Mich. Comp. Laws » Michigan Compiled Laws / Chapter 440 / Act 174 of 1962
Michigan Compiled Laws

Mich. Comp. Laws § 440.9103 (2026)

Purchase-money security interest; application of payments; burden of establishing.

✓ current as of July 2026
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UNIFORM COMMERCIAL CODE


Act 174 of 1962


440.9103 Purchase-money security interest; application of payments; burden of establishing.

Sec. 9103.

    (1) As used in this section:

    (a) "Purchase-money collateral" means goods or software that secures a purchase-money obligation incurred with respect to that collateral.

    (b) "Purchase-money obligation" means an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used.

    (2) A security interest in goods is a purchase-money security interest to the following extent, as applicable:

    (a) To the extent that the goods are purchase-money collateral with respect to that security interest.

    (b) If the security interest is in inventory that is or was purchase-money collateral, also to the extent that the security interest secures a purchase-money obligation incurred with respect to other inventory in which the secured party holds or held a purchase-money security interest.

    (c) Also to the extent that the security interest secures a purchase-money obligation incurred with respect to software in which the secured party holds or held a purchase-money security interest.

    (3) A security interest in software is a purchase-money security interest to the extent that the security interest also secures a purchase-money obligation incurred with respect to goods in which the secured party holds or held a purchase-money security interest if the debtor acquired its interest in the software in an integrated transaction in which it acquired an interest in the goods, and the debtor acquired its interest in the software for the principal purpose of using the software in the goods.

    (4) The security interest of a consignor in goods that are the subject of a consignment is a purchase-money security interest in inventory.

    (5) In a transaction other than a consumer-goods transaction, if the extent to which a security interest is a purchase-money security interest depends on the application of a payment to a particular obligation, the payment must be applied in 1 of the following, as applicable:

    (a) In accordance with any reasonable method of application to which the parties agree.

    (b) In the absence of the parties' agreement to a reasonable method, in accordance with any intention of the obligor manifested at or before the time of payment.

    (c) In the absence of an agreement to a reasonable method and a timely manifestation of the obligor's intention, in the following order:

    (i) To obligations that are not secured.

    (ii) If more than 1 obligation is secured, to obligations secured by purchase-money security interests in the order in which those obligations were incurred.

    (6) In a transaction other than a consumer-goods transaction, a purchase-money security interest does not lose its status as such, even if the purchase-money collateral also secures an obligation that is not a purchase-money obligation, collateral that is not purchase-money collateral also secures the purchase-money obligation, or the purchase-money obligation has been renewed, refinanced, consolidated, or restructured.

    (7) In a transaction other than a consumer-goods transaction, a secured party claiming a purchase-money security interest has the burden of establishing the extent to which the security interest is a purchase-money security interest.

    (8) The limitation of the rules in subsections (5), (6), and (7) to transactions other than consumer-goods transactions is intended to leave to the court the determination of the proper rules in consumer-goods transactions. The court may not infer from that limitation the nature of the proper rule in consumer-goods transactions and may continue to apply established approaches.

History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1964, Act 250, Eff. Aug. 28, 1964 ;-- Am. 1978, Act 369, Eff. Jan. 1, 1979 ;-- Am. 1987, Act 16, Imd. Eff. Apr. 24, 1987 ;-- Am. 1998, Act 278, Imd. Eff. July 27, 1998 ;-- Am. 1998, Act 488, Imd. Eff. Jan. 4, 1999 ;-- Am. 2000, Act 348, Eff. July 1, 2001

