Download - Ch. 678 UNIFORM COMMERCIAL CODE INVESTMENT SECURITIES Ch…fall.fsulawrc.com/collection/FlaStat/FlaStat1973/vol2/FlaStat1973v... · Ch. 678 UNIFORM COMMERCIAL CODE INVESTMENT SECURITIES

Transcript

Ch. 678 UNIFORM COMMERCIAL CODE INVESTMENT SECURITIES Ch. 678

may be effected by the making of appropriate entries on the books of the clearing corporation reducing the account of the transferor or pledg­or and increasing the account of the trans­feree or pledgee by the amount of the obliga­tion or the number of shares or rights trans­ferred or pledged.

(2) Under this section entries may be with respect to like securities or interests therein as a part of a fungible bulk and may refer merely to a quantity of a particular security without reference to the name of the registered owner, certificate or bond number or the like and, in appropriate cases, may be on a net basis taking into account other transfers or pledges of the same security.

(3) A transfer or pledge under this section has the effect of a delivery of a security in bearer form or duly indorsed in blank ( §678.-

301 ) representing the amount of the obliga­tion or the number of shares or rights trans­ferred or pledged. If a pledge or the creation of a security interest is intended, the making of entries has the effect of a taking of delivery by the pledgee or a secured party <*§679.304 and 679.305 ) . A transferee or pledgee under this section is a holder.

( 4 ) A transfer or pledge under this section does not eonstitute a registration of transfer under part IV of this chapter.

( 5 ) That entries made on the books of the clearing corporation as provided in subsection (1 ) are not appropriate does not affect the va­lidity or effect of the entries nor the liabilities or obligations of the clearing corporation to any person adversely affected thereby.

History .-u. ch. 65-254 . Nole .-§8-320, U .C.C.

PART IV

REGISTRATION

678.401 Duty of issuer to register transfer. 678.402 Assurance that indorsements are ef­

fective. 678.403 Limited duty of inquiry.

678.401 Duty of issuer to register trans­fer.-

(1) Where a security in registered form is presented to the issuer with a request to regis­ter transfer, the issuer is under a duty to regis­ter the transfer as requested if:

(a) The security is indorsed by the appro­priate person or persons (§678.308); and

(b) Reasonable assurance is given that those indorsements are genuine and effective ( §678.402) ; and

(c) The issuer has no duty to inquire into adverse claims or has discharged any such duty (§678.403); and

(d) Any applicable law relating to the col­lection of taxes has been complied with; and

(e) The transfer is in fact rightful or is to a bona fide purchaser.

(2) Where an issuer is under a duty to reg­ister a transfer of a security the issuer is also liable to the person presenting it for registra­tion or his principal for loss resulting from any unreasonable delay in registration or from fail­ure or refusal to register the transfer.

Hlslory.-§1. ch. 65-254. Note.-18-401, U.C.C.

cf.-§§517.07-517.091 Re registration of securities.

678.402 Assurance that indorsements are effective.-

(1) The issuer may require the following assurance that each necessary indorsement (§678.308) is genuine and effective:

(a) In all cases, a guarantee of the signa­ture ( §678.312 (1)) of the person indorsing; and

678.404 Liability and non-liability for reg­istration.

678.405 Lost, destroyed and stolen securities. 678.406 Duty of authenticating trustee, trans­

fer agent or registrar.

(b) Where the indorsement is by an agent, appropriate assurance of authority to sign;

(c ) Where the indorsement is by a fiduciary, appropriate evidence of appointment or incum­bency;

(d) Where there is more than one fiduciary, reasonable assurance that all who are required to sign have done so;

(e ) Where the indorsement is by a person not covered by any of the foregoing, assura:trce appropriate to the case corresponding as nearly as may be to the foregoing.

(2) A "guarantee of the signature" in sub­section (1) means a guarantee signed by or on behalf of a person reasonably believed by the issuer to be responsible. The issuer may adopt standards with respect to responsibility pro­vided such standards are not manifestly un­reasonable.

(3) "Appropriate evidence of appointment or incumbency" in subsection (1) means:

(a) In the case of a fiduciary appointed or qualified by a court, a certificate issued by or under the direction or supervision of that court or an officer thereof and dated within sixty days before the date of presentation for transfer; or

(b) In any other case, a copy of a document showing the appointment or a certificate issued by or on behalf of a person reasonably believed by the issuer to be responsible or in the ab­sence of such a document or certificate other evidence reasonably deemed by the issuer to be appropriate. The issuer may adopt standards with respect to such evidence provided such standards are not manifestly unreasonable. The

1801

Ch. 678 UNIFORM COMMERCIAL CODE-INVESTMENT SECURITIES Ch. 678

issuer is not charged with notice of the contents of any document obtained pursuant to this paragraph (b) except to the extent that the con­tents relate directly to the appointment or in­cumbency.

(4) The issuer may elect to require reason­able assurance beyond that specified in this section but if it does so and for a purpose other than that specified in subsection (3) (b) both re­quires and obtains a copy of a will, trust, in­denture, articles of co-partnership, by-laws or other controlling instrument it is charged with notice of all matters contained therein affecting the transfer.

History.-§!, ch . 65-25'. Note.-18-,02, U .C.C.

cr.-§610.051 Evidence or appointment or Incumbency.

678.403 Limited duty of inquiry.-(!) An issuer to whom a security is pre­

sented for registration is under a duty to in­quire into adverse claims if:

(a) A written notification of an adverse claim is received at a time and in a manner which affords the issuer a reasonable opportu­nity to act on it prior to the issuance of a new, reissued or re-registered security and the noti­fication identifies the claimant, the registered owner and the issue of which the security is a part and provides an address for communica­tions directed to the claimant; or

(b) The issuer is charged with notice of an adverse claim from a controlling instrument which it has elected to require under §678.-402 (4).

(2) The issuer may discharge any_ duty of inquiry by any reasonable means, including no~ tifying an adverse claimant by registered or certified mail at the address furnished by him or if there be no such address at his residence or regular place of business that the security has been presented for registration of transfer by a named person, and that the transfer will be reg­istered unless within thirty days from the date of mailing the notification, either:

(a) An appropriate restraining order, in­junction or other process issues from a court of competent jurisdiction; or

(b) An indemnity bond sufficient in the is­suer's judgment to protect the issuer · and any transfer agent, registrar or other agent · of the issuer involved, from any loss which it or they may suffer by complying with the adverse claim is filed with the issuer.

(3) Unless an issuer is charged with notice of an adverse claim from a controlling instru­ment which it has elected to require under §678.402 ( 4) or receives notification· of an ad­verse claim under subsection (1) of this section, where a security presented for registration is indorsed by the appropriate person or persons the issuer is under no duty to inquire into ad­verse claims. In particular:

(a) An issuer registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent, or correct description of the fiduciary relationship and thereafter the

issuer may assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security;

(b) An issuer registering transfer on an in­dorsement by a fiduciary is not bound to inquire whether the transfer is made in compliance with a controlling instrument or with the law of the state having jurisdiction of the fiduciary rela­tionship, including any law requiring the fidu­ciary to obtain court approval of the transfer; and

(c) The issuer is not charged with notice of the contents of any court record or file or other recorded or unrecorded document even though the document is in its possession and even though the transfer is made on the indorsement of a fiduciary to the fiduciary himself or to his nominee.

Hlstory.-§1, ch. 65-25,. Nole.-18-•03, U .C.C.

cf.-§610.031 Registration In the name or a fiduciary . f 610.0U Assignment by a fiduciary. 1610.081 Nonl!ab!llty of third persons.

678.404 Liability and non-liability for reg­istration.-

(1) Except as otherwise provided in any law relating to the collection of taxes, the is­suer is not liable to the owner or any other person suffering loss as a result of the registra­tion of a transfer of a security if:

(a) There were on or with the security the necessary indorsements (§678.308) ; and

(b) The issuer had no duty to inquire into adverse claims or has discharged any such duty (§678.403) .

(2) Where an issuer has registered a trans­fer of a security to a person not entitled to it the issuer on demand must deliver a like se­curity to the true owner unless:

(a) The registration was pursuant to sub­section (1 ) ; or

(b) The owner is precluded from asserting any claim for registering the transfer under §678.405(1 ) ; or

(c) Such delivery would result in overissue, in which case the issuer's liability is governed by §678.104. .

History.-§!, ch . 65-254. Note.- §8-404, U .C .C.

cr.-§610.071 Nonl!ab!llty of corporation or transfer agent.

678.405 Lost, destroyed and stolen secu­rities.-

(1) Where a security has been lost, ap­parently destroyed or wrongfully taken and the owner fails to notify the issuer of that fact within a reasonable time after he has notice of it and the issuer registers a transfer of the se­curity before receiving such a notification, the owner is precluded from asserting against the issuer any claim for registering the transfer under the preceding section or any claim to a new security under this section.

(2) Where the owner of a security claims that the security has been lost, destroyed or wrongfully taken, the issuer must issue a new

1802

UNIFORM COMMERCIAL CODE-INVESTMENT SECURITIES Ch. 678

security in place of the original security if the owner:

(a) So requests before the issuer has notice that the security has been acquired by a bona fide purchaser; and

(b) Files with the issuer a sufficient in­demnity bond; and

(c) Satisfies any other reasonable require­ments imposed by the issuer.

(3) If, after the issue of the new security, a bona fide purchaser of the original security pre­sents it for registration of transfer, the issuer must register the transfer unless registration would result in overissue, in which event the issuer's liability is governed by §678.104. In addition to any rights on the indemnity bond, the issuer may recover the new security from the person to whom it was issued or any person taking under him except a bona fide purchaser.

Bla&o17.-11. ch. 85-254. No&e.-18-405, u.c.c.; auperaedea 1814.111.

678.406 Duty of authenticating trustee, transfer agent or registrar.-

( I) Where a person acts as authenticating trustee, transfer agent, registrar, or other agent for an issuer in the registration of transfers of its securities or in the issue of new securities or in the cancellation of surrendered securities:

(a) He is under a duty to the issuer to ex­ercise good faith and due diligence in perform­ing his functions; and

(b) He has with regard to the particular functions he performs the same obligation to the holder or owner of the security and has the same rights and privileges as the issuer has in regard to those functions.

(2) Notice to an authenticating trustee, transfer agent, registrar or other such agent is notice to the issuer with respect to the functions performed by the agent.

Hls&orr.-11. ch. 65-254. No&e.-18-406, u.c.c.

1803

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS

CHAPTER 679

*UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS

ARTICLE 9 SECURED TRANSACTIONS; SALES OF ACCOUNTS, CONTRACT RIGHTS AND CHATTEL PAPER

PART I SHORT TITLE, APPLICABILITY AND DEFINITIONS (§§679.101-679.113)

PART II VALIDITY OF SECURITY AGREEMENT AND RIGHTS OF PARTIES THERETO (§§679.201-679.208)

PART III RIGHTS OF THIRD PARTIES; PERFECTED AND UNPERFECTED SECURITY INTERESTS; RULES OF PRIORITY ( § ~679.301-679.-318)

PART IV FILING (§§679.401-679.407)

PART V DEFAULT (§ §679.501-679.507)

ARTICLE 9

SECURED TRANSACTIONS; SALES OF ACCOUNTS, CONTRACT RIGHTS AND CHATTEL PAPER

PART I

SHORT TITLE, APPLICABILITY AND DEFINITIONS

679.101 679.102 679.103

679.104 679.105 679.106

679.107

Short title. Policy and scope of chapter. Accounts , contract rights, general in­

tangibles and equipment relating to another jurisdiction; and incoming goods already subject to a secu­rity interest.

Transactions excluded from chapter. Definitions and index of definitions. Definitions: "Account"; "Contract

Right"; "General Intangibles". Definitions: "Purchase Money Secur­

ity Interest".

679.101 Short title.-Chapter 679 shall be known and may be cited as uniform commercial code-secured transactions.

Hlstory.-§1, ch. 65-254. Note.-§9-101 , U.C.C.

679.102 Policy and scope of chapter.-(1) Except as otherwise provided in §679.-

103 on multiple state transactions and in §679.104 on excluded transactions, this chap­ter applies so far as concerns any personal property and fixtures within the jurisdiction of this state:

(a) To any transaction (regardless of its form) which is intended to create a security interest in personal property or fixtures includ­ing goods, documents, instruments, general intangibles, chattel paper, accounts or contract rights; and also

(b) To any sale of accounts, contract rights or chattel paper.

(2) This chapter applies to security interests

679.108

679.109

679.110 679.111 679.112

679.113

When after-acquired collateral not security for antecedent debt.

Classification of goods; "Consumer Goods"; "Equipment" ; "Farm Products"; "Inventory".

Sufficiency of description. Applicability of bulk transfer laws. Where collateral is not owned by

debtor. Security interests arising under ar­

ticle on sales.

created by contract including pledge, assign­ment, chattel mortgage, chattel trust, trust deed, factor's lien, equipment trust, conditional sale, trust receipt, other lien or title retention contract and lease or consignment intended as security. This chapter does not apply to statu­tory liens except as provided in §679.310.

(3) The application of this chapter to a se­curity interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this chapter does not apply.

Hlstory.-U. ch. 65-254. Note.-19-102, U .C.C.

*679.103 Accounts, contract rights, general intangibles and equipment relating to another jurisdiction; and incoming goods already sub­ject to a security interest.-

(!) If the office where the assignor of ac­counts or contract rights keeps his records concerning them is in this state, the validity and perfection of a security interest therein and

*Note.-Pursuant to §69, ch . 69-353, the editors have altered the numbers of all sections making up this chapter by deleting the digit and hyphen Immediately following the decimal point. The purpose Is to conform the numbering of the Code sections with the decimal numbering system used In other chapters of the Florida Statutes. The visual relationship between Florida Statutes section numbers and Code section number Is not destroyed by this alteration; the digit preceding the decimal point coincides with the Code article number, and the digits following the decimal point coincide with the Code section numbers.

1804

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

the possibility and effect of proper filing is governed by this chapter; otherwise by the law (including the conflict of laws rules) of the jurisdiction where such office is located.

(2) If the chief place of business of a debtor is in this state, this chapter governs the validity and perfection of a security interest and the possibility and effect of proper filing with re­gard to general intangibles or with regard to goods of a type which are normally used in more than one jurisdiction (such as automotive equipment, rolling stock, airplanes, road build­ing equipment, commercial harvesting equip­ment, construction machinery and the like) if ~uch goo~s are classified as equipment or class­Ified as mventory by reason of their being leased by the debtor to others. Otherwise the law (including the conflict of laws rules') of the jurisdiction where such chief place of busi­ness is located shall govern. If the chief place of business is located in a jurisdiction which ~oes not prov~de for perfection of the security mterest by fihng or recording in that jurisdic­tion, then the security interest may be per­fected by filing in this state.

(3) If personal property other than that gov­ernt:d by subsect~on~ (1) and (2) is already subJect to a secunty mterest when it is brought ~nto thi~ sta.te, the . validity of the security mterest m th1s state 1s to be determined by the law (including the conflict of laws rules) of the jurisdiction where the property was when the security interest attached. However if the parties to the transaction understood 'at the time that the security interest attached that the property would be kept in this state and it was brought into this state within 30 days after the security interest attached for . purposes other than transportation through this state, then the validity of the security interest in this state is to be .determined by the law of this state. If the secur1ty interest was already perfected under the law of the jurisdiction where the property was when the security interest attached and before being brought into this state the secur­ity interest continues perfected in' this state for four months and also thereafter if within the four month period it is perfected in this state. ~he ~ecurity interest may also be per­fected m th1s state after the expiration of the four month period; in such case perfection dates from the time of perfection in this state. If the security interest was not perfected under the law of the jurisdiction where the property was when the security interest attached ' and before bei!lg b~ought in~o this state, it may be perfected m th1s state; m such case perfection dates from the time of perfection in this state.

( 4) Notwithstanding subsections (2) and (3), if personal property is covered by a cer­tificate of title issued under a statute of this ~ta~e o~ any other j~risdiction which requires md1cat10n on a certificate of title of any se­curity interest in the property as a condition of perfection, then the perfection is governed by the law of the jurisdiction which issued the certificate.

(5) Notwithstanding subsection (1) and §679.302, if the office where the assignor of· accounts or contract rights keeps his records concerning them is not located in a jurisdiction which is a part of the United States, its terri­tories or possessions, and the accounts or con­tract rights are within the jurisdiction of this state or the transaction which creates the se­curity interest otherwise bears an appropriate relation to this state, this chapter governs the validity and perfection of the security interest and the security interest may only be perfected by notification to the account debtor. .

Hlstory.-fl, ch . 65-254. •Note.-The above section Is not Identical with the 11162 omclal

U .C.C. text. Note.-111-103, U.C.C.

*679.104 Transactions excluded from chap­ter.-This chapter does not apply:

(1) To a security interest subject to any statute of the United States such as the ship mortgage act, 1920, to the extent that such statute governs the rights of parties to and third parties affected by transactions in par­ticular types of property; or

(2) To a landlord's lien; or (3) To a lien given by statute or other rule

of law for services or materials except as pro­vided in §679.310 on priority of such liens; or

(4) To a transfer of a claim for wages, sal-ary or other compensation of an employee; or

(5) To an equipment trust or other security device covering railroad rolling stock or equip­ment nor does it apply to any property of a railroad subject to regulation by a federal or state regulatory body; or

(6) To a sale of accounts, contract rights or chattel paper as part of a sale of the business out of which they arose, or an assignment of accounts, contract rights or chattel paper which is for the purpose of collection only, or a transfer of a contract right to an assignee who is also to do the performance under the con­tract; or

(7) To a transfer of an interest or claim in or under any policy of im:;,·ance; or

(8) To a right represented by a judgment; or

(9) To any right of set-off; or (10) Except to the extent that provision is

made for fixtures in §679.313, to the creation or transfer of an interest in or lien on real estate, including a lease or rents thereunder; or

(11) To a transfer in whole or in part of any of the following: any claim arising out of tort; any deposit, savings, passbook or like account maintained with a bank, savings and loan as­sociation, credit union or like organization . .

Hlstorr.-11. ch. 65-254. •Note.-The above section Is not Identical with the 1862 omclal

U.C.C. text. Note.-111-104, U.C.C.

