LD 2245, Page 231 - 119th Legislature, FIRST REGULAR Session

revisions to Articles 8 and 9, Article 9 did not permit

perfection of security interests in securities by filing.

Accordingly, parties who deal in securities never developed a

practice of searching the UCC files before conducting securities

transactions. Although filing is now a permissible method of

perfection, in order to avoid disruption of existing practices in

this business it is necessary to give perfection by filing a

different and more limited effect for securities than for some

other forms of collateral. The priority rules are not based on

the assumption that parties who perfect by the usual method of

obtaining control will search the files. Quite the contrary, the

control priority rule is intended to ensure that, with respect to

investment property, secured parties who do obtain control are

entirely unaffected by filings. To state the point another way,

perfection by filing is intended to affect only general creditors

or other secured creditors who rely on filing. The rule that a

security interest perfected by filing can be primed by a control

security interest, without regard to awareness, is a consequence

of the system of perfection and priority rules for investment

property. These rules are designed to take account of the

circumstances of the securities markets, where filing is not

given the same effect as for some other forms of property. No

implication is made about the effect of filing with respect to

security interests in other forms of property, nor about other

Article 9 [Maine cite Article 9-A] rules, e.g., Section 9330

[Maine cite section 9-1330], which govern the circumstances in

which security interests in other forms of property perfected by

filing can be primed by subsequent perfected security interests.

The following examples illustrate the application of the
priority rule in paragraph (1) [Maine cite subsection (1)]:

Example 1: Debtor borrows from Alpha and grants Alpha a
security interest in a variety of collateral, including all of
Debtor's investment property. At that time Debtor owns 1000
shares of XYZ Co. stock for which Debtor has a certificate.
Alpha perfects by filing. Later, Debtor borrows from Beta and
grants Beta a security interest in the 1000 shares of XYZ Co.
stock. Debtor delivers the certificate, properly indorsed, to
Beta. Alpha and Beta both have perfected security interests in
the XYZ Co. stock. Beta has control, see Section 8-106(b)(1)
[Maine cite section 8-1106, subsection (2), paragraph (a)], and
hence has priority over Alpha.

Example 2: Debtor borrows from Alpha and grants Alpha a
security interest in a variety of collateral, including all of
Debtor's investment property. At that time Debtor owns 1000
shares of XYZ Co. stock, held through a securities account with
Able & Co. Alpha perfects by filing. Later, Debtor borrows from
Beta and grants Beta a security interest in the 1000 shares of

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