13 Pa.C.S. Ch. 91

in effect

13 Pa.C.S. § 9101 Short title of division.

This division shall be known and may be cited as the Uniform Commercial Code, Division 9, Secured Transactions.

13 Pa.C.S. § 9102 Definitions and index of definitions.

(a) Division 9 definitions.--The following words and phrases when used in this division shall have the meanings given to them in this subsection: "Accession." Goods which are physically united with other goods in such a manner that the identity of the original goods is not lost. "Account." (1) Except as used in "account for," "account statement," "account to," "commodity account," "customer's account," "deposit account," "on account of" and "statement of account," a right to payment of a monetary obligation, whether or not earned by performance: (i) for property which has been or is to be sold, leased, licensed, assigned or otherwise disposed of; (ii) for services rendered or to be rendered; (iii) for a policy of insurance issued or to be issued; (iv) for a secondary obligation incurred or to be incurred; (v) for energy provided or to be provided; (vi) for the use or hire of a vessel under a charter or other contract; (vii) arising out of the use of a credit or charge card or information contained on or for use with the card; or (viii) as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state or person licensed or authorized to operate the game by a state or governmental unit of a state. (2) The term includes controllable accounts and health-care-insurance receivables. (3) The term does not include: (i) chattel paper; (ii) commercial tort claims; (iii) deposit accounts; (iv) investment property; (v) letter-of-credit right or letters of credit; (vi) rights to payment for money or funds advanced or sold, other than rights arising out of the use of a credit or charge card or information contained on or for use with the card; or (vii) rights to payment evidenced by an instrument. "Account debtor." 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 negotiable instrument evidences chattel paper. "Accounting." Except as used in "accounting for," a record: (1) signed 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. "Agricultural lien." An interest in farm products: (1) which secures payment or performance of an obligation for: (i) goods or services furnished in connection with a debtor's farming operation; or (ii) rent on real property leased by a debtor in connection with its farming operation; (2) which is created by statute in favor of a person that: (i) in the ordinary course of its business furnished goods or services to a debtor in connection with a debtor's farming operation; or (ii) 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. "As-extracted collateral." Any of the following: (1) Oil, gas or other minerals which are subject to a security interest which: (i) is created by a debtor having an interest in the minerals before extraction; and (ii) attaches to the minerals as extracted. (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. "Assignee." Except as used in "assignee for benefit of creditors," a person: (1) in whose favor a security interest that secures an obligation is created or provided for under a security agreement, whether or not the obligation is outstanding; or (2) to which an account, chattel paper, payment intangible or promissory note has been sold. The term includes a person to which a security interest has been transferred by a secured party. "Assignor." A person that: (1) under a security agreement creates or provides for a security interest that secures an obligation; or (2) sells an account, chattel paper, payment intangible or promissory note. The term includes a secured party that has transferred a security interest to another person. "Authenticate." (Deleted by amendment). "Bank." An organization which is engaged in the business of banking. The term includes any savings bank, savings and loan association, credit union or trust company. "Cash proceeds." Proceeds which are money, checks, deposit accounts or the like. "Certificate of title." 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. "Chattel paper." Either: (1) a right to payment of a monetary obligation secured by specific goods, if the right to payment and security agreement are evidenced by a record; or (2) a right to payment of a monetary obligation owed by a lessee under a lease agreement with respect to specific goods and a monetary obligation owed by the lessee in connection with the transaction giving rise to the lease, if: (i) the right to payment and lease agreement are evidenced by a record; and (ii) the predominant purpose of the transaction giving rise to the lease was to give the lessee the right to possession and use of the goods. The term does not include a right to payment arising out of a charter or other contract involving the use or hire of a vessel or 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. "Collateral." 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 which have been sold; and (3) goods which are the subject of a consignment. "Commercial tort claim." 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: (i) arose in the course of the claimant's business or profession; and (ii) does not include damages arising out of personal injury to or the death of an individual. "Commodity account." An account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer. "Commodity contract." 