679.105 Definitions and index 1 of defini­tions.-

(1) In this chapter unless the context other­wise requires:

(a) "Account debtor" means the person who

1805

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

is obligated on an account, chattel paper, con­tract right or general intangible;

(b) "Chattel paper" means a writing or writings which evidence both a monetary obli­gation and a security interest in or a lease of specific goods. When a transaction is evidenced both by such a security agreement or a lease and by an instrument or a series of instru­ments, the group of writings taken together constitutes chattel paper;

(c) "Collateral" means the property subject to a security interest, and includes accounts, contract rights and chattel paper which have been sold;

(d) "Debtor" means the person who owes payment or other performance of the obligation secured, whether or not he owns or has rights in the collateral, and includes the seller of ac­counts, contract rights or chattel paper. Where the debtor and the owner of the collateral are not the same person, the term "debtor" means the owner of the collateral in any provision of the chapter dealing with the collateral, the obligor in any provision dealing with the obli­gation, and may include both where the context so requires;

(e) "Document" means document of title as defined in the general definitions of chapter 671 ( §671.201);

(f) "Goods" includes all things which are movable at the time the security interest at­taches or which are fixtures (§679.313), but does not include money, documents, instru­ments, accounts, chattel paper, general intangi­bles, contract rights and other things in action. "Goods" also include the unborn young of ani­mals and growing crops;

(g) "Instrument" means a negotiable instru­ment (defined in §673.104), or a security (de­fined in §678.102) or any other writing which evidences a right to the payment of money and is not itself a security agreement or lease and is of a type which is in ordinary course of business transferred · by delivery with any necessary indorsement or assignment;

(h) "Security agreement" means an agree­ment which creates or provides for a security interest;

(i) "Secured party" means a lender, seller or other person in whose favor there is a security -interest, including a person to whom accounts, contract rights or chattel paper have been sold. When the holders of obligations issued under an indenture of trust, equipment trust agree­ment or the like are represented by a trustee or other person, the representative is the secured party.

(2) Other definitions applying to this chap-ter and the sections in which they appear are:

"Account". §679.106. "Consumer goods". §679.109(1). "Contract right". §679.106. "Equipment". §679.109(2). "Farm products". §679.109 (3). "General intangibles". §679.106. "Inventory". §679.109 ( 4). "Lien creditor". §679.301(3).

"Proceeds". §679.306 (1). "Purchase money security

interest." §679.107. (3) The following definitions in other chap-

ters of this code apply to this chapter: "Check". §673.104. "Contract for sale". §672.106. "Holder in due course". §673.302. "Note". §673.104. "Sale". §672.106. ( 4) In addition chapter 671 contains general

definitions and principles of construction and interpretation applicable throughout this chap­ter.

Blator,.-11, ~h. 85-254. Note.-18-105, u.c.c.; supersedes 1873.01.

679.106 Definitions: "Account"; "Contract . Right"; "General Intangibles".-" Account" means any right to payment for goods sold or leased or for services rendered which is not evidenced by an instrument or chattel paper. "Contract right" means any right .to payment under a contract not yet earned by perform­ance and not evidenced by an instrument or chattel paper. "General intangibles" means any personal property (including things in action) other than goods, accounts, contract rights, chattel paper, documents and instruments.

Hlotory.-11. ch. 85-254. Note.-18-108, U.C.C.

679.107 Definitions: "Purchase Money Se­curity Interest".-A security interest is a "pur­chase money .security interest" to the extent that it is:

(1) Taken or retained by the seller of the collateral to secure all or part of its price; or

(2) Taken by . a person who by making ad­vances or incurring an obligation gives value to enable the debtor to acquire rights in or the use of collateral if such value is in fact so used.

Hi dory .-11, ch. 85-254. Note.-18-107, U.C.C.

679.108 When after-acquired collateral not security for antecedent debt.-Where a secured party makes an advance, incurs an obligation, releases a perfected security interest, or other­wise gives new value which is to be secured in whole or in part by after-acquired property his security interest in the after-acquired collateral shall be deemed to be taken for new value and not as security for an antecedent debt if the debtor acquires his rights in such collateral either in the ordinary course of his business or under a contract or purchase made pursuant to the security agreement within a reasonable time after new value is given.

Hlatory.-11. ch. 65-254. Note.-18-108, u.c.c.; auperaedee 186.30.

679.109 Classification of goods; "Consumer Goods"; "Equipment"; "Farm Products"; "In­ventory".-Goods are:

(1) "Consumer goods" if they are used or bought for use primarily for personal, family or household purposes;

(2) "Equipment" if they are used or bought for use primarily in business (including farm-

1806

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

ing or a profession) or by a debtor who is a non-profit organization or a governmental sub­division or agency or if the goods are not in­cluded in the definitions of inventory, farm products or consumer goods;

(3) "Farm products" if they are crops or livestock or supplies used or produced in farm­ing operations or if they are products of crops or livestock in their unmanufactured states (such as ginned cotton, wool-clip, maple syrup, milk and eggs), and if they are in the posses­sion of a debtor · engaged in raising, fattening, grazing or other farming operations. If goods are farm products they are neither equipment nor inventory;

(4) "Inventory" if they are held by a person who holds them for sale or lease or to be fur­nished under contracts of service or if he has so furnished them, or if they are raw materials, work in process or materials used or consumed in a business. Inventory of a person is not to be classified as his equipment.

RlotorJ.-11. ch. 65-254 . Note.-18-108, U .C.C.

679.110 Sufficiency of description.-For the purposes of this chapter any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described; except that a de­scription of real estate in an instrument filed to perfect a security interest in crops growing or to be grown or goods which are or are to be­come fixtures shall be sufficient only if the fil­ing or recording of the same constitutes con­structive notice under the laws of this state, other than this chapter, which are applicable to the filing or recording of real estate mort­gages, and a mailing or street address alone shall not be sufficient.

RlotorJ.-11. ch. 65-254; 11. ch. 67-264. Note.-18-110, U.C.C.; supersedes 11700.01, 85.30(1) (c), 688.08,

673.08.

679.111 Applicability of bulk transfer laws.

-The creation of a security interest is not a bulk transfer under chapter 676 (see §676.103).

HI .tor,. .-11. ch. 65-254. Note.-18-111, U.C.C.; auperaedea Ch, 726.

679.112 Where collateral is not owned by debtor.-Unless otherwise agreed, when a se­cured party knows that collateral is owned by a person who is not the debtor, the owner of the collateral is entitled to receive from the se­cured party any surplus under §679.502(2) or under §679.504{1), and is not liable for the debt or for any deficiency after resale, and he has the same right as the debtor:

(1) To receive statements under §679.208; (2) To receive notice of and to object to a

secured party's proposal to retain the collateral in satisfaction of the indebtedness under §679.505; .

(3) To redeem the collateral under §679.506; (4) To obtain injunctive or other relief un­

der §679.507(1); and (5) To recover losses causea to him under

§679.208 (2). HlstorJ.-11. ch . 65-254. Note.-18-112, U.C.C.

679.113 Security interests ar1smg under article on sales.-A security interest arising solely under the chapter on sales (chapter 672) is subject to the provisions of this chapter ex­cept that to the extent that and so long as the debtor does not have or does not lawfully ob­tain possession of the goods:

(1) No security agreement is necessary to make the security interest enforceable; and

{2) No filing is required to perfect the se­curity interest; and

(3) The rights of the secured party on de­fault by the debtor are governed by the chap­ter on sales (chapter 672).

Rlstor,. .-fl. ch. 65-254. Note.-18-113, U.C.C.

PART II

VALIDITY OF SECURITY AGREEMENT AND RIGHTS OF PARTIES THERETO

679.201 679.202 679.203

679.204

679.205

General validity of security agreement. Title to collateral immaterial. Enforceability of security interest;

proceeds, formal requisites. When security interest attaches.; af­

ter-acquired property; future ad­vances.

Use or disposition of collateral with­out accounting permissible.

679.201 General validity of security agree­ment.-Except as otherwise provided by this code a security agreement is effective according to its terms between the parties, against pur­chasers of the collateral and against creditors. Nothing in this chapter validates any charge or practice illegal under any statute or regula­tion thereunder governing usury, small loans, retail installment sales, or the like, or extends

679.206 Agreement not to assert defenses against assignee; modification of sales warranties where security agreement exists.

679.207 Rights and duties when collateral is in secured party's possession.

679.208 Request for statement of account or list of collateral.

the application of any such statute or regula­tion to any transaction not otherwise subject thereto. RlatorJ~fl. ch. 65-254. Note.-18-201, u.c.c.; supersedes 1873.03.

679.202 Title to collateral immaterial.­Each provision of this chapter with regard to rights, obligations and remedies applies

1807

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

whether title to collateral is in the secured party or in the debtor.

History .-11. ch. 65-254. · Note.-§8-202, u.c.c.; supersedes 11673.02, 688.03, 888.05.

679.203 Enforceability of security inter­est; proceeds, formal requisites.-

( I) Subject to the provisions of §674.208 on the security interest of a collecting bank and §679.113 on a security interest arising under the chapter on sales, a security interest is not enforceable against the debtor or third parties unless:

(a) The collateral is in the possession of the secured party; or

(b) The debtor has signed a security agree­ment which contains a description of the col­lateral and in addition, when the security in­terest covers crops or oil, gas or minerals to be extracted or timber to be cut, a description of the land concerned. In describing collateral, the word "proceeds" is sufficient without further description to cover proceeds of any character.

(2) A transaction, although subject to this chapter, is also subject to Chs. 516, 519, 520, F. S., and in the case of conflict between the provisions of this chapter and any such statute, the provisions of such statute control. Failure to comply with any applicable statute has only the effect which is specified therein.

Hlatory.-U. ch . 65-254. Nole.-§8-203, U.C.C.; supersedes 1673.02.

(b) To consumer goods other than acces­sions (§679.314) when given as additional se­curity unless the debtor acquires rights in them within ten days after the secured party gives value.

(5) Obligations covered by a security agree­ment may include future advances or other value whether or not the advances or value are given pursuant to commitment.

Hlotory .-Art. 10, fl, ch. 65-254. •Note.-The above section Ia not Identical with the 1882 o111.cla1

U .C.C. text. Note.-18-204, U.C.C.; supersedes 11888.04, 811t.05, 700.01.

ct.-1687.04 Future advances may be secured.

679.205 Use or disposition of collateral without accounting permissible.-A security in­terest is not invalid or fraudulent against credi· tors by reason of liberty in the debtor to use, commingle or dispose of all or part of the collateral (including returned or repossessed goods) or to collect or compromise accounts, contract rights or chattel paper, or to accept the return of goods or make repossessions, or to use, commingle or dispose of proceeds, or by reason of the failure of the secured party to require the debtor to account for proceeds or replace collateral. This section does not relax the requirements of possession where perfec­tion of a security interest depends upon posses­sion of the collateral by the secured party or by a bailee.

Hlatory.-11. ch. 65-254. Note.-f9-205, U.C.C.

*679.204 When security interest attaches; 679.206 Agreement not to assert defenses after-acquired property; future advances.- against assignee; modification of sales warran-

,(1) A security interest cannot attach until ties where security agreement exists.-there is agreement (§671.201 (3)) that it at- (1) Subject to any statute or decision which tach and value is given and the debtor has establishes a different rule for buyers or lessees rights in the collateral. It attaches as soon as of consumer goods, an agreement by a buyer or all of the events in the preceding sentence have lessee that he will not assert against an as­taken place unless explicit agreement postpones signee any claim or defense which he may have the time of attaching. against the seller or lessor is enforceable by

(2) For the purposes of this section the an assignee who takes his assignment for value, debtor has no rights: in good faith and without notice of a claim or

(a) In crops until they are planted or other- defense, except as to defenses of a type which wise become growing crops, in the young of may be asserted against a holder in due course livestock until they are conceived; of a negotiable instrument under the chapter

(b) In fish until caught, in oil, gas or min- on commercial paper (chapter 673). A buyer erals until they are extracted, in timber until who as part of one transaction signs both a it is cut; negotiable instrument and a security agreement

(c) In a contract right until the contract has makes such an agreement. been made; (2) When a seller retains a purchase money

(d) In an account until it comes into exist- security interest in goods the chapter on sales ence. (chapter 672) governs the sale and any dis-

(3) Except as provided in subsection (4) a claimer, limitation or modification of the sell­security agreement may provide that collateral, er's warranties. whenever acquired, shall ·secure all obligations Hiatory.-U. ch. 85-254. covered by the security agreement. Note.-18-208. u.c.c.

(4) No security interest attaches under an 679.207 Rights and duties when collateral after-acquired property clause: is in secured party's possession.-

(a) To crops which become such more than (1) A secured party must use reasonable seven years after the security agreement is exe- care in the custody and preservation of col­cuted except that a security interest in crops lateral in his possession. In the case of an in­which is given in conjunction with a lease or strument or chattel paper reasonable care a land purchase or improvement transaction includes taking necessary steps to preserve evidenced by a contract, mortgage or deed of rights against prior parties unless otherwise trust may if so agreed attach to crops to be agreed. grown on the land concerned during the period (2) Unless otherwise agreed, when collateral of such real estate transaction; is in the secured party's possession:

1808

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

(a) Reasonable expenses (including the cost of any insurance and payment of taxes or other charges) incurred in the custody, preservation, use or operation of the collateral are charge­able to the debtor and are secured by the collateral;

(b) The risk of accidental loss or damage is on the debtor to the extent of any deficiency in any effective insurance coverage;

(c) The secured party may hold as addi­tional security any increase or profits (except money) received from the collateral, but money so received, unless remitted to the debtor, shall be applied in reduction of the secured obliga­tion;

(d) The secured party must keep the col­lateral identifiable but fungible collateral may be commingled;

(e) The secured party may repledge the col­lateral upon terms which do not impair the debtor's right to redeem it.

(3) A secured party is liable for any loss caused by his failure to meet any obligation imposed by the preceding subsections but does not lose his security interest.

(4) A secured party may use or operate the collateral for the purpose of preserving the collateral or its value or pursuant to the order of a court of appropriate jurisdiction or, except in the case of consumer goods, in the manner and to the extent provided in the security agreement.

Blstor;r.-11, ch. 65-254. Note.-18-207, U.C.C.

ct.-1818.04 Selling collateral security before debt due.

679.208 Request for statement of account or list of collateral.-

(1) A debtor may sign a statement indicat­ing what he believes to be the aggregate

amount of unpaid indebtedness as of a specified date and may send it to the secured party with a request that the statement be approved or corrected and returned to the debtor. When the security agreement or any other record kept by the secured party identifies the collateral a debtor may similarly request the · secured party to approve or correct a list of the collateral.

(2) The secured party must comply with such a request within two weeks after receipt by sending a written correction or approval. If the secured party claims a security interest in all of a particular type of collateral owned by the debtor he may indicate that fact in his reply and need not approve or correct an item­ized list of such collateral. If the secured party without reasonable excuse fails to comply he is liable for any loss caused to the debtor thereby; and if the debtor has properly in­cluded in his request a good faith statement of the obligation or a list of the collateral or both the secured party may claim a security interest only as shown in the statement against persons misled by his failure to comply. If he no longer has an interest in the obligation or collateral at the time the request is received he must disclose the name and address of any successor in interest known to him and he is liable for any loss caused to the debtor as a result of failure to disclose. A successor in in­terest is not subject to this section until a request is received by him.

(3) A debtor is entitled to such a statement once every six months without charge. The se­cured party may require payment of a charge not exceeding $10 for each l!.dditional state­ment furnished.

Hlstor:r.-11, en . 65-254. Note.-18-208, u.c.c.; supersedes 1688.03.

PART III

679.301

679.302

679.303

679.304

679.305

679.306

679.307 679.308

RIGHTS OF THIRD PARTIES; PERFECTED AND UNPERFECTED SECURITY INTERESTS; RULES OF PRIORITY

Persons who take priority over on­perfected security interests; "Lien Creditor".

When filing is required to perfect security interest; security inter­ests to which filing provisions of this chapter do not apply.

When security interest is perfected; continuity of perfection.

Perfection of security interest in in­struments, documents, and goods covered by documents; perfection by permissive filing; temporary perfection without filing or trans­fer of possession.

When possession by secured party perfects security interest without filing.

"Proceeds"; secured party's rights on disposition of collateral.

Protection of buyers of goods. Purchase of chattel paper and non­

negotiable instruments.

679.309

679.310

679.311

679.312

679.313

679.314 679.315

679.316 679.317

679.318

1809

Protection of purchasers of instru­ments and documents.

Priority of certain liens arising by operation of law.

Alienability of debtor's rights: ju­dicial process.

Priorities among conflicting secur­ity interests in the same collateral.

Priority of security interests in fix­tures.

Accessions. Priority when goods are commingled

or processed. Priority subject to subordination. Secured party not obligated on con­

tract of debtor. Defenses against assignee; modifi­

cation of contract after notification of assignment; term prohibiting assignment ineffective; identifica­tion and proof of assignment.

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

679.301 Persons who take priority over un­perfected security interests; ''Lien Creditor".­

(1) Except as otherwise provided in subsec­tion (2), an unperfected security interest is subordinate to the rights of:

(a) Persons entitled to ·priority under §679.312;

(b) A person who becomes a lien creditor without knowledge of the security interest and before it is perfected;

(c) In the case of goods, instruments, docu­ments, and chattel paper, a person who is not a secured party and who is a transferee in bulk or other buyer not" in ordinary course of business to the extent that he gives value and receives delivery of the collateral without knowledge of the security interest and before it is perfected;

(d) In the case of accounts, contract rights, and general intangibles, a person who is not a secured party and who is a transferee to the extent that he gives value without knowledge of the security interest and before it is per­fected.

(2) If the secured party files with respect to a purchase money security interest before or within ten days after the collateral comes into possession of the debtor, he takes priority over the rights of a transferee in bulk or of a lien creditor which arise between the time the se­curity interest attaches and the time of filing.

(3) A "lien creditor" means a creditor who has acquired a lien on the property involved by attachment, levy or the like and includes an assignee for benefit of creditors from the time of assignment, and a trustee in bankruptcy from the date of the filing of the petition or a receiver in equity from the time of appoint­ment. Unless all the creditors represented had knowledge of the security interest such a rep­resentative of creditors is a lien creditor with­out knowledge even though he personally has knowledge of the security interest.

Biotory.-11, cb. 65-2M. NIKe.-18-301, U.C.C. ; supersedes 11613.08(2), 613.08(2) (b),

1188.01, 888.01, 100.02, 85.30, 85.25(2)(b), 613.08. cf.-1113.06 Liens of persons not In privity ; proper payments.

679.302 When filing is required to perfect security interest; security interests to which filing provisions of this chapter do not apply.­

(1) A financing statement must be filed to perfect all security interests except the follow­ing:

(a) A security interest in collateral in pos­session of the secured party under §679.305;

(b) A security interest temporarily per­fected in instruments or documents without de­livery under §679.304 or in proceeds for a 10 day period under §679.306;

(c) A purchase money security interest in farm equipment having a purchase price not in excess of $2500; but filing is required for a fixture under §679.313;

(d) A purchase money security interest in consumer goods; but filing is required for a fixture under §679.313;

(e) An assignment of accounts or contract rights which does not alone or in conjunction

with other assignments to the same assignee transfer a significant part of the outstanding accounts or contract rights of the assignor;

(f) A security interest of a collecting bank (§674.208) or arising under the chapter on sales (see §679.113) or covered in subsection (3) of this section.

(2) If a secured party assigns a perfected security interest, no filing under this chapter is required in order to continue the perfected status of the security interest against creditors of and transferees from the original debtor.

