute, or rule described in sub. (2); or
(b) Extend the application of the rule of law, statute, or rule to a transaction not otherwise subject to the rule of law, statute, or rule.
Wis. Stat. § 409.202 Title to collateral immaterial
Except as otherwise provided with respect to consignments or sales of accounts, chattel paper, payment intangibles, or promissory notes, the provisions of this chapter with regard to rights and obligations apply whether title to collateral is in the secured party or the debtor.
Wis. Stat. § 409.203 Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites
(1) Attachment. 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.
(2) Enforceability. Except as otherwise provided in subs. (3) to (9), a security interest is enforceable against the debtor and 3rd parties with respect to the collateral only if:
(a) Value has been given;
(b) The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and
(c) One of the following conditions is met:
1. 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;
2. The collateral is not a certificated security and is in the possession of the secured party under s. 409.313 pursuant to the debtor’s security agreement;
3. The collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under s. 408.301 pursuant to the debtor’s security agreement; or
4. The collateral is deposit accounts, electronic chattel paper, investment property, letter-of-credit rights, or electronic documents, and the secured party has control under s. 407.106, 409.104, 409.105, 409.106, or 409.107 pursuant to the debtor’s security agreement.
(3) Other uniform commercial code provisions. Subsection (2) is subject to s. 404.210 on the security interest of a collecting bank, s. 405.118 on the security interest of a letter-of-credit issuer or nominated person, s. 409.110 on a security interest arising under ch. 402 or 411, and s. 409.206 on security interests in investment property.
(4) When person becomes bound by another person’s security agreement.
(a) A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this chapter 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.
(b) A security agreement authenticated by one spouse is authenticated by the debtor under this section if that spouse acting alone has the right under s. 766.51 to manage and control the collateral, unless a marital property agreement or court decree that is binding on the secured party under s. 766.55 (4m) or 766.56 (2) (c) provides otherwise.
(5) Effect of new debtor becoming bound. If a new debtor becomes bound as debtor by a security agreement entered into by another person:
(a) The agreement satisfies sub. (2) (c) with respect to existing or after-acquired property of the new debtor to the extent that the property is described in the agreement; and
(b) Another agreement is not necessary to make a security interest in the property enforceable.
(6) Proceeds and supporting obligations. The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by s. 409.315 and is also attachment of a security interest in a supporting obligation for the collateral.
(7) Lien securing right to payment. 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.
(8) Security entitlement carried in securities account. 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.
(9) Commodity contracts carried in commodity account. 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.
Wis. Stat. § 409.204 After-acquired property; future advances
(1) After-acquired collateral. Except as otherwise provided in sub. (2), a security agreement may create or provide for a security interest in after-acquired collateral.
(2) When after-acquired property clause not effective. A security interest does not attach under a term constituting an after-acquired property clause to:
(a) Consumer goods, other than an accession when given as additional security, unless the debtor acquires rights in them within 10 days after the secured party gives value; or
(b) A commercial tort claim.
(3) Future advances and other value. A security agreement may provide that collateral secures, or that accounts, chattel paper, payment intangibles, or promissory notes are sold in connection with, future advances or other value, whether or not the advances or value are given pursuant to commitment.
Wis. Stat. § 409.205 Use or disposition of collateral permissible
(1) When security interest not invalid or fraudulent. A security interest is not invalid or fraudulent against creditors solely because:
(a) The debtor has the right or ability to:
1. Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;
2. Collect, compromise, enforce, or otherwise deal with collateral;
3. Accept the return of collateral or make repossessions; or
4. Use, commingle, or dispose of proceeds; or
(b) The secured party fails to require the debtor to account for proceeds or replace collateral.
(2) Requirements of possession not relaxed. This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.
Wis. Stat. § 409.206 Security interest arising in purchase or delivery of financial asset
(1) Security interest when person buys through securities intermediary. A security interest in favor of a securities intermediary attaches to a person’s security entitlement if:
(a) The person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase; and
(b) The securities intermediary credits the financial asset to the buyer’s securities account before the buyer pays the securities intermediary.
(2) Security interest secures obligation to pay for financial asset. The security interest described in sub. (1) secures the person’s obligation to pay for the financial asset.
(3) Security interest in payment against delivery transaction. A security interest in favor of a person that delivers a certificated security or other financial asset represented by a writing attaches to the security or other financial asset if:
(a) The security or other financial asset:
1. In the ordinary course of business is transferred by delivery with any necessary endorsement or assignment; and
2. Is delivered under an agreement between persons in the business of dealing with such securities or financial assets; and
(b) The agreement calls for delivery against payment.
(4) Security interest secures obligation to pay for delivery. The security interest described in sub. (3) secures the obligation to make payment for the delivery.
Wis. Stat. § 409.207 Rights and duties of secured party having possession or control of collateral
(1) Duty of care when secured party in possession. Except as otherwise provided in sub. (4), 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.
(2) Expenses, risks, duties, and rights when secured party in possession. Except as otherwise provided in sub. (4), if a secured party has possession of collateral:
(a) 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;
(b) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;
(c) The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and
(d) The secured party may use or operate the collateral:
1. For the purpose of preserving the collateral or its value;
2. As permitted by an order of a court having competent jurisdiction; or
3. Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.
(3) Duties and rights when secured party in possession or control. Except as otherwise provided in sub. (4), a secured party having possession of collateral or control of collateral under s. 407.106, 409.104, 409.105, 409.106, or 409.107:
(a) May hold as additional security any proceeds, except money or funds, received from the collateral;
(b) Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and
(c) May create a security interest in the collateral.
(4) Buyer of certain rights to payment. If the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor:
(a) Subsection (1) does not apply unless the secured party is entitled under an agreement:
1. To charge back uncollected collateral; or
2. 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
(b) Subsections (1) and (2) do not apply.
Wis. Stat. § 409.208 Additional duties of secured party having control of collateral
(1) Applicability of section. 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.
(2) Duties of secured party after receiving demand from debtor. Within 10 days after receiving an authenticated demand by the debtor:
(a) A secured party having control of a deposit account under s. 409.104 (1) (b) 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;
(b) A secured party having control of a deposit account under s. 409.104 (1) (c) shall:
1. Pay the debtor the balance on deposit in the deposit account; or
2. Transfer the balance on deposit into a deposit account in the debtor’s name;
(c) A secured party, other than a buyer, having control of electronic chattel paper under s. 409.105 shall:
1. Communicate the authoritative copy of the electronic chattel paper to the debtor or its designated custodian;
2. 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
3. Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party;
(d) A secured party having control of investment property under s. 408.106 (4) (b) or 409.106 (2) 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;
(e) A secured party having control of a letter-of-credit right under s. 409.107 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
(f) A secured party having control of an electronic document shall do all of the following:
1. Give control of the electronic document to the debtor or its designated custodian.
2. 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.
3. Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party.
Wis. Stat. § 409.209 Duties of secured party if account debtor has been notified of assignment
(1) Applicability of section. Except as otherwise provided in sub. (3), this section applies if:
(a) There is no outstanding secured obligation; and
(b) The secured party is not committed to make advances, incur obligations, or otherwise give value.
(2) Duties of secured party after receiving demand from debtor. Within 10 days after receiving an authenticated demand by the debtor, a secured party shall send to an account debtor that has received notification of an assignment to the secured party as assignee under s. 409.406 (1) an authenticated record that releases the account debtor from any further obligation to the secured party.
(3) Inapplicability to sales. This section does not apply to an assignment constituting the sale of an account, chattel paper, or payment intangible.
Wis. Stat. § 409.210 Request for accounting; request regarding list of collateral or statement of account
(1) Definitions. In this section:
(a) “Request” means a record of a type described in par. (b), (c), or (d).
(b) “Request for an accounting” means a record authenticated by a debtor requesting that the recipient provide an accounting of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship that is the subject of the request.
(c) “Request regarding a list of collateral” means a record authenticated by a debtor requesting that the recipient approve or correct a list of what the debtor believes to be the collateral securing an obligation and reasonably identifying the transaction or relationship that is the subject of the request.
(d) “Request regarding a statement of account” means a record authenticated by a debtor requesting that the recipient approve or correct a statement indicating what the debtor believes to be the aggregate amount of unpaid obligations secured by collateral as of a specified date and reasonably identifying the transaction or relationship that is the subject of the request.
(2) Duty to respond to requests. Subject to subs. (3) to (6), a secured party, other than a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor, shall comply with a request within 14 days after receipt:
(a) In the case of a request for an accounting, by authenticating and sending to the debtor an accounting; and
(b) In the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction.
(3) Request regarding list of collateral; statement concerning type of collateral. A secured party that claims a security interest in all of a particular type of collateral owned by the debtor may comply with a request regarding a list of collateral by sending to the debtor an authenticated record including a statement to that effect within 14 days after receipt.
(4) Request regarding list of collateral; no interest claimed. A person that receives a request regarding a list of collateral, claims no interest in the collateral when it receives the request, and claimed an interest in the collateral at an earlier time shall comply with the request within 14 days after receipt by sending to the debtor an authenticated record:
(a) Disclaiming any interest in the collateral; and
(b) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient’s interest in the collateral.
(5) Request for accounting or regarding statement of account; no interest in obligation claimed. A person that receives a request for an accounting or a request regarding a statement of account, claims no interest in the obligations when it receives the request, and claimed an interest in the obligations at an earlier time shall comply with the request within 14 days after receipt by sending to the debtor an authenticated record:
(a) Disclaiming any interest in the obligations; and
(b) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient’s interest in the obligations.
(6) Charges for responses. A debtor is entitled without charge to one response to a request under this section during any 6-month period. The secured party may require payment of a charge not exceeding $25 for each additional response.
Wis. Stat. § 409.301 Law governing perfection and priority of security interests
Except as otherwise provided in ss. 409.303 to 409.306, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:
(1) Location of debtor. 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) Location of collateral. 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) Location of property. Except as otherwise provided in sub. (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) Location of wellhead or minehead. 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.
Wis. Stat. § 409.302 Law governing perfection and priority of agricultural liens
While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of an agricultural lien on the farm products.
Wis. Stat. § 409.303 Law governing perfection and priority of security interests in goods covered by a certificate of title
(1) Applicability of section. This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor.
(2) When goods covered by certificate of title. Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered subsequently by a certificate of title issued by another jurisdiction.
(3) Applicable law. The local law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in goods covered by a certificate of title from the time the goods become covered by the certificate of title until the goods cease to be covered by the certificate of title.
Wis. Stat. § 409.304 Law governing perfection and priority of security interests in deposit accounts
(1) Law of bank’s jurisdiction governs. The local law of a bank’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a deposit account maintained with that bank.
(2) Bank’s jurisdiction. The following rules determine a bank’s jurisdiction for purposes of this subchapter:
(a) If an agreement between the bank and the debtor governing the deposit account expressly provides that a particular jurisdiction is the bank’s jurisdiction for purposes of this subchapter, this chapter, or chs. 401 to 411, that jurisdiction is the bank’s jurisdiction.
(b) If par. (a) does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.
(c) If neither par. (a) nor par. (b) applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.
(d) If none of pars. (a) to (c) applies, the bank’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer’s account is located.
(e) If none of pars. (a) to (d) applies, the bank’s jurisdiction is the jurisdiction in which the chief executive office of the bank is located.
Wis. Stat. § 409.305 Law governing perfection and priority of security interests in investment property
(1) Governing law: general rules. Except as otherwise provided in sub. (3), the following rules apply:
(a) While a security certificate 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 the certificated security represented thereby.
(b) The local law of the issuer’s jurisdiction as specified in s. 408.110 (4) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.
(c) The local law of the securities intermediary’s jurisdiction as specified in s. 408.110 (5) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.
(d) The local law of the commodity intermediary’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account.
(2) Commodity intermediary’s jurisdiction. The following rules determine a commodity intermediary’s jurisdiction for purposes of this subchapter:
(a) If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary’s jurisdiction for purposes of this subchapter, this chapter, or chs. 401 to 411, that jurisdiction is the commodity intermediary’s jurisdiction.
(b) If par. (a) does not apply and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.
(c) If neither par. (a) nor par. (b) applies and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.
(d) If none of pars. (a) to (c) applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer’s account is located.
(e) If none of pars. (a) to (d) applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located.
(3) When perfection governed by law of jurisdiction where debtor located. The local law of the jurisdiction in which the debtor is located governs:
(a) Perfection of a security interest in investment property by filing;
(b) Automatic perfection of a security interest in investment property created by a broker or securities intermediary; and
(c) Automatic perfection of a security interest in a commodity contract or commodity account created by a commodity intermediary.
Wis. Stat. § 409.306 Law governing perfection and priority of security interests in letter-of-credit rights
(1) Governing law: issuer’s or nominated person’s jurisdiction. Subject to sub. (3), the local law of the issuer’s jurisdiction or a nominated person’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer’s jurisdiction or nominated person’s jurisdiction is a state.
(2) Issuer’s or nominated person’s jurisdiction. For purposes of this subchapter, an issuer’s jurisdiction or nominated person’s jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in ch. 405.
(3) When section not applicable. This section does not apply to a security interest that is perfected only under s. 409.308 (4).
Wis. Stat. § 409.307 Location of debtor
(1) Place of business. In this section, “place of business” means a place where a debtor conducts its affairs.
(2) Debtor’s location: general rules. Except as otherwise provided in this section, the following rules determine a debtor’s location:
(a) A debtor who is an individual is located at the individual’s principal residence.
(b) A debtor that is an organization and has only one place of business is located at its place of business.
(c) A debtor that is an organization and has more than one place of business is located at its chief executive office.
(3) Limitation of applicability of sub. (2). Subsection (2) applies only if a debtor’s residence, place of business, or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording, or registration system as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral. If sub. (2) does not apply, the debtor is located in the District of Columbia.
(4) Continuation of location: cessation of existence. A person that ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction specified by subs. (2) and (3).
(5) Location of registered organization organized under state law. A registered organization that is organized under the law of a state is located in that state.
(6) Location of registered organization organized under federal law; bank branches and agencies. Except as otherwise provided in sub. (9), a registered organization that is organized under the law of the United States and a branch or agency of a bank that is not organized under the law of the United States or a state are located:
(a) In the state that the law of the United States designates, if the law designates a state of location;
(b) In the state that the registered organization, branch, or agency designates, if the law of the United States authorizes the registered organization, branch, or agency to designate its state of location, including by designating its main office, home office, or other comparable office; or
(c) In the District of Columbia, if neither par. (a) nor par. (b) applies.
(7) Continuation of location: change in status of registered organization. A registered organization continues to be located in the jurisdiction specified by sub. (5) or (6) notwithstanding:
(a) The suspension, revocation, forfeiture, or lapse of the registered organization’s status as such in its jurisdiction of organization; or
(b) The dissolution, winding up, or cancellation of the existence of the registered organization.
(8) Location of United States. The United States is located in the District of Columbia.
(9) Location of foreign bank branch or agency if licensed in only one state. A branch or agency of a bank that is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed, if all branches and agencies of the bank are licensed in only one state.
(10) Location of foreign air carrier. A foreign air carrier under the Federal Aviation Act of 1958, as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier.
(11) Section applies only to this subchapter. This section applies only for purposes of this subchapter.
Wis. Stat. § 409.308 When security interest or agricultural lien is perfected; continuity of perfection
(1) Perfection of security interest. Except as otherwise provided in this section and s. 409.309, a security interest is perfected if it has attached and all of the applicable requirements for perfection in ss. 409.310 to 409.316 have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches.
(2) Perfection of agricultural lien. An agricultural lien is perfected if it has become effective and all of the applicable requirements for perfection in s. 409.310 have been satisfied. An agricultural lien is perfected when it becomes effective if the applicable requirements are satisfied before the agricultural lien becomes effective.
(3) Continuous perfection; perfection by different methods. A security interest or agricultural lien is perfected continuously if it is originally perfected by one method under this chapter and is later perfected by another method under this chapter, without an intermediate period when it was unperfected.
(4) Supporting obligation. Perfection of a security interest in collateral also perfects a security interest in a supporting obligation for the collateral.
(5) Lien securing right to payment. Perfection of a security interest in a right to payment or performance also perfects a security interest in a security interest, mortgage, or other lien on personal or real property securing the right.
(6) Security entitlement carried in securities account. Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account.
(7) Commodity contract carried in commodity account. Perfection of a security interest in a commodity account also perfects a security interest in the commodity contracts carried in the commodity account.
Wis. Stat. § 409.309 Security interest perfected upon attachment
The following security interests are perfected when they attach:
(1) A purchase-money security interest in consumer goods, except as otherwise provided in s. 409.311 (2) with respect to consumer goods that are subject to a statute or treaty described in s. 409.311 (1);
(2) An assignment of accounts or payment intangibles which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor’s outstanding accounts or payment intangibles;
(3) A sale of a payment intangible;
(4) A sale of a promissory note;
(5) A security interest created by the assignment of a health-care-insurance receivable to the provider of the health-care goods or services;
(6) A security interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508 (5), until the debtor obtains possession of the collateral;
(7) A security interest of a collecting bank arising under s. 404.210;
(8) A security interest of an issuer or nominated person arising under s. 405.118;
(9) A security interest arising in the delivery of a financial asset under s. 409.206 (3);
(10) A security interest in investment property created by a broker or securities intermediary;
(11) A security interest in a commodity contract or a commodity account created by a commodity intermediary;
(12) An assignment for the benefit of all creditors of the transferor and subsequent transfers by the assignee thereunder; and
(13) A security interest created by an assignment of a beneficial interest in a decedent’s estate.
Wis. Stat. § 409.310 When filing required to perfect security interest or agricultural lien; security interests and agricultural liens to which filing provisions do not apply
(1) General rule: perfection by filing. Except as otherwise provided in sub. (2) and s. 409.312 (2), a financing statement must be filed to perfect all security interests and agricultural liens.
(2) Exceptions: filing not necessary. The filing of a financing statement is not necessary to perfect a security interest:
(a) That is perfected under s. 409.308 (4), (5), (6), or (7);
(b) That is perfected under s. 409.309 when it attaches;
(c) In property subject to a statute, regulation, or treaty described in s. 409.311 (1);
(d) In goods in possession of a bailee which is perfected under s. 409.312 (4) (a) or (b);
(e) In certificated securities, documents, goods, or instruments which is perfected without filing, control, or possession under s. 409.312 (5), (6), or (7);
(f) In collateral in the secured party’s possession under s. 409.313;
(g) In a certificated security which is perfected by delivery of the security certificate to the secured party under s. 409.313;
(h) In deposit accounts, electronic chattel paper, electronic documents, investment property, or letter-of-credit rights which is perfected by control under s. 409.314;
(i) In proceeds which is perfected under s. 409.315; or
(j) That is perfected under s. 409.316.
(3) Assignment of perfected security interest. If a secured party assigns a perfected security interest or agricultural lien, a filing under this chapter is not required to continue the perfected status of the security interest against creditors of and transferees from the original debtor.
