Page:United States Statutes at Large Volume 77.djvu/798

 766

PUBLIC LAW 88-243-DEC. 30, 1963

[77 STAT.

(b) subsection (3) of section 28:9—504 and subsection (1) of section 28:9—505 which deal with disposition of collateral; (c) subsection (2) of section 28:9—505 which deals with acceptance of collateral as discharge of obligation; (d) section 28:9—506 which deals with redemption of collateral; and (e) subsection (1) of section 28:9—507 which deals with the secured party's liaoility for failure to comply with this part. (4) If the security agreement covers both real and personal property, the secured party may proceed under this part as to the personal property or he may proceed as to both the real and the personal property in accordance with his rights and remedies in respect of the real property in which case the provisions of this part do not apply. (5) When a secured party has reduced his claim to judgment the lien of any levy which may be made upon his collateral by virtue of any execution based upon the judgment shall I'elate back to the date of the perfection of the security interest in such collateral. A judicial sale, pursuant to such execution, is a foreclosure of the security interest by judicial procedure within the meaning of this section, and the secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this article. § 28:9—502. Collection rights of secured party (1) When so agreed and in any event on default the secured party is ent'tled to notify an account debtor or the obligor on an instrument lo make payment to him whether or not the assignor was theretofore making collections on the collateral, and also to take control of any proceeds to which he is entitled under section 28:9—306. (2) A secured party who by agreement is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor and who undertakes to collect from the account debtors or obligors must proceed in a conmiercially reasonable manner and may deduct h's reasonable expenses of realization from the collections. If the security agreement secures an indebtedness, the secured party must account to the debtor for any surplus, and unless otherwise agreed, the debtor is liable for any deficiency. Rut, if the underlying transaction was a sale of accounts, contract rights, or chattel paper, the debtor is entitled to any surplus or is liable for any deficiency only if the security agreement so provides. § 28:9—503. Secured party's right to take possession after default Unless otherwise agreed a secured party has on default the right to take possession of the collateral. In taking possession a secured T)arty may proceed without judicial process if this can be done without breach of the peace or may proceed by action. If the security agreement so prov'des the secured party may require the debtor to assemble the collateral and mnke it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties. Without removal a secured party may render equipment unusable, and may dispose of collateral on the debtor's premises under section 28:9—50 i. § 28:9—504. Secured party's right to dispose of collateral after default; effect of disposition (1) A secured party after default may sell, lease or otherwise dispose of any or all of the collateral in its then condition or following any commercially reasonable preparation or processing. Any sale of goods is subiect to the !^rt"cV, on sales (article 2). The proceeds of, disposition shall be applied in the order following to