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 which 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 carried on the books of a commodity intermediary for a commodity customer. "Commodity customer." A person for whom or which a commodity intermediary carries a commodity contract on its books. "Commodity intermediary." 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 which has been designated as a contract market pursuant to Federal commodities law. "Communicate." Any of the following: (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. (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. "Consignee." A merchant to whom or which goods are delivered in a consignment. "Consignment." A transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and all of the following apply: (1) The merchant: (i) deals in goods of that kind under a name other than the name of the person making delivery; (ii) is not an auctioneer; and (iii) is not generally known by its creditors to be substantially engaged in selling the goods of others. (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. (4) The transaction does not create a security interest which secures an obligation. "Consignor." A person that delivers goods to a consignee in a consignment. "Consumer debtor." A debtor in a consumer transaction. "Consumer goods." Goods which are used or bought for use primarily for personal, family or household purposes. "Consumer-goods transaction." 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. "Consumer obligor." An obligor who: (1) is an individual; and (2) incurred the obligation as part of a transaction entered into primarily for personal, family or household purposes. "Consumer transaction." A transaction in which: (1) an individual incurs an obligation primarily for personal, family or household purposes; (2) a security interest secures the obligation; and (3) the collateral is held or acquired primarily for personal, family or household purposes. The term includes consumer-goods transactions. "Continuation statement." 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. "Controllable account." An account evidenced by a controllable electronic record that provides that the account debtor undertakes to pay the person that has control under section 12105 (relating to control of controllable electronic record) of the controllable electronic record. "Controllable payment intangible." A payment intangible evidenced by a controllable electronic record that provides that the account debtor undertakes to pay the person that has control under section 12105 of the controllable electronic record. "Debtor." A: (1) person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor; (2) seller of accounts, chattel paper, payment intangibles or promissory notes; or (3) consignee. "Deposit account." 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. "Document." A document of title or a receipt of the type described in section 7201(b) (relating to person that may issue a warehouse receipt; storage under bond). "Electronic chattel paper." (Deleted by amendment). "Encumbrance." A right, other than an ownership interest, in real property. The term includes a mortgage and any other lien on real property. "Equipment." Goods other than inventory, farm products or consumer goods. "Farm products." Goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are any of the following: (1) Crops grown, growing or to be grown, including: (i) crops produced on trees, vines and bushes; and (ii) 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. (4) Products of crops or livestock in their unmanufactured states. "Farming operation." Raising, cultivating, propagating, fattening or grazing or any other farming, livestock or aquacultural operation. "File number." The number assigned to an initial financing statement pursuant to section 9519(a) (relating to filing office duties). "Filing office." An office designated in section 9501 (relating to filing office) as the place to file a financing statement. "Filing-office rule." A rule adopted pursuant to section 9526 (relating to filing-office rules). "Financing statement." A record or records composed of an initial financing statement and any filed record relating to the initial financing statement. "Fixture filing." The filing of a financing statement: (1) covering goods which are, or are to become, fixtures; and (2) satisfying section 9502(a) (relating to sufficiency of financing statement) and (b) (relating to real-property-related financing statements). The term includes the filing of a financing statement covering goods of a transmitting utility which are, or are to become, fixtures. "Fixtures." Goods which have become so related to particular real property that an interest in them arises under real property law. "General intangible." 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 controllable electronic records, payment intangibles and software. "Good faith." (Deleted by amendment). "Goods." All things which are movable when a security interest attaches. (1) The term includes all of the following: (i) Fixtures. (ii) Standing timber which is to be cut and removed under a conveyance or contract for sale. (iii) The unborn young of animals. (iv) Crops grown, growing or to be grown, even if the crops are produced on trees, vines or bushes. (v) Manufactured homes. (vi) A computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if: (A) the program is associated with the goods in such a manner that it customarily is considered part of the goods; or (B) 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 which consist solely of the medium in which the program is embedded. (2) The term 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. "Governmental unit." 