2007 Minnesota Statutes

336.9-324 PRIORITY OF PURCHASE-MONEY SECURITY INTERESTS.
(a) General rule: purchase-money priority. Except as otherwise provided in subsection
(g), 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 section 336.9-327, 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.
(b) Inventory purchase-money priority. Subject to subsection (c) and except as otherwise
provided in subsection (g), 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 section 336.9-330, and, except as otherwise provided in
section 336.9-327, also has priority in identifiable cash proceeds of the inventory to the extent the
identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if:
(1) the purchase-money security interest is perfected when the debtor receives possession
of the inventory;
(2) the purchase-money secured party sends an authenticated notification to the holder
of the conflicting security interest;
(3) the holder of the conflicting security interest receives the notification within five years
before the debtor receives possession of the inventory; and
(4) 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.
(c) Holders of conflicting inventory security interests to be notified. Subsection (b)(2)
through (4) apply only if the holder of the conflicting security interest had filed a financing
statement covering the same types of inventory:
(1) if the purchase-money security interest is perfected by filing, before the date of the
filing; or
(2) if the purchase-money security interest is temporarily perfected without filing or
possession under section 336.9-312(f), before the beginning of the 20-day period thereunder.
(d) Livestock purchase-money priority. Subject to subsection (e) and except as otherwise
provided in subsection (g), 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 section 336.9-327, a perfected security interest in their identifiable proceeds
and identifiable products in their unmanufactured states also has priority, if:
(1) the purchase-money security interest is perfected when the debtor receives possession
of the livestock;
(2) the purchase-money secured party sends an authenticated notification to the holder
of the conflicting security interest;
(3) the holder of the conflicting security interest receives the notification within six months
before the debtor receives possession of the livestock; and
(4) 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.
(e) Holders of conflicting livestock security interests to be notified. Subsection (d)(2)
through (4) apply only if the holder of the conflicting security interest had filed a financing
statement covering the same types of livestock:
(1) if the purchase-money security interest is perfected by filing, before the date of the
filing; or
(2) if the purchase-money security interest is temporarily perfected without filing or
possession under section 336.9-312(f), before the beginning of the 20-day period thereunder.
(f) Software purchase-money priority. Except as otherwise provided in subsection (g), 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 section 336.9-327, 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.
(g) Conflicting purchase-money security interests. If more than one security interest
qualifies for priority in the same collateral under subsection (a), (b), (d), or (f):
(1) 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
(2) in all other cases, section 336.9-322(a) applies to the qualifying security interests.
History: 2000 c 399 art 1 s 44