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Tex. Bus. & Com. Code § 9.617

RIGHTS OF TRANSFEREE OF COLLATERAL

Known as the Uniform Commercial Code

The act spans §§ 1–12 (616 sections).

Applied in 2 court decisions — leading case Conseco Finance Servicing Corp. v. J & J Mobile Homes, Inc. (2003)

Most recently applied in Mitchell v. BankIllinois (July 2004)

Added by Acts 1999, 76th Leg., ch. 414, Sec. 1.01, eff

(a) A secured party's disposition of collateral after default:

(1) transfers to a transferee for value all of the debtor's rights in the collateral;

(2) discharges the security interest under which the disposition is made; and

(3) discharges any subordinate security interest or other subordinate lien.

(b) A transferee that acts in good faith takes free of the rights and interests described in Subsection (a), even if the secured party fails to comply with this chapter or the requirements of any judicial proceeding.

(c) If a transferee does not take free of the rights and interests described in Subsection (a), the transferee takes the collateral subject to:

(1) the debtor's rights in the collateral;

(2) the security interest or agricultural lien under which the disposition is made; and

(3) any other security interest or other lien.

Official source: Texas Constitution and Statutes. Reproduced from public-domain Texas statutes; confirm against the official source for the current text. Not legal advice.