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. "Health-care-insurance receivable." 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 or to be provided. "Instrument." A negotiable instrument or any other writing which evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease and is of a type which in ordinary course of business is transferred by delivery with any necessary indorsement or assignment. The term does not include: (1) investment property; (2) letters of credit; (3) writings which 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; or (4) writings that evidence chattel paper. "Inventory." 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. "Investment property." A security whether certificated or uncertificated, security entitlement, securities account, commodity contract or commodity account. "Jurisdiction of organization." With respect to a registered organization, the jurisdiction under whose law the organization is formed or organized. "Letter-of-credit right." 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. "Lien creditor." Any of the following: (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. (4) A receiver in equity from the time of appointment. "Manufactured home." A structure, transportable in one or more sections, which, in the traveling mode, is eight 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 United States Secretary of Housing and Urban Development and complies with the standards established under 42 U.S.C. (relating to public health and welfare). "Manufactured-home transaction." A secured transaction: (1) which 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. "Money." Has the meaning in section 1201(b)(24) (relating to general definitions), but does not include a deposit account. "Mortgage." A consensual interest in real property, including fixtures, which secures payment or performance of an obligation. "New debtor." A person that becomes bound as debtor under section 9203(d) (relating to when person becomes bound by another person's security agreement) by a security agreement previously entered into by another person. "New value." Any of the following: (1) Money. (2) Money's worth in property, services or new credit. (3) 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. "Noncash proceeds." Proceeds other than cash proceeds. "Obligor." A person that, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral: (1) owes payment or other performance of the obligation; (2) has provided property other than the collateral to secure payment or other performance of the obligation; or (3) is otherwise accountable in whole or in part for payment or other performance of the obligation. The term does not include any issuer or nominated person under a letter of credit. "Original debtor." Except as used in section 9310(c) (relating to assignment of perfected security interest), a person that, as debtor, entered into a security agreement to which a new debtor has become bound under section 9203(d) (relating to when person becomes bound by another person's security agreement). "Payment intangible." A general intangible under which the account debtor's principal obligation is a monetary obligation. The term includes a controllable payment intangible. "Person related to." One of the following: (1) With respect to an individual: (i) the spouse of the individual; (ii) a brother, brother-in-law, sister or sister-in-law of the individual; (iii) an ancestor or lineal descendant of the individual or the individual's spouse; or (iv) any other relative, by blood or marriage, of the individual or the individual's spouse, who shares the same home with the individual. (2) With respect to an organization: (i) a person directly or indirectly controlling, controlled by or under common control with the organization; (ii) an officer or director of or a person performing similar functions with respect to the organization; (iii) an officer or director of or a person performing similar functions with respect to a person described in subparagraph (i); (iv) the spouse of an individual described in subparagraph (i), (ii) or (iii); or (v) an individual related by blood or marriage to an individual described in subparagraph (i), (ii), (iii) or (iv) who shares the same home with the individual. "Proceeds." Except as used in section 9609(b) (relating to secured party's right to take possession after default), 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: (i) loss of the collateral; (ii) nonconformity of the collateral; (iii) interference with the use of the collateral; (iv) defects in the collateral; (v) infringement of rights in the collateral; or (vi) damage to the collateral. (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: (i) loss of the collateral; (ii) nonconformity of the collateral; (iii) defects in the collateral; (iv) infringement of rights in the collateral; or (v) damage to the collateral. "Promissory note." An instrument which: (1) evidences a promise to pay a monetary obligation; (2) does not evidence an order to pay; and (3) does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds. "Proposal." A record signed 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 under sections 9620 (relating to acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral), 9621 (relating to notification of proposal to accept collateral) and 9622 (relating to effect of acceptance of collateral). "Public organic record." 