(3) The filing provisions of this chapter do not apply to a security interest in property subject to a statute:

(a) Of the United States which provides for a national registration or filing of all security interests in such property; or

*(b) Of this state which provides for central filing of security interest in such property, or in a motor vehicle which is not inventory held for sale for which a certificate of title is re­quired under the statutes of this state if a notation of such a security interest can be indica·ted by a public official on a certificate or a duplicate thereof.

( 4) A security interest in property covered by a statute described in subsection (3) can be perfected only by registration or filing under that statute or by indication of the security interest on a certificate of title or a duplicate thereof by a public official.

Hls&ory.-fl, cb . 65-2M. •Note.-The 1862 offtclal text of paragraph (b) was drafted

In two alternatives (A and B) . Alternative B was adopted In Florida.

No&e.-18-302, U.C.C. ; supersedes 11613.08, 28.22.

679.303 When security interest is perfected; continuity of perfection.-

(!) A security interest is perfected when it has attached and when all of the applicable steps required for perfection have been taken. Such steps are specified in §§679.302, 679.304-679.306. If such steps are taken before the se­curity interest attaches, it is perfected at the time when it attaches.

(2) If a security interest is originally per­fected in any way permitted under this chapter and is subsequently perfected in some other way under this chapter, without an intermedi­ate period when it was unperfected, the secur­ity interest shall be deemed to be perfected continuously for the purposes of this chapter.

Hldory.-11, cb. 65-2M. Note.- 18-303, U.C.C. ; supersedes 11688.01, 85.30, 100.02, 811.01,

673.08, 28.221, 688.08.

679.304 Perfection of security interest in instruments, documents, and goods covered by documents; perfection by permissive filing; temporary perfection without filing or transfer

. of possession.-( I) A security interest in chattel paper or

negotiable documents may be perfected by fil­ing. A security interest in instruments (other than instruments which constitute part of chattel paper) can be perfected only by the secured party's taking possession, except as provided in subsections (4) and (5).

1810

UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

(2) During the period that goods are in the possession of the issuer of a negotiable docu­ment therefor, a security interest in the goods is perfected by perfecting a security interest in the document, and any security interest in the goods otherwise perfect.ed during such period is subject thereto.

(3) A security interest in goods in the pos­session of a bailee other than one who has is­sued a negotiable document therefor is per­fected by issuance of a document in the name of the secured party or by the bailee's receipt of notification of the secured party's interest or by filing as to the goods.

( 4) A security interest in instruments or negotiable documents is perfected without fil­ing or the taking of possession for a period of 21 days from the time it attaches to the extent that it arises for new value given under a written security agreement.

(5) A security interest remains perfected for a period of 21 days without filing where a se­cured party having a perfected security inter­est in an instrument, a negotiable document or goods in possession of a bailee other than one who has issued a negotiable document there­for:

(a) Makes available to the debtor the goods or documents representing the goods for the purpose of ultimate sale or exchange or for the purpose of loading, unloading, storing, ship­ping, transshipping, manufacturing, processing or otherwise dealing with them in a manner preliminary to their sale or exchange; or

(b) Delivers the instrument to the debtor for the purpose of ultimate sale or exchange or of presentation, collection, renewal or regis­tration of transfer.

(6) After the 21 day period in subsections (4) and (5) perfection depends upon compli­ance with applicable provisions of this chapter.

Rlo&or7 .-11. ch. 65-25,. Nole.-18-30,, u.c.c.; supersedes 11673.03, 613.08(1), 688.01,

678.33.

679.305 When possession by secured party perfects security interest without filing.-A se­curity interest in letters of credit and advices of credit (§675.116 (2) (a)), goods, instru­ments, negotiable documents or chattel paper may be perfected by the secured party's taking possession of the collateral. If such collateral other than goods covered by a negotiable docu­ment is held by a bailee, the -secured party is deemed to have possession from the time the bailee receives notification of the secured party's interest. A security interest is perfected by possession from the time possession is taken without relation back and continues only so long as possession is retained, unless otherwise specified in this chapter. The security interest may be otherwise perfected as provided in this chapter before or after the period of possession by the secured party. Blo&or7~11. ch. 85-2M. Nole.-18-305, u.c.c.; supersedes 11688.01, 678.".

679.306 "Proceeds"; secured party's rights on disposition of collateral.-

(1) "Proceeds" includes whatever is received when collateral or proceeds is sold, exchanged, collected or otherwise disposed of. The term also includes the account arising when the right to payment is earned under a contract right. Money, checks and the like are "cash proceeds". All other proceeds are "non-cash proceeds".

(2) Except where this chapter otherwise provides, a security interest continues in col­lateral notwithstanding sale, exchange or other disposition thereof by the debtor unless his action was authorized by the secured party in the -security agreement or otherwise, and also continues in any identifiable proceeds including collections received by the debtor.

(3) The security interest in proceeds is a continuously perfected security interest if the interest in the original collateral was perfected but it ceases to be a perfected security inter­est and becomes unperfected ten days after receipt of the proceeds by the debtor unless:

(a) A filed financing statement covering the original collateral also covers proceeds; or

(b) The security interest in the proceeds is perfected before the expiration of the ten day period.

( 4) In the event of insolvency proceedi~gs instituted by or against a debtor, a secured party with a perfected security interest in pro­ceeds has a perfected security interest:

(a) In identifiable non-cash proceeds; (b) In identifiable cash proceeds in the form

of money which is not commingled with other money or deposited in a bank account prior to the insolvency proceedings;

(c) In identifiable cash p.roceeds in the form of checks and the like which are not deposited in a bank account prior to the insolvency pro­ceedings; and

(d) In all cash and bank accounts of the debtor, if other cash proceeds have been com­mingled or deposited in a bank account, but the perfected security interest under this para­graph(d) is:

1. Subject to any right of set-off; and 2. Limited to an amount not greater than

the amount of any cash proceeds received by the debtor within ten days before the institu­tion of the insolvency proceedings and com­mingled or deposited in a bank account prior to the insolvency proceedings less the amount of cash proceeds received by the debtor and paid over to the secured party during the ten day period.

(5) If a sale of goods results in an account or chattel paper which is transferred by the seller to a secured party, and if the goods are returned to or are repossessed by the seller or the secured party, the following rules deter­mine priorities:

(a) If the goods were collateral at the time of sale for an indebtedness of the seller which is still unpaid, the original security interest at­taches again to the goods and continues as a perfected security interest if it was perfecied

1811

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS

at the time when the goods were sold. If the security interest was originally perfected by a filing which is still effective, nothing further is required to continue the perfected status; in any other case, the secured party must take possession of the returned or repossessed goods or must file.

(b) An unpaid transferee of the chattel paper has a security interest in the goods against the transferor. Such security interest is prior to a security interest asserted under paragraph (a) to the extent that the transferee of the chattel paper was entitled to priority under §679.308.

(c) An unpaid transferee of the account has a security interest in the goods against the transferor. Such security interest is subordi­nate to a security interest asserted under para­graph (a).

(d) A security interest of an unpaid trans­feree asserted under paragraph (b) or (c) must be perfected for protection against creditors of the transferor and purchasers of the returned or repossessed goods.

Bla&ory.-11. ch. 65-254. Note.-18-306, U.C.C.; supersedes 11613.10, 85.30.

cf.-Ch. 818 Sale of mortgaged personal property; similar olfenses.

679.307 Protection of buyers of goods.-(1) A buyer in ordinary course of business

. (§671.201 (9)) other than a person buying farm products from a person engaged in farm­ing operations takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.

(2) In the case of consumer goods and in the case of farm equipment having an original purchase price not in excess of $2500 (other than fixtures, see §679.313), a buyer takes free of a security interest even though perfected if he buys without knowledge of the security in­terest, for value and for his own personal, family or household purposes or his own farm­ing operations unless prior to the purchase the secured party has filed a financing statement covering such goods.

History.-§!, ch. 65·254. Note.-18-301, u.c.c.; supersedes 11613.08(2), 85.30.

679.308 Purchase of chattel paper and non-negotiable instruments.-A purchaser of chattel paper or a non-negotiable instrument who gives new value and takes possession of it in the ordinary course of his business and with­out knowledge that the specific paper or instru­ment is subject to a security interest has pri­ority over a security interest which is perfected under §679.304 (permissive filing and tempo­rary perfection). A purchaser of chattel paper who gives new value and takes possession of it in the ordinary course of his business has pri­ority over a security interest in chattel paper which is claimed merely as proceeds of inven­tory subject to a security interest (§679.306), even though he knows that the specific paper is subject to the security interest.

Bla&or:r.-11. ch. 65-254. Note.-18-308, U.C.C.; supersedes 11613.08(1) (a), 613.10.

679.309 Protection of purchasers of instru­ments and documents.-Nothing in this chapter limits the rights of a holder in due course of a negotiable instrument ( §673.302) or a holder to whom a negotiable document of title has been duly negotiated (§677.501) or a bona fide purchaser of a security (§678.301) and such holders or purchasers take priority over an earlier security interest even though per­fected. Filing under this chapter does not con­stitute notice of the security interest to · such holders or purchasers.

Hlstor:r.-11, ch. 65-254. Note.-18-308, U.C.C.; supersedes 1613.08(1) (a).

679.310 Priority of certain liens arising by operation of law.-When a person in the ordi­nary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the pos­session of such person given by statute or rule of law for such materials or services takes pri­ority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise.

HlstorJ.-11. ch. 65-254. Note.-ID-310, U.C.C. ; supersedes 1673.11.

cf.-1713.74 Acquisition of liens by persons In privity with the owner-as to personal property.

679.311 Alienability of debtor's rights: ju­dicial process.-The debtor's rights in collat­eral may be voluntarily or involuntarily trans­~erred (by way of sale, creation of a security mterest, attachment, levy, garnishment or other ~udicial process) notwithstanding a provision m the security agreement prohibiting any transfer or making the transfer constitute a default.

History .-11. ch. 65-254. Note.-18-311, U.C.C.; supersedes f6DD.OD.

cf.-156.061 Property subject to execution.

679.312 Priorities among conflicting secur­ity interests ,in the same collateral.-

(1) The rules of priority stated in the fol­lowi.ng sections shall govern where applicable: sectwn 674.208 with respect to the security in­terest of collecting banks in items being col-lect~d, accompanying documents and proceeds; sectwn 679.301 on certain priorities; section 6_79.304 on goods covered by documents; sec­twn. 679.306 on proceeds and repossessions; sectwn 679.307 on buyers of goods; section ~79.308 o~ possessory against non-possessory mterests m chattel paper or non-negotiable in­struments; section 679.309 on security inter­ests -in negotiable instruments, documents or se­curities; section 679.310 on priorities between P.erfected security interests and liens by opera­tion of law; section 679.313 on security in­terests in fixtures as against interests in real estate; section 679.314 on security interests in accessions as against interest in goods; section 679.315 on conflicting security interests where goods l()se their identity or become part of a product; and section 679.316 on contractual subordination.

(2) A perfected security interest in crops for new value given to enable the debtor to

1812

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

produce the crops during the production sea­son and given not more than three months be­fore the crops become growing crops by plant­ing or otherwise takes priority over an earlier perfected security interest to the extent that such earlier interest secures obligations due more than six months before the crops become growing crops by planting or otherwise, even though the person giving new value had knowl­edge of the earlier security interest.

(3) A purchase money security interest in inventory collateral has priority over a conflict­ing security interest in the same collateral if:

(a) The purchase money security interest is perfected at the time the debtor receives pos­session of the collateral; and

(b) Any secured party whose security inter­est is known to the holder of the purchase money security interest or who, prior to the date of the filing made by the holder of the purchase money security interest, had filed a financing statement covering the same items or type of inventory, has received notification of the purchase money security interest before the debtor receives possession of the collateral covered by the purchase money security inter­est; and

(c) Such notification states that the person giving the notice has or expects to acquire a purchase money security interest in inventory of the debtor, describing such inventory by item or type.

( 4) A purchase money security interest in collateral other than inventory has priority over a conflicting security interest in the same collateral if the purchase money security inter­est is perfected at the time the debtor receives possession of the collateral or within ten days thereafter.

(5) In all cases not governed by other rules stated in this section (including cases of pur­chase money security interests which do not qualify for the special priorities set forth in subsections (3) and (4) of this section), pri­ority between conflicting security interests in the same collateral shall be determined as follows:

(a) In the order of filing if both are per­fected by filing, regardless of which security interest attached first under §679.204(1) and whether it attached before or after filing;

(b) In the order of perfection unless both are perfected by filing, regardless of which security interest attached first under §679.-204(1) and, in the case of a filed security in­terest, whether it attached before or after fil­ing; and

(c) In the order of attachment under ~679.204(1) so long as neither is perfected.

(6) For the purpose of the priority rules of the immediately preceding subsection, a con­tinuously perfected security interest shall be treated at all times as if perfected by filing if it was originally so perfected and it shall be treated at all times as if perfected otherwise

than by filing if it was originally perfected otherwise than by filing.

Hislor:r.-11, ch. 65-254 . Nole.-18-312, U.C.C.; supersedes Chs. 700, 688.

679.313 Priority of security interests in fixtures.-

( I) The rules of this section do not apply to goods incorporated into a structure in the man­ner of lumber, bricks, tile, cement, glass, metal work and the like and no security interest in them exists under this chapter unless the struc­ture remains personal property under applica­ble law. The law of this state other than this code determines whether and when other goods become fixtures. This code does not prevent creation of an encumbrance upon fixtures or real estate pursuant to the law applicable to real estate.

(2) (a) A security interest which attaches to goods which are or become fixtures is invalid against any person with an interest in the real estate at the time the security interest in the goods is perfected or at the time the goods are affixed to the real estate, whichever occurs later, who has not in writing consented to the security interest or disclaimed an interest in the goods as fixtures.

(b) A security interest in goods which are or become fixtures takes priority as to the goods over the claims of all persons acquiring in­terests in the real estate subsequent to the per­fection of such security interest or the affixing of the goods to the real estate, whichever oc­curs later.

(3) (a) When under subsections (2) or (3) a secured party has priority over the claims of all persons who have interests in the real es­tate, he may, on default, subject to the provi­sions of part V, remove his collateral from the real estate but he must reimburse any encum­brancer or owner of the real estate who is not the debtor and who has not otherwise agreed for the cost of repair of any physical injury, but not for any diminution in value of the real estate caused by the absence of the goods re­moved or by any necessity for replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate security for the performance of this obligation.

(b) The secured party shall give reasonable notification of his intention to remove the col­lateral to all persons entitled to reimbursement.

Blolor:r.-11. ch. 65-254; 12, ch. 67-264. Nole.-18-313, U.C.C.

cf.-156.061 Property subject to execution. 1520.31 Deftnitions. 1713.15 Repossession of materials not used.

679.314 Accessions.-(!) A security interest in goods which at­

taches before they are installed in or affixed to other goods takes priority a-s to the goods installed or affixed (called in this section "ac­cessions") over the claims of all persons to the whole except as stated in subsection (3) and subject to §679.315 (1).

(2) A security interest which attaches to goods after they become part of a whole is

1813

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

valid against all persons subsequently acquir­ing interests in the whole except as stated in subsection (3) but is invalid against any person with an interest in the whole at the time the security interest attaches to the goods who has not in writing consented to the security inter­est or disclaimed an interest in the goods as part of the whole.

(3) The security interests described in sub­sections (1) and (2) do not take priority over:

(a) A subsequent purchaser for value of any interest in the whole; or

(b) A creditor with a lien on the whole sub­sequently obtained by judicial proceedings; or

(c) A creditor with a prior perfected secur­ity interest in the whole to the extent that he makes subsequent advances. If the subsequent purchase is made, the lien by judicial proceedings obtained or the subse­quent advance under the prior perfected se­curity interest is made or contracted for with­out knowledge of the security interest and before it is perfected. A purchaser of the whole at a foreclosure sale other than the holder of a perfected security interest purchasing at his own foreclosure sale is a subsequent purchaser within this section.

(4) When under subsections (1) or (2) and (3) a secured party has an interest in acces­sions which has priority over the claims of all persons who have interests in the whole, he may on default subject to the provisions of part V remove his collateral from the whole but he must reimburse any encumbrancer or owner of the whole who is not the debtor and who has not otherwise agreed for the cost of repair of any physical injury but not for any diminution in value of the whole caused by the absence of the goods removed or by any necessity for replacing them. A person en­titled to reimbursement may refuse permission to remove until the secured party gives ade­quate security for the performance of this obligation.

Bil&o17.-11. ch. 65-254. No&e.-18-3U, U .C.C.

679.315 Priority when goods are com­mingled or processed.-

(!) If a security interest in goods was per­fected and subsequently the goods or a part thereof have become part of a product or mass, the security interest continues in the product or mass if: ·

(a) The goods are so manufactured, proc­essed, assembled or commingled that their iden­tity is lost in the product or mass; or

(b) A financing statement covering the orig­inal goods also covers the product into which the goods have been manufactured, processed or assembled. In a case to which paragraph (b) applies, no separate security interest in that part of the original goods which has been manufactured, processed or assembled into the product may be claimed under §679.314.

(2) When under subsection (1) more than

one security interest attaches to the product or mass, they rank equally according to the ratio that the cost of the goods to which each inter­est originally attached bears to the cost of the total product or mass.

Blo&o1'7.-11. ch. 65-254. No&e.-18-315, U.C.C.

679.316 Priority subject to subordination.­Nothing in this chapter prevents subordination by agreement by any person entitled to priority.

Blo&oJ'7.-11, cb. 65-254. No&e.-18-316, U.C.C.

679.317 Secured party not obligated on con­tract of debtor.-The mere existence of a se­curity interest or authority given to the debtor to dispose of or use collateral does not impose contract or tort liability upon the secured party for the debtor's acts or omissions.

Blo&orr.-11, ch. 65-254. No&e.-18-317, U.C.C.; supersedes 1673.12.

679.318 Defenses against assignee; modifi­cation of contract after notification of assign­ment; term prohibiting assignment ineffective; identification and proof of assignment.-

(!) Unless an account debtor has made an en­forceable agreement not to assert defenses or claims arising out of a sale as provided in §679.206 the rights of an assignee are subject to:

(a) All the terms of the contract between the account debtor and assignor and any de­fense or claim arising therefrom; and

(b) Any other defense or claim of the ac­count debtor against the assignor which ac­crues before the account debtor receives noti­fication of the assignment.

(2) So far as the right to payment under an assigned contract right has not already become an account, and notwithstanding notification of the assignment, any modification of or sub­stitution for the contract made in good faith and in accordance with reasonable commercial standards is effective against an assignee un­less the account debtor has otherwise agreed but the assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that such modification or substitution is a breach by the assignor.

(3) ~he accou!lt debtor is authorized to pay the assignor until the account debtor receives notification that the account has been assigned and t~at p~yment _is to be made to the assignee. A notificatiOn which does not reasonably iden­tify the rights assigned is ineffective. If re­quested by the account debtor, the assignee must s~asonably furnish reasonable proof that the assignment has been made and unless he d?es so the account debtor may pay the as­signor.

