O.C.G.A.

O.C.G.A. § 11-9-306 (2019)

Law governing perfection and priority of security interests in letter of credit rights

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)

Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.

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(a) Governing law; issuer’s or nominated person’s jurisdiction. Subject to subsection (c) of this Code section, the local law of the issuer’s jurisdiction or a nominated person’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter of credit right if the issuer’s jurisdiction or nominated person’s jurisdiction is a state.

(b) Issuer’s or nominated person’s jurisdiction. For purposes of this part, an issuer’s jurisdiction or nominated person’s jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter of credit right as provided in Code Section 11-5-116.

(c) When Code section not applicable. This Code section does not apply to a security interest that is perfected only under subsection (d) of Code Section 11-9-308.

History

Code 1981, § 11-9-306, enacted by Ga. L. 2001, p. 362, § 1.

Annotations

RESEARCH REFERENCES U.L.A. Uniform Commercial Code (U.L.A.) § 9306.

Notes of Decisions

Cited in 25 cases, 1983–2003 · leading case: United States v. Hollie (In Hollie), 42 B.R. 111 (Bankr. M.D. Ga. 1984).

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United States v. Hollie (In Hollie), 42 B.R. 111 (Bankr. M.D. Ga. 1984). · cites it 8× “O.C.G.A. § 11-9-306(2) (Michie 1982) provides: 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…”

Tidwell v. Slocumb (In Re Georgia Steel, Inc.), 71 B.R. 903 (Bankr. M.D. Ga. 1987). · cites it 12× “O.C.G.A. § 11-9-306(2) (1982). In order for this section to apply, the Court must find that C & S Bank authorized a “sale, exchange, or other disposition” of the radio tower by Debtor.”

JCS Enter., Inc. v. Vanliner Ins., 489 S.E.2d 95 (Ga. Ct. App. 1997). · cites it 10× “See OCGA §§ 11-9-306 (1), (2); 11-9-203 (3). JCS contends this occurred as soon as the payment was otherwise payable to the Easts, and that the trial court therefore erred in concluding ‘Vanliner can pay whoever they want, whatever they want.”

In Re Rumker, 184 B.R. 621 (Bankr. S.D. Ga. 1995). · cites it 8× “O.C.G.A. § 11-9-306 (Michie 1994) (emphasis added).”

Loeb v. Franchise Distributors, Inc. (In Re Franchise Sys., Inc.), 46 B.R. 158 (Bankr. N.D. Ga. 1985). · cites it 8× “§ 11-9-306 when it consented to the sale of the equipment to the Debtor; and b) whether Georgia Bank is required to reduce its secured claim against the Estate by the amount of the certificate of deposit it holds on funds posted by the Armstrongs.”

Mann Inv. Co. v. Columbia Nitrogen Corp., 325 S.E.2d 612 (Ga. Ct. App. 1984). · cites it 8× “Since the trial court rightly held the document to be a sales contract which would create a security interest, however, the provisions of OCGA § 11-9-306 (2) clearly govern the original transaction and its sequelae: "Except where this article otherwise provides, a security…”

MALAGA Mgmt. Co. v. John Deere Co., 431 S.E.2d 746 (Ga. Ct. App. 1993). · cites it 2× “OCGA §§ 11-9-201; 11-9-203; 11-9-301; see OCGA § 11-9-306 (2); see generally Babson &c.”

Thomas v. Ralston Purina Co. (In Re Thomas), 43 B.R. 201 (Bankr. M.D. Ga. 1984). · cites it 4× “O.C.G.A. § 11-9-306(2) (Michie 1982). Debtor and the Trustee argue that the “Assignment of Proceeds from the Sale of Dairy Products and Release of Security Interest” executed in late 1981 had the effect of releasing FmHA’s lien on the milk and its proceeds.”

Metter Banking Co. v. Fisher Foods, Inc., 359 S.E.2d 145 (Ga. Ct. App. 1987). · cites it 8× “" OCGA § 11-9-306 (1) and (2) provide that "proceeds" include whatever is received upon the sale, exchange, or other disposition of collateral or proceeds; and that "a security interest continues in collateral notwithstanding, sale, exchange or other disposition thereof unless…”

McDonald v. Ocilla Cotton Warehouse, Inc. (In Re McDonald), 224 B.R. 862 (Bankr. S.D. Ga. 1998). · cites it 7× “O.C.G.A. § 11-9-306(2). Further, a security interest does not attach to collateral in which the debtor has no rights.”