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. "Public-finance transaction." A secured transaction in connection with which all of the following apply: (1) Debt securities are issued. (2) All or a portion of the securities issued have an initial stated maturity of at least 20 years. (3) Any of the following is a state or a governmental unit of a state: (i) The debtor. (ii) The obligor. (iii) The secured party. (iv) The account debtor or other person obligated on collateral. (v) The assignor or assignee of a secured obligation. (vi) The assignor or assignee of a security interest. "Pursuant to commitment." With respect to an advance made or other value given by a secured party, 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. "Record." Except as used in "for record," "of record," "record or legal title" or "record owner," either of the following: (1) Information which is inscribed on a tangible medium. (2) Information which is: (i) stored in an electronic or other medium; and (ii) retrievable in perceivable form. "Registered organization." 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 a business trust's organic record be filed with the state. "Secondary obligor." 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 or another obligor or property of either. "Secured party." Any of the following: (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 whom or 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. (6) A person that holds a security interest arising under section 2401 (relating to passing of title; reservation for security; limited application of section), 2505 (relating to shipment by seller under reservation), 2711(c) (relating to security interest of buyer in rejected goods), 2A508(e) (relating to security interest in goods in lessee's possession), 4210 (relating to security interest of collecting bank in items, accompanying documents and proceeds) or 5118 (relating to security interest of issuer or nominated person). "Security agreement." An agreement which creates or provides for a security interest. "Send." (Deleted by amendment). "Software." 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 which is included in the definition of goods. "State." 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. "Supporting obligation." A letter-of-credit right or secondary obligation which supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument or investment property. "Tangible chattel paper." (Deleted by amendment). "Termination statement." 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. "Transmitting utility." 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. (b) Definitions in other divisions.--The following definitions in other divisions apply to this division: "Applicant." Section 5102. "Beneficiary." Section 5102. "Broker." Section 8102. "Certificated security." Section 8102. "Check." Section 3104. "Clearing corporation." Section 8102. "Contract for sale." Section 2106. "Control." With respect to a document of title, section 7106. "Controllable electronic record." Section 12102. "Customer." Section 4104. "Entitlement holder." Section 8102. "Financial asset." Section 8102. "Holder in due course." Section 3302. "Issuer." With respect to a letter of credit or letter-of-credit right, section 5102. "Issuer." With respect to a document of title, section 7102. "Issuer." With respect to a security, section 8201. "Lease." Section 2A103. "Lease agreement." Section 2A103. "Lease contract." Section 2A103. "Leasehold interest." Section 2A103. "Lessee." Section 2A103. "Lessee in ordinary course of business." Section 2A103. "Lessor." Section 2A103. "Lessor's residual interest." Section 2A103. "Letter of credit." Section 5102. "Merchant." Section 2104. "Negotiable instrument." Section 3104. "Nominated person." Section 5102. "Note." Section 3104. "Proceeds of a letter of credit." Section 5114. "Protected purchaser." Section 8303. "Prove." Section 3103. "Qualifying purchaser." Section 12102. "Sale." Section 2106. "Securities account." Section 8501. "Securities intermediary." Section 8102. "Security." Section 8102. "Security certificate." Section 8102. "Security entitlement." Section 8102. "Uncertificated security." Section 8102. (c) Division 1 definitions and principles.--Division 1 (relating to general provisions) contains general definitions and principles of construction and interpretation applicable throughout this division. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; June 27, 2013, P.L.154, No.30, eff. July 1, 2013; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended the defs. of "account," "account debtor," "accounting," "chattel paper," "general intangible," "instrument," "payment intangible" and "proposal" in subsec. (a) and subsec. (b), added the defs. of "assignee," "assignor," "controllable account," "controllable payment intangible" and "money" in subsec. (a) and deleted the defs. of "authenticate," "electronic chattel paper," "send" and "tangible chattel paper" in subsec. (a). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Amendment . Act 30 amended the defs. of "authenticate," "certificate of title," "jurisdiction of organization" and "registered organization" and added the def. of "public organic record" in subsec. (a). 2008 Amendment. Act 13 amended the defs. of "agricultural lien," "document" and "health-care-insurance receivable" and deleted the def. of "good faith" in subsec. (a) and added the defs. of "control" and "issuer" in subsec. (b). Cross References. Section 9102 is referred to in sections 2103, 2A103, 8102, 8103, 91102 of this title; section 2812 of Title 66 (Public Utilities).