( 4) A term in any contract between an ac­cou!lt debtor and an assignor which prohibits ass.tgnment of an account or contract right to whtch they are parties is ineffective. '

Blo&orr.-11. ch. 65-254. No&e.-18-318, U.C.C. ; supersedes 1873.08(3).

1814

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

PART IV

FILING

679.401 Place of filing; erroneous filing; re­moval of collateral.

679.4011 Filing and recording with clerk of circuit court in Florida.

679.402 Formal requisites of financing state­ment; amendments.

679.403 What constitutes filing; duration of filing; effect of lapsed filing; du­ties of filing officer.

679.401 Place of filing; erroneous . filing; removal of collateral.-

*(!) The proper place to file in order to per­fect a security interest is as follows:

(a) When the collateral is equipment used in farming operations, or farm products, or ac­counts, contract rights or general intangibles arising from or relating to the sale of farm products by a farmer, or consumer goods, then by recording in the office of the clerk of the circuit court in the county of the debtor's resi­dence or if the debtor is not a resident of this state then by recording in the office of the clerk of the drcuit court ~n the county where the goods are kept, and in addition when the col­lateral is crops by recording in the office of the clerk of the circuit court in the county where the land on which the crops are growing or to be grown is located;

(b) When the collateral is goods which at the time the security interest attaches are or are to become fixtures, then by recording in the office and in the record where a mortgage on the real estate concerned would be recorded;

(c) In all other cases, by filing in the office of the department of state.

(2) Except as provided in §679.313 (2), a filing which is made in good faith in an im­proper place or in fewer than all of the places required by this section is nevertheless effec­tive with regard to any collateral as to which the filing complied with the requirements of this chapter, and such filing is also effective with regard to collateral covered by the financ­ing statement against any person who has knowledge of the contents of such financing statement.

*(3) Except as provided in §679.313(2), a filing which is made in the proper place in this state continues effective even though the debt­or's residence or place of business or the loca­tion of the collateral or its use, whichever con­trolled the original filing, is thereafter changed.

( 4) If collateral is brought into this state from another jurisdiction, the rules stated in §679.103 determine whether filing is neces­sary in this state.

Blotory.-11. ch. 65-254; f3, ch. 67-264; 1110, 35, ch. 68-106. •Note.-In the 1862 omclal test subsection (1) was drafted with

three altematlvea and subsection (3) was drafted with two al­ternatives. Florida adopted the above versions of these subsec­tions.

No&e.-18-401, U.C.C.; auperaedea 1873.04, 85.30.

679.4011 Filing and recording with clerk of circuit court in Florida.-The filing of a writing

679.404 Termination statement. 679.405 Assignment of security interest; du­

ties of filing officer; fees. 679.406 Release of collateral; duties of filing

officer; fees. 679.407 Information from filing officer.

in the office of a clerk of the circuit court under this chapter shall be complete and sufficient only if the writing is recorded in the office of the appropriate clerk of the circuit court, in the official records book of such office or in such record book as shall be designated by the clerk of the circuit court for such purpose. Any writ­ing required or permitted to be filed in such of­fice by any provisions of this chapter shall be entitled to be recorded without oath, acknowledg­ment or proof of its execution. In all other respects such recording shall be in the manner provided in chapter 695, F. S., for recording of conveyances of real property, and in the man­ner and upon payment of fees as provided in chapter 28, F. S. The record of such writing shall be held . for public inspection in lieu of the original. No writing under this chapter shall be deemed filed in the office of the clerk of the circuit court unless such writing shall be recorded as provided in this section.

Hlstor:r.-11, en. 65-254. Note.-New section added, applicable In Florida only.

679.402 Formal requisites of financing statement; amendments.-:-

(!) (a) A financing statement is sufficient if it is signed by the debtor and the secured party, gives an address of ~he secured party from which information concerning the security interest may be obtained, gives a mailing ad­dress of the debtor, and contains a statement indicating the types, or describing the items, of collateral. A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.

(b) When the financing statement covers crops growing or to be grown or goods which are, are to, or thereafter become fixtures, the statement must also contain a sufficient legal description of the real estate concerned (a mailing or street address not being sufficient) and the name of the ·record owner or record lessee thereof. A copy of the security agree­ment is sufficient as a financing statement if it contains the above information and is signed by both parties.

(2) A financing statement which otherwise complies with subsection (1) is sufficient al­though it is signed only by the secured party when it is filed to perfect a security interest in:

(a) Collateral already subject to a security interest in another jurisdiction when it is brought into this state. Such a financing state-

1815

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

ment must state that the collateral was brought into this state under such circumstances.

(b) Proceeds under §679.306 if the security interest in the original collateral was per­fected. Such a financing statement must de­scribe the original collateral.

(3) A form substantially as follows is suffi-cient to comply with subsection (1):

Name of debtor (or assignor) ----------------------------Address -----------------------------------------------------------------Name of secured party (or assignee) ___________ __ _

Address ------------------------------------------------------------------(a) This financing statement covers the fol­

lowing types (or items) of property: (Describe) ----------------------------------------------------------------------(b) (If couateral IS crops) The above-de­

scribed crops are growing or are to be grown on:

(Describe real estate by legal description; a mailing or street address is not sufficient. ) Rec­ord owner (or record lessee) of said real estate

(c) (If collateral is goods which are, are to, or thereafter become fixtures) The above­described goods are affixed, or are to be affixed, to:

(Describe real estate by legal description; a mailing or street address is not sufficient.) Record owner (or record Jessee) of said real estate -------------------------------------------------------------------------

(d ) (If proceeds or products of collateral are claimed) Proceeds-products of the collat­eral are also covered.

Signature of debtor (or assignor) _______________ _ Signature of secured party (or assignee) ____ _

------------------------------------------------------------( 4) The term "financing state-me-nt·,-,--as--used

in this chapter means the original financing statement and any amendments but if any amendment adds collateral, it is effective as to the added collateral only from the filing date of the amendment.

(5) A financing statement substantially com­plying with the requirements of this section is effective even though it contains minor errors which are not seriously misleading.

(6) The department of state may promul­gate approved and uniform forms of financing statements and other instruments to be filed with the department of state pursuant to this chapter. Any person filing any instrument per­mitted or required to be filed under this chap­ter with the department of state on a form other than the approved or uniform form of the department of state shall pay a fee of $3 in addition to the fee required by §15.091, F. S.

Bldory.-11. ch. 65-25'; H , ch. 67-26• ; 11. ch. 67-335; 1110, 35, ch . 69-IOO; §20, ch . 71-114.

Nole.-18-•02, U .C.C.

•679.403 What constitutes filing; duration of filing; effect of lapsed filing; duties of filing officer.-

(1) Presentation for filing of a financing statement and tender of the filing fee or ac­ceptance of the statement by the filing officer

and recording in compliance with section 679.-4011, where required, constitutes filing under this chapter.

( 2 ) A filed financing statement which states a maturity date of the obligation secured of five years or less is effective until such ma­turity date and thereafter for a period of sixty days. Any other filed financing statement is ef­fective for a period of five years from the date of filing. The effectiveness of a filed financing statement lapses on the expiration of such sixty day period after a stated maturity date or on the expiration of such five year period, as the case may be, unless a continuation statement is filed prior to the lapse. Upon such lapse the se­curity interest becomes unperfected. A filed financing statement which states that the obli­gation secured is payable on demand is effec­tive for five years from the date of filing.

(3) A continuation statement may be filed by the secured party (a ) within six months before and sixty days after a stated maturity date of five years or Jess, and (b ) otherwise within six months prior to the expiration of the five year period specified in subsection (2 ) . Any such continuation statement must be signed by the secured party, identify the original statement by file number and state that the original state­ment is still effective. Upon timely filing of the continuation statement, the effectiveness of the original statement is continued for five years after the last date to which the filing was effective whereupon it lapses in the same man­ner as provided in subsection (2) unless an­other continuation statement is filed prior to such lapse. Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the original statement.

( 4) A filing officer shall mark each statement with a file number and with the date and hour ?f filin~ and shall_ ~old the record for public ~nspection. In addition the filing officer shall mdex the statements according to the name of the debtor in the index for official records or in a separate index for recordings made under this chapter designated by the filing officer and shall note in the index the file number and the address of the debtor given in the statement.

(5) The uniform fee for filing, indexing and furnishing certified copy of an original or a continuation statement shall be as provided in chapters 15 or 28, F . S.

Hlslor:r.-11, ch. 65-25• . •Nole.-The above section Is not Identical with the 1862 omclal

U .C .C . text. Nole.-19-•03, U .C.C.

*679.404 Termination statement.-(! ) Whenever there is no outstanding se­

cured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must on written de­mand by the debtor send the debtor a state­ment that he no longer claims a security inter­est under the financing statement, which shall be identified by file number. A termination statement signed by a person other than the secured party of record must include or be accompanied by the assignment or a statement

1816

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

by the secured party of record that he has as­signed the security interest to the signer of the termination statement. The uniform fee for fil­ing and indexing such an assignment or state­ment thereof shall be as provided in chapters 15 or 28, F. S. If the affected secured party fails to send such a termination statement within ten days after proper demand therefor he shall be liable to the debtor for one hundred dollars, and in addition for any loss caused to the debt­or by such failure.

(2) On presentation to the filing officer of such a termination statement said officer must file and index such statement.

(3) The uniform fee for filing and indexing a termination statement shall be as provided in chapters 15 or 28, F. S.

Hlstor:r.-U. ch. 65-254. •Nole.-The above section Is not Identical with the 1962 omclal

U.C .C. text. Note.-§9-404, U .C.C.

*679.405 Assignment of security interest; duties of filing officer; fees.-

(1) A financing statement may disclose an assignment of a security interest in the col­lateral described in the statement by indication in the statement of the name and address of the assignee or by an assignment itself or a copy thereof on the face or back of the state­ment. Either the original secured party or the assignee may sign this statement as the secured party. On presentation to the filing officer of such a financing statement the filing officer shall mark the same as provided in §679.-403 ( 4). The uniform fee for filing, indexing and furnishing filing data for a financing statement so indicating an assignment shall be as provid­ed in chapters 15 or 28, F. S.

(2) A secured party may assign of record all or a part of his rights under a financing state­ment by the filing of a separate written state­ment of assignment signed by the secured party of record and setting forth the name of the secured party of record and the debtor, the file number and the date of filing of the fi­nancing statement and the name and address of the assignee and containing a description of the collateral assigned. A copy of the assign­ment is sufficient as a separate statement if it complies with the preceding sentence. On pre­sentation to the filing officer of such a separate statement, the filing officer shall mark such

separate statement with the date and hour of the filing, and shall file and index same. The uniform fee for filing, indexing and furnishing filing data about such a separate statement of assignment shall be as provided in chapters 15 or 28, F. S.

(3) After the disclosure or filing of an as­signment under this section, the assignee is the secured party of record.

Hlslory.-U, ch. 65-254 . •Note.-The above section Is not Identical with the 1962 omclal

U .C.C. text. Nole.-§9-405, U .C.C.

*679.406 Release of collateral; duties of fil­ing officer; fees.-A secured party of record may by his signed statement release all or a part of any collateral described in a filed fi­nancing statement. The statement of release is sufficient if it contains a description of the col­lateral being released, the name and address of the debtor, the name and address of the secured party, and the file number of the fi­nancing statement. Upon presentation of such a statement to the filing officer he shall mark the statement with the hour and date of filing and shall file and index such statement. The uniform fee for filing and indexing such a statement of release shall be as provided in chapters 15 or 28, F. S.

Hlllor:r.-11. ch. 65-254 . •Nole.-The above section Is not Identical with the 1962 omclal

U .C.C.' Iext. Nole.-§9-406, U .C.C.

*679.407 Information from filing officer.­(1) If the person filing any financing state­

ment, termination statement, statement of as­signment, or statement of release, furnishes the filing officer a copy thereof, the filing officer shall note upon the copy the file number and date and hour of the filing of the original. The department of state shall charge no additional fee for such service. The fee to be charged by a clerk of the circuit court shall be as provided

· in chapter 28, F. S. (2) Upon request of any person, the filing

officer shall provide a certified copy of any filed instrument under this chapter. The fee for such service shall be as provided in chapters 15 or 28, F. S.

Hlalor:r.-11, ch. 65-254; 11. ch. 67-364; 1110, 35, ch. 69-106. •Note.-The above section Is not Identical with the 1962 omclal

U .C .C. text. Nole.-§9-407. U .C.C.

PART V

DEFAULT

679.501 Default; procedure when security agreement covers both real and personal property.

679.502 Collection rights of secured party. 679.503 Secured party's right to take pos­

session after default.

679.504 Secured party's right to dispose of collateral after default; effect of disposition.

679.505 Compulsory disposition of collateral; acceptance of the collateral as dis­charge of obligation.

679.506 Debtor's right to redeem collateral. 679.507 Secured party's liability for failure

to comply with this part.

1817

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

679.501 Default; procedure when security agreement covers both real and personal prop­erty.-

(1) When a debtor is in default under a security agreement, a secured party has the rights and remedies provided in this part, and except as limited by subsection (3) those pro­vided in the security agreement. He may re­duce his claim to judgment, foreclose or other­wise enforce the security interest by any avail­able judicial procedure. If the collateral is documents the secured party may proceed either as to the documents or as to the goods covered thereby. A secured party in possession has the rights, remedies and duties provided in §679.-207. The rights and remedies referred to in this subsection are cumulative.

(2) After default, the debtor has the rights and remedies provided in this part, those pro­vided in the security agreement and those pro­vided in §679.207.

(3) To the extent that they give rights to the debtor and impose duties on the secured party, the rules stated in the subsections re­ferred to below may not be waived or varied except as provided with respect to compulsory disposition of collateral (§679.505(1)) and with respect to redemption of collateral (§679.506) but the parties may by agreement determine the standards by which the fulfillment of these rights and duties is to be measured if such standards are not manifestly unreasonable:

(a) Sections 679.502(2) and 679.504(2) in­sofar as they require accounting for surplus proceeds of collateral;

(b) Sections 679.504(3) and 679.505(1) which deal with disposition of collateral;

(c) Section 679.505(2) which deals with ac­ceptance of collateral as discharge of obliga­tion;

(d) Section 679.506 which deals with re­demption of collateral; and

(e) Section 679.507 (1) which deals with the secured party's liability 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 relate 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 chapter.

Blotory.-11, ch. 65-25t. Note.-18-501, u.c.c.; auperaedes 1673.06.

679.502 Collection rights of secured party.­(1) When so agreed and in any event on de­

fault the secured party is entitled to notify an account debtor or the obligor on an instrument to 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 §679.306.

(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 commercially reasonable manner and may deduct his 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. But, 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.

Blstor;r.-11, ch. 65-25t. Note.-18-502, U.C.C.; supersedes 1688.03.

679.503 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 party 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 provides the 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 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 §679.504.

Hlstor;r.-11, ch. 65-25t. Note.-18-503, U.C.C.; supersedes 11688.03, 873.06.

679.504 Secured party's right to dispose of collateral after default; effect of disposition.-

(!) 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 subject to chapter 672. The proceeds of disposition shall be applied in the order following to:

(a) The reasonable expenses of retaking, holding, preparing for sale, selling and the like and, to the extent provided for in the agree­ment and not prohibited by law, the reason­able attorneys' fees and legal expenses incurred by the secured party;

(b) The satisfaction of indebtedness se­cured by the security interest under which the disposition is made; ·

(c) The ·satisfaction of indebtedness secured by any subordinate security interest in the collateral if written notification of demand

1818

Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS Ch. 679

therefor is received before distribution of the proceeds is completed. If requested by the se­cured party, the holder of a subordinate se­curity interest must seasonably furnish rea­sonable proof of his interest, and unless he does so, the secured party need not comply with his demand.

(2) If the security interest 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. But 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.

(3) Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reason­ab~e notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, and except in the case of con­sumer goods to any other person who has a security interest in the collateral and who has duly filed a financing statement indexed in the name of the debtor in this state or who is known by the secured party to have a security interest in the collateral. The secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations he may buy at private sale.

(4) When collateral is disposed of by a se­cured party after default, the disposition trans­fers to a purchaser for value all of the debtor's rights therein, discharges the security interest under which it is made and any secur­ity interest or lien subordinate thereto. The purchaser takes free of all such rights and interests even though the secured party fails to comply with the requirements of this part or of any judicial proceedings:

(a) In the case of a public sale, if the pur­chaser has no knowledge of any defects in the sale and if he does not buy in collusion with the secured party, other bidders or the person conducting the sale; or

(b) In any other case, if the purchaser acts in good faith.

(5) A person who is liable to a secured party under a guaranty, indorsement, repurchase agreement or the like and who receives a trans­fer of collateral from the secured party or is subrogated to his rights has thereafter the rights and duties of the secured party. Such a transfer of collateral is not a sale or disposi-

tion of the collateral under this chapter. Hlalof'7.-tl. ch. 65-25<1 . Nole.-tl-50<1, u .c.c.; supersedes 11613.06, 618.03.

679.505 Compulsory disposition of collat­eral; acceptance of the collateral as discharge of obligation.-

( I) If the debtor has paid sixty per cent of the cash price in the case of a purchase money security interest in consumer goods or sixty per cent of the loan in the case of another se­curity interest in consumer goods, and has not signed after default a statement renouncing or modifying his rights under this part a secured party who has taken possession of collateral must dispose of it under §679.504 and if he fails to do so within ninety days after he takes possession the debtor at his option may re­cover in conversion or under §679.507(1) on secured party's liability.

(2) In any other case involving consumer goods or any other collateral a secured party in possession may, after default, propose to retain the collateral in satisfaction of the obligation. Written notice of such proposal shall be sent to the debtor and except in the case of con­sumer goods to any other secured party who has a security interest in the collateral and who has duly filed a financing statement in­dexed in the name of the debtor in this state or is known by the secured party in possession to have a security interest in it. If the debtor or other person entitled to receive notification objects in writing within thirty days from the receipt of the notification or if any other se­cured party objects in writing within thirty days after the secured party obtains posses·sion the secured party must dispose of.the collateral under §679.504. In the absence of such writ­ten objection the secured party may retain the collateral in satisfaction of the debtor's obliga­tion.

Hlolof'7.-11. ch 65-25<1 . Nole.-11-505, U.C.C.

679.506 Debtor's right to redeem collater­a~.-At any time before the secured party has disposed of collateral or entered into a contract for its disposition under §679.504 or before the obligation has been discharged under §679.505 (2) the debtor or any other secured party may unless otherwise agreed in writing after default redeem the collateral by tendering fulfillment of all obligations seeured by the col­lateral as well as the expenses reasonably in­curred by the secured party in retaking, holding and preparing the collateral for disposition, in arranging for the sale, and to the extent pro­vided in the agreement and not prohibited by law, his reasonable attorneys' fees and legal expenses.

