When the secured party is not required to "apply or pay over for application noncash proceeds," the proceeds nonetheless remain collateral subject to this Article. If the secured party were to dispose of them, for example, appropriate notification would be required (see Section 9-611 [Maine cite section 9- 1611]), and the disposition would be subject to the standards provided in this Part (see Section 9-610 [Maine cite section 9- 1610]). Moreover, a secured party in possession of the noncash proceeds would have the duties specified in Section 9-207 [Maine cite section 9-1207].

5. No Effect on Priority of Senior Security Interest. The application of proceeds required by subsection (a) [Maine cite subsection (1)] does not affect the priority of a security interest in collateral which is senior to the interest of the secured party who is collecting or enforcing collateral under Section 9-607 [Maine cite section 9-1607]. Although subsection (a) [Maine cite subsection (1)] imposes a duty to apply proceeds to the enforcing secured party's expenses and to the satisfaction of the secured obligations owed to it and to subordinate secured parties, that duty applies only among the enforcing secured party and those persons. Concerning the priority of a junior secured party who collects and enforces collateral, see Section 9-607 [Maine cite section 9-1607], Comment 5.

§9-1609.__Secured party's right to take possession after default

(1)__After default, a secured party:

(a)__May take possession of the collateral; and

(b)__Without removal, may render equipment unusable and dispose of collateral on a debtor's premises under section 9-1610.

(2)__A secured party may proceed under subsection (1):

(a)__Pursuant to judicial process; or

(b)__Without judicial process if it proceeds without breach of the peace.

(3)__If so agreed, and in any event after default, a secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party that is reasonably convenient to both parties.

Official Comment

1. Source. Former Section 9-503.

2. Secured Party's Right to Possession. This section follows former Section 9-503 and earlier uniform legislation. It provides that the secured party is entitled to take possession of collateral after default.

3. Judicial Process; Breach of Peace. Subsection (b) [Maine cite subsection (2)] permits a secured party to proceed under this section without judicial process if it does so "without breach of the peace." Although former Section 9-503 placed the same condition on a secured party's right to take possession of collateral, subsection (b) [Maine cite subsection (2)] extends the condition to the right provided in subsection (a)(2) [Maine cite subsection (1), paragraph (b)] as well. Like former Section 9-503, this section does not define or explain the conduct that will constitute a breach of the peace, leaving that matter for continuing development by the courts. In considering whether a secured party has engaged in a breach of the peace, however, courts should hold the secured party responsible for the actions of others taken on the secured party's behalf, including independent contractors engaged by the secured party to take possession of collateral.

This section does not authorize a secured party who repossesses without judicial process to utilize the assistance of a law-enforcement officer. A number of cases have held that a repossessing secured party's use of a law-enforcement officer without benefit of judicial process constituted a failure to comply with former Section 9-503.

4. Damages for Breach of Peace. Concerning damages that may be recovered based on a secured party's breach of the peace