13 Pa.C.S. § 9103 Purchase-money security interest; application of payments; burden of establishing.

(a) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection: "Purchase-money collateral." Goods or software which secures a purchase-money obligation incurred with respect to that collateral. "Purchase-money obligation." 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. (b) Purchase-money security interest in goods.--A security interest in goods is a purchase-money security interest: (1) to the extent that the goods are purchase-money collateral with respect to that security interest; (2) if the security interest is in inventory which 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 (3) 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. (c) 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: (1) the debtor acquired its interest in the software in an integrated transaction in which it acquired an interest in the goods; and (2) the debtor acquired its interest in the software for the principal purpose of using the software in the goods. (d) Consignor's inventory purchase-money security interest.--The security interest of a consignor in goods which are the subject of a consignment is a purchase-money security interest in inventory. (e) 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: (1) in accordance with any reasonable method of application to which the parties agree; (2) 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 (3) in the absence of an agreement to a reasonable method and a timely manifestation of the obligor's intention, in the following order: (i) to obligations which are not secured; and (ii) if more than one obligation is secured, to obligations secured by purchase-money security interests in the order in which those obligations were incurred. (f) 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: (1) the purchase-money collateral also secures an obligation which is not a purchase-money obligation; (2) collateral which is not purchase-money collateral also secures the purchase-money obligation; or (3) the purchase-money obligation has been renewed, refinanced, consolidated or restructured. (g) 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. (h) Nonconsumer-goods transactions; no inference.--The limitation of the rules in subsections (e), (f) and (g) 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.

13 Pa.C.S. § 9104 Control of deposit account.

(a) Requirements for control.--A secured party has control of a deposit account if: (1) the secured party is the bank with which the deposit account is maintained; (2) the debtor, secured party and bank have agreed in a signed 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; (3) the secured party becomes the bank's customer with respect to the deposit account; or (4) another person, other than the debtor: (i) has control of the deposit account and acknowledges that it has control on behalf of the secured party; or (ii) obtains control of the deposit account after having acknowledged that it will obtain control of the deposit account on behalf of the secured party. (b) Debtor's right to direct disposition.--A secured party that has satisfied subsection (a) has control, even if the debtor retains the right to direct the disposition of funds from the deposit account. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (a). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9104 is referred to in sections 9203, 9207, 9208, 9314, 9327, 9340, 9342, 9601, 9607 of this title.

13 Pa.C.S. § 9105 Control of electronic copy of record evidencing chattel paper.

(a) General rule; control of electronic copy of record evidencing chattel paper.--A purchaser has control of an authoritative electronic copy of a record evidencing chattel paper if a system employed for evidencing the assignment of interests in the chattel paper reliably establishes the purchaser as the person to which the authoritative electronic copy was assigned. (b) Single authoritative copy.--A system satisfies subsection (a) if the record or records evidencing the chattel paper are created, stored and assigned in a manner that: (1) a single authoritative copy of the record or records exists which is unique, identifiable and, except as otherwise provided in paragraphs (4), (5) and (6), unalterable; (2) the authoritative copy identifies the purchaser as the assignee of the record or records; (3) the authoritative copy is communicated to and maintained by the purchaser or its designated custodian; (4) copies or amendments which add or change an identified assignee of the authoritative copy can be made only with the consent of the purchaser; (5) each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and (6) any amendment of the authoritative copy is readily identifiable as authorized or unauthorized. (c) One or more authoritative copies.--A system satisfies subsection (a) and a purchaser has control of an authoritative electronic copy of a record evidencing chattel paper, if the electronic copy, a record attached to or logically associated with the electronic copy or a system in which the electronic copy is recorded: (1) enables the purchaser readily to identify each electronic copy as either an authoritative copy or a nonauthoritative copy; (2) enables the purchaser readily to identify itself in any way, including by name, identifying number, cryptographic key, office or account number, as the assignee of the authoritative electronic copy; and (3) gives the purchaser exclusive power, subject to subsection (d), to: (i) prevent others from adding or changing an identified assignee of the authoritative electronic copy; and (ii) transfer control of the authoritative electronic copy. (d) Meaning of exclusive.--Subject to subsection (e), a power is exclusive under subsection (c)(3) even if: (1) the authoritative electronic copy, a record attached to or logically associated with the authoritative electronic copy or a system in which the authoritative electronic copy is recorded limits the use of the authoritative electronic copy or has a protocol programmed to cause a change, including a transfer or loss of control; or (2) the power is shared with another person. (e) When power not shared with another person.--A power of a purchaser is not shared with another person under subsection (d)(2) and the purchaser's power is not exclusive if: (1) the purchaser can exercise the power only if the power also is exercised by the other person; and (2) the other person: (i) can exercise the power without exercise of the power by the purchaser; or (ii) is the transferor to the purchaser of an interest in the chattel paper. (f) Presumption of exclusivity of certain powers.--If a purchaser has the powers specified in subsection (c)(3), the powers are presumed to be exclusive. (g) Obtaining control through another person.--A purchaser has control of an authoritative electronic copy of a record evidencing chattel paper if another person, other than the transferor to the purchaser of an interest in the chattel paper: (1) has control of the authoritative electronic copy and acknowledges that it has control on behalf of the purchaser; or (2) obtains control of the authoritative electronic copy after having acknowledged that it will obtain control of the electronic copy on behalf of the purchaser. (June 27, 2013, P.L.154, No.30, eff. July 1, 2013; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9105 is referred to in sections 9207, 9208, 9317, 9330, 9601 of this title.