Hlalof'7.-tl, ch. 85-25<1. Nole.-tl-508, u.c.c.

679.507 Secured party's liability for fail­ure to comply with this part.-

(1) If it is established that the secured party is not proceeding in accordance with the provisions of this part disposition may be

1819

Ch. 679 UNIFORM COMMERCIAL CODE-sECURED TRANSACTIONS Ch. 679

ordered or restrained on appropriate terms and conditions. If the disposition has occurred the debtor or any person entitled to notification or whose security interest has been made known to the secured party prior to the dis­position has a right to recover from the secured party any loss caused by a failure to comply with the provisions of this part. If the collat­eral is consumer goods the debtor has a right to recover in any event an amount not less than the credit service charge plus ten per cent of the principal amount of the debt or the time price differential plus ten per cent of the cash price.

(2) The fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to estab­lish that the sale was not made in a commer­cially reasonable manner. If the secured party

either sells the collateral in the usual manner in any recognized market therefor or if he sells at the price current in such market at the time of his sale or if he has otherwise sold in con­formity with reasonable commercial practices among dealers in the type of property sold he has sold in a commercially reasonable manner. The principles stated in the two preceding sentences with respect to sales also apply as may be appropriate to other types of disposi­tion. A disposition which has been approved in any judicial proceeding or by any bona fide creditors' committee or representative of credi­tors shall conclusively be deemed to be com­mercially reasonable, but this sentence does not indicate that any such approval must be obtained in any case nor does it indicate that any disposition not so approved is not com­mercially reasonable.

Hlstory.-fl. ch . 65-2M. Note.-18-507, U.C.C.

1820

UNIFORM COMMERCIAL CODE-EFFECTIVE DATE AND REPEALER Ch. 680

CHAPTER 680

*UNIFORM COMMERCIAL CODE-EFFECTIVE DATE AND REPEALER

ARTICLE 10 EFFECTIVE DATE AND REPEALER 680.101 Effective date; provision for tran­

sition; presigning and prefiling of financing statements.

680.102 Laws specifically repealed or modi­fied.

680.103 General repealer.

680.101 Effective date; provision for tran· sition; presigning and prefiling of financing statements.-

( I) This code shall become effective at 12:01 A. M. on January 1, 1967. It applies to transactions entered into and events occurring after that date.

(2) Transactions validly entered into before the effective date specified in this section and the rights, duties and interests flowing from them remain valid thereafter and may be ter­minated, completed, consummated or enforced as required or permitted by any statute or other law amended or repealed by this code as though such repeal or amendment had not occurred. However, on and after July 1, 1969, all instru­ments required to be filed pursuant to chapters 85, 524, and 673, as same existed prior to the ef­fective date of chapter 680 shall be filed pursu­ant to the provisions of chapter 679.

(3) Although signed prior to the effective date of this code, a security agreement and a financing statement shall have the same effect on and after such effective date as if signed thereafter. A financing statement may be filed and the appropriate filing officer shall accept the same for filing on or after October 1, 1966. The provisions of this code and all other laws relating to financing statements and the filing of financing statements apply to the financing statements so filed notwithstanding the fact that this code or such other laws shall not then have taken effect. Each financing statement so filed shall be deemed to have been filed on the date and at the hour when the office of the filing officer is first open for the transaction of busi­ness on or after the effective date of this code, notwithstanding the date and hour of filing marked on such financing statement.

Blotor:r.-11. ch. 65-254; 11. ch. 68-218.

680.102 Laws specifically repealed or modi· hed.-

(1) The following laws or parts of laws are repealed:

Chapters 674, 675, and 676.-The uniform negotiable instruments law.

Chapter 678.-Warehousemen and warehouse receipts (The uniform warehouse receipts act).

Chapter 614.-The uniform stock transfer law.

680.104

680.105 680.106 680.107

Laws not repealed; precedence where code provisions in conflict there­with; certain statutory remedies retained.

Severability. Amendment to ~674.403 of code. Amendment to §679.204 of code.

Chapter 673.-The uniform trust receipts act.

Chapter 524.-Accounts receivable. Chapter 699.-Livestock mortgages. Chapter 700.-Crop mortgages. Chapter 85.-Part 11-Factors' liens-

(§~85.29-85.35). Section 725.02.-Contracts to sell personalty

(Statute of frauds). Section 351.10.-Contracts for sale of rail·

road. Section 520.11.-Repossession of motor vehi­

cles. Chapter 685.-Collateral securities. The following sections in chapter 659, the

Florida banking code, second part: 659.26-Payment of items. 659.31-Payment of stale checks. 659.32-Revocation, countermand of stop-

payment orders. 659.33-Nonpayment of check through error. 659.34-Rights on improper payment of item. 659.37-Liability of bank for amo11nt paid on

forged or raised checks or endorsements. 659.39-Death or incompetency of depositor. 659.4Q.....-Powers of attorney. The following sections in chapter 726, fraud- .

ulent conveyances, sales and loans, such sec­tions comprising the Florida bulk sales law~

726.02-Vendee of stock of goods in bulk to demand from vendor statement of creditors.

726.03-Notice to creditors by vendee. 726.04-Sale without notice to creditors pre-

sumed fraudulent. · 726.05-What sales deemed fraudulent; pro­

viso. 726.06-Punishment for making false state­

ments to vendee of stock of goods in bulk. The following sections of chapter 55, judg­

ments and executions: 55.25-Executions against corporate stock. 55.26-Executions against corporate stock;

manner of levy. 55.27-Executions against .corporate stock;

requiring statement of stock; penalty. 55.28-Executions against corporate stock;

ascertaining amount vf stock owned by execu­tion debtor; penalty.

55.29-Executions against corporate stock; creditor may furnish description of stock.

•Note.-Pursuant to 169, ch . 69- 353, the editors have altered the numbers of all sections making up this chapter by deleting the digit and hyphen Immediately following the decimal point. The purpose Is to conform the numbering of the Code sections with the decimal numbering system used In other chapters of the Florida Statutes.

1821

Ch. 680 UNIFORM COMMERCIAL CODE-EFFECTIVE DATE AND REPEALER

55.30-Executions against corporate stock; effect of levy of writ; penalty.

55.31-Executions against corporate stock; manner of sale of stock.

(2) The following laws or parts of laws are modified as indicated:

Chapter 695.-Record of conveyance of real property, is amended by adding the following section:

695.032 Provisions not applicable to trans­actions under chapter 679, uniform commercial code.-Section 695.03, shall not apply to any of the transactions within the scope of chapter 679 of the uniform commercial code.

Chapter 201.-Excise tax on documents, is amended by adding the following section:

201.22 Financing statements under chapter 679 of the uniform commercial code.-The ex­cise tax on documents provided by this chapter shall be applicable to transactions covered by the uniform commercial code to the same extent that it would be if the code had not been en­acted. The clerk or filing officer shall not accept for filing or filing and recording any financing statement under chapter 679, unless there ap­pears thereon the notation that the stamps re­quired by this chapter have been placed on the promissory instruments secured by said financ­ing statement and will be placed on any addi­tional promissory instruments, advances or sim­ilar· instrument that may be secured by said financing statement. The failure to pay the tax required by this chapter, as so stated, shall be subject to the penalties provided by this chap-

. ter.

Chapter 15.-Secretary of state, is amended by adding the following section:

15.091 Fees; filing · under chapter 679, uni­form commercial code.-The fees for filing of any financing statement or other writing re­quired or permitted to be filed by any pro­visions of chapter 679 of the uniform com­mercial code are two dollars for the first page of each financing statement or. other writing and one dollar fQr each additional page thereof.

Chapter 698.-Chattel mortgages, is amended by adding the following section:

698.12 Chapter not applicable to transactions under uniform commercial code • .....:..The provi­sions of this chapter shall not apply to trans­actions governed by any of the provisions of the uniform commercial code, but shall remain applicable to transactions to which that code does not apply.

Hll&oi'J'.-fl, ch. 85-:IM.

680.103 General repealer.-Except as pro­vided in §680.104, all laws and parts of laws inconsistent with this code are repealed.

Hll&orJ.-11, cb. 85·2M.

680.104 Laws not repealed; precedence where code provisions in conflict therewith; certain statutory remedies retained.-

(!) The article on documents of title (Art. 7) does not repeal or modify any laws pre­scribing the form or contents of documents of title or the services or facilities to be afforded by bailees, or otherwise regulating bailees• businesses in respects not specifically dealt with herein; but the fact that such laws are vio­lated does not affect the status of a document of title which otherwise complies with the def­inition of a document of title (§671.201).

(2) The following laws and parts of laws are specifically not repealed and shall take precedence over any provisions of this code which may be inconsistent or in conflict there­with:

Chapter 517.-Sale of securities. Chapter 610.-Uniform act for simplification

of fiduciary security transfers. D

Chapter 687.-Interest and usury. Chapter 516.-Small loan business. Chapter 519.-Florida consumer finance law.

Chapter 520.-Retail installment sales (Part I, motor vehicle sales finance act; Part II, retail installment sales act; Part III, installment sales finance act), except §520.11.

Chapter 665.-Savings association act. Chapter 657.-Credit unions. Chapter 319.-Title certificates (motor vehi­

cle). Section 205.434.-Pawnbrokers. Section 205.442.-Pawnbrokers; reports to

sheriff; penalty.

Section 715.04.-Pawnbrokers, disposition of pledged property for nonpayment of principal or interest.

Chapters 658, 659, 660 and 661.-Florida banking code, ~xcept those sections in chapter 659 enumerated in §680.102. ·

(3) The following laws or parts of laws, although not repealed, shall yield to and be superseded by any provisions of the code which may be inconsistent or in conflict therewith:

Chapter 697.-Instruments deemed mort­gages and the nature of a mortgage.

Chapter 701.-Assignment and cancellation of mortgages.

Chapter 702.-Foreclosure of mortgages. Chapter 727.-General assignments.

(4) Notwithstanding any provisions to the contrary in any of the following Florida Stat­utes, the remedies provided by such statutes shall not restrict the remedies otherwise avail­able to a secured party under this code, but all such remedies shall be cumulatively available in accordance with their respective terms to a secured party under this code:

Chapter 76.-Attachment. Hll&orJ.-11, ch. 85-2M.

1822

UNIFORM COMMERCIAL CODE-EFFECTIVE DATE AND REPEALER Ch. 680

680.105 Severability.-If any provision of this code or the application of such provision to any circumstance is held invalid for any reason whatsoever, the remainder of the code or the application of the provision to other cir­cumstances, shall not be affected thereby.

Blotorr.-11, ch. 65-254.

680.106 Amendment to §674.403 of code.­Section 674.403 of this code is amended as follows:

67 4.403 Customer's right to stop payment; burden of proof of loss.-

(1) A customer, or any customer if there is more than one, or any person authorized to sign checks or make withdrawals on or from an account, may stop payment of any item pay­able, for or drawn against such customer's or customers' account but the same shall not be effective and the bank may disregard the same unless the order is in writing, is signed by such customer or authorized person, describes with certainty the item on which payment is to be stopped, and is served upon and received by an officer of the bank at the banking house during regular banking hours and in such time and in such manner as to afford the bank a reasonable opportunity to act on it prior to the happening of any of the events described in §674.303, and in any event no bank shall be responsible or liable for failure to comply with any such order on the day the same is served upon or received by such bank unless such omission or failure to comply with the same on the day received result from the willful and intentional disregard of such order.

(2) An order may be disregarded by the bank six months after its receipt unless re­newed in writing.

(3) The bank may be liable to its customer for the actual loss incurred by the customer resulting from the wrongful payment of an item contrary to a valid and binding stop pay­ment order, not exceeding the amount of the item unless the bank is guilty of gross negli­gence or unless such wrongful payment was made as a result of the willful and intentional disregard by the bank of such order. The bur­den of establishing the fact and amount of loss resulting from the wrongful payment of an item contrary to a binding stop payment order is on the customer.

Hlatorr .-11. ch. 65-254.

680.107 Amendment to §679.204 of code.­Paragraph (a) of subsection (4) of §679.204 is amended as follows:

679.204 When security interest attaches; after-acquired property; future advances.­

(4) No security interest attaches under an after-acquired property clause:

(a) To crops which become such more than seven years after the security agreement is executed except that a security interest in crops which is given in conjunction with a lease or a land purchase or improvement transaction evidenced by a contract, mortgage or deed of trust may if so agreed attach to crops to be grown on the land concerned during the period of such real estate transaction;

Hlatorr.-11. ch. 65-254.

1823

Ch.682 FLORIDA ARBITRATION CODE Ch. 682

CHAPTER 682

FLORIDA ARBITRATION CODE

682.01 682.02

Florida arbitration code. 682.11 Fees and expenses of arbitration. Arbitration agreements made valid, ir- 682.12 Confirmation of an award.

revocable and enforceable; scope. 682.13 Vacating an award~ 682.03

682.04 682.05 682.06 682.07 682.08 682.09 682.10

Proceedings to compel and to stay arbi- 682.14 Modification or correction of award. tration. 682.15 Judgment or decree on award.

Appointment of arbitrators by court. 682.16 Judgment roll, docketing. Majority action by arbitrators. 682.17 Application to court. Hearing. 682.18 Court, jurisdiction. Representation by attorney. 682.19 Venue. Witnesses, subpoenas, depositions. 682.20 Appeals. Award. 682.21 Law not retroactive. Change of award by arbitrators or urn- 682.22 Severability.

pire.

682.01 Florida arbitration code.-Sections 682.01-682.22 may be cited as the "Florida Ar­bitration Code."

Hlotory.-122. ch. 51-402 ; 112, ch. 61-254. Note.-See former 151.10.

682.02 Arbitration agreem~nts made valid, irrevocable and enforceable; scope.-Two or more parties may agree in writing to submit to arbitration any controversy existing between them at the time of the agreement, or they may include in a written contract a provision for the settlement by arbitration of any contro­versy thereafter ariBing between them relat­ing to such contract or the failure or refusal to perform the whole or any part thereof. Such agreement or provision shall be valid, enforceable and irrevocable without regard to the )usticiable character of the controversy; prov1ded that this act shall not apply to any such agreement or provision to arbitrate in which it is stipulated that this law shall not apply or to any arbitration or award thereun­der.

Blotor)'.-11, cb. 51-402; 112, cb. 61-254. Note.-Bee former •51.11.

682.03 Proceedings to compel and to stay arbitration.-

( I) A party to an agreement or prov1s1on for arbitration subject to this law claiming the neglect or refusal of another party thereto to comply therewith may make application to the court for an order directing the parties to pro­ceed with arbitration in accordance with the terms thereof. If the court is satisfied that no substantial issue exists as to the making of the agreement or provision, it shall grant the ap­plication. If the court shall find that a substan­tial issue is raised as to the making of the agreement or provision, it shall summarily hear and determine the issue and, according to its determination, shall grant or deny the applica­tion.

(2) If an issue referable to arbitration un­der an agreement or provision for arbitration subject to this law becomes involved in an ac­tion or proceeding pending in a court having jurisdiction to hear an application under sub­section (1) of this section, such application shall be made in said court. Otherwise and subject to §682.19, such application may be

made in any court of competent jurisdiction. (3) Any action or proceeding involving an

issue subject to arbitration under this law shall be stayed if an order for arbitration or an ap­plication therefor has been made under this section or, if the issue is severable, the stay may be wi·th respect thereto only. When the application is made in such action or proceed­ing, the order for arbitration shall include such stay.

(4) On application the court may stay an arbitration proceeding commenced or about to be commenced, if it shall find that no agree­ment or provision for arbitration subject to this law exists between the party making the appli­cation and the party causing the arbitration to be had. The court 'shall summarily hear and determine the issue of the making of the agree­ment or provision and, according to its deter­mination, shall grant or deny the application.

(5) An order for arbitration shall not be refused on the ground that the claim in issue lacks merit or bona fides or because any fault or grounds for the claim sought to be arbitrated have not been shown.

Blotorr.-12, cb. 51-402; 112, cb. 81-254. Note.-8ee former 151.12.

682.04 Appointment of arbitrators by court. -If an agreement or provision for arbitration subject to this law provides a method for the appointment of arbitrators or an umpire, this method shall be followed. In the absence thereof, or if the agreed method fails or for any reason cannot be followed, or if an arbi­trator or umpire who has been appointed fails to act and his successor has not been duly aP­pointed, the court, on application of a party to such agreement or provision shall appoint one or more arbitrators or an umpire. An arbitra­tor or umpire so appointed shall have like powers as if named or provided for in the agreement or provision.

Blotor)'.-13, ch. 51-402; 112, ch. 81-254. Note.-Bee former 151.13.

682.05 Majority action by arbitrators.-The powers of the arbitrators may be exercised by a majority of their number unless otherwise provided in the agreement or provision for ar­bitration.

Blolorr.-14, ch. 51-402; 112, ch. 87-254. Note.-8ee former 151.14.

1824

Ch. 682 FLORIDA ARBITRATION CODE Ch. 682

682.06 Hearing.-Unless otherwise provided by the agreement or provision for arbitration:

(1) (a) The arbitrators shall appoint a time and place for the hearing and cause notification to the parties to be served personally or by registered or certified mail not less than five days before the hearing. Appearance at the hearing waives a party's right to such notice. The arbitrators may adjourn their hearing from time to time upon their own motion and shall do so upon the request of any party to the arbitration for good cause shown, provided that no adjournment or postponement of their hearing shall extend ·beyond the da:te fixed in the agreement or provision for making the award unless the parties consent to a later date. An umpire authorized to hear and decide the cause upon failure of the arbitrators to agree upon an award shall, in the course of his jurisdiction, have like powers and be sub­ject to like limitations thereon.

(b) The arbitrators, or umpire in the course of his jurisdiction, may hear and decide the controversy upon the evidence produced not­withstanding the failure or refusal of a party duly notified of the time and place of the hear­ing to appear. The court· on application may direct the arbitrators, or the umpire in the course of his jurisdiction, to proceed promptly with the hearing and making of the award.

(2) The parties are entitled to be heard, to present evidence material to the controversy and to cross-examine witnesses appearing at the hearing.

(3) The hearing shall be conducted by all of the arbitrators but a majority may deter­mine any question and render a final award. An umpire authorized to hear and decide the cause upon the failure of the arbitrators to agree upon an award shall sit with the arbitrators throughout their hearing but shall not be counted as a part of their quorum or in the making of their award. If, during the course of the hearing, an arbitrator for any reason ceases to act, the remaining arbitrator, arbitra­tors or umpire appointed to act as neutrals may continue with the hearing and determina­tion of the controversy.

BlaloJ7.-15, ch. 57·402; 112, ch. 87·254. Note.-Bee former 157.15.

682.07 Representation by attomey.-A par­ty has the right to be represented by an at­torney at any arbitration proceeding or hearing under this law. A waiver thereof prior to the proceeding or hearing is ineffective.

Blatory.-18, ch. 57-402; 112. ch. 87·254. Note.-Bee former 157.16.