Notes of Decisions
Cited in 18 cases (2 in the last 5 years), 1972–2024 · leading case: In Re Rolland Harold Angier. Edward M. Yampolsky, Tr. v. White Motor Credit Corp., 684 F.2d 397 (6th Cir. 1982).
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In Re Rolland Harold Angier. Edward M. Yampolsky, Tr. v. White Motor Credit Corp., 684 F.2d 397 (6th Cir. 1982). · cites it 4× “White Motor Credit argued that notation of its interest on the Ohio Certificate of Title satisfied the conflict-of-laws provisions of Mich. Comp. Laws § 440.9103 (4), Uniform Commercial Code 9-103(4) (1962 *399 version).”
Frank v. Norbel Credit Union (In Re Murray), 109 B.R. 245 (Bankr. E.D. Mich. 1989). · cites it 6× “§ 544 (a) and Mich.Comp.Laws § 440.9103(2)(b). 1 The latter provides that a security interest in a vehicle which is perfected by a notation on a certificate of title remains perfected for a minimum of four months after a debtor has removed the vehicle from the state from which…”
Nuvell Credit Co. v. Muldrew (In Re Muldrew), 396 B.R. 915 (E.D. Mich. 2008). · cites it 4× “Nuvell argues that under the UCC’s definitions for “purchase-money collateral” and “purchase-money obligation,” the “price” of a new vehicle includes the negative equity from a *920 trade-in and the negative equity constitutes “value given to enable” Muldrew to acquire rights in…”
Uhle v. Parts & Trucks (In Re Paige), 3 B.R. 115 (Bankr. W.D. Mich. 1980). · cites it 4× “3-202, 3-101, and 3-102) Since neither of the two conditions for applying Subsection (4) of Section 440.9103 were met, the choice of law rule stated by Subsection (2) of Section 440.”
Arthur Glick Truck Sales, Inc. v. Stuphen East Corp., 914 F. Supp. 2d 529 (S.D.N.Y. 2012). · cites it 2× “See Mich. Comp. Laws Ann. § 440.9103 (2)(b); N.”
Crestmark Bank v. Electrolux Home Prods., Inc., 155 F. Supp. 3d 723 (E.D. Mich. 2016). “§ 440.9103. . The elements of a "bailment” under Michigan law require that one person deliver personal property "to another in trust for a specific purpose, with a contract, express or implied, that the trust shall be faithfully executed and the property returned or duly…”
Matter of Kids Stop of Am., Inc., 64 B.R. 397 (Bankr. M.D. Fla. 1986). “26 § 9-103(1)(d)) Michigan (Mich.Comp.Laws § 440.9103(1)(d)), and Wisconsin (Wis.”
Chrystler v. Int'l Harvester Credit Corp. (In re Cossairt), 43 B.R. 41 (W.D. Mich. 1984). · cites it 2× “Mich.Comp.Laws § 440.9103 (Mich.Stat. Ann.”
Ford Credit Canada Leasing, Ltd. v. DePaul, 637 N.W.2d 831 (Mich. Ct. App. 2001). · cites it 4× “Although the parties in the instant case do not dispute that the Uniform Commercial Code, specifically MCL 440.9103 (§ 9103), which addresses the perfection of security interests in multiple-state transactions, applies to the present case, they offer differing interpretations…”
Tibble v. Huntington Nat'l Bank (In Re Fasick), 234 B.R. 891 (W.D. Mich. 1999). “§ 440.9103(2)(b). Under the Bankruptcy Code, the rights of the parties are fixed as of the bankruptcy petition date.”
Transp. Acceptance Corp. v. Crosby (In re Crosby), 23 B.R. 514 (Bankr. E.D. Tenn. 1982). “The Sixth Circuit reaffirmed an earlier holding that the provisions of this section, Mich.Comp.Laws § 440.9103(4), “plainly supercede” other provisions of the code “when a foreign jurisdiction issues a certificate of title.”
Powell v. Whirlpool Employees Fed. Credit Union, 201 N.W.2d 683 (Mich. Ct. App. 1972). “MCLA 440.9103(2); MSA 19.9103(2) provides: "If the chief place of business of a debtor is in this state, this article governs the validity and perfection of a security interest.”