Wis. Stat. § 409.311 Perfection of security interests in property subject to certain statutes, regulations, and treaties
(1) Security interest subject to other law. Except as otherwise provided in sub. (4), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to:
(a) A statute, regulation, or treaty of the United States whose requirements for a security interest’s obtaining priority over the rights of a lien creditor with respect to the property preempt s. 409.310 (1).
(b) The following vehicle title statutes: ss. 342.19 and 342.20.
(bm) The following boat title statutes: ss. 30.57, 30.572, and 30.573.
(c) A statute of another jurisdiction which provides for a security interest to be indicated on a certificate of title as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the property.
(d) Sections 182.025 and 190.11 and other statutes providing for central filing.
(e) A master lease entered into by the state under s. 16.76 (4).
(f) The manufactured home security interest provisions under subch. V of ch. 101.
(2) Compliance with other law. Compliance with the requirements of a statute, regulation, or treaty described in sub. (1) for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this chapter. Except as otherwise provided in sub. (4) and ss. 409.313 and 409.316 (4) and (5) for goods covered by a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in sub. (1) may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral.
(3) Duration and renewal of perfection. Except as otherwise provided in sub. (4) and s. 409.316 (4) and (5), duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in sub. (1) are governed by the statute, regulation, or treaty. In other respects, the security interest is subject to this chapter.
(4) Inapplicability to certain inventory. During any period in which collateral subject to a statute specified in sub. (1) (b), (bm), or (f) is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person.
Wis. Stat. § 409.312 Perfection of security interests in chattel paper, deposit accounts, documents, goods covered by documents, instruments, investment property, letter-of-credit rights, and money; perfection by permissive filing; temporary perfection without filing or transfer of possession
(1) Perfection by filing permitted. A security interest in chattel paper, negotiable documents, instruments, or investment property may be perfected by filing.
(2) Control or possession of certain collateral. Except as otherwise provided in s. 409.315 (3) and (4) for proceeds:
(a) A security interest in a deposit account may be perfected only by control under s. 409.314;
(b) And except as otherwise provided in s. 409.308 (4), a security interest in a letter-of-credit right may be perfected only by control under s. 409.314; and
(c) A security interest in money may be perfected only by the secured party’s taking possession under s. 409.313.
(3) Goods covered by negotiable document. While goods are in the possession of a bailee that has issued a negotiable document covering the goods:
(a) A security interest in the goods may be perfected by perfecting a security interest in the document; and
(b) 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.
(4) Goods covered by nonnegotiable document. 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:
(a) Issuance of a document in the name of the secured party;
(b) The bailee’s receipt of notification of the secured party’s interest; or
(c) Filing as to the goods.
(5) Temporary perfection: new value. 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 20 days from the time it attaches to the extent that it arises for new value given under an authenticated security agreement.
(6) Temporary perfection: goods or documents made available to debtor. 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 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of:
(a) Ultimate sale or exchange; or
(b) Loading, unloading, storing, shipping, transshipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange.
(7) Temporary perfection: delivery of security certificate or instrument to debtor. A perfected security interest in a certificated security or instrument remains perfected for 20 days without filing if the secured party delivers the security certificate or instrument to the debtor for the purpose of:
(a) Ultimate sale or exchange; or
(b) Presentation, collection, enforcement, renewal, or registration of transfer.
(8) Expiration of temporary perfection. After the 20-day period specified in sub. (5), (6), or (7) expires, perfection depends upon compliance with this chapter.
Wis. Stat. § 409.313 When possession by or delivery to secured party perfects security interest without filing
(1) Perfection by possession or delivery. Except as otherwise provided in sub. (2), 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 s. 408.301.
(2) Goods covered by certificate of title. 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 s. 409.316 (4).
(3) Collateral in possession of person other than debtor. 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:
(a) The person in possession authenticates a record acknowledging that the person holds possession of the collateral for the secured party’s benefit; or
(b) The person takes possession of the collateral after having authenticated a record acknowledging that the person will hold possession of collateral for the secured party’s benefit.
(4) Time of perfection by possession; continuation of perfection. If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no earlier than the time the secured party takes possession and continues only while the secured party retains possession.
(5) Time of perfection by delivery; continuation of perfection. A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under s. 408.301 and remains perfected by delivery until the debtor obtains possession of the security certificate.
(6) Acknowledgment not required. A person in possession of collateral is not required to acknowledge that it holds possession for a secured party’s benefit.
(7) Effectiveness of acknowledgment; no duties or confirmation. If a person acknowledges that it holds possession for the secured party’s benefit:
(a) The acknowledgment is effective under sub. (3) or s. 408.301 (1), even if the acknowledgment violates the rights of a debtor; and
(b) Unless the person otherwise agrees or law other than this chapter otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.
(8) Secured party’s delivery to person other than debtor. 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:
(a) To hold possession of the collateral for the secured party’s benefit; or
(b) To redeliver the collateral to the secured party.
(9) Effect of delivery under sub. (8); no duties or confirmation. A secured party does not relinquish possession, even if a delivery under sub. (8) violates the rights of a debtor. A person to which collateral is delivered under sub. (8) 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 this chapter otherwise provides.
Wis. Stat. § 409.314 Perfection by control
(1) Perfection by control. A security interest in investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, or electronic documents may be perfected by control of the collateral under s. 407.106, 409.104, 409.105, 409.106, or 409.107.
(2) Specified collateral: time of perfection by control; continuation of perfection. A security interest in deposit accounts, electronic chattel paper, letter-of-credit rights, or electronic documents is perfected by control under s. 407.106, 409.104, 409.105, or 409.107 when the secured party obtains control and remains perfected by control only while the secured party retains control.
(3) Investment property: time of perfection by control; continuation of perfection. A security interest in investment property is perfected by control under s. 409.106 from the time the secured party obtains control and remains perfected by control until:
(a) The secured party does not have control; and
(b) One of the following occurs:
1. If the collateral is a certificated security, the debtor has or acquires possession of the security certificate;
2. If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner; or
3. If the collateral is a security entitlement, the debtor is or becomes the entitlement holder.
Wis. Stat. § 409.315 Secured party’s rights on disposition of collateral and in proceeds
(1) Disposition of collateral: continuation of security interest or agricultural lien; proceeds. Except as otherwise provided in this chapter and in s. 402.403 (2):
(a) A security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and
(b) A security interest attaches to any identifiable proceeds of collateral.
(2) When commingled proceeds identifiable. Proceeds that are commingled with other property are identifiable proceeds:
(a) If the proceeds are goods, to the extent provided by s. 409.336; and
(b) If the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this chapter with respect to commingled property of the type involved.
(3) Perfection of security interest in proceeds. A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.
(4) Continuation of perfection. A perfected security interest in proceeds becomes unperfected on the 21st day after the security interest attaches to the proceeds unless:
(a) The following conditions are satisfied:
1. A filed financing statement covers the original collateral;
2. The proceeds are collateral in which a security interest may be perfected by filing in the office in which the financing statement has been filed; and
3. The proceeds are not acquired with cash proceeds;
(b) The proceeds are identifiable cash proceeds; or
(c) The security interest in the proceeds is perfected other than under sub. (3) when the security interest attaches to the proceeds or within 20 days thereafter.
(5) When perfected security interest in proceeds becomes unperfected. If a filed financing statement covers the original collateral, a security interest in proceeds which remains perfected under sub. (4) (a) becomes unperfected at the later of:
(a) When the effectiveness of the filed financing statement lapses under s. 409.515 or is terminated under s. 409.513; or
(b) The 21st day after the security interest attaches to the proceeds.
Wis. Stat. § 409.316 Effect of change in governing law
(1) General rule: effect on perfection of change in governing law. A security interest perfected pursuant to the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) remains perfected until the earliest of:
(a) The time perfection would have ceased under the law of that jurisdiction;
(b) The expiration of 4 months after a change of the debtor’s location to another jurisdiction; or
(c) The expiration of one year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction.
(2) Security interest perfected or unperfected under law of new jurisdiction. If a security interest described in sub. (1) becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.
(3) Possessory security interest in collateral moved to new jurisdiction. A possessory security interest in collateral, other than goods covered by a certificate of title and as-extracted collateral consisting of goods, remains continuously perfected if:
(a) The collateral is located in one jurisdiction and subject to a security interest perfected under the law of that jurisdiction;
(b) Thereafter the collateral is brought into another jurisdiction; and
(c) Upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction.
(4) Goods covered by certificate of title from this state. Except as otherwise provided in sub. (5), a security interest in goods covered by a certificate of title which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this state remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered.
(5) When sub. (4) security interest becomes unperfected against purchasers. A security interest described in sub. (4) becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection under s. 409.311 (2) or 409.313 are not satisfied before the earlier of:
(a) The time the security interest would have become unperfected under the law of the other jurisdiction had the goods not become covered by a certificate of title from this state; or
(b) The expiration of 4 months after the goods had become so covered.
(6) Change in jurisdiction of bank, issuer, nominated person, securities intermediary, or commodity intermediary. A security interest in deposit accounts, letter-of-credit rights, or investment property which is perfected under the law of the bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s jurisdiction, the securities intermediary’s jurisdiction, or the commodity intermediary’s jurisdiction, as applicable, remains perfected until the earlier of:
(a) The time the security interest would have become unperfected under the law of that jurisdiction; or
(b) The expiration of 4 months after a change of the applicable jurisdiction to another jurisdiction.
(7) Sub. (6) security interest perfected or unperfected under law of new jurisdiction. If a security interest described in sub. (6) becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.
(8) Effect on filed financing statement of change in governing law. The following rules apply to collateral to which a security interest attaches within 4 months after the debtor changes its location to another jurisdiction:
(a) A financing statement filed before the change pursuant to the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) is effective to perfect a security interest in the collateral if the financing statement would have been effective to perfect a security interest in the collateral had the debtor not changed its location.
(b) If a security interest perfected by a financing statement that is effective under par. (a) becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) or the expiration of the 4-month period, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.
(9) Effect of change in governing law on financing statement filed against original debtor. If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) and the new debtor is located in another jurisdiction, the following rules apply:
(a) The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within 4 months after, the new debtor becomes bound under s. 409.203 (4), if the financing statement would have been effective to perfect a security interest in the collateral had the collateral been acquired by the original debtor.
(b) A security interest perfected by the financing statement and which becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) or the expiration of the 4-month period remains perfected thereafter. A security interest that is perfected by the financing statement but which does not become perfected under the law of the other jurisdiction before the earlier time or event becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.
Wis. Stat. § 409.317 Interests that take priority over or take free of security interest or agricultural lien
(1) Conflicting security interests and rights of lien creditors. A security interest or agricultural lien is subordinate to the rights of:
(a) A person entitled to priority under s. 409.322; and
(b) Except as otherwise provided in sub. (5), a person that becomes a lien creditor before the earlier of the time:
1. The security interest or agricultural lien is perfected; or
2. One of the conditions specified in s. 409.203 (2) (c) is met and a financing statement covering the collateral is filed.
(2) Buyers that receive delivery. Except as otherwise provided in sub. (5), a buyer, other than a secured party, of tangible chattel paper, tangible documents, goods, instruments, or a certificated security 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.
(3) Lessees that receive delivery. Except as otherwise provided in sub. (5), 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.
(4) Licensees and buyers of certain collateral. A licensee of a general intangible or a buyer, other than a secured party, of collateral other than tangible chattel paper, tangible documents, goods, instruments, or 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.
(5) Purchase-money security interest. Except as otherwise provided in ss. 409.320 and 409.321, if a person files a financing statement with respect to a purchase-money security interest before or within 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 which arise between the time the security interest attaches and the time of filing.
Wis. Stat. § 409.318 No interest retained in right to payment that is sold; rights and title of seller of account or chattel paper with respect to creditors and purchasers
(1) Seller retains no interest. A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold.
(2) Deemed rights of debtor if buyer’s security interest unperfected. For purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper from, a debtor that has sold an account or chattel paper, while the buyer’s security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold.
Wis. Stat. § 409.319 Rights and title of consignee with respect to creditors and purchasers
(1) Consignee has consignor’s rights. Except as otherwise provided in sub. (2), for purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer.
(2) Applicability of other law. For purposes of determining the rights of a creditor of a consignee, law other than this chapter determines the rights and title of a consignee while goods are in the consignee’s possession if, under this subchapter, a perfected security interest held by the consignor would have priority over the rights of the creditor.
Wis. Stat. § 409.320 Buyer of goods
(1) Buyer in ordinary course of business. Except as otherwise provided in sub. (5), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer’s seller, even if the security interest is perfected and the buyer knows of its existence.
(2) Buyer of consumer goods. Except as otherwise provided in sub. (5), a buyer of goods from a person who used or bought the goods for use primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys:
(a) Without knowledge of the security interest;
(b) For value;
(c) Primarily for the buyer’s personal, family, or household purposes; and
(d) Before the filing of a financing statement covering the goods.
(3) Effectiveness of filing for sub. (2). To the extent that it affects the priority of a security interest over a buyer of goods under sub. (2), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by s. 409.316 (1) and (2).
(4) Buyer in ordinary course of business at wellhead or minehead. A buyer in ordinary course of business buying oil, gas, or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance.
(5) Possessory security interest not affected. Subsections (1) and (2) do not affect a security interest in goods in the possession of the secured party under s. 409.313.
Wis. Stat. § 409.321 Licensee of general intangible and lessee of goods in ordinary course of business
(1) Licensee in ordinary course of business. In this section, “licensee in ordinary course of business” means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor’s own usual or customary practices.
(2) Rights of licensee in ordinary course of business. A licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence.
(3) Rights of lessee in ordinary course of business. A lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor, even if the security interest is perfected and the lessee knows of its existence.
Wis. Stat. § 409.322 Priorities among conflicting security interests in and agricultural liens on same collateral
(1) General priority rules. Except as otherwise provided in this section, priority among conflicting security interests and agricultural liens in the same collateral is determined according to the following rules:
(a) Conflicting perfected security interests and agricultural liens rank according to priority in time of filing or perfection. Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest or agricultural lien is first perfected, if there is no period thereafter when there is neither filing nor perfection.
(b) A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien.
(c) The first security interest or agricultural lien to attach or become effective has priority if conflicting security interests and agricultural liens are unperfected.
(2) Time of perfection: proceeds and supporting obligations. For the purposes of sub. (1) (a):
(a) The time of filing or perfection as to a security interest in collateral is also the time of filing or perfection as to a security interest in proceeds; and
(b) The time of filing or perfection as to a security interest in collateral supported by a supporting obligation is also the time of filing or perfection as to a security interest in the supporting obligation.
(3) Special priority rules: proceeds and supporting obligations. Except as otherwise provided in sub. (6), a security interest in collateral which qualifies for priority over a conflicting security interest under s. 409.327, 409.328, 409.329, 409.330, or 409.331 also has priority over a conflicting security interest in:
(a) Any supporting obligation for the collateral; and
(b) Proceeds of the collateral if:
1. The security interest in proceeds is perfected;
2. The proceeds are cash proceeds or of the same type as the collateral; and
3. In the case of proceeds that are proceeds of proceeds, all intervening proceeds are cash proceeds, proceeds of the same type as the collateral, or an account relating to the collateral.
(4) First-to-file priority rule for certain collateral. Subject to sub. (5) and except as otherwise provided in sub. (6), if a security interest in chattel paper, deposit accounts, negotiable documents, instruments, investment property, or letter-of-credit rights is perfected by a method other than filing, conflicting perfected security interests in proceeds of the collateral rank according to priority in time of filing.
(5) Applicability of sub. (4). Subsection (4) applies only if the proceeds of the collateral are not cash proceeds, chattel paper, negotiable documents, instruments, investment property, or letter-of-credit rights.
(6) Limitations on subs. (1) to (5). Subsections (1) to (5) are subject to:
(a) Subsection (7) and the other provisions of this subchapter;
(b) Section 404.210 with respect to a security interest of a collecting bank;
(c) Section 405.118 with respect to a security interest of an issuer or nominated person; and
(d) Section 409.110 with respect to a security interest arising under ch. 402 or 411.
(7) Priority under agricultural lien statute. A perfected agricultural lien on collateral has priority over a conflicting security interest in or agricultural lien on the same collateral if the statute creating the agricultural lien so provides.
Wis. Stat. § 409.323 Future advances
(1) When priority based on time of advance. Except as otherwise provided in sub. (3), for purposes of determining the priority of a perfected security interest under s. 409.322 (1) (a), perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that:
(a) Is made while the security interest is perfected only:
1. Under s. 409.309 when it attaches; or
2. Temporarily under s. 409.312 (5), (6), or (7); and
(b) Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under s. 409.309 or 409.312 (5), (6), or (7).
(2) Lien creditor. Except as otherwise provided in sub. (3), a security interest is subordinate to the rights of a person that becomes a lien creditor to the extent that the security interest secures an advance made more than 45 days after the person becomes a lien creditor unless the advance is made:
(a) Without knowledge of the lien; or
(b) Pursuant to a commitment entered into without knowledge of the lien.
(3) Buyer of receivables. Subsections (1) and (2) do not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor.
(4) Buyer of goods. Except as otherwise provided in sub. (5), a buyer of goods other than a buyer in ordinary course of business takes free of a security interest to the extent that it secures advances made after the earlier of:
(a) The time the secured party acquires knowledge of the buyer’s purchase; or
(b) Forty-five days after the purchase.
(5) Advances made pursuant to commitment: priority of buyer of goods. Subsection (4) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer’s purchase and before the expiration of the 45-day period.
(6) Lessee of goods. Except as otherwise provided in sub. (7), a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of:
(a) The time the secured party acquires knowledge of the lease; or
(b) Forty-five days after the lease contract becomes enforceable.
(7) Advances made pursuant to commitment: priority of lessee of goods. Subsection (6) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the 45-day period.
Wis. Stat. § 409.324 Priority of purchase-money security interests
(1) General rule: purchase-money priority. Except as otherwise provided in sub. (7), a perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, and, except as otherwise provided in s. 409.327, a perfected security interest in its identifiable proceeds also has priority, if the purchase-money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter.
(2) Inventory purchase-money priority. Subject to sub. (3) and except as otherwise provided in sub. (7), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in s. 409.330, and, except as otherwise provided in s. 409.327, also has priority in identifiable cash proceeds of the inventory to the extent that the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if:
(a) The purchase-money security interest is perfected when the debtor receives possession of the inventory;
(b) The purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;
(c) The holder of the conflicting security interest receives the notification within 5 years before the debtor receives possession of the inventory; and
(d) The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory.
(3) Holders of conflicting inventory security interests to be notified. Subsection (2) (b) to (d) applies only if the holder of the conflicting security interest had filed a financing statement covering the same types of inventory:
(a) If the purchase-money security interest is perfected by filing, before the date of the filing; or
(b) If the purchase-money security interest is temporarily perfected without filing or possession under s. 409.312 (6), before the beginning of the 20-day period thereunder.
