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#273786 - 11/10/04 02:32 PM Definitions of UCC language
Anonymous
Unregistered


What is the difference between a "fixture" and an "accession"? Can anyone give me examples of both? If a fixture filing is perfected in real estate records, is an accession perfected by filing there also or would you need a central filing for that so that you basically have two filings? I don't think I understand the difference.

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Article 9
#273787 - 12/17/04 05:26 PM Re: Definitions of UCC language
Anonymous
Unregistered


In the state of Indiana, when a ucc is being filed on furniture, fixtures, inventory and equipment, is the verbage "all furniture, fixtures, inventory and equipment of ABC Corp. now owned and hereafter aquired" acceptabl?

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#273788 - 03/11/05 03:55 PM Re: Definitions of UCC language
Sotally Tober Offline
Junior Member

Registered: 01/13/04
Posts: 48
Loc: SW Missouri
According to my book on Article 9 "Accession" means goods that are physically united with other goods in such a manner that the idenity of the original goods in not lost.

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#273789 - 03/11/05 04:04 PM Re: Definitions of UCC language
Sotally Tober Offline
Junior Member

Registered: 01/13/04
Posts: 48
Loc: SW Missouri
Fixtures, it may be difficult to differentiate goods, which are either equipment or consumer goods, from goods that have become fixtures. If one were to purchase a ceiling fan at the store, it is either a consumer good or equipment, but when the fan is installed, somewhere during the process it becomes a fixture. Missouri declares goods are fixtures "when they become so relted to particular real estate that in interest in them arised under the real estate law"

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#273790 - 03/11/05 06:01 PM Re: Definitions of UCC language
rainman Offline
Power Poster

Registered: 11/12/04
Posts: 2873
They are very similar - the difference is what the fixture or accession is attached to. Fixtures are attached to real estate; accessions are attached to other stuff that's not real estate.

Fixtures are things that become so attached to real estate (or more often, to the structure that's on the real estate) that they are considered part of the real estate. An example would be an air conditioning unit (not a window model) that's attached to a slab next to the house and connected to the house.

Accessions are things that are attached to other things (besides real estate) in such a way that they become part of the other things. An example would be an engine that's mounted in a car.
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#273791 - 04/16/05 09:37 PM Re: Definitions of UCC language
Anonymous
Unregistered


instrument

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#273792 - 06/21/05 07:08 AM Re: Definitions of UCC language
Anonymous
Unregistered


perfection

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#273793 - 08/17/05 03:32 PM Re: Definitions of UCC language
Anonymous
Unregistered


fixtures

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#1017385 - 08/11/08 07:52 PM Re: Definitions of UCC language [Re: Anonymous]
Tom at HOME Offline
Diamond Poster

Registered: 10/27/05
Posts: 1139
I was reading some old blogs and decided to answer them even though they are OOOOOld.

The first one is about the definition of an "instrument." Most states have two definitions for the term instrument:

1. an instrument defined by 9-304 (checks, drafts, promissory notes, and CDs, but they must be in negotiable form (except checks) to be an instrument and few CDs are in negotiable form; and
2. an instrument formed by its use, i.e. any other writing that:
[*]a. evidences a right to the payment of a monetary obligation,
[*]b. is not itself a security agreement or lease, and
[*]c. is of a type that, in ordinary course of business, is transferred by delivery with any necessary endorsement or assignment.
In other words, if you treat something as an instrument, it becomes and instrument.

A few states included, in its definition of an instrument, a written CD that would be considered an instrument except for the fact that the writing is not negotiable.

In my opinion these few states made a big mistake. You see, if a CD is not an instrument it becomes a deposit account. The method of perfecting a security on a deposit account is by the secured party obtaining and maintaining control. This is easy if you are the depository institution.

But if the CD is an instrument, it cannot be perfected by control. The only method of perfection is by the filing of a financing statement or by the secured party taking possession. This would be OK if possession trumped a filing. But it doesn't unless you're a buyer of the instrument. Banks don't purchase the collateral, they take security interests and therefore could lose to someone who files a financing statement and the security party in possession did not perform a UCC search.
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The illusion of knowledge is more dangerous than known ignorance. -- Tom Bridge

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#1018600 - 08/13/08 12:27 AM Re: Definitions of UCC language [Re: Anonymous]
Tom at HOME Offline
Diamond Poster

Registered: 10/27/05
Posts: 1139
Now for the definition of "perfection."

When a secured party's security interest attaches the secured party has a lien on the collateral that secures performance of an obligation. Attachment of a security interest represents the relationship between the debtor and the secured party. Attachment of a security interest is what allows the secured party to foreclose on the collateral upon default as set forth in a security agreement.

When a security interest is perfected, it protects the security interest against other creditors. This represents the relationship between the perfected secured party and the rest of the world. Perfection does not give you a security interest; it only protects the security interest if you have a security interest.

Most lender spend much time talking about perfection, perfection, perfection and not enough time talking about attachment.
_________________________
asktom@bbcon.com
The illusion of knowledge is more dangerous than known ignorance. -- Tom Bridge

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