Show all 18 citing cases →
— Mich. Comp. Laws § 440.9103(1)(a) — 1 case
Farmland Capital Solutions LLC v. Michigan Valley Irrigation Co (Mich. Ct. App. 2021).
— Mich. Comp. Laws § 440.9103(1)(b) — 1 case
Farmland Capital Solutions LLC v. Michigan Valley Irrigation Co (Mich. Ct. App. 2021).
— Mich. Comp. Laws § 440.9103(1)(d) — 1 case
Matter of Kids Stop of Am., Inc., 64 B.R. 397 (Bankr. M.D. Fla. 1986). “26 § 9-103(1)(d)) Michigan (Mich.Comp.Laws § 440.9103(1)(d)), and Wisconsin (Wis.”
— Mich. Comp. Laws § 440.9103(2) — 3 cases
In Re Rolland Harold Angier. Edward M. Yampolsky, Tr. v. White Motor Credit Corp., 684 F.2d 397 (6th Cir. 1982). “White Motor Credit argued that notation of its interest on the Ohio Certificate of Title satisfied the conflict-of-laws provisions of Mich. Comp. Laws § 440.9103 (4), Uniform Commercial Code 9-103(4) (1962 *399 version).”
Arthur Glick Truck Sales, Inc. v. Stuphen East Corp., 914 F. Supp. 2d 529 (S.D.N.Y. 2012). “See Mich. Comp. Laws Ann. § 440.9103 (2)(b); N.”
Powell v. Whirlpool Employees Fed. Credit Union, 201 N.W.2d 683 (Mich. Ct. App. 1972). “MCLA 440.9103(2); MSA 19.9103(2) provides: "If the chief place of business of a debtor is in this state, this article governs the validity and perfection of a security interest.”
— Mich. Comp. Laws § 440.9103(2)(b) — 3 cases
Frank v. Norbel Credit Union (In Re Murray), 109 B.R. 245 (Bankr. E.D. Mich. 1989). “§ 544 (a) and Mich.Comp.Laws § 440.9103(2)(b). 1 The latter provides that a security interest in a vehicle which is perfected by a notation on a certificate of title remains perfected for a minimum of four months after a debtor has removed the vehicle from the state from which…”
Tibble v. Huntington Nat'l Bank (In Re Fasick), 234 B.R. 891 (W.D. Mich. 1999). “§ 440.9103(2)(b). Under the Bankruptcy Code, the rights of the parties are fixed as of the bankruptcy petition date.”
Kellum v. Hershberger (In re Stults), 65 B.R. 652 (W.D. Mich. 1986).
— Mich. Comp. Laws § 440.9103(4) — 2 cases
In Re Rolland Harold Angier. Edward M. Yampolsky, Tr. v. White Motor Credit Corp., 684 F.2d 397 (6th Cir. 1982). “White Motor Credit argued that notation of its interest on the Ohio Certificate of Title satisfied the conflict-of-laws provisions of Mich. Comp. Laws § 440.9103 (4), Uniform Commercial Code 9-103(4) (1962 *399 version).”
Transp. Acceptance Corp. v. Crosby (In re Crosby), 23 B.R. 514 (Bankr. E.D. Tenn. 1982). “The Sixth Circuit reaffirmed an earlier holding that the provisions of this section, Mich.Comp.Laws § 440.9103(4), “plainly supercede” other provisions of the code “when a foreign jurisdiction issues a certificate of title.”
— Mich. Comp. Laws § 440.9103(a) — 1 case
Gochá v. Ford Motor Credit (In Re Vega), 323 B.R. 656 (Bankr. W.D. Mich. 2005).
— Mich. Comp. Laws § 440.9103(b) — 1 case
Gochá v. Ford Motor Credit (In Re Vega), 323 B.R. 656 (Bankr. W.D. Mich. 2005).
— Mich. Comp. Laws § 440.9103(l)(d)(i) — 1 case
Ford Credit Canada Leasing, Ltd. v. DePaul, 637 N.W.2d 831 (Mich. Ct. App. 2001). “Although the parties in the instant case do not dispute that the Uniform Commercial Code, specifically MCL 440.9103 (§ 9103), which addresses the perfection of security interests in multiple-state transactions, applies to the present case, they offer differing interpretations…”
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