Code of Alabama
Ala. Code § 7-9-307 (2026)
Protection of Buyer of Goods.
✓ 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Repealed by Act 2001-481, p. 647, § 4, effective January 1, 2002.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 1981, No. 81-312, p. 399; Acts 1986, No. 86-507, p. 989, §1; Acts 1987, No. 87-410, p. 595, §1.)
Notes of Decisions
Cited in 14
cases, 1979–1997 · leading case: First Dallas Cnty. Bank v. Gen. Motors Acceptance Corp., 425 So. 2d 460 (Ala. Civ. App. 1982).
First Dallas Cnty. Bank v. Gen. Motors Acceptance Corp., 425 So. 2d 460 (Ala. Civ. App. 1982). “a buyer takes free of a security interest even though perfected if he buys without knowledge of the security interest, for value and for his own personal, family or household purposes .”
Ex Parte Gen. Motors Acceptance Corp., 425 So. 2d 464 (Ala. 1983). “*Page 466 The sole issue presented on this appeal is whether the Court of Civil Appeals erred in holding that Everette Smith and First Dallas County Bank were protected under Code 1975, §§ 7-9-307 (1) and 32-8-60 , thereby taking priority over GMAC's security interest in that…”
McCord v. State, 501 So. 2d 520 (Ala. Crim. App. 1986). “) Although the defendant, as a buyer of crops from a farmer, would not ordinarily take the crops free of an FmHA security interest created by the farmer, see Ala. Code (1975) § 7-9-307(1), and would be liable in conversion to the FmHA for sale of the crops, see United States v.”
Whitworth v. Dodd., 435 So. 2d 1305 (Ala. Civ. App. 1983). “In that case Davis, a used car dealer, purchased a 1980 Pontiac for his own personal use on an installment sales contract and security *Page 1307 agreement which was eventually sold to GMAC. After about seven months of personal use, Davis sold the automobile to Smith who…”
Transamerica Com. Fin. v. Union Bank, 584 So. 2d 1299 (Ala. 1991). “Whether the trial court erred in holding that, pursuant to Ala. Code 1975, § 7-9-307(1), Wright's Leasing was a "buyer in the ordinary course of business.”
Gen. Elec. Credit Corp. v. Humble, 532 F. Supp. 703 (M.D. Ala. 1982). ““Reading the two provisions [Sections 7-9-307 and 7-1-201(9)] together, it results that the buyer takes free if he merely knows that there is a security interest which covers the goods but takes subject if he knows, in addition, that the sale is in violation of some term in the…”
Warehouse Home Furnishing Distributors, Inc. v. Whitson, 709 So. 2d 1144 (Ala. 1997). “Ala.Code 1975, §§ 7-9-307, 7-1-201(32), and 7-1-201(44)(d).”
First State Bank of Altoona v. Barnes, 496 So. 2d 53 (Ala. Civ. App. 1986). “Barnes argues that even though section 7-9-306 (2) provides that a security interest continues in the collateral following an unauthorized disposition by the debtor, that he falls under section 7-9-307 (1), Code 1975, an exception to this provision.”
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…”
Frank Davis Buick Amc-jeep, Inc. v. First Alabama Bank Huntsville, Na, 423 So. 2d 855 (Ala. Civ. App. 1982). “" § 7-9-307 (1), Code 1975. Important to our disposition of this case is a determination of whether Frank Davis Buick qualifies as a buyer in the ordinary course of business.”
Massey-Ferguson Credit Corp. v. Wells Motor Co., 374 So. 2d 319 (Ala. 1979). “" In view of the plain meaning of the 1972 revisions, we believe our interpretation, in addition to being correct, serves to promote uniformity of the law with respect to commercial transactions, which is itself the underlying principle of the Uniform Commercial Code. AFFIRMED.…”
Ford Motor Credit Co. v. Dothan Lincoln-Mercury Co. (In re Dothan Lincoln-Mercury Co.), 40 B.R. 17 (Bankr. M.D. Ala. 1984). “Black, as a purchaser of this vehicle from the debtor, while the debtor was in Chapter 11, and was debtor in possession, is a “buyer in ordinary course of business” as that term is used in Section 7-9-307, and Section 7-1-201(9) of the Alabama Uniform Commercial Code.”
— Ala. Code § 7-9-307(1) — 4 cases
McCord v. State, 501 So. 2d 520 (Ala. Crim. App. 1986). “) Although the defendant, as a buyer of crops from a farmer, would not ordinarily take the crops free of an FmHA security interest created by the farmer, see Ala. Code (1975) § 7-9-307(1), and would be liable in conversion to the FmHA for sale of the crops, see United States v.”
Transamerica Com. Fin. v. Union Bank, 584 So. 2d 1299 (Ala. 1991). “Whether the trial court erred in holding that, pursuant to Ala. Code 1975, § 7-9-307(1), Wright's Leasing was a "buyer in the ordinary course of business.”
Gen. Elec. Credit Corp. v. Humble, 532 F. Supp. 703 (M.D. Ala. 1982). ““Reading the two provisions [Sections 7-9-307 and 7-1-201(9)] together, it results that the buyer takes free if he merely knows that there is a security interest which covers the goods but takes subject if he knows, in addition, that the sale is in violation of some term in the…”
First Montgomery Bank v. Slocomb Nat'l Bank (In re BMR, Inc.), 57 B.R. 28 (Bankr. M.D. Ala. 1985).
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