(4) Livestock purchase-money priority. Subject to sub. (5) and except as otherwise provided in sub. (7), a perfected purchase-money security interest in livestock that are farm products has priority over a conflicting security interest in the same livestock, and, except as otherwise provided in s. 409.327, a perfected security interest in their identifiable proceeds and identifiable products in their unmanufactured states also has priority, if:
(a) The purchase-money security interest is perfected when the debtor receives possession of the livestock;
(b) The purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;
(c) The holder of the conflicting security interest receives the notification within 6 months before the debtor receives possession of the livestock; and
(d) The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock.
(5) Holders of conflicting livestock security interests to be notified. Subsection (4) (b) to (d) applies only if the holder of the conflicting security interest had filed a financing statement covering the same types of livestock:
(a) If the purchase-money security interest is perfected by filing, before the date of the filing; or
(b) If the purchase-money security interest is temporarily perfected without filing or possession under s. 409.312 (6), before the beginning of the 20-day period thereunder.
(6) Software purchase-money priority. Except as otherwise provided in sub. (7), a perfected purchase-money security interest in software has priority over a conflicting security interest in the same collateral, and, except as otherwise provided in s. 409.327, a perfected security interest in its identifiable proceeds also has priority, to the extent that the purchase-money security interest in the goods in which the software was acquired for use has priority in the goods and proceeds of the goods under this section.
(7) Conflicting purchase-money security interests. If more than one security interest qualifies for priority in the same collateral under sub. (1), (2), (4), or (6):
(a) A security interest securing an obligation incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral; and
(b) In all other cases, s. 409.322 (1) applies to the qualifying security interests.
Wis. Stat. § 409.325 Priority of security interests in transferred collateral
(1) Subordination of security interest in transferred collateral. Except as otherwise provided in sub. (2), a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if:
(a) The debtor acquired the collateral subject to the security interest created by the other person;
(b) The security interest created by the other person was perfected when the debtor acquired the collateral; and
(c) There is no period thereafter when the security interest is unperfected.
(2) Limitation of sub. (1) subordination. Subsection (1) subordinates a security interest only if the security interest:
(a) Otherwise would have priority solely under s. 409.322 (1) or 409.324; or
(b) Arose solely under s. 402.711 (3) or 411.508 (5).
Wis. Stat. § 409.326 Priority of security interests created by new debtor
(1) Subordination of security interest created by new debtor. Subject to sub. (2), a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and is perfected solely by a filed financing statement that would be ineffective to perfect the security interest but for the application of s. 409.316 (9) (a) or 409.508 is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement.
(2) Priority under other provisions; multiple original debtors. The other provisions of this subchapter determine the priority among conflicting security interests in the same collateral perfected by filed financing statements described in sub. (1). However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor’s having become bound.
Wis. Stat. § 409.327 Priority of security interests in deposit account
The following rules govern priority among conflicting security interests in the same deposit account:
(1) Control by secured party. A security interest held by a secured party having control of the deposit account under s. 409.104 has priority over a conflicting security interest held by a secured party that does not have control.
(2) Priority in time of control. Except as otherwise provided in subs. (3) and (4), security interests perfected by control under s. 409.314 rank according to priority in time of obtaining control.
(3) Priority of bank regarding deposit account. Except as otherwise provided in sub. (4), a security interest held by the bank with which the deposit account is maintained has priority over a conflicting security interest held by another secured party.
(4) Priority over bank regarding deposit account. A security interest perfected by control under s. 409.104 (1) (c) has priority over a security interest held by the bank with which the deposit account is maintained.
Wis. Stat. § 409.328 Priority of security interests in investment property
The following rules govern priority among conflicting security interests in the same investment property:
(1) Control by secured party. A security interest held by a secured party having control of investment property under s. 409.106 has priority over a security interest held by a secured party that does not have control of the investment property.
(2) Priority in time of control. Except as otherwise provided in subs. (3) and (4), conflicting security interests held by secured parties each of which has control under s. 409.106 rank according to priority in time of:
(a) If the collateral is a security, obtaining control;
(b) If the collateral is a security entitlement carried in a securities account and:
1. If the secured party obtained control under s. 408.106 (4) (a), the secured party’s becoming the person for which the securities account is maintained;
2. If the secured party obtained control under s. 408.106 (4) (b), the securities intermediary’s agreement to comply with the secured party’s entitlement orders with respect to security entitlements carried or to be carried in the securities account; or
3. If the secured party obtained control through another person under s. 408.106 (4) (c), the time on which priority would be based under this subsection if the other person were the secured party; or
(c) If the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in s. 409.106 (2) (b) with respect to commodity contracts carried or to be carried with the commodity intermediary.
(3) Priority of securities intermediary regarding entitlement or account. A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party.
(4) Priority of securities intermediary regarding contract or account. A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party.
(5) Priority in certificated securities. A security interest in a certificated security in registered form which is perfected by taking delivery under s. 409.313 (1) and not by control under s. 409.314 has priority over a conflicting security interest perfected by a method other than control.
(6) Priority of conflicting security interests; intermediaries. Conflicting security interests created by a broker, securities intermediary, or commodity intermediary which are perfected without control under s. 409.106 rank equally.
(7) Priority of conflicting security interests; others. In all other cases, priority among conflicting security interests in investment property is governed by ss. 409.322 and 409.323.
Wis. Stat. § 409.329 Priority of security interests in letter-of-credit right
The following rules govern priority among conflicting security interests in the same letter-of-credit right:
(1) Control by secured party. A security interest held by a secured party having control of the letter-of-credit right under s. 409.107 has priority to the extent of its control over a conflicting security interest held by a secured party that does not have control.
(2) Priority in time of control. Security interests perfected by control under s. 409.314 rank according to priority in time of obtaining control.
Wis. Stat. § 409.330 Priority of purchaser of chattel paper or instrument
(1) Purchaser’s priority: security interest claimed merely as proceeds. A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds of inventory subject to a security interest if:
(a) 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 s. 409.105; and
(b) The chattel paper does not indicate that it has been assigned to an identified assignee other than the purchaser.
(2) Purchaser’s priority: other security interests. A purchaser of chattel paper has priority over a security interest in the chattel paper which 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 s. 409.105 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.
(3) Chattel paper purchaser’s priority in proceeds. Except as otherwise provided in s. 409.327, a purchaser having priority in chattel paper under sub. (1) or (2) also has priority in proceeds of the chattel paper to the extent that:
(a) Section 409.322 provides for priority in the proceeds; or
(b) 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.
(4) Instrument purchaser’s priority. Except as otherwise provided in s. 409.331 (1), 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.
(5) Holder of purchase-money security interest gives new value. For purposes of subs. (1) and (2), the holder of a purchase-money security interest in inventory gives new value for chattel paper constituting proceeds of the inventory.
(6) Indication of assignment gives knowledge. For purposes of subs. (2) and (4), 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.
Wis. Stat. § 409.331 Priority of rights of purchasers of instruments, documents, and securities under other chapters; priority of interests in financial assets and security entitlements under ch. 408
(1) Rights under chs. 403, 407, and 408 not limited. This chapter does not limit the rights of a holder in due course of a negotiable instrument, a holder to which a negotiable document of title has been duly negotiated, or a protected purchaser of a security. These holders or purchasers take priority over an earlier security interest, even if perfected, to the extent provided in chs. 403, 407, and 408.
(2) Protection under ch. 408. This chapter does not limit the rights of or impose liability on a person to the extent that the person is protected against the assertion of an adverse claim under ch. 408.
(3) Filing not notice. Filing under this chapter does not constitute notice of a claim or defense to the holders, or purchasers, or persons described in subs. (1) and (2).
Wis. Stat. § 409.332 Transfer of money; transfer of funds from deposit account
(1) Transferee of money. A transferee of money takes the money free of a security interest unless the transferee acts in collusion with the debtor in violating the rights of the secured party.
(2) Transferee of funds from deposit account. A transferee of funds from a deposit account takes the funds free of a security interest in the deposit account unless the transferee acts in collusion with the debtor in violating the rights of the secured party.
Wis. Stat. § 409.333 Priority of certain liens arising by operation of law
(1) Possessory lien. In this section, “possessory lien” means an interest, other than a security interest or an agricultural lien:
(a) Which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person’s business;
(b) Which is created by statute or rule of law in favor of the person; and
(c) Whose effectiveness depends on the person’s possession of the goods.
(2) Priority of possessory lien. A possessory lien on goods has priority over a security interest in the goods unless the lien is created by a statute that expressly provides otherwise.
Wis. Stat. § 409.334 Priority of security interests in fixtures and crops
(1) Security interest in fixtures under this chapter. A security interest under this chapter may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this chapter in ordinary building materials incorporated into an improvement on land.
(2) Security interest in fixtures under real property law. This chapter does not prevent creation of an encumbrance upon fixtures under real property law.
(3) General rule: subordination of security interest in fixtures. In cases not governed by subs. (4) to (8), a security interest in fixtures is subordinate to a conflicting interest of an encumbrancer or owner of the related real property other than the debtor.
(4) Fixtures purchase-money priority. Except as otherwise provided in sub. (8), a perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property and:
(a) The security interest is a purchase-money security interest;
(b) The interest of the encumbrancer or owner arises before the goods become fixtures; and
(c) The security interest is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter.
(5) Priority of security interest in fixtures over interests in real property. A perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if:
(a) The debtor has an interest of record in the real property or is in possession of the real property and the security interest:
1. Is perfected by a fixture filing before the interest of the encumbrancer or owner is of record; and
2. Has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner;
(b) Before the goods become fixtures, the security interest is perfected by any method permitted by this chapter and the fixtures are readily removable:
1. Factory or office machines;
2. Equipment that is not primarily used or leased for use in the operation of the real property; or
3. Replacements of domestic appliances that are consumer goods;
(c) The conflicting interest is a lien on the real property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this chapter; or
(d) The security interest is:
1. Created in a manufactured home in a manufactured-home transaction; and
2. Perfected pursuant to a statute described in s. 409.311 (1) (b) or (f).
(6) Priority based on consent, disclaimer, or right to remove. A security interest in fixtures, whether or not perfected, has priority over a conflicting interest of an encumbrancer or owner of the real property if:
(a) The encumbrancer or owner has, in an authenticated record, consented to the security interest or disclaimed an interest in the goods as fixtures; or
(b) The debtor has a right to remove the goods as against the encumbrancer or owner.
(7) Continuation of sub. (6) priority. The priority of the security interest under sub. (6) (b) continues for a reasonable time if the debtor’s right to remove the goods as against the encumbrancer or owner terminates.
(8) Priority of construction mortgage. A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land, including the acquisition cost of the land, if a recorded record of the mortgage so indicates. Except as otherwise provided in subs. (5) and (6), a security interest in fixtures is subordinate to a construction mortgage if a record of the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction. A mortgage has this priority to the same extent as a construction mortgage to the extent that it is given to refinance a construction mortgage.
(9) Priority of security interest in crops. A perfected security interest in crops growing on real property has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property.
Wis. Stat. § 409.335 Accessions
(1) Creation of security interest in accession. A security interest may be created in an accession and continues in collateral that becomes an accession.
(2) Perfection of security interest. If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral.
(3) Priority of security interest. Except as otherwise provided in sub. (4), the other provisions of this subchapter determine the priority of a security interest in an accession.
(4) Compliance with certificate-of-title statute. A security interest in an accession is subordinate to a security interest in the whole which is perfected by compliance with the requirements of a certificate-of-title statute under s. 409.311 (2).
(5) Removal of accession after default. After default, subject to subch. VI, a secured party may remove an accession from other goods if the security interest in the accession has priority over the claims of every person having an interest in the whole.
(6) Reimbursement following removal. A secured party that removes an accession from other goods under sub. (5) shall promptly reimburse any holder of a security interest or other lien on, or owner of, the whole or of the other goods, other than the debtor, for the cost of repair of any physical injury to the whole or the other goods. The secured party need not reimburse the holder or owner for any diminution in value of the whole or the other goods caused by the absence of the accession removed or by any necessity for replacing it. A person entitled to reimbursement may refuse permission to remove an accession until the secured party gives adequate assurance for the performance of the obligation to reimburse.
Wis. Stat. § 409.336 Commingled goods
(1) Commingled goods. In this section, “commingled goods” means goods that are physically united with other goods in such a manner that their identity is lost in a product or mass.
(2) No security interest in commingled goods as such. A security interest does not exist in commingled goods as such. However, a security interest may attach to a product or mass that results when goods become commingled goods.
(3) Attachment of security interest to product or mass. If collateral becomes commingled goods, a security interest attaches to the product or mass.
(4) Perfection of security interest. If a security interest in collateral is perfected before the collateral becomes commingled goods, the security interest that attaches to the product or mass under sub. (3) is perfected.
(5) Priority of security interest. Except as otherwise provided in sub. (6), the other provisions of this subchapter determine the priority of a security interest that attaches to the product or mass under sub. (3).
(6) Conflicting security interests in product or mass. If more than one security interest attaches to the product or mass under sub. (3), the following rules determine priority:
(a) A security interest that is perfected under sub. (4) has priority over a security interest that is unperfected at the time the collateral becomes commingled goods.
(b) If more than one security interest is perfected under sub. (4), the security interests rank equally in proportion to the value of the collateral at the time it became commingled goods.
Wis. Stat. § 409.337 Priority of security interests in goods covered by certificate of title
If, while a security interest in goods is perfected by any method under the law of another jurisdiction, this state issues a certificate of title that does not show that the goods are subject to the security interest or contain a statement that they may be subject to security interests not shown on the certificate:
(1) A buyer of the goods, other than a person in the business of selling goods of that kind, takes free of the security interest if the buyer gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security interest; and
(2) The security interest is subordinate to a conflicting security interest in the goods that attaches, and is perfected under s. 409.311 (2), after issuance of the certificate and without the conflicting secured party’s knowledge of the security interest.
Wis. Stat. § 409.338 Priority of security interest or agricultural lien perfected by filed financing statement providing certain incorrect information
If a security interest or agricultural lien is perfected by a filed financing statement providing information described in s. 409.516 (2) (e) which 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.
Wis. Stat. § 409.339 Priority subject to subordination
This chapter does not preclude subordination by agreement by a person entitled to priority.
Wis. Stat. § 409.340 Effectiveness of right of recoupment or setoff against deposit account
(1) Exercise of recoupment or setoff. Except as otherwise provided in sub. (3), a bank with which a deposit account is maintained may exercise any right of recoupment or setoff against a secured party that holds a security interest in the deposit account.
(2) Recoupment or setoff not affected by security interest. Except as otherwise provided in sub. (3), the application of this chapter to a security interest in a deposit account does not affect a right of recoupment or setoff of the secured party as to a deposit account maintained with the secured party.
(3) When setoff ineffective. The exercise by a bank of a setoff against a deposit account is ineffective against a secured party that holds a security interest in the deposit account which is perfected by control under s. 409.104 (1) (c), if the setoff is based on a claim against the debtor.
Wis. Stat. § 409.341 Bank’s rights and duties with respect to deposit account
Except as otherwise provided in s. 409.340 (3), and unless the bank otherwise agrees in an authenticated record, a bank’s rights and duties with respect to a deposit account maintained with the bank are not terminated, suspended, or modified by:
(1) The creation, attachment, or perfection of a security interest in the deposit account;
(2) The bank’s knowledge of the security interest; or
(3) The bank’s receipt of instructions from the secured party.
Wis. Stat. § 409.342 Bank’s right to refuse to enter into or disclose existence of control agreement
This chapter does not require a bank to enter into an agreement of the kind described in s. 409.104 (1) (b), even if its customer so requests or directs. A bank that has entered into such an agreement is not required to confirm the existence of the agreement to another person unless requested to do so by its customer.
Wis. Stat. § 409.401 Alienability of debtor’s rights
(1) Other law governs alienability; exceptions. Except as otherwise provided in sub. (2) and ss. 409.406, 409.407, 409.408, and 409.409, whether a debtor’s rights in collateral may be voluntarily or involuntarily transferred is governed by law other than this chapter.
(2) Agreement does not prevent transfer. An agreement between the debtor and secured party which prohibits a transfer of the debtor’s rights in collateral or makes the transfer a default does not prevent the transfer from taking effect.
Wis. Stat. § 409.402 Secured party not obligated on contract of debtor or in tort
The existence of a security interest, agricultural lien, or authority given to a debtor to dispose of or use collateral, without more, does not subject a secured party to liability in contract or tort for the debtor’s acts or omissions.
Wis. Stat. § 409.403 Agreement not to assert defenses against assignee
(1) Value. In this section, “value” has the meaning provided in s. 403.303 (1).
(2) Agreement not to assert claim or defense. Except as otherwise provided in this section, an agreement between an account debtor and an assignor not to assert against an assignee any claim or defense that the account debtor may have against the assignor is enforceable by an assignee that takes an assignment:
(a) For value;
(b) In good faith;
(c) Without notice of a claim of a property or possessory right to the property assigned; and
(d) Without notice of a defense or claim in recoupment of the type that may be asserted against a person entitled to enforce a negotiable instrument under s. 403.305 (1).
(3) When sub. (2) not applicable. Subsection (2) does not apply to defenses of a type that may be asserted against a holder in due course of a negotiable instrument under s. 403.305 (2).
(4) Omission of required statement in consumer transaction. In a consumer transaction, if a record evidences the account debtor’s obligation, law other than this chapter requires that the record include a statement to the effect that the rights of an assignee are subject to claims or defenses that the account debtor could assert against the original obligee, and the record does not include such a statement:
(a) The record has the same effect as if the record had included such a statement; and
(b) The account debtor may assert against an assignee those claims and defenses that would have been available if the record had included such a statement.
(5) Rule for individual under other law. This section is subject to law other than this chapter which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.
(6) Other law not displaced. Except as otherwise provided in sub. (4), this section does not displace law other than this chapter which gives effect to an agreement by an account debtor not to assert a claim or defense against an assignee.
Wis. Stat. § 409.404 Rights acquired by assignee; claims and defenses against assignee
(1) Assignee’s rights subject to terms, claims, and defenses; exceptions. Unless an account debtor has made an enforceable agreement not to assert defenses or claims, and subject to subs. (2) to (5), the rights of an assignee are subject to:
(a) All terms of the agreement between the account debtor and assignor and any defense or claim in recoupment arising from the transaction that gave rise to the contract; and
(b) Any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives a notification of the assignment authenticated by the assignor or the assignee.
(2) Account debtor’s claim reduces amount owed to assignee. Subject to sub. (3) and except as otherwise provided in sub. (4), the claim of an account debtor against an assignor may be asserted against an assignee under sub. (1) only to reduce the amount the account debtor owes.
(3) Rule for individual under other law. This section is subject to law other than this chapter which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.