13 Pa.C.S. § 9106 Control of investment property.

(a) Control under section 8106.--A person has control of a certificated security, an uncertificated security or a security entitlement as provided in section 8106 (relating to control). (b) Control of commodity contract.--A secured party has control of a commodity contract if: (1) the secured party is the commodity intermediary with which the commodity contract is carried; or (2) 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. (c) 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. Cross References. Section 9106 is referred to in sections 9203, 9207, 9208, 9314, 9328, 9601 of this title.

13 Pa.C.S. § 9107 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 section 5114(c) (relating to recognition of assignment of proceeds) or otherwise applicable law or practice. Cross References. Section 9107 is referred to in sections 9203, 9207, 9208, 9314, 9329, 9601 of this title.

13 Pa.C.S. § 9107.1 Control of controllable electronic record, controllable account or controllable payment intangible.

(a) Control under section 12105.--A secured party has control of a controllable electronic record as provided in section 12105 (relating to control of controllable electronic record). (b) Control of controllable account and controllable payment intangible.--A secured party has control of a controllable account or controllable payment intangible if the secured party has control of the controllable electronic record that evidences the controllable account or controllable payment intangible. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 added section 9107.1. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9107.1 is referred to in sections 9203, 9207, 9314, 9601 of this title.

13 Pa.C.S. § 9108 Sufficiency of description.

(a) Sufficiency of description.--Except as otherwise provided in subsections (c), (d) and (e), a description of personal or real property is sufficient, whether or not it is specific, if it reasonably identifies what is described. (b) Examples of reasonable identification.--Except as otherwise provided in subsection (d), a description of collateral reasonably identifies the collateral if it identifies the collateral by: (1) specific listing; (2) category; (3) except as otherwise provided in subsection (e), a type of collateral defined in this title; (4) quantity; (5) computational or allocational formula or procedure; or (6) except as otherwise provided in subsection (c), any other method, if the identity of the collateral is objectively determinable. (c) 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. (d) Investment property.--Except as otherwise provided in subsection (e), a description of a security entitlement, securities account or commodity account is sufficient if it describes: (1) the collateral by those terms or as investment property; or (2) the underlying financial asset or commodity contract. (e) When description by type insufficient.--A description only by type of collateral defined in this title is an insufficient description of: (1) a commercial tort claim; or (2) in a consumer transaction, consumer goods, a security entitlement, a securities account or a commodity account. Cross References. Section 9108 is referred to in section 9504 of this title; section 6222 of Title 12 (Commerce and Trade).

