N.D. Cent. Code § 41-09-48
(9-328) Priority of security interests in investment property
Redline — December 1, 2021 → current.View current text →
Current — January 1, 2022
As of December 1, 2021
The following rules govern priority among conflicting security interests in the same investment property:
The following rules govern priority among conflicting security interests in the same investment property:
(1) A security interest held by a secured party having control of investment property under section 41-09-06 has priority over a security interest held by a secured party that does not have control of the investment property.
(1) A security interest held by a secured party having control of investment property under section 41-09-06 has priority over a security interest held by a secured party that does not have control of the investment property.
(2) Except as otherwise provided in subsections 3 and 4, conflicting security interests held by secured parties each of which has control under section 41-09-06 rank according to priority in time of: If the collateral is a security, obtaining control;
(2) Except as otherwise provided in subsections 3 and 4, conflicting security interests held by secured parties each of which has control under section 41-09-06 rank according to priority in time of: If the collateral is a security, obtaining control;
(3) If the collateral is a security entitlement carried in a securities account and: If the secured party obtained control under subdivision a of subsection 4 of section 41-08-06, the secured party’s becoming the person for which the securities account is maintained;
(3) If the collateral is a security entitlement carried in a securities account and: If the secured party obtained control under subdivision a of subsection 4 of section 41-08-06, the secured party’s becoming the person for which the securities account is maintained;
(4) If the secured party obtained control under subdivision b of subsection 4 of section 41-08-06, the securities intermediary’s agreement to comply with the secured party’s entitlement orders with respect to security entitlements carried or to be carried in the securities account; or
(4) If the secured party obtained control under subdivision b of subsection 4 of section 41-08-06, the securities intermediary’s agreement to comply with the secured party’s entitlement orders with respect to security entitlements carried or to be carried in the securities account; or
(5) If the secured party obtained control through another person under subdivision c of subsection 4 of section 41-08-06, the time on which priority would be based under this subsection if the other person were the secured party; or
(5) If the secured party obtained control through another person under subdivision c of subsection 4 of section 41-08-06, the time on which priority would be based under this subsection if the other person were the secured party; or
(6) If the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in subdivision b of subsection 2 of section 41-09-06 with respect to commodity contracts carried or to be carried with the commodity intermediary.
(6) If the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in subdivision b of subsection 2 of section 41-09-06 with respect to commodity contracts carried or to be carried with the commodity intermediary.
(7) A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party.
(7) A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party.
(8) A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party.
(8) A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party.
(9) A security interest in a certificated security in registered form which is perfected by taking delivery under subsection 1 of section 41-09-33 and not by control under section 41-09-34 has priority over a conflicting security interest perfected by a method other than control.
(9) A security interest in a certificated security in registered form which is perfected by taking delivery under subsection 1 of section 41-09-33 and not by control under section 41-09-34 has priority over a conflicting security interest perfected by a method other than control.
(10) Conflicting security interests created by a broker, securities intermediary, or commodity intermediary which are perfected without control under section 41-09-06 rank equally.
(10) Conflicting security interests created by a broker, securities intermediary, or commodity intermediary which are perfected without control under section 41-09-06 rank equally.
(11) In all other cases, priority among conflicting security interests in investment property is governed by sections 41-09-42 and 41-09-43.
(11) In all other cases, priority among conflicting security interests in investment property is governed by sections 41-09-42 and 41-09-43.
(12) Relation to Other Law. Section 1-103 provides that “unless displaced by particular provisions of this Act, the principles of law and equity…shall supplement its provisions.” There may be circumstances in which a secured party’s action in acquiring a security interest that has priority under this section constitutes conduct that is wrongful under other law. Though the possibility of such resort to other law may provide an appropriate “escape valve” for cases of egregious conduct, care must be taken to ensure that this does not impair the certainty and predictability of the priority rules. Whether a court may appropriately look to other law to impose liability upon or estop a secured party from asserting its Article 9 priority depends on an assessment of the secured party’s conduct under the standards established by such other law as well as a determination of whether the particular application of such other law is displaced by the UCC.
Official source: North Dakota Legislative Branch. Reproduced from public-domain North Dakota statutes; confirm against the official source for the current text. Not legal advice.