(4) Omission of required statement in consumer transaction. In a consumer transaction, if a record evidences the account debtor’s obligation, law other than this chapter requires that the record include a statement to the effect that the account debtor’s recovery against an assignee with respect to claims and defenses against the assignor may not exceed amounts paid by the account debtor under the record, and the record does not include such a statement, the extent to which a claim of an account debtor against the assignor may be asserted against an assignee is determined as if the record had included such a statement.
(5) Inapplicability to health care insurance receivable. This section does not apply to an assignment of a health care insurance receivable.
Wis. Stat. § 409.405 Modification of assigned contract
(1) Effect of modification on assignee. A modification of or substitution for an assigned contract is effective against an assignee if made in good faith. The assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that the modification or substitution is a breach of contract by the assignor. This subsection is subject to subs. (2) to (4).
(2) Applicability of sub. (1). Subsection (1) applies to the extent that:
(a) The right to payment or a part thereof under an assigned contract has not been fully earned by performance; or
(b) The right to payment or a part thereof has been fully earned by performance and the account debtor has not received notification of the assignment under s. 409.406 (1).
(3) Rule for individual under other law. This section is subject to law other than this chapter which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.
(4) Inapplicability to health care insurance receivable. This section does not apply to an assignment of a health care insurance receivable.
Wis. Stat. § 409.406 Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective
(1) Discharge of account debtor; effect of notification. Subject to subs. (2) to (9), an account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, authenticated by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor.
(2) When notification ineffective. Subject to sub. (8), notification is ineffective under sub. (1):
(a) If it does not reasonably identify the rights assigned;
(b) To the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor’s duty to pay a person other than the seller and the limitation is effective under law other than this chapter; or
(c) At the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if:
1. Only a portion of the account, chattel paper, or payment intangible has been assigned to that assignee;
2. A portion has been assigned to another assignee; or
3. The account debtor knows that the assignment to that assignee is limited.
(3) Proof of assignment. Subject to sub. (8), if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under sub. (1).
(4) Term restricting assignment generally ineffective. Except as otherwise provided in sub. (5) and ss. 409.407 and 411.303, and subject to sub. (8), a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it:
(a) Prohibits, restricts, or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note; or
(b) Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note.
(5) Inapplicability of sub. (4) to certain sales. Subsection (4) does not apply to the sale of a payment intangible or promissory note, other than a sale pursuant to a disposition under s. 409.610 or an acceptance of collateral under s. 409.620.
(6) Legal restrictions on assignment generally ineffective. Except as otherwise provided in ss. 108.13, 409.407, 411.303, and 565.30 and subject to subs. (8) and (9), a rule of law, statute, or rule that prohibits, restricts, or requires the consent of a government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law, statute, or rule:
(a) Prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, the account or chattel paper; or
(b) Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper.
(7) Subsection (2) (c) not waivable. Subject to sub. (8), an account debtor may not waive or vary its option under sub. (2) (c).
(8) Rule for individual under other law. This section is subject to law other than this chapter which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.
(9) Inapplicability to health-care-insurance receivable. This section does not apply to an assignment of a health-care-insurance receivable.
Wis. Stat. § 409.407 Restrictions on creation or enforcement of security interest in leasehold interest or in leasor’s residual interest
(1) Term restricting assignment generally ineffective. Except as otherwise provided in sub. (2), a term in a lease agreement is ineffective to the extent that it:
(a) Prohibits, restricts, or requires the consent of a party to the lease to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, an interest of a party under the lease contract or in the lessor’s residual interest in the goods; or
(b) Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease.
(2) Effectiveness of certain terms. Except as otherwise provided in s. 411.303 (7), a term described in sub. (1) (b) is effective to the extent that there is:
(a) A transfer by the lessee of the lessee’s right of possession or use of the goods in violation of the term; or
(b) A delegation of a material performance of either party to the lease contract in violation of the term.
(3) Security interest not material impairment. The creation, attachment, perfection, or enforcement of a security interest in the lessor’s interest under the lease contract or the lessor’s residual interest in the goods is not a transfer that materially impairs the lessee’s prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of s. 411.303 (4) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.
Wis. Stat. § 409.408 Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective
(1) Term restricting assignment generally ineffective. Except as otherwise provided in sub. (2), a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license, or franchise, and which term prohibits, restricts, or requires the consent of the person obligated on the promissory note or the account debtor to, the assignment or transfer of, or creation, attachment, or perfection of a security interest in, the promissory note, health-care-insurance receivable, or general intangible, is ineffective to the extent that the term:
(a) Would impair the creation, attachment, or perfection of a security interest; or
(b) Provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.
(2) Applicability of sub. (1) to sales of certain rights to payment. Subsection (1) applies to a security interest in a payment intangible or promissory note only if the security interest arises out of a sale of the payment intangible or promissory note, other than a sale pursuant to a disposition under s. 409.610 or an acceptance of collateral under s. 409.620.
(3) Legal restrictions on assignment generally ineffective. A rule of law, statute, or rule that prohibits, restricts, or requires the consent of a government, governmental body or official, person obligated on a promissory note or account debtor to the assignment or transfer of, or creation of a security interest in, a promissory note, health-care-insurance receivable, or general intangible, including a contract, permit, license, or franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute, or rule:
(a) Would impair the creation, attachment, or perfection of a security interest; or
(b) Provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.
(4) Limitation on ineffectiveness under subs. (1) and (3). To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable, or general intangible or a rule of law, statute, or rule described in sub. (3) would be effective under law other than this chapter but is ineffective under sub. (1) or (3), the creation, attachment, or perfection of a security interest in the promissory note, health-care-insurance receivable, or general intangible:
(a) Is not enforceable against the person obligated on the promissory note or the account debtor;
(b) Does not impose a duty or obligation on the person obligated on the promissory note or the account debtor;
(c) Does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party, or accept payment or performance from the secured party;
(d) Does not entitle the secured party to use or assign the debtor’s rights under the promissory note, health-care-insurance receivable, or general intangible, including any related information or materials furnished to the debtor in the transaction giving rise to the promissory note, health-care-insurance receivable, or general intangible;
(e) Does not entitle the secured party to use, assign, possess, or have access to any trade secrets or confidential information of the person obligated on the promissory note or the account debtor; and
(f) Does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable, or general intangible.
Wis. Stat. § 409.409 Restrictions on assignment of letter-of-credit rights ineffective
(1) Term or law restricting assignment generally ineffective. A term in a letter of credit or a rule of law, statute, rule, custom, or practice applicable to the letter of credit which prohibits, restricts, or requires the consent of an applicant, issuer, or nominated person to a beneficiary’s assignment of or creation of a security interest in a letter-of-credit right is ineffective to the extent that the term or rule of law, statute, rule, custom, or practice:
(a) Would impair the creation, attachment, or perfection of a security interest in the letter-of-credit right; or
(b) Provides that the assignment or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the letter-of-credit right.
(2) Limitation on ineffectiveness under sub. (1). To the extent that a term in a letter of credit is ineffective under sub. (1) but would be effective under law other than this chapter or a custom or practice applicable to the letter of credit, to the transfer of a right to draw or otherwise demand performance under the letter of credit, or to the assignment of a right to proceeds of the letter of credit, the creation, attachment, or perfection of a security interest in the letter-of-credit right:
(a) Is not enforceable against the applicant, issuer, nominated person, or transferee beneficiary;
(b) Imposes no duties or obligations on the applicant, issuer, nominated person, or transferee beneficiary; and
(c) Does not require the applicant, issuer, nominated person, or transferee beneficiary to recognize the security interest, pay or render performance to the secured party, or accept payment or other performance from the secured party.
Wis. Stat. § 409.501 Filing office
(1) Filing offices. Except as otherwise provided in sub. (2), if the local law of this state governs perfection of a security interest or agricultural lien, the office in which to file a financing statement to perfect the security interest or agricultural lien is:
(a) The office designated for the filing or recording of a record of a mortgage on the related real property, if:
1. The collateral is as-extracted collateral or timber to be cut; or
2. The financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures; or
(b) The office of the department of financial institutions or any office duly authorized by the department, in all other cases, including a case in which the collateral is goods that are or are to become fixtures and the financing statement is not filed as a fixture filing.
(2) Filing office for transmitting utilities. The office in which to file a financing statement to perfect a security interest in collateral, including fixtures, of a transmitting utility is the office of the department of financial institutions. The financing statement also constitutes a fixture filing as to the collateral indicated in the financing statement which is or is to become fixtures.
Wis. Stat. § 409.502 Contents of financing statement; record of mortgage as financing statement; time of filing financing statement
(1) Sufficiency of financing statement. Subject to sub. (2), a financing statement is sufficient only if it:
(a) Provides the name of the debtor;
(b) Provides the name of the secured party or a representative of the secured party; and
(c) Indicates the collateral covered by the financing statement.
(2) Real-property-related financing statements. Except as otherwise provided in s. 409.501 (2), to be sufficient, a financing statement that covers as-extracted collateral or timber to be cut, or which is filed as a fixture filing and covers goods that are or are to become fixtures, must satisfy sub. (1) and also:
(a) Indicate that it covers this type of collateral;
(b) Indicate that it is to be filed for record in the real property records;
(c) Provide a description of the real property to which the collateral is related sufficient to give constructive notice of a mortgage under the law of this state if the description were contained in a record of the mortgage of the real property; and
(d) If the debtor does not have an interest of record in the real property, provide the name of a record owner.
(3) Record of mortgage as financing statement. A record of a mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut only if:
(a) The record indicates the goods or accounts that it covers;
(b) The goods are or are to become fixtures related to the real property described in the record or the collateral is related to the real property described in the record and is as-extracted collateral or timber to be cut;
(c) The record satisfies the requirements for a financing statement in this section, but:
1. The record need not indicate that it is to be filed in the real property records; and
2. The record sufficiently provides the name of a debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, even if the debtor is an individual to whom s. 409.503 (1) (dm) applies; and
(d) The record is duly recorded.
(4) Filing before security agreement or attachment. A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.
Wis. Stat. § 409.503 Name of debtor and secured party
(1) Sufficiency of debtor’s name. A financing statement sufficiently provides the name of the debtor:
(a) Except as otherwise provided in par. (c), if the debtor is a registered organization or the collateral is held in a trust that is a registered organization, only if the financing statement provides the name that is stated to be the registered organization’s name on the public organic record most recently filed with or issued or enacted by the registered organization’s jurisdiction of organization which purports to state, amend, or restate the registered organization’s name;
(b) Subject to sub. (6), if the collateral is being administered by the personal representative of a decedent, only if the financing statement provides, as the name of the debtor, the name of the decedent and, in a separate part of the financing statement, indicates that the collateral is being administered by a personal representative;
(c) If the collateral is held in a trust that is not a registered organization, only if the financing statement:
1m. Provides, as the name of the debtor:
a. If the organic record of the trust specifies a name for the trust, the name specified; or
b. If the organic record of the trust does not specify a name for the trust, the name of the settlor or testator; and
2m. In a separate part of the financing statement:
a. If the name is provided in accordance with subd. 1m. a., indicates that the collateral is held in a trust; or
b. If the name is provided in accordance with subd. 1m. b., provides additional information sufficient to distinguish the trust from other trusts having one or more of the same settlors or the same testator and indicates that the collateral is held in a trust, unless the additional information so indicates;
(dm) Subject to sub. (7), if the debtor is an individual to whom this state has issued an operator’s license under ch. 343 or identification card under s. 343.50 that has not expired, only if the financing statement provides the name of the individual which is indicated on the operator’s license or identification card;
(e) If the debtor is an individual to whom par. (dm) does not apply, only if the financing statement provides the individual name of the debtor or the surname and first personal name of the debtor; and
(f) In other cases:
1. If the debtor has a name, only if the financing statement provides the organizational name of the debtor; and
2. If the debtor does not have a name, only if the financing statement provides the names of the partners, members, associates, or other persons comprising the debtor, in a manner that each name provided would be sufficient if the person named were the debtor.
(2) Additional debtor-related information. A financing statement that provides the name of the debtor in accordance with sub. (1) is not rendered ineffective by the absence of:
(a) A trade name or other name of the debtor; or
(b) Unless required under sub. (1) (f) 2., names of partners, members, associates, or other persons comprising the debtor.
(3) Debtor’s trade name insufficient. A financing statement that provides only the debtor’s trade name does not sufficiently provide the name of the debtor.
(4) Representative capacity. Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement.
(5) Multiple debtors and secured parties. A financing statement may provide the name of more than one debtor and the name of more than one secured party.
(6) Name of decedent. The name of the decedent indicated on the order appointing the personal representative of the decedent issued by the court having jurisdiction over the collateral is sufficient as the “name of the decedent” under sub. (1) (b).
(7) Multiple licenses or identification cards. If this state has issued to an individual more than one operator’s license under ch. 343 or identification card under s. 343.50 of a kind described in sub. (1) (dm), the one that was issued most recently is the one to which sub. (1) (dm) refers.
(8) Definition. In this section, the “name of the settlor or testator” means:
(a) If the settlor is a registered organization, the name that is stated to be the settlor’s name on the public organic record most recently filed with or issued or enacted by the settlor’s jurisdiction of organization which purports to state, amend, or restate the settlor’s name;
(b) In other cases, the name of the settlor or testator indicated in the trust’s organic record.
Wis. Stat. § 409.504 Indication of collateral
A financing statement sufficiently indicates the collateral that it covers if the financing statement provides:
(1) A description of the collateral pursuant to s. 409.108; or
(2) An indication that the financing statement covers all assets or all personal property.
Wis. Stat. § 409.505 Filing and compliance with other statutes and treaties for consignments, leases, other bailments, and other transactions
(1) Use of terms other than debtor and secured party. A consignor, lessor, or other bailor of goods, a licensor, or a buyer of a payment intangible or promissory note may file a financing statement, or may comply with a statute or treaty described in s. 409.311 (1), using the terms “consignor”, “consignee”, “lessor”, “lessee”, “bailor”, “bailee”, “licensor”, “licensee”, “owner”, “registered owner”, “buyer”, “seller”, or words of similar import, instead of the terms “secured party” and “debtor”.
(2) Effect of financing statement under sub. (1). This subchapter applies to the filing of a financing statement under sub. (1) and, as appropriate, to compliance that is equivalent to filing a financing statement under s. 409.311 (2), but the filing or compliance is not of itself a factor in determining whether the collateral secures an obligation. If it is determined for another reason that the collateral secures an obligation, a security interest held by the consignor, lessor, bailor, licensor, owner, or buyer which attaches to the collateral is perfected by the filing or compliance.
Wis. Stat. § 409.506 Effect of errors or omissions
(1) Minor errors and omissions. A financing statement substantially satisfying the requirements of this subchapter is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading.
(2) Financing statement seriously misleading. Except as otherwise provided in sub. (3), a financing statement that fails sufficiently to provide the name of the debtor in accordance with s. 409.503 (1) is seriously misleading.
(3) Financing statement not seriously misleading. If a search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with s. 409.503 (1), the name provided does not make the financing statement seriously misleading.
(4) Debtor’s correct name. For purposes of s. 409.508 (2), the “debtor’s correct name” in sub. (3) means the correct name of the new debtor.
Wis. Stat. § 409.507 Effect of certain events on effectiveness of financing statement
(1) Disposition. A filed financing statement remains effective with respect to collateral that is sold, exchanged, leased, licensed, or otherwise disposed of and in which a security interest or agricultural lien continues, even if the secured party knows of or consents to the disposition.
(2) Information becoming seriously misleading. Except as otherwise provided in sub. (3) and s. 409.508, a financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under s. 409.506.
(3) Change in debtor’s name. If the name that a filed financing statement provides for a debtor becomes insufficient as the name of the debtor under s. 409.503 (1) so that the financing statement becomes seriously misleading under s. 409.506:
(a) The financing statement is effective to perfect a security interest in collateral acquired by the debtor before, or within 4 months after, the filed financing statement becomes seriously misleading; and
(b) The financing statement is not effective to perfect a security interest in collateral acquired by the debtor more than 4 months after the filed financing statement becomes seriously misleading, unless an amendment to the financing statement which renders the financing statement not seriously misleading is filed within 4 months after the financing statement became seriously misleading.
Wis. Stat. § 409.508 Effectiveness of financing statement if new debtor becomes bound by security agreement
(1) Financing statement naming original debtor. Except as otherwise provided in this section, a filed financing statement naming an original debtor is effective to perfect a security interest in collateral in which a new debtor has or acquires rights to the extent that the financing statement would have been effective had the original debtor acquired rights in the collateral.
(2) Financing statement becoming seriously misleading. If the difference between the name of the original debtor and that of the new debtor causes a filed financing statement that is effective under sub. (1) to be seriously misleading under s. 409.506:
(a) The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within 4 months after, the new debtor becomes bound under s. 409.203 (4); and
(b) The financing statement is not effective to perfect a security interest in collateral acquired by the new debtor more than 4 months after the new debtor becomes bound under s. 409.203 (4) unless an initial financing statement providing the name of the new debtor is filed before the expiration of that time.
(3) When section not applicable. This section does not apply to collateral as to which a filed financing statement remains effective against the new debtor under s. 409.507 (1).
Wis. Stat. § 409.509 Persons entitled to file a record
(1) Person entitled to file record. A person may file an initial financing statement, amendment that adds collateral covered by a financing statement, or amendment that adds a debtor to a financing statement only if:
(a) The debtor authorizes the filing in an authenticated record or pursuant to sub. (2) or (3); or
(b) The person holds an agricultural lien that has become effective at the time of filing and the financing statement covers only collateral in which the person holds an agricultural lien.
(2) Security agreement as authorization. By authenticating or becoming bound as debtor by a security agreement, a debtor or new debtor authorizes the filing of an initial financing statement, and an amendment, covering:
(a) The collateral described in the security agreement; and
(b) Property that becomes collateral under s. 409.315 (1) (b), whether or not the security agreement expressly covers proceeds.
(3) Acquisition of collateral as authorization. By acquiring collateral in which a security interest or agricultural lien continues under s. 409.315 (1) (a), a debtor authorizes the filing of an initial financing statement, and an amendment, covering the collateral and property that becomes collateral under s. 409.315 (1) (b).
(4) Person entitled to file certain amendments. A person may file an amendment other than an amendment that adds collateral covered by a financing statement or an amendment that adds a debtor to a financing statement only if:
(a) The secured party of record authorizes the filing; or
(b) The amendment is a termination statement for a financing statement as to which the secured party of record has failed to file or send a termination statement as required by s. 409.513 (1) or (3), the debtor authorizes the filing, and the termination statement indicates that the debtor authorized it to be filed.
(5) Multiple secured parties of record. If there is more than one secured party of record for a financing statement, each secured party of record may authorize the filing of an amendment under sub. (4).
Wis. Stat. § 409.510 Effectiveness of filed record
(1) Filed record effective if authorized. A filed record is effective only to the extent that it was filed by a person that may file it under s. 409.509.
