New York Laws
Sub Part 3 - Priority
9-324 - Priority of Purchase-Money Security Interests

(a) General rule: purchase-money priority. Except as otherwise
provided in subsection (g), a perfected purchase-money security interest
in goods other than inventory or livestock has priority over a
conflicting security interest in the same goods, and, except as
otherwise provided in Section 9--327, a perfected security interest in
its identifiable proceeds also has priority, if the purchase-money
security interest is perfected when the debtor receives possession of
the collateral or within 20 days thereafter.
(b) Inventory purchase-money priority. Subject to subsection (c) and
except as otherwise provided in subsection (g), a perfected
purchase-money security interest in inventory has priority over a
conflicting security interest in the same inventory, has priority over a
conflicting security interest in chattel paper or an instrument
constituting proceeds of the inventory and in proceeds of the chattel
paper, if so provided in Section 9--330, and, except as otherwise
provided in Section 9--327, also has priority in identifiable cash
proceeds of the inventory to the extent the identifiable cash proceeds
are received on or before the delivery of the inventory to a buyer, if:
(1) the purchase-money security interest is perfected when the
debtor receives possession of the inventory;
(2) the purchase-money secured party sends an authenticated
notification to the holder of the conflicting security
interest;
(3) the holder of the conflicting security interest receives the
notification within five years before the debtor receives
possession of the inventory; and
(4) the notification states that the person sending the
notification has or expects to acquire a purchase-money
security interest in inventory of the debtor and describes
the inventory.
(c) Holders of conflicting inventory security interests to be
notified. Subsections (b)(2) through (4) apply only if the holder of
the conflicting security interest had filed a financing statement
covering the same types of inventory:
(1) if the purchase-money security interest is perfected by
filing, before the date of the filing; or
(2) if the purchase-money security interest is temporarily
perfected without filing or possession under Section
9--312(f), before the beginning of the 20-day period
thereunder.
(d) Livestock purchase-money priority. Subject to subsection (e) and
except as otherwise provided in subsection (g), a perfected
purchase-money security interest in livestock that are farm products has
priority over a conflicting security interest in the same livestock,
and, except as otherwise provided in Section 9--327, a perfected
security interest in their identifiable proceeds and identifiable
products in their unmanufactured states also has priority, if:
(1) the purchase-money security interest is perfected when the
debtor receives possession of the livestock;
(2) the purchase-money secured party sends an authenticated
notification to the holder of the conflicting security
interest;
(3) the holder of the conflicting security interest receives the
notification within six months before the debtor receives
possession of the livestock; and
(4) the notification states that the person sending the
notification has or expects to acquire a purchase-money

security interest in livestock of the debtor and describes
the livestock.
(e) Holders of conflicting livestock security interests to be
notified. Subsections (d)(2) through (4) apply only if the holder of
the conflicting security interest had filed a financing statement
covering the same types of livestock:
(1) if the purchase-money security interest is perfected by
filing, before the date of the filing; or
(2) if the purchase-money security interest is temporarily
perfected without filing or possession under Section
9--312(f), before the beginning of the 20-day period
thereunder.
(f) Software purchase-money priority. Except as otherwise provided in
subsection (g), a perfected purchase-money security interest in software
has priority over a conflicting security interest in the same
collateral, and, except as otherwise provided in Section 9--327, a
perfected security interest in its identifiable proceeds also has
priority, to the extent that the purchase-money security interest in the
goods in which the software was acquired for use has priority in the
goods and proceeds of the goods under this section.
(g) Conflicting purchase-money security interests. If more than one
security interest qualifies for priority in the same collateral under
subsection (a), (b), (d), or (f):
(1) a security interest securing an obligation incurred as all or
part of the price of the collateral has priority over a
security interest securing an obligation incurred for value
given to enable the debtor to acquire rights in or the use of
collateral; and
(2) in all other cases, Section 9--322(a) applies to the
qualifying security interests.