2017 ORS 79.0207¹
UCC 9-207. Rights and duties of secured party having possession or control of collateral

(1) Except as otherwise provided in subsection (4) of this section, a secured party shall use reasonable care in the custody and preservation of collateral in the secured party’s possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.

(2) Except as otherwise provided in subsection (4) of this section, if a secured party has possession of collateral:

(a) Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use or operation of the collateral are chargeable to the debtor and are secured by the collateral;

(b) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;

(c) The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and

(d) The secured party may use or operate the collateral:

(A) For the purpose of preserving the collateral or its value;

(B) As permitted by an order of a court having competent jurisdiction; or

(C) Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.

(3) Except as otherwise provided in subsection (4) of this section, a secured party having possession of collateral or control of collateral under ORS 77.1060 (Control of electronic document of title), 79.0104 (UCC 9-104. Control of deposit account), 79.0105 (UCC 9-105. Control of electronic chattel paper), 79.0106 (UCC 9-106. Control of investment property) or 79.0107 (UCC 9-107. Control of letter-of-credit right):

(a) May hold as additional security any proceeds, except money or funds, received from the collateral;

(b) Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and

(c) May create a security interest in the collateral.

(4) If the secured party is a buyer of accounts, chattel paper, payment intangibles or promissory notes or a consignor:

(a) Subsection (1) of this section does not apply unless the secured party is entitled under an agreement:

(A) To charge back uncollected collateral; or

(B) Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and

(b) Subsections (2) and (3) of this section do not apply. [2001 c.445 §17; 2009 c.181 §93]

Law Review Cita­tions

89 OLR 623 (2010)

Chapter 79

Notes of Decisions

Where creditor with prior perfected secured interest opts not to exercise elective remedies against debtor, creditor maintains security interest and sub­se­quent garnishor takes subject to creditor so that may trace and recapture collateral funds from garnishor. Davis v. F.W. Financial Services, Inc., 260 Or App 191, 317 P3d 916 (2013), Sup Ct review denied

1 Legislative Counsel Committee, CHAPTER 79—Secured Transactions, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors079.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 79, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano079.­html (2017) (last ac­cessed Mar. 30, 2018).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.