(2) Authorization by one secured party of record. A record authorized by one secured party of record does not affect the financing statement with respect to another secured party of record.
(3) Continuation statement not timely filed. A continuation statement that is not filed within the 6-month period prescribed by s. 409.515 (4) is ineffective.
Wis. Stat. § 409.511 Secured party of record
(1) Secured party of record. A secured party of record with respect to a financing statement is a person whose name is provided as the name of the secured party or a representative of the secured party in an initial financing statement that has been filed. If an initial financing statement is filed under s. 409.514 (1), the assignee named in the initial financing statement is the secured party of record with respect to the financing statement.
(2) Amendment naming secured party of record. If an amendment of a financing statement which provides the name of a person as a secured party or a representative of a secured party is filed, the person named in the amendment is a secured party of record. If an amendment is filed under s. 409.514 (2), the assignee named in the amendment is a secured party of record.
(3) Amendment deleting secured party of record. A person remains a secured party of record until the filing of an amendment of the financing statement which deletes the person.
Wis. Stat. § 409.512 Amendment of financing statement
(1) Amendment of information in financing statement. Subject to s. 409.509, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or, subject to sub. (5), otherwise amend the information provided in, a financing statement by filing an amendment that:
(a) Identifies, by its file number, the initial financing statement to which the amendment relates; and
(b) If the amendment relates to an initial financing statement filed or recorded in a filing office described in s. 409.501 (1) (a), provides the date on which the initial financing statement was filed or recorded and the information specified in s. 409.502 (2).
(2) Period of effectiveness not affected. Except as otherwise provided in s. 409.515, the filing of an amendment does not extend the period of effectiveness of the financing statement.
(3) Effectiveness of amendment adding collateral. A financing statement that is amended by an amendment that adds collateral is effective as to the added collateral only from the date of the filing of the amendment.
(4) Effectiveness of amendment adding debtor. A financing statement that is amended by an amendment that adds a debtor is effective as to the added debtor only from the date of the filing of the amendment.
(5) Certain amendments ineffective. An amendment is ineffective to the extent that it:
(a) Purports to delete all debtors and fails to provide the name of a debtor to be covered by the financing statement; or
(b) Purports to delete all secured parties of record and fails to provide the name of a new secured party of record.
Wis. Stat. § 409.513 Termination statement
(1) Consumer goods. A secured party shall cause the secured party of record for a financing statement to file a termination statement for the financing statement if the financing statement covers consumer goods and:
(a) There is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or
(b) The debtor did not authorize the filing of the initial financing statement.
(2) Time for compliance with sub. (1). To comply with sub. (1), a secured party shall cause the secured party of record to file the termination statement:
(a) Within one month after there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or
(b) If earlier, within 20 days after the secured party receives an authenticated demand from a debtor.
(3) Other collateral. In cases not governed by sub. (1), within 20 days after a secured party receives an authenticated demand from a debtor, the secured party shall cause the secured party of record for a financing statement to send to the debtor a termination statement for the financing statement or file the termination statement in the filing office if:
(a) Except in the case of a financing statement covering accounts or chattel paper that has been sold or goods that are the subject of a consignment, there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value;
(b) The financing statement covers accounts or chattel paper that has been sold but as to which the account debtor or other person obligated has discharged its obligation;
(c) The financing statement covers goods that were the subject of a consignment to the debtor but are not in the debtor’s possession; or
(d) The debtor did not authorize the filing of the initial financing statement.
(4) Effect of filing termination statement. Except as otherwise provided in s. 409.510, upon the filing of a termination statement with the filing office, the financing statement to which the termination statement relates ceases to be effective. Except as otherwise provided in s. 409.510, for the purposes of ss. 409.519 (7), 409.522 (1), and 409.523 (3), the filing with the filing office of a termination statement relating to a financing statement that indicates that the debtor is a transmitting utility also causes the effectiveness of the financing statement to lapse.
Wis. Stat. § 409.514 Assignment of powers of secured party of record
(1) Assignment reflected on initial financing statement. Except as otherwise provided in sub. (3), an initial financing statement may reflect an assignment of all of the secured party’s power to authorize an amendment to the financing statement by providing the name and mailing address of the assignee as the name and address of the secured party.
(2) Assignment of filed financing statement. Except as otherwise provided in sub. (3), a secured party of record may assign of record all or part of its power to authorize an amendment to a financing statement by filing in the filing office an amendment of the financing statement which:
(a) Identifies, by its file number, the initial financing statement to which it relates;
(b) Provides the name of the assignor; and
(c) Provides the name and mailing address of the assignee.
(3) Assignment of record of mortgage. An assignment of record of a security interest in a fixture covered by a record of a mortgage which is effective as a financing statement filed as a fixture filing under s. 409.502 (3) may be made only by an assignment of record of the mortgage in the manner provided by law of this state other than chs. 401 to 411.
Wis. Stat. § 409.515 Duration and effectiveness of financing statement; effect of lapsed financing statement
(1) Five-year effectiveness. Except as otherwise provided in subs. (2), (5), (6), and (7), a filed financing statement is effective for a period of 5 years after the date of filing.
(2) Public-finance or manufactured-home transaction. Except as otherwise provided in subs. (5), (6), and (7), an initial financing statement filed in connection with a public-finance transaction or manufactured-home transaction is effective for a period of 30 years after the date of filing if it indicates that it is filed in connection with a public-finance transaction or manufactured-home transaction.
(3) Lapse and continuation of financing statement. The effectiveness of a filed financing statement lapses on the expiration of the period of its effectiveness unless before the lapse a continuation statement is filed pursuant to sub. (4). Upon lapse, a financing statement ceases to be effective and any security interest or agricultural lien that was perfected by the financing statement becomes unperfected, unless the security interest is perfected otherwise. If the security interest or agricultural lien becomes unperfected upon lapse, it is deemed never to have been perfected as against a purchaser of the collateral for value.
(4) When continuation statement may be filed. A continuation statement may be filed only within 6 months before the expiration of the 5-year period specified in sub. (1) or the 30-year period specified in sub. (2), whichever is applicable.
(5) Effect of filing continuation statement. Except as otherwise provided in s. 409.510, upon timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of 5 years commencing on the day on which the financing statement would have become ineffective in the absence of the filing. Upon the expiration of the 5-year period, the financing statement lapses in the same manner as provided in sub. (3), unless, before the lapse, another continuation statement is filed pursuant to sub. (4). Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement.
(6) Transmitting utility financing statement. If a debtor is a transmitting utility and a filed initial financing statement so indicates, the financing statement is effective until a termination statement is filed.
(7) Record of mortgage as financing statement. A record of a mortgage that is effective as a financing statement filed as a fixture filing under s. 409.502 (3) remains effective as a financing statement filed as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real property.
Wis. Stat. § 409.516 What constitutes filing; effectiveness of filing
(1) What constitutes filing. Except as otherwise provided in sub. (2), communication of a record to a filing office and tender of the filing fee or acceptance of the record by the filing office constitutes filing.
(2) Refusal to accept record; filing does not occur. Filing does not occur with respect to a record that a filing office refuses to accept because:
(a) The record is not communicated by a method or medium of communication authorized by the filing office;
(b) An amount equal to or greater than the applicable filing fee is not tendered;
(c) The filing office is unable to index the record because:
1. In the case of an initial financing statement, the record does not provide a name for the debtor;
2. In the case of an amendment or information statement, the record:
a. Does not identify the initial financing statement as required by s. 409.512 or 409.518, as applicable; or
b. Identifies an initial financing statement whose effectiveness has lapsed under s. 409.515;
3. In the case of an initial financing statement that provides the name of a debtor identified as an individual or an amendment that provides a name of a debtor identified as an individual which was not previously provided in the financing statement to which the record relates, the record does not identify the debtor’s surname; or
4. In the case of a record filed or recorded in the filing office described in s. 409.501 (1) (a), the record does not provide a sufficient description of the real property to which it relates;
(d) In the case of an initial financing statement or an amendment that adds a secured party of record, the record does not provide a name and mailing address for the secured party of record;
(e) In the case of an initial financing statement or an amendment that provides a name of a debtor which was not previously provided in the financing statement to which the amendment relates, the record does not:
1. Provide a mailing address for the debtor; or
2. Indicate whether the name provided as the name of the debtor is the name of an individual or an organization;
(f) In the case of an assignment reflected in an initial financing statement under s. 409.514 (1) or an amendment filed under s. 409.514 (2), the record does not provide a name and mailing address for the assignee; or
(g) In the case of a continuation statement, the record is not filed within the 6-month period prescribed by s. 409.515 (4).
(h) The record contains the social security number of an individual.
(3) Rules applicable to sub. (2). For purposes of sub. (2):
(a) A record does not provide information if the filing office is unable to read or decipher the information; and
(b) A record that does not indicate that it is an amendment or identify an initial financing statement to which it relates, as required by s. 409.512, 409.514, or 409.518, is an initial financing statement.
(4) Refusal to accept record; record effective as filed record. A record that is communicated to the filing office with tender of the filing fee, but which the filing office refuses to accept for a reason other than one set forth in sub. (2), is effective as a filed record except as against a purchaser of the collateral which gives value in reasonable reliance upon the absence of the record from the files.
Wis. Stat. § 409.517 Effect of indexing errors
The failure of the filing office to index a record correctly does not affect the effectiveness of the filed record.
Wis. Stat. § 409.518 Claim concerning inaccurate or wrongfully filed record
(1) Statement with respect to record indexed under person’s name. A person may file in the filing office an information statement with respect to a record indexed there under the person’s name if the person believes that the record is inaccurate or was wrongfully filed.
(2) Contents of statement under sub. (1). An information statement under sub. (1) must:
(a) Identify the record to which it relates by:
1. The file number assigned to the initial financing statement to which the record relates; and
2. If the information statement relates to a record filed or recorded in a filing office described in s. 409.501 (1) (a), the date on which the initial financing statement was filed or recorded and the information specified in s. 409.502 (2);
(b) Indicate that it is an information statement; and
(c) Provide the basis for the person’s belief that the record is inaccurate and indicate the manner in which the person believes the record should be amended to cure any inaccuracy or provide the basis for the person’s belief that the record was wrongfully filed.
(3m) Statement by secured party of record. A person may file in the filing office an information statement with respect to a record filed there if the person is a secured party of record with respect to the financing statement to which the record relates and believes that the person that filed the record was not entitled to do so under s. 409.509 (4).
(4) Contents of statement under sub. (3m). An information statement under sub. (3m) must:
(a) Identify the record to which it relates by:
1. The file number assigned to the initial financing statement to which the record relates; and
2. If the information statement relates to a record filed or recorded in a filing office described in s. 409.501 (1) (a), the date that the initial financing statement was filed or recorded and the information specified in s. 409.502 (2);
(b) Indicate that it is an information statement; and
(c) Provide the basis for the person’s belief that the person that filed the record was not entitled to do so under s. 409.509 (4).
(5) Record not affected by information statement. The filing of an information statement does not affect the effectiveness of an initial financing statement or other filed record.
Wis. Stat. § 409.519 Numbering, maintaining, and indexing records; communicating information provided in records
(1) Filing-office duties. For each record filed in a filing office, the filing office shall:
(a) Assign a unique number to the filed record;
(b) Create a record that bears the number assigned to the filed record and the date and time of filing;
(c) Maintain the filed record for public inspection; and
(d) Index the filed record in accordance with subs. (3), (4), and (5).
(2) File number. A file number assigned after January 1, 2002, must include a digit that:
(a) Is mathematically derived from or related to the other digits of the file number; and
(b) Aids the filing office in determining whether a number communicated as the file number includes a single-digit or transpositional error.
(3) Indexing: general. Except as otherwise provided in subs. (4) and (5), the filing office shall:
(a) Index an initial financing statement according to the name of the debtor and index all filed records relating to the initial financing statement in a manner that associates with one another an initial financing statement and all filed records relating to the initial financing statement; and
(b) Index a record that provides a name of a debtor which was not previously provided in the financing statement to which the record relates also according to the name that was not previously provided.
(4) Indexing: real-property-related financing statement. If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, it must be filed for record and the filing office shall index it:
(a) Under the names of the debtor and of each owner of record shown on the financing statement as if they were the mortgagors under a mortgage of the real property described; and
(b) To the extent that the law of this state provides for indexing of records of mortgages under the name of the mortgagee, under the name of the secured party as if the secured party were the mortgagee thereunder, or, if indexing is by description, as if the financing statement were a record of a mortgage of the real property described.
(5) Indexing: real-property-related assignment. If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, the filing office shall index an assignment filed under s. 409.514 (1) or an amendment filed under s. 409.514 (2):
(a) Under the name of the assignor as grantor; and
(b) To the extent that the law of this state provides for indexing a record of the assignment of a mortgage under the name of the assignee, under the name of the assignee.
(6) Retrieval and association capability. The filing office shall maintain a capability:
(a) To retrieve a record by the name of the debtor and:
1. If the filing office is described in s. 409.501 (1) (a), by the file number assigned to the initial financing statement to which the record relates and the date on which the record was filed or recorded; or
2. If the filing office is described in s. 409.501 (1) (b), by the file number assigned to the initial financing statement to which the record relates; and
(b) To associate and retrieve with one another an initial financing statement and each filed record relating to the initial financing statement.
(7) Removal of debtor’s name. The filing office may not remove a debtor’s name from the index until one year after the effectiveness of a financing statement naming the debtor lapses under s. 409.515 with respect to all secured parties of record.
(8) Timeliness of filing-office performance. The filing office shall perform the acts required by subs. (1) to (5) at the time and in the manner prescribed by filing-office rule, but not later than:
(a) Five business days after the filing office receives the record in question for acts performed before July 1, 2003; and
(b) Two business days after the filing office receives the record in question for acts performed on or after July 1, 2003.
(9) Inapplicability to real-property-related filing office. Subsection (2) does not apply to a filing office described in s. 409.501 (1) (a).
Wis. Stat. § 409.520 Acceptance and refusal to accept record; social security numbers
(1) Mandatory refusal to accept record. A filing office shall refuse to accept a record for filing for a reason set forth in s. 409.516 (2) and may refuse to accept a record for filing only for a reason set forth in s. 409.516 (2).
(1m) Social security numbers.
(a) A filing office may not file and index a record under this subchapter if the record contains the social security number of an individual. If a filing office is presented with a record that contains an individual’s social security number, the filing office may, prior to filing and indexing the record, remove or obscure characters from the social security number such that the social security number is not discernable on the record.
(b) If a filing office is presented with a record for filing and indexing that contains an individual’s social security number, and if the filing office does not discover that the record contains the individual’s social security number until after the record is filed and indexed, the filing office is not liable for the record drafter’s placement of the individual’s social security number on the record and the filing office may remove or obscure characters from the social security number such that the social security number is not discernable on the record.
(c) If a filing office files and indexes a record that contains the complete social security number of an individual, the record drafter is liable to the individual whose social security number appears in the filed and indexed record for any actual damages resulting from the record being filed and indexed.
(2) Communication concerning refusal. If a filing office refuses to accept a record for filing, the filing office shall communicate to the person that presented the record the fact of and reason for the refusal and the date and time the record would have been filed had the filing office accepted the record. The communication must be made at the time and in the manner prescribed by filing-office rule but, in no event more than:
(a) Five business days after the filing office receives the record for records received before July 1, 2003; and
(b) Two business days after the filing office receives the record for records received on or after July 1, 2003.
(3) When filed financing statement effective. A filed financing statement satisfying s. 409.502 (1) and (2) is effective, even if the filing office is required to refuse to accept it for filing under sub. (1). However, s. 409.338 applies to a filed financing statement providing information described in s. 409.516 (2) (e) which is incorrect at the time the financing statement is filed.
(4) Separate application to multiple debtors. If a record communicated to a filing office provides information that relates to more than one debtor, this subchapter applies as to each debtor separately.
Wis. Stat. § 409.521 Uniform form of written financing statement and amendment
(1) Tax identification number. In publishing instructions for the forms specified in subs. (2) and (3), the department of financial institutions shall include a statement, where applicable, that inclusion of an employer identification number is not required under Wisconsin law.
(2) Initial financing statement form. A filing office that accepts written records may not refuse to accept a written initial financing statement in the following form and format except for a reason set forth in s. 409.516 (2):
(3) Amendment form. A filing office that accepts written records may not refuse to accept a written record in the following form and format except for a reason set forth in s. 409.516 (2):
Wis. Stat. § 409.522 Maintenance and destruction of records
(1) Postlapse maintenance and retrieval of information. The filing office shall maintain a record of the information provided in a filed financing statement for at least one year after the effectiveness of the financing statement has lapsed under s. 409.515 with respect to all secured parties of record. The record must be retrievable by using the name of the debtor and:
(a) If the record was filed or recorded in the filing office described in s. 409.501 (1) (a), by using the file number assigned to the initial financing statement to which the record relates and the date on which the record was filed or recorded; or
(b) If the record was filed in the filing office described in s. 409.501 (1) (b), by using the file number assigned to the initial financing statement to which the record relates.
(2) Destruction of written records. Except to the extent that a statute governing disposition of public records provides otherwise, the filing office may destroy immediately any written record evidencing a financing statement. However, if the filing office destroys a written record, it shall maintain another record of the financing statement which complies with sub. (1).
Wis. Stat. § 409.523 Information from filing office; sale or license of records
(1) Acknowledgment of filing written record. If a person that files a written record requests an acknowledgment of the filing, the filing office shall send to the person an image of the record showing the number assigned to the record pursuant to s. 409.519 (1) (a) and the date and time of the filing of the record. However, if the person furnishes a copy of the record to the filing office, the filing office may instead:
(a) Note upon the copy the number assigned to the record pursuant to s. 409.519 (1) (a) and the date and time of the filing of the record; and
(b) Send the copy to the person.
(2) Acknowledgment of filing other record. If a person files a record other than a written record, the filing office shall communicate to the person an acknowledgment that provides:
(a) The information in the record;
(b) The number assigned to the record pursuant to s. 409.519 (1) (a); and
(c) The date and time of the filing of the record.
(3) Communication of requested information. The filing office described in s. 409.501 (1) (b) shall communicate or otherwise make available in a record the following information to any person that requests it:
(a) Whether there is on file on a date and time specified by the filing office, but not a date earlier than 3 business days before the filing office receives the request, any financing statement that:
1. Designates a particular debtor or, if the request so states, designates a particular debtor at the address specified in the request;
2. Has not lapsed under s. 409.515 with respect to all secured parties of record; or
3. If the request so states, has lapsed under s. 409.515 and a record of which is maintained by the filing office under s. 409.522 (1);
(b) The date and time of filing of each financing statement; and
(c) The information provided in each financing statement.
(4) Medium for communicating information. In complying with its duty under sub. (3), the filing office may communicate information in any medium. However, if requested, the filing office shall communicate information by issuing a record that can be admitted into evidence in the courts of this state without extrinsic evidence of its authenticity.
