2023 New Mexico Statutes › Chapter 55 - Uniform Commercial Code › Article 9 - Secured Transactions › Part 3 - PERFECTION AND PRIORITY › Subpart 2 - PERFECTION › Section 55-9-309 - 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 Subsection (b) of Section 55-9-311 NMSA 1978 with respect to consumer goods that are subject to a statute or treaty described in Subsection (a) of Section 55-9-311 NMSA 1978;
(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 Section 55-2-401, 55-2-505, Subsection (3) of Section 55-2-711 or Subsection (5) of Section 55-2A-508 NMSA 1978, until the debtor obtains possession of the collateral;
(7) a security interest of a collecting bank arising under Section 55-4-210 NMSA 1978;
(8) a security interest of an issuer or nominated person arising under Section 55-5-118 NMSA 1978;
(9) a security interest arising in the delivery of a financial asset under Subsection (c) of Section 55-9-206 NMSA 1978;
(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;
(13) a security interest created by an assignment of a beneficial interest in a decedent's estate; and
(14) a sale by an individual of an account that is a right to payment of winnings in a lottery or other game of chance.
History:
1978 Comp., § 55-9-309, enacted by Laws 2001, ch. 139, § 29; 2005, ch. 144, § 100.
OFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
1. Source. Derived from former sections 9-115(4)(c) and (d), 9-116, and 9-302(1).
2. Automatic Perfection. This section contains the perfection-upon-attachment rules previously located in former sections 9-115(4)(c) and (d), 9-116, and 9-302(1). Rather than continue to state the rule by indirection, this section explicitly provides for perfection upon attachment.
3. Purchase-Money Security Interest in Consumer Goods. Former section 9-302(1)(d) has been revised and appears here as paragraph (1). No filing or other step is required to perfect a purchase-money security interest in consumer goods, other than goods, such as automobiles, that are subject to a statute or treaty described in section 9-311(a). However, filing is required to perfect a non-purchase-money security interest in consumer goods and is necessary to prevent a buyer of consumer goods from taking free of a security interest under section 9-320(b). A fixture filing is required for priority over conflicting interests in fixtures to the extent provided in section 9-334.
4. Rights to Payment. Paragraph (2) expands upon former section 9-302(1)(e) by affording automatic perfection to certain assignments of payment intangibles as well as accounts. The purpose of paragraph (2) is to save from ex post facto invalidation casual or isolated assignments - assignments which no one would think of filing. Any person who regularly takes assignments of any debtor's accounts or payment intangibles should file. In this connection section 9-109(d)(4) through (7), which excludes certain transfers of accounts, chattel paper, payment intangibles, and promissory notes from this article, should be consulted.
Paragraphs (3) and (4), which are new, afford automatic perfection to sales of payment intangibles and promissory notes, respectively. They reflect the practice under former article 9. Under that article, filing a financing statement did not affect the rights of a buyer of payment intangibles or promissory notes, inasmuch as the former article did not cover those sales. To the extent that the exception in paragraph (2) covers outright sales of payment intangibles, which automatically are perfected under paragraph (3), the exception is redundant.
5. Health-Care-Insurance Receivables. Paragraph (5) extends automatic perfection to assignments of health-care-insurance receivables if the assignment is made to the health-care provider that provided the health-care goods or services. The primary effect is that, when an individual assigns a right to payment under an insurance policy to the person who provided health-care goods or services, the provider has no need to file a financing statement against the individual. The normal filing requirements apply to other assignments of health-care-insurance receivables covered by this article,
e.g.
, assignments from the health-care provider to a financer.
6. Investment Property. Paragraph (9) replaces the last clause of former section 9-116(2), concerning security interests that arise in the delivery of a financial asset.
Paragraphs (10) and (11) replace former section 9-115(4)(c) and (d), concerning secured financing of securities and commodity firms and clearing corporations. The former sections indicated that, with respect to certain security interests created by a securities intermediary or commodity intermediary, "(t)he filing of a financing statement . . . has no effect for purposes of perfection or priority with respect to that security interest." No change in meaning is intended by the deletion of the quoted phrase.
Secured financing arrangements for securities firms are currently implemented in various ways. In some circumstances, lenders may require that the transactions be structured as "hard pledges," where the securities are transferred on the books of a clearing corporation from the debtor's account to the lender's account or to a special pledge account for the lender where they cannot be disposed of without the specific consent of the lender. In other circumstances, lenders are content with so-called "agreement to pledge" or "agreement to deliver" arrangements, where the debtor retains the positions in its own account, but reflects on its books that the positions have been hypothecated and promises that the securities will be transferred to the secured party's account on demand.
