N.Y. UCC Law § 9-330 — New York Code / Act UCC / Article 9 / Part 3 / Subpart 3 / Section 9-330
Priority of Purchaser of Chattel Paper or Instrument
Status: in_force

Section 9--330. Priority of Purchaser of Chattel Paper or Instrument.\n  (a) Purchaser's priority: security interest claimed merely as\nproceeds. A purchaser of chattel paper has priority over a security\ninterest in the chattel paper which is claimed merely as proceeds of\ninventory subject to a security interest if:\n       (1) in good faith and in the ordinary course of the purchaser's\n           business, the purchaser gives new value, takes possession of\n           each authoritative tangible copy of the record evidencing the\n           chattel paper, and obtains control under Section 9--105 of\n           each authoritative electronic copy of the record evidencing\n           the chattel paper; and\n       (2) the authoritative copies of the record evidencing the chattel\n           paper do not indicate that the chattel paper has been\n           assigned to an identified assignee other than the purchaser.\n  (b) Purchaser's priority: other security interests. A purchaser of\nchattel paper has priority over a security interest in the chattel paper\nwhich is claimed other than merely as proceeds of inventory subject to a\nsecurity interest if the purchaser gives new value, takes possession of\neach authoritative tangible copy of the record evidencing the chattel\npaper, and obtains control under Section 9--105 of each authoritative\nelectronic copy of the record evidencing the chattel paper in good\nfaith, in the ordinary course of the purchaser's business, and without\nknowledge that the purchase violates the rights of the secured party.\n  (c) Chattel paper purchaser's priority in proceeds. Except as\notherwise provided in Section 9--327, a purchaser having priority in\nchattel paper under subsection (a) or (b) also has priority in proceeds\nof the chattel paper to the extent that:\n       (1) Section 9--322 provides for priority in the proceeds; or\n       (2) the proceeds consist of the specific goods covered by the\n           chattel paper or cash proceeds of the specific goods, even if\n           the purchaser's security interest in the proceeds is\n           unperfected.\n  (d) Instrument purchaser's priority. Except as otherwise provided in\nSection 9--331(a), a purchaser of an instrument has priority over a\nsecurity interest in the instrument perfected by a method other than\npossession if the purchaser gives value and takes possession of the\ninstrument in good faith and without knowledge that the purchase\nviolates the rights of the secured party.\n  (e) Holder of purchase-money security interest gives new value. For\npurposes of subsections (a) and (b), the holder of a purchase-money\nsecurity interest in inventory gives new value for chattel paper\nconstituting proceeds of the inventory.\n  (f) Indication of assignment gives knowledge. For purposes of\nsubsections (b) and (d), if the authoritative copies of the record\nevidencing chattel paper or an instrument indicate that the chattel\npaper or instrument has been assigned to an identified secured party\nother than the purchaser, a purchaser of the chattel paper or instrument\nhas knowledge that the purchase violates the rights of the secured\nparty.\n