(5) Timeliness of filing-office performance. The filing office shall perform the acts required by subs. (1) to (4) at the time and in the manner prescribed by filing-office rule, but not later than:
(a) Five business days after the filing office receives the request for requests received before July 1, 2003; and
(b) Two business days after the filing office receives the request for requests received on or after July 1, 2003.
(6) Public availability of records. At least weekly, the department of financial institutions shall offer to sell or license to the public on a nonexclusive basis, in bulk, copies of all records filed in it under this subchapter, in every medium from time to time available to the department of financial institutions.
(7) Liability of filing officer. No filing officer nor any of the filing officer’s employees or agents shall be subject to personal liability by reason of any error or omission in the performance of any duty under this chapter except in case of misconduct as defined in s. 946.12.
Wis. Stat. § 409.524 Delay by filing office
Delay by the filing office beyond a time limit prescribed by this subchapter is excused if:
(1) The delay is caused by interruption of communication or computer facilities, war, emergency conditions, failure of equipment, or other circumstances beyond the control of the filing office; and
(2) The filing office exercises reasonable diligence under the circumstances.
Wis. Stat. § 409.525 Fees
(1) Initial financing statement or other record. Except as otherwise provided in this section, the fee for filing and indexing a record under this subchapter and the portion of the fee that an office duly authorized by the department under s. 409.501 (1) (b) may retain shall be prescribed by filing-office rule.
(1m) No fee for filing termination statement. There is no fee for the filing of a termination statement.
(2) Basis for rule. The rule under sub. (1) must set the fees for filing and indexing a record under this subchapter on the following basis:
(a) If the record presented for filing is communicated to the filing office in writing and consists of more than 2 pages, the fee for filing and indexing the record must be at least twice the amount of the fee for a record communicated in writing that consists of 1 or 2 pages; and
(b) If the record is communicated by another medium authorized by filing-office rule, the fee for filing and indexing the record must be no more than 50 percent of the amount of the fee for a record communicated in writing that consists of 1 or 2 pages.
(3) Number of names. The number of names required to be indexed does not affect the amount of the fee under this section.
(4) Response to information request. Except as otherwise provided in this section, the fee for responding to a request for information from the filing office, including for communicating whether there is on file any financing statement naming a particular debtor, and the portion of the fee that an office duly authorized by the department under s. 409.501 (1) (b) may retain shall be prescribed by filing-office rule. The fee for responding to a request communicated in writing must be not less than twice the amount of the fee for responding to a request communicated by another medium authorized by filing-office rule. This subsection does not require that a fee be charged for remote access searching of the filing-office data base. The rule promulgated pursuant to this subsection need not specify a fee for remote access searching of the filing-office data base.
(5) Record of mortgage. This section does not require a fee with respect to a record of a mortgage which is effective as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut under s. 409.502 (3). However, the recording and satisfaction fees that otherwise would be applicable to the record of the mortgage apply.
Wis. Stat. § 409.526 Filing-office rules
(1) Promulgation of filing-office rules. The secretary of financial institutions shall promulgate filing-office rules to implement this chapter. The filing-office rules must be:
(a) Consistent with this chapter; and
(b) Promulgated in accordance with ch. 227.
(2) Harmonization of rules. To keep the filing-office rules and practices of the filing office in harmony with the rules and practices of filing offices in other jurisdictions that enact substantially this subchapter, and to keep the technology used by the filing office compatible with the technology used by filing offices in other jurisdictions that enact substantially this subchapter, the secretary of financial institutions, so far as is consistent with the purposes, policies, and provisions of this chapter, in promulgating filing-office rules, shall:
(a) Consult with filing offices in other jurisdictions that enact substantially this subchapter;
(b) Consult the most recent version of the Model Rules promulgated by the International Association of Corporate Administrators or any successor organization; and
(c) Take into consideration the rules and practices of, and the technology used by, filing offices in other jurisdictions that enact substantially this subchapter.
Wis. Stat. § 409.527 Duty to report
The department of financial institutions shall include in its report under s. 15.04 (1) (d) a report on the operation of the filing office. The report must contain a statement of the extent to which:
(1) Harmonization of rules: filing offices in other jurisdictions. The filing-office rules are not in harmony with the rules of filing offices in other jurisdictions that enact substantially this subchapter and the reasons for these variations; and
(2) Harmonization of rules: model rules. The filing-office rules are not in harmony with the most recent version of the Model Rules promulgated by the International Association of Corporate Administrators, or any successor organization, and the reasons for these variations.
Wis. Stat. § 409.528 Statewide lien system
The department shall establish and maintain a statewide lien system under this subchapter.
Wis. Stat. § 409.601 Rights after default; judicial enforcement; consignor or buyer of accounts, chattel paper, payment intangibles, or promissory notes
(1) Rights of secured party after default. After default, a secured party has the rights provided in this subchapter and, except as otherwise provided in s. 409.602, those provided by agreement of the parties. A secured party:
(a) May reduce a claim to judgment, foreclose, or otherwise enforce the claim, security interest, or agricultural lien by any available judicial procedure; and
(b) If the collateral is documents, may proceed either as to the documents or as to the goods they cover.
(2) Rights and duties of secured party in possession or control. A secured party in possession of collateral or control of collateral under s. 407.106, 409.104, 409.105, 409.106, or 409.107 has the rights and duties provided in s. 409.207.
(3) Rights cumulative; simultaneous exercise. The rights under subs. (1) and (2) are cumulative and may be exercised simultaneously.
(4) Rights of debtor and obligor. Except as otherwise provided in sub. (7) and s. 409.605, after default, a debtor and an obligor have the rights provided in this subchapter and by agreement of the parties.
(5) Lien of levy after judgment. 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:
(a) The date of perfection of the security interest or agricultural lien in the collateral;
(b) The date of filing a financing statement covering the collateral; or
(c) Any date specified in a statute under which the agricultural lien was created.
(6) Execution sale. 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 this chapter.
(7) Consignor or buyer of certain rights to payment. Except as otherwise provided in s. 409.607 (3), this subchapter imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.
Wis. Stat. § 409.602 Waiver and variance of rights and duties
Except as otherwise provided in s. 409.624, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the rules stated in the following listed sections:
(1) Section 409.207 (2) (d) 3., which deals with use and operation of the collateral by the secured party;
(2) Section 409.210, which deals with requests for an accounting and requests concerning a list of collateral and statement of account;
(3) Section 409.607 (3), which deals with collection and enforcement of collateral;
(4) Sections 409.608 (1) and 409.615 (3) to the extent that they deal with application or payment of noncash proceeds of collection, enforcement, or disposition;
(5) Sections 409.608 (1) and 409.615 (4) to the extent that they require accounting for or payment of surplus proceeds of collateral;
(6) Section 409.609 to the extent that it imposes upon a secured party that takes possession of collateral without judicial process the duty to do so without breach of the peace;
(7) Sections 409.610 (2), 409.611, 409.613, and 409.614, which deal with disposition of collateral;
(8) Section 409.615 (6), which deals with calculation of a deficiency or surplus when a disposition is made to the secured party, a person related to the secured party, or a secondary obligor;
(9) Section 409.616, which deals with explanation of the calculation of a surplus or deficiency;
(10) Sections 409.620, 409.621, and 409.622, which deal with acceptance of collateral in satisfaction of obligation;
(11) Section 409.623, which deals with redemption of collateral;
(12) Section 409.624, which deals with permissible waivers; and
(13) Sections 409.625 and 409.626, which deal with the secured party’s liability for failure to comply with this chapter.
Wis. Stat. § 409.603 Agreement on standards concerning rights and duties
(1) Agreed standards. The parties may determine by agreement the standards measuring the fulfillment of the rights of a debtor or obligor and the duties of a secured party under a rule stated in s. 409.602 if the standards are not manifestly unreasonable.
(2) Agreed standards inapplicable to breach of peace. Subsection (1) does not apply to the duty under s. 409.609 to refrain from breaching the peace.
Wis. Stat. § 409.604 Procedure if security agreement covers real property or fixtures
(1) Enforcement: personal and real property. If a security agreement covers both personal and real property, a secured party may proceed:
(a) Under this subchapter as to the personal property without prejudicing any rights with respect to the real property; or
(b) As to both the personal property and the real property in accordance with the rights with respect to the real property, in which case the other provisions of this subchapter do not apply.
(2) Enforcement: fixtures. Subject to sub. (3), if a security agreement covers goods that are or become fixtures, a secured party may proceed:
(a) Under this subchapter; or
(b) In accordance with the rights with respect to real property, in which case the other provisions of this subchapter do not apply.
(3) Removal of fixtures. Subject to the other provisions of this subchapter, if a secured party holding a security interest in fixtures has priority over all owners and encumbrancers of the real property, the secured party, after default, may remove the collateral from the real property.
(4) Injury caused by removal. A secured party that removes collateral shall promptly reimburse any encumbrancer or owner of the real property, other than the debtor, for the cost of repair of any physical injury caused by the removal. The secured party need not reimburse the encumbrancer or owner for any diminution in value of the real property caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.
Wis. Stat. § 409.605 Unknown debtor or secondary obligor
A secured party does not owe a duty based on its status as secured party:
(1) To a person that is a debtor or obligor, unless the secured party knows:
(a) That the person is a debtor or obligor;
(b) The identity of the person; and
(c) How to communicate with the person; or
(2) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:
(a) That the person is a debtor; and
(b) The identity of the person.
Wis. Stat. § 409.606 Time of default for agricultural lien
For purposes of this subchapter, a default occurs in connection with an agricultural lien at the time the secured party becomes entitled to enforce the lien in accordance with the statute under which it was created.
Wis. Stat. § 409.607 Collection and enforcement by secured party
(1) Collection and enforcement generally. If so agreed, and in any event after default, a secured party:
(a) May notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party;
(b) May take any proceeds to which the secured party is entitled under s. 409.315;
(c) May enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral;
(d) If it holds a security interest in a deposit account perfected by control under s. 409.104 (1) (a), may apply the balance of the deposit account to the obligation secured by the deposit account; and
(e) If it holds a security interest in a deposit account perfected by control under s. 409.104 (1) (b) or (c), may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.
(2) Nonjudicial enforcement of mortgage. If necessary to enable a secured party to exercise under sub. (1) (c) the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded:
(a) A copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and
(b) The secured party’s sworn affidavit in recordable form stating that:
1. A default has occurred with respect to the obligation secured by the mortgage; and
2. The secured party is entitled to enforce the mortgage nonjudicially.
(3) Commercially reasonable collection and enforcement. A secured party shall proceed in a commercially reasonable manner if the secured party:
(a) Undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral; and
(b) Is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.
(4) Expenses of collection and enforcement. A secured party may deduct from the collections made pursuant to sub. (3) reasonable expenses of collection and enforcement, including reasonable attorney fees and legal expenses incurred by the secured party.
(5) Duties to secured party not affected. This section does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.
Wis. Stat. § 409.608 Application of proceeds of collection or enforcement; liability for deficiency and right to surplus
(1) Application of proceeds, surplus, and deficiency if obligation secured. If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:
(a) A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under s. 409.607 in the following order to:
1. The reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney fees and legal expenses incurred by the secured party;
2. The satisfaction of obligations secured by the security interest or agricultural lien under which the collection or enforcement is made; and
3. The satisfaction of obligations secured by any subordinate security interest in or other lien on the collateral subject to the security interest or agricultural lien under which the collection or enforcement is made if the secured party receives an authenticated demand for proceeds before distribution of the proceeds is completed.
(b) If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder complies, the secured party need not comply with the holder’s demand under par. (a) 3.
(c) A secured party need not apply or pay over for application noncash proceeds of collection and enforcement under s. 409.607 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.
(d) A secured party shall account to and pay a debtor for any surplus, and the obligor is liable for any deficiency.
(2) No surplus or deficiency in sales of certain rights to payment. If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is not entitled to any surplus, and the obligor is not liable for any deficiency.
Wis. Stat. § 409.609 Secured party’s right to take possession after default
(1) Possession; rendering equipment unusable; disposition on debtor’s premises. After default, a secured party:
(a) May take possession of the collateral; and
(b) Without removal, may render equipment unusable and dispose of collateral on a debtor’s premises under s. 409.610.
(2) Judicial and nonjudicial process. A secured party may proceed under sub. (1):
(a) Pursuant to judicial process; or
(b) Without judicial process, if it proceeds without breach of the peace.
(3) Assembly of collateral. If so agreed, and in any event after default, a secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties.
Wis. Stat. § 409.610 Disposition of collateral after default
(1) Disposition after default. After default, a secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing.
(2) Commercially reasonable disposition. Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms.
(3) Purchase by secured party. A secured party may purchase collateral:
(a) At a public disposition; or
(b) At a private disposition only if the collateral is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations.
(4) Warranties on disposition. A contract for sale, lease, license, or other disposition includes the warranties relating to title, possession, quiet enjoyment, and the like which by operation of law accompany a voluntary disposition of property of the kind subject to the contract.
(5) Disclaimer of warranties. A secured party may disclaim or modify warranties under sub. (4):
(a) In a manner that would be effective to disclaim or modify the warranties in a voluntary disposition of property of the kind subject to the contract of disposition; or
(b) By communicating to the purchaser a record evidencing the contract for disposition and including an express disclaimer or modification of the warranties.
(6) Record sufficient to disclaim warranties. A record is sufficient to disclaim warranties under sub. (5) if it indicates “There is no warranty relating to title, possession, quiet enjoyment, or the like in this disposition” or uses words of similar import.
Wis. Stat. § 409.611 Notification before disposition of collateral
(1) Notification date. In this section, “notification date” means the earlier of the date on which:
(a) A secured party sends to the debtor and any secondary obligor an authenticated notification of disposition; or
(b) The debtor and any secondary obligor waive the right to notification.
(2) Notification of disposition required. Except as otherwise provided in sub. (4), a secured party that disposes of collateral under s. 409.610 shall send to the persons specified in sub. (3) a reasonable, authenticated notification of disposition.
(3) Persons to be notified. To comply with sub. (2), the secured party shall send an authenticated notification of disposition to:
(a) The debtor;
(b) Any secondary obligor; and
(c) If the collateral is other than consumer goods:
1. Any other person from which the secured party has received, before the notification date, an authenticated notification of a claim of an interest in the collateral;
2. Any other secured party or lienholder that, 10 days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:
a. Identified the collateral;
b. Was indexed under the debtor’s name as of that date; and
c. Was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date; and
3. Any other secured party that, 10 days before the notification date, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in s. 409.311 (1).
(4) Subsection (2) inapplicable: perishable collateral; recognized market. Subsection (2) does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.
(5) Compliance with sub. (3) (c) 2. A secured party complies with the requirement for notification prescribed by sub. (3) (c) 2. if:
(a) Not later than 20 days or earlier than 30 days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor’s name in the office indicated in sub. (3) (c) 2.; and
(b) Before the notification date, the secured party:
1. Did not receive a response to the request for information; or
2. Received a response to the request for information and sent an authenticated notification of disposition to each secured party or other lienholder named in that response whose financing statement covered the collateral.
Wis. Stat. § 409.612 Timeliness of notification before disposition of collateral
(1) Reasonable time is question of fact. Except as otherwise provided in sub. (2), whether a notification is sent within a reasonable time is a question of fact.
(2) Ten-day period sufficient in nonconsumer transaction. In a transaction other than a consumer transaction, a notification of disposition sent after default and 10 days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.
Wis. Stat. § 409.613 Contents and form of notification before disposition of collateral: general
Except in a consumer-goods transaction, the following rules apply:
(1) Notification: when sufficient. The contents of a notification of disposition are sufficient if the notification:
(a) Describes the debtor and the secured party;
(b) Describes the collateral that is the subject of the intended disposition;
(c) States the method of intended disposition;
(d) States that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting; and
(e) States the time and place of a public disposition or the time after which any other disposition is to be made.
(2) Notification: question of fact. Whether the contents of a notification that lacks any of the information specified in sub. (1) are nevertheless sufficient is a question of fact.
(3) Notification: other information or minor errors. The contents of a notification providing substantially the information specified in sub. (1) are sufficient, even if the notification includes:
(a) Information not specified by sub. (1); or
(b) Minor errors that are not seriously misleading.
(4) Substantial compliance. A particular phrasing of the notification is not required.
(5) Notification: form sufficient. The following form of notification and the form appearing in s. 409.614 (3), when completed, each provide sufficient information:
Wis. Stat. § 409.614 Contents and form of notification before disposition of collateral: consumer-goods transaction
In a consumer-goods transaction, the following rules apply:
(1) Notification of disposition. A notification of disposition must provide the following information:
(a) The information specified in s. 409.613 (1);
(b) A description of any liability for a deficiency of the person to which the notification is sent;
(c) A telephone number from which the amount that must be paid to the secured party to redeem the collateral under s. 409.623 is available; and
(d) A telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available.
(2) Substantial compliance. A particular phrasing of the notification is not required.
(3) Notification: form sufficient. The following form of notification, when completed, provides sufficient information:
(4) Notification: other information. A notification in the form of sub. (3) is sufficient, even if additional information appears at the end of the form.
(5) Notification: errors. A notification in the form of sub. (3) is sufficient, even if it includes errors in information not required by sub. (1), unless the error is misleading with respect to rights arising under this chapter.
(6) Notification: not in form. If a notification under this section is not in the form of sub. (3), law other than this chapter determines the effect of including information not required by sub. (1).
Wis. Stat. § 409.615 Application of proceeds of disposition; liability for deficiency and right to surplus
(1) Application of proceeds. A secured party shall apply or pay over for application the cash proceeds of disposition under s. 409.610 in the following order to:
(a) The reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing of, and, to the extent provided for by agreement and not prohibited by law, reasonable attorney fees and legal expenses incurred by the secured party;
(b) The satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is made;
(c) The satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral if:
1. The secured party receives from the holder of the subordinate security interest or other lien an authenticated demand for proceeds before distribution of the proceeds is completed; and
2. In a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor; and
(d) A secured party that is a consignor of the collateral if the secured party receives from the consignor an authenticated demand for proceeds before distribution of the proceeds is completed.
(2) Proof of subordinate interest. If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply with the holder’s demand under sub. (1) (c).
(3) Application of noncash proceeds. A secured party need not apply or pay over for application noncash proceeds of disposition under s. 409.610 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.
(4) Surplus or deficiency if obligation secured. If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by sub. (1) and permitted by sub. (3):
(a) Unless sub. (1) (d) requires the secured party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus; and
(b) The obligor is liable for any deficiency.
(5) No surplus or deficiency in sales of certain rights to payment. If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes:
(a) The debtor is not entitled to any surplus; and
(b) The obligor is not liable for any deficiency.