682.08 Witnesses, subpoenas, depositions.­(!) Arbitrators, or an umpire authorized to

hear and decide the cause upon failure of the arbitrators to agree upon an award, in the course of his jurisdiction, may issue subpoenas for the a>ttendance of witnesses and for the production of books, records, documents and other evidence, and shall have the power to administer oaths. Subpoenas so issued shall be served, and upon application to the court by a

party to the arbitration or the arbitrators, or the umpire, enforced in the manner provided by law for the service and enforcement of sub­poenas in a civil action.

(2) On application of a party to the arbitra­tion and for use as· evidence, the arbitrators, or the umpire in the course of his jurisdiction, may permit a deposition to be taken, in the manner and upon the terms designated by them or him of a witness who cannot be subpoenaed or is unable to attend the hearing.

(3) All provisions of law compelling a per­son under subpoena to testify are applicable.

(4) Fees for attendance as a witness shall be the same as for a witness in the circuit court.

Hlotory.-17, ch. 57-402; U2, ch. 67-254 . Note.-See former 157.17.

682.09 Award.-(1) The award shall be in writing and shall

be signed by the arbitrators joining in the award or by the umpire in the course of his ju­risdiction. They or he shall deliver a copy to each party to the arbitration either personally or by registered or certified mail, or as pro­vided in the agreement or provision.

(2) An award shall be made within the time fixed therefor by the agreement or provision for arbitration or, if not so fixed, within such time as the court may order on application of a party to the arbitration. The parties may, by written agreement, extend the time either before or after the expiration thereof. Any ob­jection that an award was not made within the time required is waived unless the objecting party notifies the arbitrators or umpire in writ­ing of his objection prior to the delivery of the award to him.

Blatory.-18, ch. 57·402; 112. ch. 87·254. Note.-Bee former 157.18.

682.10 Change of award by arbitrators or umpire.-On application of a party to the arbi­tration, or if an application to the court is pending under §§682.12, 682.13 or 682.14, on submission to the arbitrators, or to the umpire in the case of an umpire's award, by the court under such conditions as the court may order, the arbitra.tors or umpire may modify or correct the award upon the grounds stated in §682.14 (1) (a) and (c) or for the purpose of clarifying the award. The application shall be made within twenty days after delivery of the award to the applicant. Written notice thereof shall be given forthwith to the other party to the arbitration, stating that he must serve his ob­jections thereto, if any, within ten cays from the notice. The award so modified or corrected is subject to the provisions of §§682.12-682.14.

BlatoJ7.-I8. ch. 57-402; 112, ch. 87-254. Note.-Bee former 157.18.

682.11 Fees and expenses of arbitration.­Unless otherwise provided in the agreement or provision for arbitration, the arbitrators' and umpire's expenses and fees, together with other expenses, not including counsel fees, incurred

1825

Ch.682 FLORIDA ARBITRATION CODE

in the conduct of the arbitration, shall be paid as provided in the award.

IDotorJ.-110, ch. 57-402; 112, ch. 87-254. Note.-See former 157.20.

682.12 Confirmation of an award.-Upon application of a party to the arbitration, the court shall confirm an award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which case the court shall pro­ceed as provided in §§682.13 and 682.14.

HlstorJ.-111, ch. 57-402 ; 112, ch. 67-254. Note.-See former 157.21.

682.13 Vacating an award.-(1) Upon application of a party, the court

shall vacate an award when: (a) The award was procured by corruption,

fraud or other undue means; (b) There was evident partiality by an ar­

bitrator appointed as a neutral or corruption in any of the arbitrators or umpire or misconduct prejudicing the rights of any party;

(c) The arbitrators or the umpire in the course of his jurisdiction exceeded their powers;

(d) The arbitrators or the umpire in the course of his jurisdiction refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of §682.06, as to prejudice substantially the rights of a party; or

(e) There was no agreement or provision for arbitration subject to this law, unless the matter was determined in proceedings under §682.03 and unless the party participated in the arbitration hearing without raising the objec­tion; But the fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award.

(2) An application under this section shall be made within ninety days after delivery of a copy of the award to the applicant, except that, if predicaJted upon corruption, fraud or other undue means, it shall be made within ninety days after such grounds are known or should have been known.

(3) In vacating the award on grounds other than those stated in subsection (1) (e), the court may order a rehearing before new arbi­trators chosen as provided in the agreement or provision for arbitration or by the court in ac­cordance with §682.04, or, if the award is va­cated on grounds set forth in subsection (l)(c) and (d), the court may order a rehearing be­fore the arbitrators or umpire who made the award or their successors appointed in ac­cordance with §682.04. The time within which the agreement or provision for arbitration re­quires the award to be made is applicable to the rehearing and commences from the date of the order therefor.

( 4) If the application to vacate is denied and no motion to modify or correct the award

is pending, the court shall confirm the award. HlltorJ.-112, ch. 67-402; 112, ch. 87-254. Note.-See former 157.22.

682.14 Modification or correction award.-

(1) Upon application made within ninety days after delivery of a copy of the award to the applicant, the court shall modify or correct the award when:

(a) There is an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award;

(b) The arbitrators or umpire have award­ed upon a matter not submitted to them or him and the award may be corrected without affect­ing the merits of the decision upon the issues submitted; or

(c) The award is imperfect as a matter of form, not affecting the merits of the con­troversy.

(2) If the application is granted, the court shall modify and correct the award so as to ef­fect its intent and shall confirm the award as so modified and corrected. Otherwise, the court shall confirm the award as made.

(3) An application to modify or correct an award may be joined in the alternative with an application to vacate the award.

Hlstory.-113, ch. 57-402; 112, ch. 87-254. Note.-See former 157.23.

682.15 Judgment or decree on award.­Upon the granting of an order confirming, mod­ifying or correcting an award, judgment or de­cree shall be entered in conformity therewith and be enforced as any other judgment or de­cree. Costs of the application and of the pro­ceedings subsequent thereto, and disbursements may be awarded by the court.

Hlotory.-114, ch. 57-402; 112, cb. 87-254. Note.-See former 157.24.

682.16 Judgment roll, docketing.-(1) On entry of judgment or decree, the

clerk shall prepare the judgment roll consist­ing, to the extent filed, of the following:

(a) The agreement or provision for arbitra-tion and each writ ten extension of the time within which to make the award;

(b) The award; (c) A copy of the order confirming, modify­

ing or correcting the award; and (d) A copy of the judgment or decree. (2) The · judgment or decree may be dock­

eted as if rendered in a civil action. HlotorJ.-115, eh. 57-402; 112, cb. 87-254. Note.-See former 157.25.

682.17 Application to court.-Except as otherwise provided, an application to the court under this law shall be by motion and shall be heard in the manner and upon the notice vided by law or rule of court for the ............ K and hearing of motions. Unless the have agreed otherwise, notice of an ini plication for an order shall be served in manner provided by law for the service of summons in an action.

HlotorJ.-118, cb. 57-402; 112, ch. 87-254. Note.-See former 157.28.

1826

Ch. 682 FLORIDA ARBITRATION CODE Ch. 682

682.18 Court, jurisdiction.-( I) The term "court" means any court of

competent jurisdiction of this state. The mak­ing of an agreement or provision for arbitra­tion subject to this law and providing for ar­bitration in this state shall, whether made within or outside this state, confer jurisdiction on the court to enforce the agreement or provi­sion under this law, to enter judgment on an award duly rendered in an arbitration there­under and to vacate, modify or correct an award rendered thereunder for such cause and in the manner provided in this law.

(2) Any judgment entered upon an award by a court of competent jurisdiction of any state, territory, the Commonwealth of Puerto Rico or foreign country shall be enforceable by application as provided in §682.17 and re­gardless of the time when said award may have been made.

Blotory.-117. ch. 57-402; fl2, ch. 67-254. No&e.-&!e former 157.21.

682.19 Venue.-Any application under this law may be made to the court of the county in which the other party to the agreement or pro­vision for arbitration resides or has a place of business, or, if he has no residence or place of business in this state, then to the court of any county. All applications under this law subsequent to an initial application shall be made to the court hearing the initial applica­tion unless it shall order otherwise.

m.tory.-118, ch. 57-402; 112, ch. 87-254. No&e.-See former 151.28.

682.20 Appeals.-(1) An appeal may be taken from: (a) An order denying an application to

compel arbitration made under §682.03; (b) An order granting an application to

stay arbitration made under §682.03(2)-{4); (c) An order confirming or denying con­

firmation of an award; (d) An order modifying or correcting an

award; (e) An order vacating an award without

directing a rehearing; or (f) A judgment or decree entered pursuant

to the provisions of this law. (2) The appeal shall be taken in the man­

ner and to the same extent as from orders or judgments in a civil act~on.

Blo&orJ.-118, cb. 57-402; 112, ch. 87·254. No&e.-See former 157.28.

682.21 Law not retroactive.-This law ap­plies only to agreements and proviaions for ar­bitration made subsequent to the taking effect of this law.

Blo&orJ.-120, ch. n-402; 112, ch. 67-254. No&e.-see former 157.30.

682.22 Severability.-lf any provision of this chapter or the application thereof to any person or circumstance is held invalid, that in­validity shall not affect other provisions or ap­plications of this chapter. In any action or pro­ceeding in any state or territory of the United States, the Commonwealth of Puerto Rico, or any foreign country, this chapter and any agreement or provision to arbitrate made there­under shall be classified as substantive within the meaning of that term in the conflict of laws; provided, however, that such substantive classi­fication shall never be intended to derogate the public policy of such other jurisdiction.

BlotorJ.-121, ch. 57-402; 112, ch. 87-254. No&o.-See former 157.31.

1827

Ch. 683 LEGAL HOLIDAYS Ch. 683

CHAPTER 683

LEGAL HOLIDAYS

683.01 Legal holidays. 683.02 Meaning of term "legal holidays" as

used in contracts. 683.04 Arbor day, 683.05 Pan-American day. 683.06 Pascua Florida day.

683.01 Legal holidays.-(1) The legal holidays, which are also

public holidays, are the following: (a) Sunday, the first day of each week. (b) New year's day, January 1. (c) Birthday of Robert E. Lee, January 19. (d) Washington's birthday, the · third Mon-

day in February. (e) Good Friday. (f) Confederate Memorial day, April 26. (g) Memorial day, the last Monday in May. (h) Birthday of Jefferson Davis, June 3. (i) Independence day, July 4. (j) Labor day, the first Monday in Septem­

ber. (k) Columbus day and Farmers' day, the

second Monday in October. (1) Veterans' day, November 11. (m) General election day. (n) Thanksgiving day, the fourth Thursday

in November. (o) Christmas day, December 25. (p) Shrove Tuesday (sometimes also known

as Mardi Gras), in counties where carnival associations are organized for the purpose of celebrating the same.

(2) Whenever any legal holiday shall fall upon a Sunday, the Monday next following shall be deemed a public holiday for all and any of the purposes aforesaid.

Blator:r.-RS 2315, 2311; Ill eb. 4118, 1813; fl, eb. ff87, 1815; 11. eb. 4fll, 1811; fl, eh. o275, 1103; t 1, eb. 6312, 1105; 08 3102; fl, eb. 8872, 1115; RGS 4848; COL 8132; f1, eb. 18017, 1133; 11, eh. 20250, 1K1; 11. eh .. 20525, 1141; 11. eh. 22810, 1145; §1 , ch. 29926, 1955; §1, ch. 69-24; §1, ch. 73-44.

683.02 Meaning of term "legal holidays" as used in contracts.-Whenever, in contracts to be performed in the state, reference is made to "legal holidays," the term shall be understood to include those holidays designated in §683.01 and such others as may be designated by law. Rlo&t~r:r-11. cb. 15892. 1906: cb. 18'72, 1916; 'RGS 4114'7:

COL 6833; 12, ch. 18087, 1133; f2, eh. 21828, 1155; 12, ch. 81-24.

683.04 Arbor day.-The third Friday in January of each year be and is hereby designated as Arbor Day in the state.

Blalor:r.-11, ch. 22536, 1145.

683.05 Pan-American day.-( 1) The governor shall proclaim the four­

teenth day of April of each year to be "Pan­American Day," which day shall be suitably ob­served in the public schools of the state as a day honoring the republics of Latin America, and which day shall otherwise be suitably observed

683.08 Gasparilla day, legal holiday in Hills­borough county.

683.09 DeSoto day, legal holiday in Manatee county.

683.10 Grandmother's Day. 683.11 Law enforcement appreciation month. 683.12 Parade Day, Hillsborough County.

by such public exercises in the state capitol and elsewhere as the governor may designate. If the fourteenth day of April shall fall on a day which is not a school day, "Pan-American Day" shall be observed in the schools on the school day next pre­ceding or on such preceding day as may be designated by local school authorities.

(2) The purpose of the law is to establish a day on which the mutually, friendly relationship between the state and the · Pan-American Re­publics will be recognized and perpetuated.

Blo&or:r .-111, 2, ch. 22976, 1946.

683.06 Pascua Florida day.- · (1) April 2 of each year is hereby desig­

nated as Florida state day. The day to be known as "Pascua Florida Day."

(2) The governor may annually issue a proclamation designating April 2 as said state day and designating the week of March 27 to April 2 as "Pascua Florida" week at the sug­gestion of Mary A. Harrell, and calling upon public schools and citizens of Florida to ob­serve the same as a patriotic occasion. Said day will be observed on April 2 unless the day fall on Saturday or Sunday, in which event the governor may declare the preceding Friday or following Monday as state day.

History .-ft 1, 2, ch. 28063, 1153.

683.08 Gasparilla day, legal holiday in Hills­borough county.-The day known and desig­nated as Gasparilla day in Hillsborough county shall be a legal holiday within said county, and all city, county, and state offices, and banking institutions may remain closed on Gasparilla day.

Hlotory.-fl, ch. 63-411.

683.09 DeSoto day, legal holiday in Manatee county.-The last Friday of DeSoto week every year shall be known as DeSoto day and shall be a legal holiday in Manatee county, and all city, county, and state offices and banking institu­tions may remain closed on DeSoto day.

Rlolor:r .-11, ch. 81-258; 11. ch. 81-281.

683.10 Grandmother's Day.-(1) The second Sunday of October of each

year is designated Grandmother's Day. (2) The governor may issue annually a

proclamation designating the second Sunday of October as Grandmother's Day and calling upon public schools and citizens of the state to observe the occasion.

History.-§!, ch. 71-188.

1828

Ch. 683 LEGAL HOLIDAYS Ch. 683

683.11 Law enforcement appreciation month.-

(1) The month of May of each year is. hE!re· by designated Law Enforcement Apprec1atwn Month.

(2) The governor and the mayor of e~ch municipality may issue annually a proclamatiOn designating the month of May as ~w Enf~r<;e· ment Appreciation Month and urgmg all ClVl~, fraternal, and religious organizations and pub.hc and private educational institutions to recogmze and observe this occasion through appropriate programs, meetings; services, or celebrations

in which state, county, and local law enforce· ment officers are invited to participate. History.-§! , ch . 72·322.

683.12 Parade Day, Hillsborough County.­The day known and designated as Parade Day of the Hillsborough County Fair and Plant City Strawberry Festival in Hillsborough County shall be a legal holiday within said county, and all city and county offices and banking institu­tions may remain closed on Parade Day of the Hillsborough County Fair and Plant City Straw­berry Festival.

History.-§! , ch. 73-160.

1829

Ch. 687 INTEREST AND USURY

CHAPTER 687

INTEREST AND USURY 687.01 Rate of interest. 687.02 Usurious contracts defined. 687.03 Unlawful rates of interest defined; pro­

viso. 687.031 Construction, §§687.02 and 687.03. 687.04 Penalty for usury; not to apply to

transferee of negotiable paper un­less usury appears on face.

687.05 Provisions for payment of attorney's fees.

687.06 Attorney's fee in enforcing nonusurious contracts; proviso; insurance premi­ums; attorney's fee provided in note.

687.071 Criminal usury, loan sharking; shy­locking.

687.01 Rate of interest.-In all eases where interest shall accrue without a special contract for the rate thereof, the rate shall be aix per cent per annum, but partiea may contract for a lesser or greater rate by contract in writing.

WIIOJT,-11, cb. 1.83, 1888; Ill, 2, cb. 1582, 1888; RS 2320; QS 3103; RGS ol841 ; CGL 8838; 11, cb. 227"5, llol5. cf.-1155.01, 55.0• Ju<~cmenta.

*687.02 Usurious contracts defined.-All contracts, other than of a corporation, for the payment of interest upon any loan, advance of money, or forbearance to enforce the collection of any debt, or upon any contract whatever, at ~ higher rate of interest than 10 percent per an­num are hereby declared usurious. However, if such loan, advance of money, forbearance to en­force the collection of any debt, or contract ex­ceeds $500,000 in amount or value, then no con­tract to pay interest thereon is usurious unless the rate of interest exceeds 15 percent per an­num. Any contract whereby a corporation under­takes to pay an interest rate higher than 15 per­cent per annum is hereby declared usurious.

H istory.-§! , ch . 4022, 1891; GS 3104; §1, ch. 5960, 1909; RGS 4850; CGL 6937; §1, ch. 29705, 1955; §1, ch. 73-298.

•Note.-This section as amended takes effect October 1, 1973. cf.-Ch . 516 Florida Consumer Finance Act.

§665.395, Collection of fines, interest or premium on loans made by building and loan associations.

*687.03 Unlawful rates of interest defined; proviso.-It shall be usury and unlawful for any person, or for any agent, officer or other representative of any person, to reserve, charge or take for any loan, or for any advance of money, or for forbearance to enforce the col­lection of any sum of money, except upon an obligation of a _corporation, a rate of interest greater than ten per cent per annum, either directly or indirectly, by way of commission for advances, discounts, exchange, or by any contract, contrivance or device whatever, whereby the debtor is required or obligated to pay a sum of money greater than the actual principal sum received, together with interest at the rate of ten per cent; and such transac­tions with a corporation shall, whereby the cor­poration pays interest, be usury and unlawful if for a rate of interest greater than fifteen percent per annum; however, if any loan, ad-

687.08 Persons lending money to give bor­rower receipt for payments; con­tents of receipt; penalty for viola­tion.

687.09 Persons accepting chattel mortgage as security for loans under one hundred dollars to cause amount as principal, etc., to be inserted.

687.10 Not applicable to chartered banks, trust companies, building and loan associations, savings and loan asso­ciations, or insurance companies.

687.11 Interest rates; individuals secondarily liable on corporate obligations.

vance of money, forbearance to enforce the col­lection of any debt, or contract exceeds $500,000 in amount or value, it shall not be usury or un­lawful to reserve, charge, or take interest thereon unless the rate of interest exceeds 15 percent per annum. The provisions of this section shall not apply to sales of bonds in excess of one hundred dollars and mortgages securing the same or money loaned on bonds. For the purpose of this section and §687.02, the rate of interest on any loan of money shall be determined and computed upon the assumption that the debt will be paid according to the agreed terms, and in the event said loan is paid or collected by court action prior to the term of said loan, any payments charged, reserved, or taken as an advance or for­bearance whh:h are in the nature of, and taken into account in the calculation of, interest shall be spread over the stated term of the loan for the purpose of determining the rate of interest.