The perfection and priority rules of this article are designed to facilitate current secured financing arrangements for securities firms as well as to provide sufficient flexibility to accommodate new arrangements that develop in the future. Hard pledge arrangements are covered by the concept of control. See sections 8-106, 9-106, and 9-314. Noncontrol secured financing arrangements for securities firms are covered by the automatic perfection rule of paragraph (10). Before the 1994 revision of articles 8 and 9, agreement to pledge arrangements could be implemented under a provision that a security interest in securities given for new value under a written security agreement was perfected without filing or possession for a period of 21 days. Although the security interests were temporary in legal theory, the financing arrangements could, in practice, be continued indefinitely by rolling over the loans at least every 21 days. Accordingly, a knowledgeable creditor of a securities firm realizes that the firm's securities may be subject to security interests that are not discoverable from any public records. The automatic-perfection rule of paragraph (10) makes it unnecessary to engage in the purely formal practice of rolling over these arrangements every 21 days.
In some circumstances, a clearing corporation may be the debtor in a secured financing arrangement. For example, a clearing corporation that settles delivery-versus-payment transactions among its participants on a net, same-day basis relies on timely payments from all participants with net obligations due to the system. If a participant that is a net debtor were to default on its payment obligation, the clearing corporation would not receive some of the funds needed to settle with participants that are net creditors to the system. To complete end-of-day settlement after a payment default by a participant, a clearing corporation that settles on a net, same-day basis may need to draw on credit lines and pledge securities of the defaulting participant or other securities pledged by participants in the clearing corporation to secure such drawings. The clearing corporation may be the top-tier securities intermediary for the securities pledged, so that it would not be practical for the lender to obtain control. Even where the clearing corporation holds some types of securities through other intermediaries, however, the clearing corporation is unlikely to be able to complete the arrangements necessary to convey "control" over the securities to be pledged in time to complete settlement in a timely manner. However, the term "securities intermediary" is defined in section 8-102(a)(14) to include clearing corporations. Thus, the perfection rule of paragraph (10) applies to security interests in investment property granted by clearing corporations.
7. Beneficial Interests in Trusts. Under former section 9-302(1)(c), filing was not required to perfect a security interest created by an assignment of a beneficial interest in a trust. Because beneficial interests in trusts are now used as collateral with greater frequency in commercial transactions, under this article filing is required to perfect a security interest in a beneficial interest.
8. Assignments for Benefit of Creditors. No filing or other action is required to perfect an assignment for the benefit of creditors. These assignments are not financing transactions, and the debtor ordinarily will not be engaging in further credit transactions.
ANNOTATIONS
Repeals and reenactments.
— Laws 2001, ch. 139, § 29 repealed former 55-9-309 NMSA 1978, as amended by Laws 1996, ch. 47, § 67, and enacted a new section, effective July 1, 2001.
The 2005 amendment,
effective January 1, 2006, adds Subsection (14) to provide that a security interest in a sale by an individual of an account that is a right to payment of winnings in a lottery or other game of chance are perfected when it attaches.
Applicability.
— Laws 2005, ch. 144, § 114 provides that Laws 2005, ch. 144, § 100 applies to a sale of an account described in Subsection (14) of Section 55-9-309 NMSA 1978 even if the sale was entered into before that subsection took effect. However, if the relative priorities of conflicting claims to the account were established before that subsection took effect, Chapter 55, Article 9 NMSA 1978 as in effect immediately prior to the date that subsection took effect determines priority.
Law reviews.
— For article, "The Warehouseman vs. the Secured Party: Who Prevails When the Warehouseman's Lien Covers Goods Subject to a Security Interest?" see 8 Nat. Resources J. 331 (1968).
For article, "Buyers and Sellers of Goods in Bankruptcy," see 1 N.M. L. Rev. 435 (1971).
Am. Jur. 2d, A.L.R. and C.J.S. references.
— Construction and effect of UCC article 9, dealing with secured transactions, etc., 30 A.L.R.3d 9, 67 A.L.R.3d 308, 69 A.L.R.3d 1162, 76 A.L.R.3d 11, 99 A.L.R. 3d 807, 99 A.L.R.3d 1080, 100 A.L.R.3d 10, 100 A.L.R.3d 940, 7 A.L.R.4th 308, 11 A.L.R.4th 241, 90 A.L.R.4th 859, 25 A.L.R.5th 696.