Prior Uniform Statutory Provision: None.

Purposes:

To exclude certain security transactions from this Article.

1. Where a federal statute regulates the incidents of security interests in particular types of property, those security interests are of course governed by the federal statute and excluded from this Article. The Ship Mortgage Act, 1920, is an example of such a federal act. Legislation covering aircraft financing has been proposed to the Congress, and, if enacted, would displace this Article in that field. The present provisions of the Civil Aeronautics Act (49 U.S.C.A. §523) call for registration of title to and liens upon aircraft with the Civil Aeronautics Administrator and such registration is recognized as equivalent to filing under this Article (Section 9-302(3)); but to the extent that the Civil Aeronautics Act does not regulate the rights of parties to and third parties affected by such transactions, security interests in aircraft remain subject to this Article, pending passage of federal legislation.

Although the Federal Copyright Act contains provisions permitting the mortgage of a copyright and for the recording of an assignment of a copyright (17 U.S.C. §§28, 30) such a statute would not seem to contain sufficient provisions regulating the rights of the parties and third parties to exclude security interests in copyrights from the provisions of this Article. Compare Republic Pictures Corp. v. Security-First National Bank of Los Angeles, 197 F.2d 767 (9th Cir. 1952). Compare also with respect to patents, 35 U.S.C. §47. The filing provisions under these Acts, like the filing provisions of the Aeronautics Act, are recognized as the equivalent to filing under this Article. Section 9-302(3).

Even such a statute as the Ship Mortgage Act is far from a comprehensive regulation of all aspects of ship mortgage financing. That Act contains provisions on formal requisites, on recordation and on foreclosure but not much more. If problems arise under a ship mortgage which are not covered by the Act, the federal admiralty court must decide whether to improvise an answer under "federal law" or to follow the law of some state with which the mortgage transaction has appropriate contacts. The exclusionary language in paragraph (a) is that this Article does not apply to such security interest "to the extent" that the federal statute governs the rights of the parties. Thus if the federal statute contained no relevant provision, this Article could be looked to for an answer.

2. Except for fixtures (Section 9-313), the Article applies only to security interests in personal property. The exclusion of landlord's liens by paragraph (b) and of leases and other interests in or liens on real estate by paragraph (j) merely reiterates the limitations on coverage already made explicit in Section 9-102(3). See Comment 4 to that section.

3. In all jurisdictions liens are given suppliers of many types of services and materials either by statute or by common law. It was thought to be both inappropriate and unnecessary for this Article to attempt a general codification of that lien structure which is in considerable part determined by local conditions and which is far removed from ordinary commercial financing. Paragraph (c) therefore excludes such liens from the Article. Section 9-310 states a rule for determining priorities between such liens and the consensual security interests covered by this Article.

4. In many states assignments of wage claims and the like are regulated by statute. Such assignments present important social problems whose solution should be a matter of local regulation. Paragraph (d) therefore excludes them from this Article.

5. The exclusion of (e) is made because the persons chiefly interested in railroad equipment trusts have insisted that their rights and obligations are better governed by existing law. Notice that the exclusion applies only to equipment trusts covering railway rolling stock. Equipment trusts on other kinds of property (e.g. trucks, busses, contractors' equipment) are therefore covered by the Article, and so are security arrangements on railway rolling stock which are not equipment trusts. Further, the exclusion of (e) does not affect the question of the extent to which Section 20c of the Interstate Commerce Act (49 U.S.C. §20c) overrides state law. See exclusion (a), Comment 1 and Section 9-302(3)(a).

6. In general sales as well as security transfers of accounts, contract rights and chattel paper are within the Article (see Section 9-102). Paragraph (f) excludes from the Article certain transfers of such intangibles which, by their nature, have nothing to do with commercial financing transactions.

7. Rights under life insurance and other policies, and deposit accounts, are often put up as collateral. Such transactions are often quite special, do not fit easily under a general commercial statute and are adequately covered by existing law. Paragraphs (g) and (k) make appropriate exclusions.

8. The remaining exclusions go to other types of claims which do not customarily serve as commercial collateral judgments under paragraph (h), set-offs under paragraph (i) and tort claims under paragraph (k).

Cross References:

Point 1: Section 9-302(3).

Point 2: Sections 9-102(3) and 9-313.

Point 3: Sections 9-102(2) and 9-310.

Point 5: Section 9-302(3).

Point 6: Section 9-102.

Definitional Cross References:

"Account". Section 9-106.

"Bank". Section 1-201.

"Chattel paper". Section 9-105.

"Contract". Section 1-201.

"Contract right". Section 9-106.

"Party". Section 1-201.

"Rights". Section 1-201.

"Security interest". Section 1-201.