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355.9-336 Commingled goods.
(1)
(2)
(3)
(4)
(5)
(6)
In this section, "commingled goods" means goods that are physically united with
other goods in such a manner that their identity is lost in a product or mass.
A security interest does not exist in commingled goods as such. However, a security
interest may attach to a product or mass that results when goods become
commingled goods.
If collateral becomes commingled goods, a security interest attaches to the product
or mass.
If a security interest in collateral is perfected before the collateral becomes
commingled goods, the security interest that attaches to the product or mass under
subsection (3) of this section is perfected.
Except as otherwise provided in subsection (6) of this section, the other provisions
of this part of this article determine the priority of a security interest that attaches to
the product or mass under subsection (3) of this section.
If more than one (1) security interest attaches to the product or mass under
subsection (3) of this section, the following rules determine priority:
(a) A security interest that is perfected under subsection (4) of this section has
priority over a security interest that is unperfected at the time the collateral
becomes commingled goods.
(b) If more than one (1) security interest is perfected under subsection (4) of this
section, the security interests rank equally in proportion to the value of the
collateral at the time it became commingled goods.
Effective: July 1, 2001
History: Created 2000 Ky. Acts ch. 408, sec. 76, effective July 1, 2001.
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