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 Post subject: Exceptions When Lien Property Is Transferred 697.740
PostPosted: Wed Dec 24, 2008 10:41 am 
Partner of Riser Adkisson LLP
Partner of Riser Adkisson LLP
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Joined: Fri Dec 12, 2008 10:13 am
Posts: 931
Location: Newport Beach, CA
CCP 697.740

Except as provided in Sections 9617 and 9622 of the Commercial Code and in Section 701.630, if personal property subject to an execution lien is not in the custody of a levying officer and the property is transferred or encumbered, the property remains subject to the lien after the transfer or encumbrance except where the transfer or encumbrance is made to one of the following persons:

(a) A person who acquires an interest in the property under the law of this state for reasonably equivalent value without knowledge of the lien. For purposes of this subdivision, value is given for a transfer or encumbrance if, in exchange for the transfer or encumbrance, property is transferred or an antecedent debt is secured or satisfied.

(b) A buyer in ordinary course of business (as defined in Section 1201 of the Commercial Code) who, under Section 9320 of the Commercial Code, would take free of a security interest created by the seller or encumbrancer.

(c) A lessee in ordinary course of business (as defined in paragraph (15) of subdivision (a) of Section 10103 of the Commercial Code) or a licensee in the ordinary course of business (as defined in subdivision (a) of Section 9321 of the Commercial Code) who, under Section 9321 of the Commercial Code, would take free of a security interest created by the lessor or the licensor.

(d) A holder in due course (as defined in Section 3302 of the Commercial Code) of a negotiable instrument within the meaning of Section 3104 of the Commercial Code.

(e) A holder to whom a negotiable document of title has been duly negotiated within the meaning of Section 7501 of the Commercial Code.

(f) A protected purchaser (as defined in Section 8303 of the Commercial Code) of a security or a person entitled to the benefits of Section 8502 or 8510 of the Commercial Code.

(g) A purchaser of chattel paper who gives new value and takes possession of the chattel paper in good faith and in the ordinary course of the purchaser's business or a purchaser of an instrument who gives value and takes possession of the instrument in good faith.

(h) A holder of a purchase money security interest (as defined in Section 9103 of the Commercial Code).

(i) A collecting bank holding a security interest in items being collected, accompanying documents and proceeds, pursuant to Section 4210 of the Commercial Code.

(j) A person who acquires any right or interest in letters of credit, advices of credit, or money.

(k) A person who acquires any right or interest in property subject to a certificate of title statute of another jurisdiction under the law of which indication of a security interest on the certificate of title is required as a condition of perfection of the security interest.

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