History .-§2, ch. 4022, 1891; GS 3105; §2, ch. 5960, 1909; RGS 4851; CGL 6938; §2, ch . 29705, 1955; §1, ch. 70-331; §2, ch. 73-298.

• Note.- This section as amended takes effect October 1, 1973. cf.-§1.01(3), "Person" defined.

687.031 Construction, 1§687.02 and 687.03.­Sections 687.02 and 687.03 shall not be con­strued to repeal, modify or limit any or either of the special provisions of existing atatutory law creating exceptions to the general law gov­erning interest and usury (chapter 687) and specifying the interest rates and charges which may be made pursuant to such exception&, in­cluding but not limited to those exception& which relate to banks, Morris plan banks, die­count consumer financing, small loan compa­nies and domestic building and loan associa­tions.

WltorJ.-f3, cb. 28701, 1851.

687.04 Penalty for usury; not to apply to transferee of negotiable paper unless usury appears on face.-Any person, or any agent, oftlcer or other representative of any peraon, willfully violating the provisions of §687 .03 shall forfeit the entire interest so charged, or contracted to be charged or reserved, and only the actual principal sum of sucb usurioua contract can be enforced in any court in

1830

Ch. 687 INTEREST AND USURY Ch. 687

this state, either at law or in equity; and when said usurious interest is taken or re­served, or has been paid, then and in that event the person, who has taken or reserved, or has been paid, either directly or indirectly, such usurious interest, shall forfeit to the party from whom such usurious interest has been reserved, taken or exacted in any way, double the amount of interest so reserved, taken or exacted; provided, however, that this shall not apply to a bona fide endorsee or transferee of negotiable paper purchased before maturity, unless the usurious character should appear upon its face, or that the said endorsee or transferee shall have had actual notice of the same before the purchase of such paper, but in such event double the amount of such usurious interest may be recovered after payment, by action against the party originally exacting the same, in any court of competent jurisdiction in this state, to­gether with an attorney's fee, as provided in §687.06. ..... ..,._. .. ola • ..,._ 1111; GS 1101; II, ola. 1180, 1101;

RGS 41&1; CGL -·

687.05 Provisions for payment of attorney's fees.-No provision for the payment of attor­ney's fees, or charge for exchange or similar charge shall render such instrument subject to the terms of any statute of this state, limit­ing the amount of interest which shall be charged on such instrument.

Hlatory.-12. ch. 4374, 1885 ; OS 3107; ROB 4853; COL 8840.

687.06 Attorney's fee in enforcin~t non­usurious contracts; proviso; insurance prem­iums; attorney's fee provided in note.-This chapter shall not be so construed as to pre­vent provision for the payment of such at­torney's fees as the court may determine in cases brought before the court to be reason­able and just for legal services rendered in enforcing nonusurious contracts, either at law or in equity. This chapter shall not be construed so as to prohibit mortgagees from contracting for or collecting premiums for

· insurance actually issued on the property mortgaged, with the usual loss payable or mortgage clause attached theret.o; provided further, that it shall not be necessary for the court to adjudge an attorney's fee, pro­vided in any note or other instrument of writ­ing, to be reasonable and just, when such fee does not exceed ten per cent of the prin­cipal sum named in said note, or other instrument in writing.

Hietory.-§4. ch. 5960, 1909; §1 , ch. 6870, 1915; RGS 4854; CGL 6941; §26, ch. 73-334.

an extension of credit or any person claiming by, under, or through such person;

(c) "Debtor" means any person who re­ceives an extension of credit or any person who guarantees the repayment of a loan of money for another person;

(d) "Extension of credit" means to make or renew a loan of money or any agreement for forbearance to enforce the collection of such loan;

(e) "Extortionate extension of credit" is any extension of credit whereby it is the under­standing of the creditor and the debtor at the time an extension of credit is made that delay in making repayment or failure to make repay­ment could result in the use of violence or other criminal means to cause harm to the person, reputation, or property of any person.

(f) "Loan shark" or "shylock" shall mean any person as defined herein who lends money unlawfully under subsections (2),(3), or (4).

(g) "Loan sharking" or "shylocking" shall mean the act of any person as defined herein lending money unlawfully under subsections (2), (3), or (4).

(2) Unless otherwise specifically allowed by law, any person making an extension of credit to any person, who shall willfully and knowingly charge, take, or receive interest thereon at a rate exceeding twenty-five percent per annum but not in excess of forty-five percent per annum, or the equivalent rate for a longer or shorter period of time, whether directly or indirectly, or conspires so to do, shall be guilty of a misdemeanor of the second degree, punish­able as provided in §775.082 or §775.083.

(3) Unless otherwise specifically allowed by law, any person making an extension of credit to any person, who shall willfully and knowingly charge, take or receive interest thereon at a rate exceeding forty-five percent per annum or the equivalent rate for a longer or shorter period of time, whether directly or indirectly or conspire so to do, shall be guilty of a felony of the third degree, punishable as provided in §775.082, §775.083, or §775.084.

( 4) Any person who shall knowingly and willfully make an extortionate extension of credit to any person or conspire so to do shall be guilty of a felony of the second degree, punishable as provided in §775.082, §775.083, or §775.084. In any prosecution under this subsection, evidence that the creditor then had a reputation in the debtor's community for the use or threat of use of violence or other criminal means to cause harm to the person, reputation, or property of any person to collect extensions of credit or to punish the nonrepay­ment thereof shall be admissible.

68_7.071 Criminal usury, loan sharking; shy- (oJ Books of account or other documents lockmg.- recording extensions of credit in violation of

(1) DEFINITIONS.-The following words b t" (3) and phrases, as used in this section shall have su sec Ions or (4) are declared to be con-the following meanings: • traband, and any person, other than a public

officer in the performance of his duty, and other (a) "Person" shall be construed to be defined than the person charged such usurious interest

as provided in § 1.01 (3) ; and person acting on his behalf, who shall (b) "Creditor" means any person who makes knowingly and willfully possess or maintain

1831

Ch. 687 INTEREST AND USURY Ch. 687

such books of account or other documents, or conspire so to do, shall be guilty of a misde­meanor of the first degree, punishable as provided in §775.082 or §775.083.

(6) No person shall be excused from attend­ing and testifying or producing any books, paper, or other document before any court upon any investigation, proceeding, or trial, for any violation of this section upon the ground or for the reason that the testimony or evidence, documentary or otherwise, re­quired of him may tend to convict him of a crime or subject him to a penalty or forfeiture, but no person shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he may so testify or produce evidence, documentary or otherwise, and no testimony so given or produced shall be received against him upon any criminal investigation or pro­ceeding.

(7) No extension of credit made in violation of any of the provisions of this section shall be an enforceable debt in the courts of this state.

History.-§!, ch . 69-135; §676, ch. 71-136.

687.08 Persons lending money to give bor· rower receipt for payments; contents of receipt; penalty for violation.-Every person, or the agent, officer, or other reptesentative of any person, lending money in this state upon security shall, whenever the borrower of such money makes payment of any money, either principal or interest, immediately upon such payment being made, give to said borrower, a receipt, dated of the date of such payment, which receipt shall state the amount paid and for what such payments is made. If such payment is for interest on the sum borrowed, the receipt shall so state. If the sum so paid is to be applied to the payment of the prin· cipal sum borrowed, the receipt shall so state. All such receipts shall be duly and properly signed by the person, or the agent, officer or other representative of the person, to whom such money is paid. Whoever refuses, upon demand, to give a receipt complying with the requirements of this section shall forfeit the entire interest upon said principal sum to the borrower.

Bl•tor;r.-18, ch. 61180, 1909; ROS 411&8; COL 8H8. cf.-11.01(1) "Penon" 4eftne4.

887.09 Persons accepting chattel mortgage '• as security for loans under one hundred dol-

Iars to cause amount as principal, etc., to be fnserted.-Every mortgagee accepting a mort­gage on personal property as security for the repayment of a loan of money less than one hundred dollars shall cause to be stated in such mortgage, separately and distinctly, the several amounts secured as principal, interest and fees, and any mortgagee willfully violat­ing the provisions of this section shall forfeit all interest and fees secured by such mort­gage, and be entitled to recover only the prin­cipal sum.

Bl•tor;r.--17, ch. 6880, 1109; ROS 4115'1; COL IN4.

687.10 Not applicable to chartered banks, trust companies, building and loan associations, savings and loan associations, or insurance companies.-The provisions of §§687.08 and 687.09 shall not apply to chartered banks, state or national, trust companies, building and loan associations or to savings and loan associations, whether chartered under state or federal stat­utes, or insurance companies.

History .-18, ch. 5860, 1808; ROB •ass; COL se•s; 11. ch. se-so.

687.11 Interest rates; individuals secondar­ily liable on corporate obligations.-

(!) No individual secondarily liable as en­dorser, guarantor, surety, or otherwise on any corporate obligation shall be required, in any proceeding for collection of interest in the courts of this state, to pay aJily interest in ex­cess of ten per cent per annum, and any inter­est claimed therein against such individual in excess of ten per cent per annum shall be for­feited; and no corporation, in any such pro­ceeding in the courts of this state where the interest is proven to exceed fifteen per cent per annum, shall be required to pay any interest, and in such event all interest shall be forfeited.

(2) All laws or parts of laws in conflict herewith and all other statutory penalties for usury applicable to loans to corporations are hereby repealed.

(3) The provisions of this act shall not be construed to repeal, modify or limit any or ei­ther of the special provisions of existing statu­tory law creating exceptions to the general law governing interest and usury and specifying the interest rates and charges which may be made pursuant to such exceptions, including but not limited to those exceptions which relate to banks, Morris plan banks, discount consumer financing, small loan companies and domestic building and .loan associations.

Hlatory.-111-3, ch. 65-:ltl.

1832

TITLE XXXIX REAL AND PERSONAL PROPERTY

CHAPTER 689

CONVEYANCES OF LAND AND DECLARATIONS OF TRUST

689.01 - 689.02

689.03 689.04 689.05 689.06 689.07

How real estate conveyed. Form of warranty deed prescribed. Effect of such deed. How executed. How declarations of trust proved. How trust estate conveyed. "Trustee" or "as trustee" added to name

of grantee, transferee, assignee or mortgagee transfers interest or creates lien as if additional word or words not used.

689.071 Land trusts transferrinR" interests in real estate; ownership vests in trustee.

689.075 Inter vivos trusts; powers retained

- 689.08 689.09

..-689.10

by settlor. Fines and common recoveries. Deeds under statute of uses. Words of limitation and the words "fee

simple" dispensed with. 689.11 Conveyances between husband and wife

direct; homestead.

689.01 How real estate conveyed.-No estate or interest of freehold, or for a term of more than one year, or any uncertain interest of, in or out of any messuages, lands, tenements or hereditaments shall be created, made, granted, transferred or released in any other manner than by instrument in writing, signed in the pres­ence of two subscribing witnesses by the party creating, making, granting, conveying, trans­ferring or releasing such estate, interest, or term of more than one year, or by his agent there­unto lawfully authorized, unless by will and testa­ment, or other testamentary appointment, duly made according to law; and no estate or inter­est, either of freehold, or of term of more than one year, or any uncertain interest of, in, to or out of any messuages, lands, tenements or hered­itaments, shall be assigned or surrendered un­less it be by instrument signed in the presence of two subscribing witnesses by the party so assigning or surrendering, or by his agent there­unto lawfully authorized, or by the act and op­eration of law. No seal shall be necessary to give validity to any instrument executed in con­formity with this section. Corporations may con­vey in accordance with the provisions of this section or in accordance with the provisions of §§692.01 and 692.02.

Blatei'J.-11, NoY. Ill, 1821; R8 11110; 08 uti; 1108 J'rft; COL 11880; It, ch. 201M, IKI. cf.-1692.01 et seq ., Conveyances by corporations to be sealed.

16911.01, Recordation of conveyances.

689.111 Conveyances of homestead; power of attorney.

689.12 How state lands conveyed for educa­tional purposes.

689.13 Rule against perpetuities not applicable to dispositions of property for private cemeteries, etc.

- 689.14 Entailed estates. 689.15 Estates by survivorship.

-689.17 Rule in Shelley's case abolished. 689.18 Reverter or forfeiture provisions, limi­

tations; exceptions. 689.19 Variances of names in recorded in­

struments. 689.20 Limitation on use of word "minerals." 689.21 Disclaimer of interests in property

passing under certain nontesta­mentary instruments or under certain powers of appointment.

16911.03, A.cknowledcment and proof. 16911.031, A.ftldavlts and acknowle4cmenta by m-bera

of armed service.

1725.01 Praudulent aalea. 727.01 et seq., General uslpment.

689.02 Form of warranty deed prescribed.­Warranty deeds of conveyance to land may be in the following form, viz. :

"This indenture, made this -------------------- day of ____________________ A. D. ________ , between --------------------• of the county of ------------------------ in the State of --------------------------• party of the first part, and ·-------------------• of the county of -·--·· ·---------·--·• in the State of ______________________ , party of the second part, witnesseth: That the said party of the first part, for and in consideration of the sum of ____________________ dollars, to him in hand paid by the said party of the second part, the receipt whereof is hereby acknowledged, has granted, bargained and sold to the said party of the second part, his heirs and assigns forever, the following described land, to-wit: ----------------------

And the said party of the first part does hereby fully warrant the title to said land, and will defend the same against the lawful claims of all persons whomsoever."

Hlato.,.-11, ch. f088, 1881; GS ZU9; RGS 8788; CGL &661.

1833

Ch. 689 CONVEYANCES OF LAND AND DECLARATIONS OF TRUST Ch. 689

689.03 Effect of such deed.-A conveyance executed substantially in the foregoing form shall be held to be a warranty deed with full com­mon law covenants, and shall just as effectually bind the grantor, and his heirs, as if said cove­nants were specifically set out therein. And this form of conveyance when signed by a married woman shall be held to convey whatever inter­est in the property conveyed which she may possess.

Blato17.-12, ch. 4088, 1881; GS 24110; RGS 1711; CGL liS62; 15, ch. 209154, lNl.

689.04 How executed.-such deeds shall be executed and acknowledged as is now or may hereafter be provided by the law regulating conveyances of realty by deed.

Bl•tol7-18, ch. 4088, 1881; GS 1451; RGS 1'110; CGL 5688. cf.-§695.03, Acknowledgment.

§695.031, Acknowledgmente by members of armed forces.

689.05 How declarations of trust proved.­All declarations and creations of trust and confidence of or in any messuages, lands, tene­ments or hereditaments shall be manifested and proved by some writing, signed by the party authorized by law to declare or create such trust or confidence, or by his last will and testament, or else they shall be utterly void and of none effect; provided, always, that where any conveyance shall be made of any lands, messuages or tenements by which a trust or confidence shall or may arise or result by the implication or construction of law, or be transferred or extinguished by the act and operation of law, then, and in every such case, such trust or confidence shall be of the like force and effect as the same would have been if this section had not been made, anything herein contained to the contrary in anywise notwithstanding.

Blato17-12, Nov. 15, 1828; RS 1851; GS 24112; RGS 8791; CGL 11864.

689.06 How trust estate conveyed.-All grants, conveyances or assignments of trust or confidence of or in any lands, tenements or hereditaments, or of any estate or interest therein, shall be by deed signed, sealed and delivered, in the presence of two subscribing witnesses, by the party granting, conveying or assigning, or by his attorney or agent there­unto lawfully authorized, or by last will and testament duly made and executed, or else the same shall be void and of none effect.

Blato17.-18, Nov. 15, 1828; RS 11152; GS 2468; RGS 87112; CGL 6666.

689.07 ''Trustee" or "as trustee" added to name of grantee, transferee, assignee or mort­gagee transfers interest or creates lien as if additional word or words not used.-

(1) Every deed or conveyance of real estate heretofore or hereafter made or exe­cuted, in which the words "trustee" or "as trustee" are added to the name of the grantee, and in which no beneficiaries are named nor the nature and purposes of the trust, if any, are set forth, shall grant and is hereby

declared to have granted a fee simple estate with full power and authority in and to the grantee in such deed to sell, convey and grant and encumber both the legal and beneficial in­terest in the real estate conveyed, unless a con­tary intention shall appear in the deed or con­veyance; provided, that there shall not appear of record among the public records of the county in which the real property is situate at the time of recording of such deed or convey­ance, a declaration of trust by the grantee so described declaring the purposes of such trust, if any, declaring that the real estate is held other than for the benefit of the grantee.

(2) Every instrument heretofore or here­after made or executed transferring or assign­ing an interest in real property in which the words "trustee" or "as trustee" are added to the name of the transferee or assignee, and in which no beneficiaries are named nor the nature and purposes of the trust, if any, are set forth, shall transfer and assign and is hereby declared to have transferred and as­signed the interest of the transferor or assignor to the transferee or assignee with full power and authority to transfer, assign and encumber such interest, unless a contrary intention shall appear in the instrument; provided that there shall not appear of record among the public records of the county in which the real prop­erty is situate at the time of the recording of such instrument, a declaration of trust by the assignee or transferee so described declaring the purposes of such trust, if any, or declaring that the interest in real property is held other than for the benefit of the transferee or as­signee.

(3) Every mortgage of any interest in real estate or assignment thereof heretofore or here­after made or executed in which the words "trustee" or "as trustee" are added to the name of the mortgagee or assignee and in which no beneficiaries are named nor the nature and purposes of the trust, if any, are set forth, shall vest and is hereby declared to have vested full rights of ownership to such mortgage or assignment and the lien created thereby with full power in such mortgagee or assignee to assign, hypothecate, release, satisfy or fore­close such mortgage unless a contrary intention shall appear in the mortgage or assignment; provided that there shall not appear of record among the public records of the county in which the property constituting security is situate at the time of recording of such mort­gage or assignment, a declaration of trust by such mortgagee or assignee declaring the pur­poses of such trust, if any, or declaring that such mortgage is held other than for the bene­fit of the mortgagee or assignee.

(4) Nothing herein contained shall prevent any person from causing any declaration of trust to be recorded before or after the recorda­tion of the instrument evidencing title or own­ership of property in a trustee; nor shall this section be construed as preventing any bene-

1834

CONVEYANCES OF LAND AND DECLARATIONS OF TRUST Ch. 689

ficiary under an unrecorded declaration of trust from enforcing the terms thereof against the trustee; provided, however, that any grantee, transferee, assignee or mortgagee, or person ob­taining a release or satisfaction of mortgage from such trustee for value prior to the placing of record of such declaration of trust among the public records of the county in which such real property is situate, shall take such inter­est or hold such previously mortgaged property free and clear of the claims of the beneficiaries of such declaration of trust and of anyone claiming by, through or under such benefici­aries, and such person need not see to the appli­cation of funds furnished to obtain such trans­fer of interest in property or assignment or release or satisfaction of mortgage thereon.