Provident Bank v. Morequity, Inc., 585 S.E.2d 625 (Ga. Ct. App. 2003). · cites it 4× “\ MorEquity argues that former OCGA § 11-9-306 (2) applies here to effectively eliminate Provident’s security interest.”

Jones v. Small Bus. Admin. (In Re Cohutta Mills, Inc.), 108 B.R. 815 (N.D. Ga. 1989). · cites it 2× “” Ga. Code Ann. § 11-9-306 (2). In the instant case, SBA, the secured party, clearly authorized the disposition of the collateral from King’s Tuft to Cohutta Mills.”

Superior Bank v. Human Servs. Employees Credit Union, 556 S.E.2d 155 (Ga. Ct. App. 2001). · cites it 4× “A different interpretation of [OCGA § 11-2-403 (2) and (3)] as to whether an entruster can empower a dealer to transfer *492 rights of the secured creditor in the goods [ ] would contravene [OCGA § 11-9-306 (2),] which provides: “Except where this Article otherwise provides, a…”

Paulsen Street Investors v. EBCO Gen. Agencies, 481 S.E.2d 246 (Ga. Ct. App. 1997). · cites it 2× “(f) [t]o a transfer of an interest or claim in or under any policy of insurance, except as provided with respect to proceeds (Code Section 11-9-306) and priorities in proceeds (Code Section 11-9-312).”

Dixie Prod. Credit Ass'n v. Kent, 307 S.E.2d 277 (Ga. Ct. App. 1983). · cites it 6× “OCGA § 11-9-306 (Code Ann. § 109A-9—306) does not require such a re-perfection of a security interest by filing a second financing statement within 10 days of the sale of the collateral, where the proceeds are cash proceeds.”

Sw. Georgia Prod. Credit Ass'n v. James, 350 S.E.2d 786 (Ga. Ct. App. 1986). · cites it 2× “1970), and the proceeds therefrom, see OCGA § 11-9-306 (1). However, James argues that under the terms of their agreement, Whaley (Southwest’s debtor) acquired no rights in the subject pea crop or the proceeds therefrom until such time as a profit was made from the crop; at such…”

Fin. Sec. Assurance, Inc. v. Tollman-Hundley Dalton, L.P., 165 B.R. 698 (N.D. Ga. 1994). · cites it 2× “” O.C.G.A. § 11-9-306. The Hotel revenues came from the operation of the Hotel, however, not from the sale of the Hotel.”

Borg-Warner Acceptance Corp. v. Valentine Assocs. Ltd., 384 S.E.2d 223 (Ga. Ct. App. 1989). · cites it 2× “” OCGA § 11-9-306 (1). Under the statutory definitions, the Catalina was inventory at the time of repossession since it was being held for sale or lease.”

Driggers v. Cont'l Grain Co., 435 S.E.2d 722 (Ga. Ct. App. 1993). · cites it 2× “As noted above, a security interest was expressly granted in the proceeds of the Driggers’ swine.”

Small v. Collegedale Distributors (In re Unity Foods, Inc.), 75 B.R. 222 (D. Ga. 1987). · cites it 6× “The extent of a secured party’s interest in proceeds acquired from a debtor’s pre-petition sale of collateral is governed by O.C.G.A. § 11-9-306(4), which provides: (4) In the event of insolvency proceedings instituted by or against a debtor, a secured party with a perfected…”

C. Itoh Indus. Mach., Inc. v. Forklift Serv. Co., 348 S.E.2d 551 (Ga. Ct. App. 1986). “It utilized the available statutory right to take control of the lease payments, to which it was entitled under § 11-9-306. Its action did not invade or ignore or interfere with the rights and liabilities of Forklift or its customer.”

Intermet Corp. v. Fin. Fed. Credit, Inc., 588 S.E.2d 810 (Ga. Ct. App. 2003). · cites it 4× “, and Ellington, J., concur. Because the transactions at issue took place before Article 9 of Title 11 was amended, we will cite the former Code sections of that article in this opinion.”

