(1)__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.

(2)__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.

(3)__If collateral becomes commingled goods, a security interest attaches to the product or mass.

(4)__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 (3) is perfected.

(5)__Except as otherwise provided in subsection (6), the other provisions of this Part determine the priority of a security interest that attaches to the product or mass under subsection (3).

(6)__If more than one security interest attaches to the product or mass under subsection (3), the following rules determine priority.

(a)__A security interest that is perfected under subsection (4) has priority over a security interest that is unperfected at the time the collateral becomes commingled goods.

(b)__If more than one security interest is perfected under subsection (4), the security interests rank equally in proportion to value of the collateral at the time it became commingled goods.

Official Comment

1. Source. Former Section 9-315.

2. "Commingled Goods." Subsection (a) [Maine cite subsection (1)] defines "commingled goods." It is meant to include not only goods whose identity is lost through manufacturing or production (e.g., flour that has become part of baked goods) but also goods whose identity is lost by commingling with other goods from which they cannot be distinguished (e.g., ball bearings).