Ohio Code 1309.203 – Attachment and enforceability of security interest – proceeds – supporting obligation – formal requisites – UCC 9-203
(A) A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment.
Terms Used In Ohio Code 1309.203
- Account: includes health-care insurance receivables. See Ohio Code 1309.102
- Another: when used to designate the owner of property which is the subject of an offense, includes not only natural persons but also every other owner of property. See Ohio Code 1.02
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Bank: includes savings banks, savings and loan associations, credit unions, and trust companies. See Ohio Code 1309.102
- Collateral: means the property subject to a security interest or agricultural lien, including:
(a) Proceeds to which a security interest attaches;
(b) Accounts, chattel paper, payment intangibles, and promissory notes that have been sold; and
(c) Goods that are the subject of a consignment. See Ohio Code 1309.102
- Commodity account: means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer. See Ohio Code 1309.102
- Contract: A legal written agreement that becomes binding when signed.
- Debtor: means :
(a) A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;
(b) A seller of accounts, chattel paper, payment intangibles, or promissory notes; or
(c) A consignee. See Ohio Code 1309.102
- Investment property: means a security, whether certificated or uncertificated, a security entitlement, a securities account, a commodity contract, or a commodity account. See Ohio Code 1309.102
- Lien: A claim against real or personal property in satisfaction of a debt.
- New debtor: means a person that becomes bound as debtor under division (D) of section 1309. See Ohio Code 1309.102
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes an individual, corporation, business trust, estate, trust, partnership, and association. See Ohio Code 1.59
- Property: means real and personal property. See Ohio Code 1.59
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Secured party: means :
(a) A person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;
(b) A person that holds an agricultural lien;
(c) A consignor;
(d) A person to whom accounts, chattel paper, payment intangibles, or promissory notes have been sold;
(e) A trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or
(f) A person who holds a security interest arising under section 1302. See Ohio Code 1309.102
- Security agreement: means an agreement that creates or provides for a security interest. See Ohio Code 1309.102
- Supporting obligation: means a letter-of-credit right or secondary obligation that supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument, or investment property. See Ohio Code 1309.102
(B) Except as otherwise provided in divisions (C) to (I) of this section, a security interest is enforceable against the debtor and third parties with respect to the collateral only if:
(1) Value has been given;
(2) The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and
(3) One of the following conditions is met:
(a) The debtor has authenticated a security agreement that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned;
(b) The collateral is not a certificated security and is in the possession of the secured party under section 1309.313 of the Revised Code pursuant to the debtor’s security agreement;
(c) The collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under section 1308.27 of the Revised Code pursuant to the debtor’s security agreement; or
(d) The collateral is deposit accounts, electronic chattel paper, investment property, letter-of-credit rights, or electronic documents, and the secured party has control under section 1307.106, 1309.104, 1309.105, 1309.106, or 1309.107 of the Revised Code pursuant to the debtor’s security agreement.
(C) Division (B) of this section is subject to section 1304.20 of the Revised Code on the security interest of a collecting bank, section 1305.18 of the Revised Code on the security interest of a letter-of-credit issuer or nominated person, section 1309.110 of the Revised Code on a security interest arising under Chapter 1302. or 1310. of the Revised Code, and section 1309.206 of the Revised Code on security interests in investment property.
(D) A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this article or by contract:
(1) The security agreement becomes effective to create a security interest in the person’s property; or
(2) The person becomes generally obligated for the obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person.
(E) If a new debtor becomes bound as debtor by a security agreement entered into by another person:
(1) The agreement satisfies division (B)(3) of this section with respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and
(2) Another agreement is not necessary to make a security interest in the property enforceable.
(F) The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by section 1309.315 of the Revised Code and is also attachment of a security interest in a supporting obligation for the collateral.
(G) The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on personal or real property is also attachment of a security interest in the security interest, mortgage, or other lien.
(H) The attachment of a security interest in a securities account is also attachment of a security interest in the security entitlements carried in the securities account.
(I) The attachment of a security interest in a commodity account is also attachment of a security interest in the commodity contracts carried in the commodity account.