13 Pa.C.S. § 9109 Scope.

(a) General scope of division.--Except as otherwise provided in subsections (c) and (d), this division applies to: (1) a transaction, regardless of its form, which creates a security interest in personal property or fixtures by contract; (2) an agricultural lien; (3) a sale of accounts, chattel paper, payment intangibles or promissory notes; (4) a consignment; (5) a security interest arising under section 2401 (relating to passing of title; reservation for security; limited application of section), 2505 (relating to shipment by seller under reservation), 2711(c) (relating to security interest of buyer in rejected goods) or 2A508(e) (relating to security interest in goods in lessee's possession), as provided in section 9110 (relating to security interests arising under Division 2 or 2A); and (6) a security interest arising under section 4210 (relating to security interest of collecting bank in items, accompanying documents and proceeds) or 5118 (relating to security interest of issuer or nominated person). (b) Security interest in secured obligation.--The application of this division 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 division does not apply. (c) Extent to which division does not apply.--This division does not apply to the extent that: (1) a statute, regulation or treaty of the United States preempts this division; (2) another statute of this Commonwealth expressly governs the creation, perfection, priority or enforcement of a security interest created by the Commonwealth or a governmental unit of the Commonwealth; (3) 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 (4) the rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under section 5114 (relating to assignment of proceeds). (d) Inapplicability of division.--This division does not apply to any of the following: (1) A landlord's lien other than an agricultural lien. (2) A lien, other than an agricultural lien, given by statute or other rule of law for services or materials. Section 9333 (relating to priority of certain liens arising by operation of law) applies with respect to priority of the lien. (3) An assignment of a claim for wages, salary or other compensation of an employee. (4) A sale of accounts, chattel paper, payment intangibles or promissory notes as part of a sale of the business out of which they arose. (5) An assignment of accounts, chattel paper, payment intangibles or promissory notes which is for the purpose of collection only. (6) An assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract. (7) An assignment of a single account, payment intangible or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness. (8) 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. Sections 9315 (relating to secured party's rights on disposition of collateral and in proceeds) and 9322 (relating to priorities among conflicting security interests in and agricultural liens on same collateral) apply with respect to proceeds and priorities in proceeds. (9) An assignment of a right represented by a judgment, other than a judgment taken on a right to payment which was collateral. (10) A right of recoupment or set-off. However: (i) section 9340 (relating to effectiveness of right of recoupment or set-off against deposit account) applies with respect to the effectiveness of rights of recoupment or set-off against deposit accounts; and (ii) section 9404 (relating to rights acquired by assignee; claims and defenses against assignee) applies with respect to defenses or claims of an account debtor. (11) 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: (i) liens on real property in sections 9203 (relating to attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites) and 9308 (relating to when security interest or agricultural lien is perfected; continuity of perfection); (ii) fixtures in section 9334 (relating to priority of security interests in fixtures and crops); (iii) fixture filings in sections 9501 (relating to filing office), 9502 (relating to contents of financing statement; record of mortgage as financing statement; time of filing financing statement), 9512 (relating to amendment of financing statement), 9516 (relating to what constitutes filing; effectiveness of filing) and 9519 (relating to numbering, maintaining and indexing records; communicating information provided in records); and (iv) security agreements covering personal and real property in section 9604 (relating to procedure if security agreement covers real property or fixtures). (12) An assignment of a claim arising in tort, other than a commercial tort claim. Sections 9315 and 9322 apply with respect to proceeds and priorities in proceeds. (13) An assignment of a deposit account in a consumer transaction. Sections 9315 and 9322 apply with respect to proceeds and priorities in proceeds. (14) A security interest in intangible transition property, as defined in 66 Pa.C.S. § 2812(g) (relating to approval of transition bonds), to the extent that such security interest is governed by 66 Pa.C.S. § 2812 rather than by this title. Cross References. Section 9109 is referred to in section 2A303 of this title.

13 Pa.C.S. § 9110 Security interests arising under Division 2 or 2A.

A security interest arising under section 2401 (relating to passing of title; reservation for security; limited application of section), 2505 (relating to shipment by seller under reservation), 2711(c) (relating to security interest of buyer in rejected goods) or 2A508(e) (relating to security interest in goods in lessee's possession) is subject to this division. However, until the debtor obtains possession of the goods: (1) the security interest is enforceable, even if section 9203(b)(3) (relating to enforceability) 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 Division 2 (relating to sales) or 2A (relating to leases); and (4) the security interest has priority over a conflicting security interest created by the debtor. Cross References. Section 9110 is referred to in sections 9109, 9203, 9322 of this title.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=13Fetched: 10/16/2026