N.Y. Uniform Commercial Code Law § 9-336: Commingled Goods

Section 9--336. Commingled Goods.

(a) "Commingled goods." 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.

(b) No security interest in commingled goods as such. 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.

(c) Attachment of security interest to product or mass. If collateral

becomes commingled goods, a security interest attaches to the product or

mass.

(d) Perfection of security interest. 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 (c) is perfected.

(e) Priority of security interest Except as otherwise provided in

subsection (f), the other provisions of this part determine the priority

of a security interest that attaches to the product or mass under

subsection (c).

(f) Conflicting security interests in product or mass If more than one

security interest attaches to the product or mass under subsection (c),

the following rules determine priority:

(1) A security interest that is perfected under subsection (d)

has priority over a security interest that is unperfected at

the time the collateral becomes commingled goods.

(2) If more than one security interest is perfected under

subsection (d), the security interests rank equally in

proportion to the value of the collateral at the time it

became commingled goods.