In re Chappell, 224 B.R. 507 (Bankr. M.D. Ga. 1998). · cites it 4× “Accordingly, the 1967 Ford pickup truck qualifies as “proceeds” within the meaning of O.C.G.A. § 11-9-306(1). Furthermore, since perfection of the Ford pickup truck could have been accomplished by filing a financing statement in the same office where the financing statement for…”

Ray's Mobile Home Repair Serv., Inc. v. Presidential Fin. Corp., 386 S.E.2d 48 (Ga. Ct. App. 1989). · cites it 2× “We agree that Ray’s had a prior perfected security interest in Ashmore’s goods and inventory, but find that execution of the partial release by Ray’s eliminated any secured interest in Ashmore’s accounts receivable or proceeds it otherwise would have had under OCGA § 11-9-306.…”

United States v. Georgia Vegetables Co., 123 B.R. 456 (M.D. Ga. 1990). · cites it 2× “O.C.G.A. § 11-9-306(2). Since Farmers Home Administration had no security interest in the Paulk’s 1982 crop, it likewise had no security interest in the monetary sales proceeds.”

— 11-9-306(1) — 1 case

In re Chappell, 224 B.R. 507 (Bankr. M.D. Ga. 1998). “Accordingly, the 1967 Ford pickup truck qualifies as “proceeds” within the meaning of O.C.G.A. § 11-9-306(1). Furthermore, since perfection of the Ford pickup truck could have been accomplished by filing a financing statement in the same office where the financing statement for…”

— 11-9-306(2) — 6 cases

United States v. Hollie (In Hollie), 42 B.R. 111 (Bankr. M.D. Ga. 1984). “O.C.G.A. § 11-9-306(2) (Michie 1982) provides: 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…”

Tidwell v. Slocumb (In Re Georgia Steel, Inc.), 71 B.R. 903 (Bankr. M.D. Ga. 1987). “O.C.G.A. § 11-9-306(2) (1982). In order for this section to apply, the Court must find that C & S Bank authorized a “sale, exchange, or other disposition” of the radio tower by Debtor.”

Loeb v. Franchise Distributors, Inc. (In Re Franchise Sys., Inc.), 46 B.R. 158 (Bankr. N.D. Ga. 1985). “§ 11-9-306 when it consented to the sale of the equipment to the Debtor; and b) whether Georgia Bank is required to reduce its secured claim against the Estate by the amount of the certificate of deposit it holds on funds posted by the Armstrongs.”

Thomas v. Ralston Purina Co. (In Re Thomas), 43 B.R. 201 (Bankr. M.D. Ga. 1984). “O.C.G.A. § 11-9-306(2) (Michie 1982). Debtor and the Trustee argue that the “Assignment of Proceeds from the Sale of Dairy Products and Release of Security Interest” executed in late 1981 had the effect of releasing FmHA’s lien on the milk and its proceeds.”

McDonald v. Ocilla Cotton Warehouse, Inc. (In Re McDonald), 224 B.R. 862 (Bankr. S.D. Ga. 1998). “O.C.G.A. § 11-9-306(2). Further, a security interest does not attach to collateral in which the debtor has no rights.”

United States v. Georgia Vegetables Co., 123 B.R. 456 (M.D. Ga. 1990). “O.C.G.A. § 11-9-306(2). Since Farmers Home Administration had no security interest in the Paulk’s 1982 crop, it likewise had no security interest in the monetary sales proceeds.”

— 11-9-306(3) — 1 case

— 11-9-306(4) — 3 cases

In Re Rumker, 184 B.R. 621 (Bankr. S.D. Ga. 1995). “O.C.G.A. § 11-9-306 (Michie 1994) (emphasis added).”

Small v. Collegedale Distributors (In re Unity Foods, Inc.), 75 B.R. 222 (D. Ga. 1987). “The extent of a secured party’s interest in proceeds acquired from a debtor’s pre-petition sale of collateral is governed by O.C.G.A. § 11-9-306(4), which provides: (4) In the event of insolvency proceedings instituted by or against a debtor, a secured party with a perfected…”

— 11-9-306(4)(a) — 1 case

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.