Code of Alabama
Ala. Code § 7-9-306 (2026)
“Proceeds”; Secured Party’s Rights on Disposition of Collateral.
✓ official Alabama Legislature (ALISON) text, current July 2026
Repealed by Act 2001-481, p. 647, § 4, effective January 1, 2002.
(Acts 1965, No. 549, p. 811; Acts 1979, No. 79-256, p. 390; Acts 1981, No. 81-312, p. 399; Acts 1996, No. 96-742, p. 1241, §2.)
Notes of Decisions
Cited in 23
cases, 1978–2003 · leading case: Wadsworth v. Yancey Bros. Co., 423 So. 2d 1343 (Ala. 1982).
Wadsworth v. Yancey Bros. Co., 423 So. 2d 1343 (Ala. 1982). “" Official Comment 4, Ala.Code § 7-9-306 (1975) (emphasis added).”
McCord v. State, 501 So. 2d 520 (Ala. Crim. App. 1986). “1969), the FmHA's security interest in the soybeans would not continue in the proceeds of the sale if the FmHA authorized the sale of the crops in its security agreement with the farmer "or otherwise," see Ala. Code (1975), § 7-9-306(2). See generally , Van Hooser, "Farm…”
Get It Kwik of Am., Inc. v. FIRST ALA. BANK, ETC., 361 So. 2d 568 (Ala. Civ. App. 1978). “See Official Comments, Code of Ala. 1975, § 7-9-306. Defendant next argues that the funds in plaintiff's account were the proceeds from the sale of the inventory by the plaintiff.”
REALTY GROWTH INV. v. Com. & Indus. Bank, 370 So. 2d 297 (Ala. Civ. App. 1979). “In order to decide which priority rule applies, this court finds it imperative to define "proceeds" for purposes of this case as it is used in Code of Alabama 1975, § 7-4-208 . The word "proceeds" is defined in Code of Alabama 1975, § 7-9-306 (1), as including: "[W]hatever is…”
Legg v. Kelly, 412 So. 2d 1202 (Ala. 1982). “Lucas and Ellis next argue that under Code 1975, § 7-9-306, a security interest continues in collateral notwithstanding a sale or exchange by the debtor, and, therefore, plaintiff could not have been injured by the transfer.”
Ex Parte Alabama Mobile Homes, Inc., 468 So. 2d 156 (Ala. 1985). “Under § 7-9-306 (2), ITT's security interest in the mobile home continued in the "identifiable cash proceeds" of the sale.”
Transamerica Com. Fin. v. Union Bank, 584 So. 2d 1299 (Ala. 1991). “Section 7-9-306(2) states: "Except where this article otherwise provides, a security interest continues in collateral notwithstanding sale , exchange or other disposition thereof unless the disposition was authorized by the secured party in the security agreement or otherwise,…”
Dixie Ag Supply, Inc. v. Nelson, 500 So. 2d 1036 (Ala. 1986). “" This section, and the official comments which follow both § 7-9-306 and § 7-9-307, make it clear that a creditor does not forfeit his security interest in the proceeds of the collateral upon sale of the collateral to a third party, even when the sale is made with the…”
Citizens & S. Factors, Inc. v. Small Bus. Admin., 375 So. 2d 251 (Ala. 1979). “At issue is whether § 7-9-306 (5) or § 7-9-312 (5) of the Code of 1975 governs the priority of security interests in returned goods when the accounts purchaser expressly took a security interest in returned goods and was the first to file a financing statement with respect to…”
Morgan v. Farmers & Merchants Bank, 856 So. 2d 811 (Ala. 2003). “*Page 817 "( l ) To a transfer of an interest in any deposit account (subsection (1) of Section 7-9-105), except as provided with respect to proceeds (Section 7-9-306) and priorities in proceeds (Section 7-9-312).”
Frank Davis Buick Amc-jeep, Inc. v. First Alabama Bank Huntsville, Na, 423 So. 2d 855 (Ala. Civ. App. 1982). “The bank's claim is based on section 7-9-306 (2), Code 1975, which provides: "Except where this article otherwise provides, a security interest continues in collateral notwithstanding sale, exchange or other disposition thereof by the debtor unless the disposition was authorized…”
Ford Motor Credit Co. v. Troy Bank & Trust Co., 76 B.R. 836 (M.D. Ala. 1986). “Both Ford Credit and Troy Bank concede that subsections (1), (2), and (3) of section 7-9-306 of the Uniform Commercial Code, as adopted in the 1975 Alabama Code, generally provide for the continuance of a secured creditor’s rights to identifiable proceeds resulting from the…”
— Ala. Code § 7-9-306(1) — 2 cases
In Re Coker, 216 B.R. 843 (Bankr. N.D. Ala. 1997).
Cent. Bank of The South v. Sims (In re Sims), 59 B.R. 651 (Bankr. N.D. Ala. 1986).
— Ala. Code § 7-9-306(2) — 9 cases
McCord v. State, 501 So. 2d 520 (Ala. Crim. App. 1986). “1969), the FmHA's security interest in the soybeans would not continue in the proceeds of the sale if the FmHA authorized the sale of the crops in its security agreement with the farmer "or otherwise," see Ala. Code (1975), § 7-9-306(2). See generally , Van Hooser, "Farm…”
Transamerica Com. Fin. v. Union Bank, 584 So. 2d 1299 (Ala. 1991). “Section 7-9-306(2) states: "Except where this article otherwise provides, a security interest continues in collateral notwithstanding sale , exchange or other disposition thereof unless the disposition was authorized by the secured party in the security agreement or otherwise,…”
Dixie Ag Supply, Inc. v. Nelson, 500 So. 2d 1036 (Ala. 1986). “" This section, and the official comments which follow both § 7-9-306 and § 7-9-307, make it clear that a creditor does not forfeit his security interest in the proceeds of the collateral upon sale of the collateral to a third party, even when the sale is made with the…”
Gen. Elec. Credit Corp. v. Humble, 532 F. Supp. 703 (M.D. Ala. 1982).
In re O'Connor, 280 B.R. 907 (Bankr. S.D. Ala. 2002).
— Ala. Code § 7-9-306(5) — 1 case
Citizens & S. Factors, Inc. v. Small Bus. Admin., 375 So. 2d 251 (Ala. 1979). “At issue is whether § 7-9-306 (5) or § 7-9-312 (5) of the Code of 1975 governs the priority of security interests in returned goods when the accounts purchaser expressly took a security interest in returned goods and was the first to file a financing statement with respect to…”
— Ala. Code § 7-9-306(5)(a) — 1 case
Citizens & S. Factors, Inc. v. Small Bus. Admin., 375 So. 2d 251 (Ala. 1979). “At issue is whether § 7-9-306 (5) or § 7-9-312 (5) of the Code of 1975 governs the priority of security interests in returned goods when the accounts purchaser expressly took a security interest in returned goods and was the first to file a financing statement with respect to…”
— Ala. Code § 7-9-306(5)(b) — 1 case
Wadsworth v. Yancey Bros. Co., 423 So. 2d 1343 (Ala. 1982). “" Official Comment 4, Ala.Code § 7-9-306 (1975) (emphasis added).”
— Ala. Code § 7-9-306(5)(c) — 1 case
Citizens & S. Factors, Inc. v. Small Bus. Admin., 375 So. 2d 251 (Ala. 1979). “At issue is whether § 7-9-306 (5) or § 7-9-312 (5) of the Code of 1975 governs the priority of security interests in returned goods when the accounts purchaser expressly took a security interest in returned goods and was the first to file a financing statement with respect to…”
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