(6) Calculation of surplus or deficiency in disposition to person related to secured party. The surplus or deficiency following a disposition is calculated based on the amount of proceeds that would have been realized in a disposition complying with this subchapter to a transferee other than the secured party, a person related to the secured party or a secondary obligor if:
(a) The transferee in the disposition is the secured party, a person related to the secured party, or a secondary obligor; and
(b) The amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.
(7) Cash proceeds received by junior secured party. A secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest or agricultural lien under which the disposition is made:
(a) Takes the cash proceeds free of the security interest or other lien;
(b) Is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest or other lien; and
(c) Is not obligated to account to or pay the holder of the security interest or other lien for any surplus.
Wis. Stat. § 409.616 Explanation of calculation of surplus or deficiency
(1) Definitions. In this section:
(a) “Explanation” means a writing that:
1. States the amount of the surplus or deficiency;
2. Provides an explanation in accordance with sub. (3) of how the secured party calculated the surplus or deficiency;
3. States, if applicable, that future debits, credits, charges, including additional credit service charges or interest, rebates, and expenses may affect the amount of the surplus or deficiency; and
4. Provides a telephone number or mailing address from which additional information concerning the transaction is available.
(b) “Request” means a record:
1. Authenticated by a debtor or consumer obligor;
2. Requesting that the recipient provide an explanation; and
3. Sent after disposition of the collateral under s. 409.610.
(2) Explanation of calculation. In a consumer-goods transaction in which the debtor is entitled to a surplus or a consumer obligor is liable for a deficiency under s. 409.615, the secured party shall:
(a) Send an explanation to the debtor or consumer obligor, as applicable, after the disposition and:
1. Before or when the secured party accounts to the debtor and pays any surplus or first makes written demand on the consumer obligor after the disposition for payment of the deficiency; and
2. Within 14 days after receipt of a request; or
(b) In the case of a consumer obligor who is liable for a deficiency, within 14 days after receipt of a request, send to the consumer obligor a record waiving the secured party’s right to a deficiency.
(3) Required information. To comply with sub. (1) (a) 2., a writing must provide the following information in the following order:
(a) The aggregate amount of obligations secured by the security interest under which the disposition was made, and, if the amount reflects a rebate of unearned interest or credit service charge, an indication of that fact, calculated as of a specified date:
1. If the secured party takes or receives possession of the collateral after default, not more than 35 days before the secured party takes or receives possession; or
2. If the secured party takes or receives possession of the collateral before default or does not take possession of the collateral, not more than 35 days before the disposition;
(b) The amount of proceeds of the disposition;
(c) The aggregate amount of the obligations after deducting the amount of proceeds;
(d) The amount, in the aggregate or by type, and types of expenses, including expenses of retaking, holding, preparing for disposition, processing, and disposing of the collateral, and attorney fees secured by the collateral which are known to the secured party and relate to the current disposition;
(e) The amount, in the aggregate or by type, and types of credits, including rebates of interest or credit service charges, to which the obligor is known to be entitled and which are not reflected in the amount in par. (a); and
(f) The amount of the surplus or deficiency.
(4) Substantial compliance. A particular phrasing of the explanation is not required. An explanation complying substantially with the requirements of sub. (1) is sufficient, even if it includes minor errors that are not seriously misleading.
(5) Charges for responses. A debtor or consumer obligor is entitled without charge to one response to a request under this section during any 6-month period in which the secured party did not send to the debtor or consumer obligor an explanation pursuant to sub. (2) (a). The secured party may require payment of a charge not exceeding $25 for each additional response.
Wis. Stat. § 409.617 Rights of transferee of collateral
(1) Effects of disposition. A secured party’s disposition of collateral after default:
(a) Transfers to a transferee for value all of the debtor’s rights in the collateral;
(b) Discharges the security interest under which the disposition is made; and
(c) Discharges any subordinate security interest or other subordinate lien.
(2) Rights of good-faith transferee. A transferee that acts in good faith takes free of the rights and interests described in sub. (1), even if the secured party fails to comply with this chapter or the requirements of any judicial proceeding.
(3) Rights of other transferee. If a transferee does not take free of the rights and interests described in sub. (1), the transferee takes the collateral subject to:
(a) The debtor’s rights in the collateral;
(b) The security interest or agricultural lien under which the disposition is made; and
(c) Any other security interest or other lien.
Wis. Stat. § 409.618 Rights and duties of certain secondary obligors
(1) Rights and duties of secondary obligor. A secondary obligor acquires the rights and becomes obligated to perform the duties of the secured party after the secondary obligor:
(a) Receives an assignment of a secured obligation from the secured party;
(b) Receives a transfer of collateral from the secured party and agrees to accept the rights and assume the duties of the secured party; or
(c) Is subrogated to the rights of a secured party with respect to collateral.
(2) Effect of assignment, transfer, or subrogation. An assignment, transfer, or subrogation described in sub. (1):
(a) Is not a disposition of collateral under s. 409.610; and
(b) Relieves the secured party of further duties under this chapter.
Wis. Stat. § 409.619 Transfer of record or legal title
(1) Transfer statement. In this section, “transfer statement” means a record authenticated by a secured party stating:
(a) That the debtor has defaulted in connection with an obligation secured by specified collateral;
(b) That the secured party has exercised its postdefault remedies with respect to the collateral;
(c) That, by reason of the exercise, a transferee has acquired the rights of the debtor in the collateral; and
(d) The name and mailing address of the secured party, debtor, and transferee.
(2) Effect of transfer statement. A transfer statement entitles the transferee to the transfer of record of all rights of the debtor in the collateral specified in the statement in any official filing, recording, registration, or certificate-of-title system covering the collateral. If a transfer statement is presented with the applicable fee and request form to the official or office responsible for maintaining the system, the official or office shall:
(a) Accept the transfer statement;
(b) Promptly amend its records to reflect the transfer; and
(c) If applicable, issue a new appropriate certificate of title in the name of the transferee.
(3) Transfer not a disposition; no relief of secured party’s duties. A transfer of the record or legal title to collateral to a secured party under sub. (2) or otherwise is not of itself a disposition of collateral under this chapter and does not of itself relieve the secured party of its duties under this chapter.
Wis. Stat. § 409.620 Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral
(1) Conditions to acceptance in satisfaction. Except as otherwise provided in sub. (7), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:
(a) The debtor consents to the acceptance under sub. (3);
(b) The secured party does not receive, within the time set forth in sub. (4), a notification of objection to the proposal authenticated by:
1. A person to which the secured party was required to send a proposal under s. 409.621; or
2. Any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is the subject of the proposal;
(c) If the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and
(d) Subsection (5) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to s. 409.624.
(2) Purported acceptance ineffective. A purported or apparent acceptance of collateral under this section is ineffective unless:
(a) The secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and
(b) The conditions of sub. (1) are met.
(3) Debtor’s consent. For purposes of this section:
(a) A debtor consents to an acceptance of collateral in partial satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default; and
(b) A debtor consents to an acceptance of collateral in full satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default or the secured party:
1. Sends to the debtor after default a proposal that is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained;
2. In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and
3. Does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.
(4) Effectiveness of notification. To be effective under sub. (1) (b), a notification of objection must be received by the secured party:
(a) In the case of a person to which the proposal was sent pursuant to s. 409.621, within 20 days after notification was sent to that person; and
(b) In other cases:
1. Within 20 days after the last notification was sent pursuant to s. 409.621; or
2. If a notification was not sent, before the debtor consents to the acceptance under sub. (3).
(5) Mandatory disposition of consumer goods. A secured party that has taken possession of collateral shall dispose of the collateral pursuant to s. 409.610 within the time specified in sub. (6) if:
(a) Sixty percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or
(b) Sixty percent of the principal amount of the obligation secured has been paid in the case of a nonpurchase-money security interest in consumer goods.
(6) Compliance with mandatory disposition requirement. To comply with sub. (5), the secured party shall dispose of the collateral:
(a) Within 90 days after taking possession; or
(b) Within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and authenticated after default.
(7) No partial satisfaction in consumer transaction. In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.
Wis. Stat. § 409.621 Notification of proposal to accept collateral
(1) Persons to which proposal to be sent. A secured party that desires to accept collateral in full or partial satisfaction of the obligation it secures shall send its proposal to:
(a) Any person from which the secured party has received, before the debtor consented to the acceptance, an authenticated notification of a claim of an interest in the collateral;
(b) Any other secured party or lienholder that, 10 days before the debtor consented to the acceptance, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:
1. Identified the collateral;
2. Was indexed under the debtor’s name as of that date; and
3. Was filed in the office or offices in which to file a financing statement against the debtor covering the collateral as of that date; and
(c) Any other secured party that, 10 days before the debtor consented to the acceptance, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in s. 409.311 (1).
(2) Proposal to be sent to secondary obligor in partial satisfaction. A secured party that desires to accept collateral in partial satisfaction of the obligation it secures shall send its proposal to any secondary obligor in addition to the persons described in sub. (1).
Wis. Stat. § 409.622 Effect of acceptance of collateral
(1) Effect of acceptance. A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:
(a) Discharges the obligation to the extent consented to by the debtor;
(b) Transfers to the secured party all of a debtor’s rights in the collateral;
(c) Discharges the security interest or agricultural lien that is the subject of the debtor’s consent and any subordinate security interest or other subordinate lien; and
(d) Terminates any other subordinate interest.
(2) Discharge of subordinate interest notwithstanding noncompliance. A subordinate interest is discharged or terminated under sub. (1), even if the secured party fails to comply with this chapter.
Wis. Stat. § 409.623 Right to redeem collateral
(1) Persons that may redeem. A debtor, any secondary obligor, or any other secured party or lienholder may redeem collateral.
(2) Requirements for redemption. To redeem collateral, a person shall tender:
(a) Fulfillment of all obligations secured by the collateral; and
(b) The reasonable expenses and attorney fees described in s. 409.615 (1) (a).
(3) When redemption may occur. A redemption may occur at any time before a secured party:
(a) Has collected collateral under s. 409.607;
(b) Has disposed of collateral or entered into a contract for its disposition under s. 409.610; or
(c) Has accepted collateral in full or partial satisfaction of the obligation it secures under s. 409.622.
Wis. Stat. § 409.624 Waiver
(1) Waiver of disposition notification. A debtor or secondary obligor may waive the right to notification of disposition of collateral under s. 409.611 only by an agreement to that effect entered into and authenticated after default.
(2) Waiver of mandatory disposition. A debtor may waive the right to require disposition of collateral under s. 409.620 (5) only by an agreement to that effect entered into and authenticated after default.
(3) Waiver of redemption right. Except in a consumer-goods transaction, a debtor or secondary obligor may waive the right to redeem collateral under s. 409.623 only by an agreement to that effect entered into and authenticated after default.
Wis. Stat. § 409.625 Remedies for secured party’s failure to comply with chapter
(1) Judicial orders concerning noncompliance. If it is established that a secured party is not proceeding in accordance with this chapter, a court may order or restrain collection, enforcement, or disposition of collateral on appropriate terms and conditions.
(2) Damages for noncompliance. Subject to subs. (3) and (4), a person is liable for damages in the amount of any loss caused by a failure to comply with this chapter. Loss caused by a failure to comply may include loss resulting from the debtor’s inability to obtain, or increased costs of, alternative financing.
(3) Persons entitled to recover damages; statutory damages if collateral is consumer goods. Except as otherwise provided in s. 409.628:
(a) A person that, at the time of the failure, was a debtor, was an obligor, or held a security interest in or other lien on the collateral may recover damages under sub. (2) for its loss; and
(b) If the collateral is consumer goods, a person that was a debtor or a secondary obligor at the time a secured party failed to comply with this subchapter may recover for that failure in any event an amount not less than the credit service charge plus 10 percent of the principal amount of the obligation or the time-price differential plus 10 percent of the cash price.
(4) Recovery when deficiency eliminated or reduced. A debtor whose deficiency is eliminated under s. 409.626 may recover damages for the loss of any surplus. However, a debtor or secondary obligor whose deficiency is eliminated or reduced under s. 409.626 may not otherwise recover under sub. (2) for noncompliance with the provisions of this subchapter relating to collection, enforcement, disposition, or acceptance.
(7) Limitation of security interest: noncompliance with s. 409.210. If a secured party fails to comply with a request regarding a list of collateral or a statement of account under s. 409.210, the secured party may claim a security interest only as shown in the list or statement included in the request as against a person that is reasonably misled by the failure.
Wis. Stat. § 409.626 Action in which deficiency or surplus is in issue
(1) Applicable rules if amount of deficiency or surplus in issue. In an action arising from a transaction, other than a consumer transaction, in which the amount of a deficiency or surplus is in issue, the following rules apply:
(a) A secured party need not prove compliance with the provisions of this subchapter relating to collection, enforcement, disposition, or acceptance unless the debtor or a secondary obligor places the secured party’s compliance in issue.
(b) If the secured party’s compliance is placed in issue, the secured party has the burden of establishing that the collection, enforcement, disposition, or acceptance was conducted in accordance with this subchapter.
(c) Except as otherwise provided in s. 409.628, if a secured party fails to prove that the collection, enforcement, disposition, or acceptance was conducted in accordance with the provisions of this subchapter relating to collection, enforcement, disposition, or acceptance, the liability of a debtor or a secondary obligor for a deficiency is limited to an amount by which the sum of the secured obligation, expenses, and attorney fees exceeds the greater of:
1. The proceeds of the collection, enforcement, disposition, or acceptance; or
2. The amount of proceeds that would have been realized had the noncomplying secured party proceeded in accordance with the provisions of this subchapter relating to collection, enforcement, disposition, or acceptance.
(d) For purposes of par. (c) 2., the amount of proceeds that would have been realized is equal to the sum of the secured obligation, expenses, and attorney fees unless the secured party proves that the amount is less than that sum.
(e) If a deficiency or surplus is calculated under s. 409.615 (6), the debtor or obligor has the burden of establishing that the amount of proceeds of the disposition is significantly below the range of prices that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.
(2) Nonconsumer transactions; no inference. The limitation of the rules in sub. (1) to transactions other than consumer transactions is intended to leave to the court the determination of the proper rules in consumer transactions. The court may not infer from that limitation the nature of the proper rule in consumer transactions and may continue to apply established approaches.
Wis. Stat. § 409.627 Determination of whether conduct was commercially reasonable
(1) Greater amount obtainable under other circumstances; no preclusion of commercial reasonableness. The fact that a greater amount could have been obtained by a collection, enforcement, disposition, or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition, or acceptance was made in a commercially reasonable manner.
(2) Dispositions that are commercially reasonable. A disposition of collateral is made in a commercially reasonable manner if the disposition is made:
(a) In the usual manner on any recognized market;
(b) At the price current in any recognized market at the time of the disposition; or
(c) Otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.
(3) Approval by court or on behalf of creditors. A collection, enforcement, disposition, or acceptance is commercially reasonable if it has been approved:
(a) In a judicial proceeding;
(b) By a bona fide creditors’ committee;
(c) By a representative of creditors; or
(d) By an assignee for the benefit of creditors.
(4) Approval under sub. (3) not necessary; absence of approval has no effect. Approval under sub. (3) need not be obtained, and lack of approval does not mean that the collection, enforcement, disposition, or acceptance is not commercially reasonable.
Wis. Stat. § 409.628 Nonliability and limitation on liability of secured party; liability of secondary obligor
(1) Limitation of liability of secured party for noncompliance with chapter. Unless a secured party knows that a person is a debtor or obligor, knows the identity of the person, and knows how to communicate with the person:
(a) The secured party is not liable to the person, or to a secured party or lienholder that has filed a financing statement against the person, for failure to comply with this chapter; and
(b) The secured party’s failure to comply with this chapter does not affect the liability of the person for a deficiency.
(2) Limitation of liability based on status as secured party. A secured party is not liable because of its status as secured party:
(a) To a person that is a debtor or obligor, unless the secured party knows:
1. That the person is a debtor or obligor;
2. The identity of the person; and
3. How to communicate with the person; or
(b) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:
1. That the person is a debtor; and
2. The identity of the person.
(3) Limitation of liability if reasonable belief that transaction not a consumer-goods transaction or consumer transaction. A secured party is not liable to any person, and a person’s liability for a deficiency is not affected, because of any act or omission arising out of the secured party’s reasonable belief that a transaction is not a consumer-goods transaction or a consumer transaction or that goods are not consumer goods, if the secured party’s belief is based on its reasonable reliance on:
(a) A debtor’s representation concerning the purpose for which collateral was to be used, acquired, or held; or
(b) An obligor’s representation concerning the purpose for which a secured obligation was incurred.
(4) Limitation of liability for statutory damages. A secured party is not liable to any person under s. 409.625 (3) (b) for its failure to comply with s. 409.616.
(5) Limitation of multiple liability for statutory damages. A secured party is not liable under s. 409.625 (3) (b) more than once with respect to any one secured obligation.
Wis. Stat. § 409.702 Savings clause
(1) Preeffective-date transactions or liens. Except as otherwise provided in this subchapter, 2001 Wisconsin Act 10 applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before July 1, 2001.
(2) Continuing validity. Except as otherwise provided in sub. (3) and ss. 409.703 to 409.709:
(a) Transactions and liens that were not governed by ch. 409, 1999 stats., were validly entered into or created before July 1, 2001, and would be subject to 2001 Wisconsin Act 10 if they had been entered into or created on or after July 1, 2001, and the rights, duties, and interests flowing from those transactions and liens remain valid on and after July 1, 2001; and
(b) The transactions and liens may be terminated, completed, consummated, and enforced as required or permitted by 2001 Wisconsin Act 10 or by the law that otherwise would apply if this paragraph had not taken effect.
(3) Preeffective-date proceedings. 2001 Wisconsin Act 10 does not affect an action, case, or proceeding commenced before July 1, 2001.
Wis. Stat. § 409.703 Security interest perfected before effective date
(1) Continuing priority over lien creditor: perfection requirements satisfied. A security interest that is enforceable immediately before July 1, 2001, and would have priority over the rights of a person that becomes a lien creditor at that time is a perfected security interest under 2001 Wisconsin Act 10 if, on July 1, 2001, the applicable requirements for enforceability and perfection under 2001 Wisconsin Act 10 are satisfied without further action.
(2) Continuing priority over lien creditor: perfection requirements not satisfied. Except as otherwise provided in s. 409.705, if, immediately before July 1, 2001, a security interest is enforceable and would have priority over the rights of a person that becomes a lien creditor at that time, but the applicable requirements for enforceability or perfection under 2001 Wisconsin Act 10 are not satisfied as of July 1, 2001, the security interest:
(a) Is a perfected security interest until one year after July 1, 2001;
(b) Remains enforceable on and after one year after July 1, 2001, only if the security interest becomes enforceable under s. 409.203 before one year after July 1, 2001; and
(c) Remains perfected on and after one year after July 1, 2001, only if the applicable requirements for perfection under 2001 Wisconsin Act 10 are satisfied before one year after July 1, 2001.
Wis. Stat. § 409.704 Security interest unperfected before effective date
A security interest that is enforceable immediately before July 1, 2001, but which would be subordinate to the rights of a person that becomes a lien creditor at that time:
(1) Remains an enforceable security interest for one year after July 1, 2001;
(2) Remains enforceable on and after one year after July 1, 2001, if the security interest becomes enforceable under s. 409.203 on July 1, 2001, or within one year thereafter; and
(3) Becomes perfected:
(a) Without further action, on July 1, 2001, if the applicable requirements for perfection under 2001 Wisconsin Act 10 are satisfied before or at that time; or
(b) When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.
Wis. Stat. § 409.705 Effectiveness of action taken before effective date
(1) Preeffective-date action; one-year perfection period unless reperfected. If action, other than the filing of a financing statement, is taken before July 1, 2001, and the action would have resulted in priority of a security interest over the rights of a person that becomes a lien creditor had the security interest become enforceable before July 1, 2001, the action is effective to perfect a security interest that attaches under 2001 Wisconsin Act 10 before July 1, 2001. An attached security interest becomes unperfected one year after July 1, 2001, unless the security interest becomes a perfected security interest under 2001 Wisconsin Act 10 before one year after July 1, 2001.
(2) Preeffective-date filing. The filing of a financing statement before July 1, 2001, is effective to perfect a security interest to the extent that the filing would satisfy the applicable requirements for perfection under 2001 Wisconsin Act 10.
(3) Preeffective-date filing in jurisdiction formerly governing perfection. 2001 Wisconsin Act 10 does not render ineffective an effective financing statement that, before July 1, 2001, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in s. 409.103, 1999 stats. However, except as otherwise provided in subs. (4) and (5) and s. 409.706, the financing statement ceases to be effective at the earlier of:
(a) The time the financing statement would have ceased to be effective under the law of the jurisdiction in which it is filed; or
(b) June 30, 2006.
(4) Continuation statement. The filing of a continuation statement on or after July 1, 2001, does not continue the effectiveness of the financing statement filed before July 1, 2001. However, upon the timely filing of a continuation statement on or after July 1, 2001, and in accordance with the law of the jurisdiction governing perfection as provided in subch. III, the effectiveness of a financing statement filed in the same office in that jurisdiction before July 1, 2001, continues for the period provided by the law of that jurisdiction.
(5) Application of sub. (3) (b) to transmitting utility financing statement. Subsection (3) (b) applies to a financing statement that, before July 1, 2001, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in s. 409.103, 1999 stats., only to the extent that subch. III provides that the law of a jurisdiction other than the jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.
(6) Application of subch. V. A financing statement that includes a financing statement filed before July 1, 2001, and a continuation statement filed on or after July 1, 2001, is effective only to the extent that it satisfies the requirements of subch. V for an initial financing statement.
Wis. Stat. § 409.706 When initial financing statement suffices to continue effectiveness of financing statement
(1) Initial financing statement in lieu of continuation statement. The filing of an initial financing statement in the office specified in s. 409.501 continues the effectiveness of a financing statement filed before July 1, 2001, if:
(a) The filing of an initial financing statement in that office would be effective to perfect a security interest under 2001 Wisconsin Act 10;
(b) The preeffective-date financing statement was filed in an office in another state or another office in this state; and
(c) The initial financing statement satisfies sub. (3).
(2) Period of continued effectiveness. The filing of an initial financing statement under sub. (1) continues the effectiveness of the preeffective-date financing statement:
(a) If the initial financing statement is filed before July 1, 2001, for the period provided in s. 409.403, 1999 stats., with respect to a financing statement; and
(b) If the initial financing statement is filed on or after July 1, 2001, for the period provided in s. 409.515 with respect to an initial financing statement.
(3) Requirements for initial financing statement under sub. (1). To be effective for purposes of sub. (1), an initial financing statement must:
(a) Satisfy the requirements of subch. V for an initial financing statement;
(b) Identify the preeffective-date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and
(c) Indicate that the preeffective-date financing statement remains effective.
Wis. Stat. § 409.707 Amendment of preeffective-date financing statement
(1) Preeffective-date financing statement. In this section, “preeffective-date financing statement” means a financing statement filed before July 1, 2001.
(2) Applicable law. On or after July 1, 2001, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a preeffective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in subch. III. However, the effectiveness of a preeffective-date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.
(3) Method of amending: general rule. Except as otherwise provided in sub. (4), if the law of this state governs perfection of a security interest, the information in a preeffective-date financing statement may be amended on or after July 1, 2001, only if:
(a) The preeffective-date financing statement and an amendment are filed in the office specified in s. 409.501;
(b) An amendment is filed in the office specified in s. 409.501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies s. 409.706 (3); or
(c) An initial financing statement that provides the information as amended and satisfies s. 409.706 (3) is filed in the office specified in s. 409.501.
(4) Method of amending: continuation. If the law of this state governs perfection of a security interest, the effectiveness of a preeffective-date financing statement may be continued only under s. 409.705 (4) and (6) or 409.706.
(5) Method of amending: additional termination rule. Whether or not the law of this state governs perfection of a security interest, the effectiveness of a preeffective-date financing statement filed in this state may be terminated on or after July 1, 2001, by filing a termination statement in the office in which the preeffective-date financing statement is filed, unless an initial financing statement that satisfies s. 409.706 (3) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in subch. III as the office in which to file a financing statement.
Wis. Stat. § 409.708 Persons entitled to file initial financing statement or continuation statement
A person may file an initial financing statement or a continuation statement under this subchapter if:
(1) The secured party of record authorizes the filing; and
(2) The filing is necessary under this subchapter:
(a) To continue the effectiveness of a financing statement filed before July 1, 2001; or
(b) To perfect or continue the perfection of a security interest.
Wis. Stat. § 409.709 Priority
(1) Law governing priority. 2001 Wisconsin Act 10 determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before July 1, 2001, ch. 409, 1999 stats., determines priority.
(2) Priority if security interest becomes enforceable under s. 409.203. For purposes of s. 409.322 (1), the priority of a security interest that becomes enforceable under s. 409.203 dates from July 1, 2001, if the security interest is perfected under 2001 Wisconsin Act 10 by the filing of a financing statement before July 1, 2001, which would not have been effective to perfect the security interest under ch. 409, 1999 stats. This subsection does not apply to conflicting security interests each of which is perfected by the filing of such a financing statement.
Wis. Stat. § 409.710 Special transitional provision for maintaining and searching local filing office records
(1) Definitions. In this section:
(a) “Former-ch.-409 records”:
1. Means:
a. Financing statements and other records that have been filed in a local filing office before July 1, 2001, and that are, or upon processing and indexing will be, reflected in the index maintained, as of June 30, 2001, by the local filing office for financing statements and other records filed in the local filing office before July 1, 2001; and
b. The index as of June 30, 2001.
2. Does not include records presented to a local filing office for filing after June 30, 2001, whether or not the records relate to financing statements filed in the local filing office before July 1, 2001.
(b) “Local filing office” means a filing office, other than the department of financial institutions, that is designated as the proper place to file a financing statement under s. 409.401 (1), 1999 stats., with respect to a record that covers a type of collateral as to which the filing office is designated in that subsection as the proper place to file.
(2) Prohibition of filing after June 30, 2001. A local filing office shall not accept for filing a record presented after June 30, 2001, whether or not the record relates to a financing statement filed in the local filing office before July 1, 2001.
(3) Maintenance of records. Until July 1, 2008, each local filing office must maintain all former-ch.-409 records in accordance with ch. 409, 1999 stats. A former-ch.-409 record that is not reflected on the index maintained at June 30, 2001, by the local filing office must be processed and indexed, and reflected on the index as of June 30, 2001, as soon as practicable but in any event no later than July 30, 2001.
(4) Information requests. Until at least June 30, 2008, each local filing office must respond to requests for information with respect to former-ch.-409 records relating to a debtor and issue certificates, in accordance with ch. 409, 1999 stats. The fees charged for responding to requests for information relating to a debtor and issuing certificates with respect to former-ch.-409 records must be the fees in effect under ch. 409, 1999 stats., on June 30, 2001, unless a different fee is later set by the local filing office. However, the different fee must not exceed the amount set by filing-office rule for responding to a request for information relating to a debtor or for issuing a certificate. This subsection does not require that a fee be charged for remote access searching of the filing-office data base. The rule promulgated pursuant to this subsection need not specify a fee for remote access searching of the filing-office data base.
(5) Destruction of records. After June 30, 2008, each local filing office may remove and destroy, in accordance with any then-applicable record retention law of this state, all former-ch.-409 records, including the related index.
(6) Exclusion. This section does not apply, with respect to financing statements and other records, to a filing office in which mortgages or records of mortgages on real property are required to be filed or recorded, if:
(a) The collateral is timber to be cut or as-extracted collateral; or
(b) The record is or relates to a financing statement filed as a fixture filing and the collateral is goods that are or are to become fixtures.
Wis. Stat. § 409.802 Savings clause
(1) Preeffective-date transactions or liens. Except as otherwise provided in this subchapter, 2011 Wisconsin Act 206 applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before July 1, 2013.
(2) Preeffective-date proceedings. 2011 Wisconsin Act 206 does not affect an action, case, or proceeding commenced before July 1, 2013.
Wis. Stat. § 409.803 Security interest perfected before effective date
(1) Continuing perfection: perfection requirements satisfied. A security interest that is a perfected security interest immediately before July 1, 2013, is a perfected security interest under this chapter, as affected by 2011 Wisconsin Act 206 if, on July 1, 2013, the applicable requirements for attachment and perfection under this chapter, as affected by 2011 Wisconsin Act 206 are satisfied without further action.
(2) Continuing perfection: perfection requirements not satisfied. Except as otherwise provided in s. 409.805, if, immediately before July 1, 2013, a security interest is a perfected security interest, but the applicable requirements for perfection under this chapter, as affected by 2011 Wisconsin Act 206 are not satisfied as of July 1, 2013, the security interest remains perfected thereafter only if the applicable requirements for perfection under this chapter, as affected by 2011 Wisconsin Act 206, are satisfied within one year after July 1, 2013.
Wis. Stat. § 409.804 Security interest unperfected before effective date
A security interest that is an unperfected security interest immediately before July 1, 2013, becomes a perfected security interest:
(1) Without further action, on July 1, 2013, if the applicable requirements for perfection under this chapter, as affected by 2011 Wisconsin Act 206, are satisfied before or at that time; or
(2) When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.
Wis. Stat. § 409.805 Effectiveness of action taken before effective date
(1) Preeffective-date filing effective. The filing of a financing statement before July 1, 2013, is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this chapter, as affected by 2011 Wisconsin Act 206.
(2) When preeffective-date filing becomes ineffective. 2011 Wisconsin Act 206 does not render ineffective an effective financing statement that, before July 1, 2013, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in ch. 409, 2009 stats. However, except as otherwise provided in subs. (3) and (4) and s. 409.806, the financing statement ceases to be effective:
(a) If the financing statement is filed in this state, at the time the financing statement would have ceased to be effective had 2011 Wisconsin Act 206 not taken effect; or
(b) If the financing statement is filed in another jurisdiction, at the earlier of:
1. The time the financing statement would have ceased to be effective under the law of that jurisdiction; or
2. June 30, 2018.
(3) Continuation statement. The filing of a continuation statement on or after July 1, 2013, does not continue the effectiveness of a financing statement filed before July 1, 2013. However, upon the timely filing of a continuation statement on or after July 1, 2013, and in accordance with the law of the jurisdiction governing perfection as provided in this chapter, as affected by 2011 Wisconsin Act 206, the effectiveness of a financing statement filed in the same office in that jurisdiction before July 1, 2013, continues for the period provided by the law of that jurisdiction.
(4) Application of sub. (2) (b) 2. to transmitting utility financing statement. Subsection (2) (b) 2. applies to a financing statement that, before July 1, 2013, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in ch. 409, 2009 stats., only to the extent that this chapter, as affected by 2011 Wisconsin Act 206, provides that the law of a jurisdiction other than the jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.
(5) Application of subch. V. A financing statement that includes a financing statement filed before July 1, 2013, and a continuation statement filed on or after July 1, 2013, is effective only to the extent that it satisfies the requirements of subch. V, as affected by 2011 Wisconsin Act 206, for an initial financing statement. A financing statement that indicates that the debtor is a decedent’s estate indicates that the collateral is being administered by a personal representative within the meaning of s. 409.503 (1) (b), as affected by 2011 Wisconsin Act 206. A financing statement that indicates that the debtor is a trust or is a trustee acting with respect to property held in trust indicates that the collateral is held in a trust within the meaning of s. 409.503 (1) (c), as affected by 2011 Wisconsin Act 206.
Wis. Stat. § 409.806 When initial financing statement suffices to continue effectiveness of financing statement
(1) Initial financing statement in lieu of continuation statement. The filing of an initial financing statement in the office specified in s. 409.501 continues the effectiveness of a financing statement filed before July 1, 2013, if:
(a) The filing of an initial financing statement in that office would be effective to perfect a security interest under this chapter, as affected by 2011 Wisconsin Act 206;
(b) The preeffective-date financing statement was filed in an office in another state; and
(c) The initial financing statement satisfies sub. (3).
(2) Period of continued effectiveness. The filing of an initial financing statement under sub. (1) continues the effectiveness of the preeffective-date financing statement:
(a) If the initial financing statement is filed before July 1, 2013, for the period provided in s. 409.515, 2009 stats., with respect to an initial financing statement; and
(b) If the initial financing statement is filed on or after July 1, 2013, for the period provided in s. 409.515, as affected by 2011 Wisconsin Act 206, with respect to an initial financing statement.
(3) Requirements for initial financing statement under sub. (1). To be effective for purposes of sub. (1), an initial financing statement must:
(a) Satisfy the requirements of subch. V, as affected by 2011 Wisconsin Act 206, for an initial financing statement;
(b) Identify the preeffective-date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and
(c) Indicate that the preeffective-date financing statement remains effective.
Wis. Stat. § 409.807 Amendment of preeffective-date financing statement
(1) Preeffective-date financing statement. In this section, “preeffective-date financing statement” means a financing statement filed before July 1, 2013.
(2) Applicable law. On or after July 1, 2013, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a preeffective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in this chapter, as affected by 2011 Wisconsin Act 206. However, the effectiveness of a preeffective-date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.
(3) Method of amending: general rule. Except as otherwise provided in sub. (4), if the law of this state governs perfection of a security interest, the information in a preeffective-date financing statement may be amended on or after July 1, 2013, only if:
(a) The preeffective-date financing statement and an amendment are filed in the office specified in s. 409.501;
(b) An amendment is filed in the office specified in s. 409.501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies s. 409.806 (3); or
(c) An initial financing statement that provides the information as amended and satisfies s. 409.806 (3) is filed in the office specified in s. 409.501.
(4) Method of amending: continuation. If the law of this state governs perfection of a security interest, the effectiveness of a preeffective-date financing statement may be continued only under s. 409.805 (3) and (5) or 409.806.
(5) Method of amending: additional termination rule. Whether or not the law of this state governs perfection of a security interest, the effectiveness of a preeffective-date financing statement filed in this state may be terminated on or after July 1, 2013, by filing a termination statement in the office in which the preeffective-date financing statement is filed, unless an initial financing statement that satisfies s. 409.806 (3) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in this chapter, as affected by 2011 Wisconsin Act 206, as the office in which to file a financing statement.
Wis. Stat. § 409.808 Persons entitled to file initial financing statement or continuation statement
A person may file an initial financing statement or a continuation statement under this subchapter if:
(1) The secured party of record authorizes the filing; and
(2) The filing is necessary under this subchapter:
(a) To continue the effectiveness of a financing statement filed before July 1, 2013; or
(b) To perfect or continue the perfection of a security interest.
Wis. Stat. § 409.809 Priority
2011 Wisconsin Act 206 determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before July 1, 2013, ch. 409, 2009 stats., determines priority.
Wis. Stat. § 409.1035 Production-money crops; production-money obligation; production-money security interest; burden of establishing
(1) A security interest in crops is a production-money security interest to the extent that the crops are production-money crops.
(2) If the extent to which a security interest is a production-money security interest depends on the application of a payment to a particular obligation, the payment must be applied in the following order until fully applied:
(a) First, to all production-money obligations secured by production-money crops, in the order in which those obligations were incurred;
(b) Second, to all obligations secured by conflicting security interests in the production-money crops referred to in par. (a), in the order in which those obligations were incurred; and
(c) Third, to all unsecured obligations of the debtor making the payment, in the order in which those obligations were incurred.
(3) A production-money security interest does not lose its status as such, even if:
(a) The production-money crops also secure an obligation that is not a production-money obligation;
(b) Collateral that is not production-money crops also secures the production-money obligation; or
(c) The production-money obligation has been renewed, refinanced, or restructured.
(4) A secured party claiming a production-money security interest has the burden of establishing the extent to which the security interest is a production-money security interest.
(5) This section does not affect any right to proceeds under s. 409.315.
(6) A person may not claim a purchase-money security interest in crops grown, growing, or to be grown.
Wis. Stat. § 409.3245 Priority of production-money security interests and agricultural liens
(1) Except as otherwise provided in subs. (3), (4), and (5), if the requirements of sub. (2) are satisfied, a perfected production-money security interest in production-money crops has priority over a conflicting security interest in the same crops to the extent of the production-money obligation secured by the production-money security interest and, except as otherwise provided in s. 409.327, also has priority in their identifiable proceeds.
(2) A production-money security interest has priority under sub. (1) if:
(a) The production-money security interest is perfected by filing when the production-money secured party first gives new value to enable the debtor to produce the crops;
(b) The production-money secured party sends an authenticated notification by certified mail to the holder of the conflicting security interest not less than 20 or more than 30 days before the production-money secured party first gives new value to enable the debtor to produce the crops if the holder had filed a financing statement covering the crops before the date of the filing made by the production-money secured party; and
(c) The notification states that the production-money secured party has or expects to acquire a production-money security interest in the debtor’s crops and provides a description of the crops, the name and mailing address of the production-money secured party giving the notice, the name and mailing address of the debtor, the name and mailing address of the lender to whom notice is being sent, the date on which the transaction would take place, and the maximum amount of new value to be provided.
(3) Except as otherwise provided in sub. (4) or (5), if more than one security interest qualifies for priority in the same collateral under sub. (1), the security interests rank according to priority in time of filing under s. 409.322 (1).
(4) To the extent that a person holding a perfected security interest in production-money crops that are the subject of a production-money security interest gives new value to enable the debtor to produce the production-money crops and the value is in fact used for the production of the production-money crops, the security interests rank according to priority in time of filing under s. 409.322 (1).
(5) To the extent that a person holds both an agricultural lien and a production-money security interest in the same collateral securing the same obligations, the rules of priority applicable to agricultural liens govern priority.
Source: WI Statutes (Official Site)URL: https://docs.legis.wisconsin.gov/statutes/statutes/409Fetched: 10/7/2026