(5) In all cases in which tangible personal property is or has been sold, transferred or mortgaged in a transaction in conjunction with and subordinate to the transfer or mortgage of real property, and the personal property so transferred or mortgaged is physically located on and used in conjunction with such real property, the prior provisions of this section are applicable to the transfer or mortgage of such personal property, and, where the prior provisions of this section in fact apply to a transfer or mortgage of personal property, then any transferee or mortgagee of such tangible personal property shall take such personal property free and clear of the claims of the beneficiaries under such declaration of trust (if any), and of the claims of anyone claiming by, through or under such beneficiaries, and the release or satisfaction of a mortgage on such personal property by such trustee shall release or satisfy such personal property from the claims of the beneficiaries under such declara­tion of trust (if any) and from the claims of anyone claiming by, through or under such beneficiaries.

Hlstory.-§1, ch. 6925, 1915; §10, ch. 7838, 1919; RGS 3793; CGL 5666; §1, ch. 59-251.

689.071 Land trusts transferring interests in real estate; ownership vests in trustee.-

(1) Every conveyance, deed, mortgage, lease assignment or other instrument heretofore or hereafter made, hereinafter referred to as the recorded instrument, transferring any interests in real property in this state including but not limited to leasehold and mortgagee interests to any person, corporation, bank, or trust company, qualified to act as a fiduciary in this state, in which said recorded instrument said person, corporation, bank, or trust company is desig­nated trustee, or, as trustee, without therein naming the beneficiaries of such trust, whether or not reference is made in said recorded in­strument to any separate collateral unrecorded declarations or agreements, shall be effective to vest and is hereby declared to have vested in such trustee full rights of ownership over said real property or interest therein, with full power and authority as granted and provided in said recorded instrument to deal in and with said

property or interest therein or any part thereof: provided, said recorded instrument shall confer on the trustee the power and authority either to protect, conserve and to sell, or to lease, or to encumber, or otherwise to manage and dispose of the real property described in said recorded instrument.

(2) Any grantee, mortgagee, lessee, trans-feree, assignee, or person obtaining satisfac­tions, releases, or otherwise in any way dealing with the trustee with respect to said real prop­erties held in trust under said recorded instru­ment, as hereinabove provided for, shall not be obligated to inquire into the identification or status of any named or unnamed beneficiaries, or their heirs or assigns to whom a trustee may be accountable under the terms of said recorded instrument, or under any unrecorded separate declarations or agreements collateral to said recorded instrument whether or not such declarations or agreements are referred to therein, nor to inquire into or ascertain the authority of such trustee to act within and exercise the powers granted under said recorded instrument, nor to inquire into the adequacy or disposition of any consideration, if any is paid or delivered to such trustee in connection with any interest so acquired from such trustee, nor to inquire into any of the provisions of any said unrecorded declarations or agreements.

*(3) All persons dealing with the trustee under said recorded instrument as hereinabove provided shaiJ take any interest transferred by the trustee thereunder within the power and authority as granted and provided therein, free and clear of the claims of all the named or unnamed beneficiaries of such trust, and of any unrecorded declarations or agreements col­lateral thereto whether referred to in said recorded instrument or not, and of anyone claiming by, through or under said beneficiaries including and without limiting the foregoing to any claim arising out of any dower or curtesy interest of the spouse of any beneficiary thereof; provided, nothing herein contained shaiJ prevent a beneficiary of any said unrecorded coiiateral declarations or agreements from enforcing the terms thereof against the trustee.

( 4) In all cases where said recorded instru­ment, as hereinabove provided, contains a pro­vision defining and declaring the interests of beneficiaries thereunder to be personal property only, such provision shaiJ be controlling for all purposes where such determination shaiJ become an issue under the laws or in the courts of this state.

(5) This act is remedial in nature and shall be given a liberal interpretation to effectuate the intent and purposes hereinabove expressed.

(6) This act shaiJ not apply to any deed, mortgage or other instrument to which §689.07, applies.

History,-§§1-6, ch. 63-468. *Note.-Ch. 73-107, Laws of Florida, effective October 1, 1973, abolished the right of dower in property transferred prior to death.

689.075 Inter vivos trusts; powers retained by settlor.-

(1) An otherwise valid trust which has

1835

Ch. 689 CONVEYANCES OF LAND AND DECLARATIONS OF TRUST Ch. 689

been created by a written instrument shall not be held invalid or an attempted testamentary disposition for any of the following reasons:

(a) Because the settlor or another person or both possess the power to revoke, amend, alter, or modify the trust in whole or in part;

(b) Because the settlor or another person or both possess the power to appoint by deed or will the persons and organizations to whom the income shall be paid or the principal dis­tributed;

(c) Because the settlor or another person or both possess the power to add to, or withdraw from, the trust all or any part of the principal or income at one time or at different times;

(d) Because the settlor or· another person or both possess the power to remove the trustee or trustees and appoint a successor trustee or trustees;

(e) Because the settlor or another person or both possess the power to control the trustee or trustees in the administration of the trust;

(f) Because the settlor has retained the right to receive all or part of the income of the trust during his life or for any part thereof;

(g) Because the settlor is, at the time of the execution of the instrument, or thereafter becomes, sole trustee; provided that at the time the trust instrument is executed it is either valid under the laws of the jurisdiction in which it is executed or it is executed in accordance with the formalities for the execution of wills required in such jurisdiction.

(2) Nothing contained herein shall affect the validity of those accounts, including but not limited to bank accounts, share accounts, de­posits, certificates of deposit, savings certifi­cates, and other similar arrangements, hereto­fore or hereafter established at any bank or savings and loan association by one or more persons, in trust for one or more other persons, which arrangements are, by their terms, rev­ocable by the person making the same until his death or incompetency.

(3) The fact that any one or more of the powers specified in subsection (1) are in fact exercised once, or more than once, shall not affect the validity of the trust or its nontesta-mentary character. · - ( 4) This -section shall be applicable to

trusts executed before or after July 1, 1969 by persons who are living on or after said date.

History.-§§1, 2, ch. 69·192; §1, ch. 69·1747; §§1 , 2, ch. 71·126; §169, ch. 73·333.

689.08 Fines and common recoveries.­Conveyance by fine or by common recovery shall never be used in this state.

HlltOJT.-12, Feb. 4, 1113&; RS 19158; OS 2464; ROS 8794; CGL 6667.

689.09 Deeds under statute of uses.-By deed of bargain and sale, ,or by deed of lease and release, or of covenant to stand seized to the use of any other person, or by deed operat­ing by way of covenant to stand seized to the use of another person, of or in any lands or

tenements in this state, the possession of the bargainor, releasor or covenantor shall be deemed and adjudged to be transferred to the bargainee, releasee or person entitled to the use as perfectly as if such bargainee, releasee or person entitled to the use had been enfeoffed by livery of seizin of the land conveyed by such deed of bargain and sale, release or covenant to stand seized; provided, that livery of seizin can be lawfully made of the lands or tene­ments at the time of the execution of the said deeds or any of them.

Hl•tor;y.-§12, Nov. 16, 1828; R!l 1954; GS 2466; ROS 87H; COL 5668.

689.10 Words of limitation and the words "fee simple" dispensed with.-Where any real estate has heretofore been conveyed or granted or shall hereafter be conveyed or granted with­out there being used in the said deed or con­veyance or grant any words of limitation, such as heirs or successors, or similar words, such conveyance or grant, whether heretofore made or hereafter made, shall be construed to vest the fee simple title or other whole estate or interest which the grantor had power to dispose of at that time in the real estate conveyed or granted, unless a contrary intention shall appear in the deed, conveyance or grant.

Hl•tor;y.-11, cb. 6146, 1903·; GS 2466; RGS 3796; 11. cb. 10170, 1925; CGL 6669.

689.11 Conveyances between husband and wife direct; homestead.-

(1) A conveyance of real estate, including homestead, made by one spouse to the other shall convey the legal title to the grantee spouse in all cases in which it would be effectual if the parties were not married, and the grantee need not execute the conveyance. An estate by the "' entirety may be created by the action of the spouse holding title:

(a) Conveying to the other by a deed in which the purpose to create the estate is stated; or

(b) Conveying to both spouses. (2) All deeds heretofore made by a husband

direct to his wife or by a wife direct to her hus­band are hereby validated and made as effectual to convey the title as they would have been were the parties not married;

(3) Provided, that nothing herein shall be construed as validating any deed made for the purpose, or that operates to defraud any creditor or to avoid payment of any legal debt or claim; and

(4) Provided further, that this section shall not apply to any conveyance heretofore made, the validity of which shall be contested by euit commenced within one year of the effective date of this law.

Hlltor;y.-11, cb. 5147, 1908; OS 2457; ROS 8797; COL 5670; §6, ch . 20954, 1941; §1, ch. 23964, 1947; §1, ch. 71·54.

689.111 Conveyances of homestead; power of attorney.-

(1) A deed or mortgage of homestead realty owned by an unmarried person may be

1836

Ch. 689 CONVEYANCES OF LAND AND DECLARATIONS OF TRUST Ch. 689

executed by virtue of a power of attorney executed in the same manner as a deed.

(2) A deed or mortgage of homestead realty owned by a married person, or owned as ·an · estate by the entirety, may be executed by virtue of a power of attorney executed solely by one spouse to the other, or solely by one spouse or both spouses to a third party, provided the power of attorney is executed in the same manner as a deed. Nothing in this section shall be construed as dispensing with the requirement that husband and wife join in the conveyance or mortgage of homestead realty, but the joinder may be accomplished through the exercise of a power of attorney.

History.-§1, ch . 71-27.

689.12 How state lands conveyed for edu· cational purposes.-

( I) The title to all lands granted to or held by the state for educational purposes shall be conveyed by deed executed by the members of the State Board of Education, with an impres­sion of the seal of the Board of Trustees of the Internal Improvement Trust Fund of the state thereon and when so impressed by this seal deeds shall be entitled to be recorded in the public records and to be received in evidence in all courts and judicial proceedings.

(2) Lands held for any tuberculosis hospi­tal and declared to be surplus to the needs of such hospital may be conveyed to the district school board in which said lands are located for educational purposes.

Hl•tor;r.-11, ch 4999, 1901; GS 2468; RGS 8798; CGL 5671; 111, 2, ch. 67-191; §§27, 35, ch. 69-106 ; 11. ch. 69-300.

689.13 Rule against perpetuities not applic­able to dispositions of property for private cemeteries, etc.-No disposition of property, or the income thereof, hereafter made for the maintenance or care of a~y public or private burying ground, churchyard, or other place for the burial of the dead, or any portion thereof, or grave therein, or monument or other erection in or about the same, shall fail by reason of such disposition having been made in perpetuity; but such disposition shall be held to be made for a charitable purpose or purposes.

Bl•tor;r.-§1, ch. 14666, 1931; CGL 1936 Supp. 6671(1).

689.14 Entailed estates.-No property, real or personal, shall be entailed in this state. Any instrument purporting to create an estate tail, express or implied, shall be deemed to create an estate for life in the first taker with remainder per stirpes to the lineal descendants of the first taker in being at the time of his death. If tht> remainder fails for want of such remainderman, then it shall vest in any other remaindermen designated in such instrument, or, if there is no such designation, then it shall revert to the original donor or to his heirs.

Hletor;r.-§20, Nov. 17, 1829; RS 1818; GS 2293; RGS 8616; CGL 6481; 12, ch. 20964, 1941; am. 11, ch. 28126, 1946. cf.-1689.17, Rule lu Shelley's Cue abolished.

689.15 Estates by survivorship.-The doc-

trine of the right of survivorship in cases of real estate and personal property held by joint tenants shall not prevail in this state; that is to say, except in caf!eS of estates by entirety, a devise, transfer or conveyance heretofore or hereafter made to two or more shall create a tenancy in common, unless the instrument cre­ating the estate shall expressly provide for the right of survivorship; and in cases of estates by entirety, the tenants, upon dissolution of mar­riage, shall become tenants in common.

History.- §20, Nov. 17, 1829; RS 1819; GS 2294; RGS 3617; CGL 5482; §3, ch . 20954, 1941; §1, ch. 73-300.

689.17 Rule in Shelley's case abolished.­The rule in Shelley's case is hereby abolished. Any instrument purporting to create an estate for life in a person with remainder to his heirs, lawful heirs, heirs of his body or to his heirs described by words of similar import, shall be deemed to create an estate for life with remainder per stirpes to the life tenant's lineal descendants in being at the time said life estate commences, but said remainder shall be subject to open and to take in per stirpes other lineal descendants of the life tenant who come into being during the continuance of said life estate.

Hlator:r .-12, ch. 28126, 1946. cf.- §689.14, Entailed estates.

689.18 Reverter or forfeiture provisions, limitations; exceptions.-

( I) It is hereby declared by the legisla­ture of the state that reverter or forfeiture provisions of unlimited duration in the convey­ance of real estate or any interest therein in the state constitute an unreasonable restraint on alienation and are contrary to the public policy of the state.

(2) All reverter or forfeiture provisions of unlimited duration embodied in any plat or deed executed more than twenty-one years prior to the passage of this law conveying real estate or any interest therein in the state, be and the same are hereby cancelled and an­nulled and declared to be of no further force and effect.

(3) All reverter provisions in any con­veyance of real estate of any interest therein in the state, now in force, shall cease and termi­nate and become null, void and unenforceable twenty-one years from the date of the convey­ance embodying such reverter or forfeiture provision.

(4) No reverter or forfeiture provision contained in any deed conveying real estate or any interest therein in the state, executed on and after July 1, 1951, shall be valid and binding more than twenty-one years from the date of such deed, and upon the expiration of such period of twenty-one years, the reverter or fo;rfeiture provision shall become null, void and unenforceable.

(5) Any and all conveyances of real prop­erty in this state heretofore or hereafter made to any governmental, educational, literary, scientific, religious, public utility, public trans-

1837

Ch. 689 CONV}}YANCES OF LAND AND DECLARATIONS OF TRUST Ch. 689

portation, charitable or non-profit corporation or association are hereby excepted from the provisions of this section.

(6) Any holder of a possibility of reverter who claims title to any real property in the state, or any interest therein by reason of a re­version or forfeiture under the terms or provi­sions of any deed heretofore executed and de­livered containing such reverter or forfeiture provision shall have one year from July 1, 1961, to institute suit in a court of competent juris­diction in this state to establish or enforce such right, and failure to institute such action with­in said time shall be conclusive evidence of the abandonment of any such right, title or inter­est~ and all right of forfeiture or reversion shall thereupon cease and determine, and become null, void and unenforceable.

(7) This section shall not vary, alter or terminate the restrictions placed upon said real estate, contained either in restrictive cov­enants or reverter or forfeiture clauses, and all said restrictions may be enforced and viola­tions thereof restrained by a court of com­petent jurisdiction whenever any one of said restrictions or conditions shall be violated, or threat to violate the same be made by owners or parties in possession or control of said real estate, by an injunction which may be issued upon petition of any person adversely affected, mandatorily requiring the abatement of such violations or threatened violation and restraining any future violation of said re­strictions and conditions.

Blo&ory.-tll-'J, ch. 2882'1, 1851.

689.19 Variances of names in recorded in· struments.-

(1) The word "instrument" as used in this section shall be construed to mean and include not only instruments voluntarily executed but also papers filed or issued in or in connection with actions and other proceedings in court and orders, judgments and decrees entered therein and transcripts of such judgments and pro­ceedings in foreclosure of mortgage or other liens.

(2) Variances between any two instruments affecting the title to the same real property both of which shall have been spread on the record for the period of more than ten years among the public records of the county in which such real property is situated, with respect to the names of persons named in the respective instruments or in acknowledgments thereto arising from the full christian name appearing in one and only the initial letter of that christian name appearing in the other or from a full middle name appearing in one and only the initial letter of that middle name appearing in the other or from the initial letter of a middle name appearing in one and not appearing in the other, irrespective of which one of the two instruments in which any such variance occurred was prior in point of time to the other and irrespective of whether the

instruments were executed or originated before or after August 6, 1963, shall not destroy or impair the presumption that the person so named in one of said instruments was the same person as the one so named in the other of said instruments which would exist if the names in the two instruments were identical; and, in spite of any such variance, the person so named in one of said instruments shall be pre­sumed to be the same person as the one so named in the other until such time as the con­trary appears and, until such time, either or both of such instruments or the record thereof or certified copy or copies of the record thereof shall be admissible in evidence in the same manner as though the names in the two instru­ments were identical.

Blo&ory .-11. ch. 28208, 1853.

689.20 Limitation on use of word "miner­als."-Whenever the word "minerals" is here­after used in any deed, lease or other contract in writing, said word or term shall not include any of the following: topsoil, muck, peat, humus, sand and common clay, unlel[ls expressly provided in said deed, lease or other contract in writing.

BloiHJ.-11, oh. 11·3'18.

689.21 Disclaimer of interests in property passing under certain nontestamentary instru­ments or under certain powers of appointment.­

(!) DEFINITIONS.-(a) "Beneficiary" means any person who

becomes entitled to an interest in property in any manner described in subsection (2).

(b) "Grantor" means the person by whom an interest in property was created.

(c) "Power of appointment" means any power described in subparagraph (d) 3.

(d) An "interest in property" which may be disclaimed shall include:

1. The whole of any property, real or personal, legal or equitable, or any fractional part, share, or portion of property, or specific assets thereof; or

2. Any estate in such property; or 3. Any power to appoint, consume, apply,

or expend property or any other right, power privilege, or immunity relating thereto. '

(2) SCOPE OF RIGHT TO DISCLAIM.-(a) A beneficiary may disclaim any interest

in property which would pass (unless disclaimed) to the beneficiary:

1. As donee; 2. As grantee; 3. Under any deed, assignment or other

nontestamentary instrument of con~eyance or transfer;

4. As beneficiary of an inter vivos trust· 5. As beneficiary of an insurance contract: 6. Through exercise or nonexercise of ~

power of appointment exercisable by deed; 7. Through nontestamentary exercise of a

power of appointment exercisable by deed or will;

1838

CONVEYANCES OF LAND AND DECLARATIONS OF TRUST Ch. 689

8. As donee of a power of appointment created _ by a non testamentary instrument;

9. By succession in any manner described in this subsection to a disclaimed interest; or

10. In any other manner not specifically enumerated herein under a nontestamentary instrument.

(b) Disclaimer may be made for a minor, incompetent, or deceased beneficiary by the guardian or personal representative if the circuit court having jurisdiction of the estate of such minor, incompetent, or deceased beneficiary, after hearing upon petition filed by the guard­ian, personal representative, or other interested person and served upon such persons and in such manner as the judge shall direct, finds that it is in the best interests of those interested in the estate of such beneficiary, and of those who take the beneficiary's interest by virtue of the disclaimer, and not detrimental to the best interests of the beneficiary, to make the dis­claimer. If so ordered by the circuit court, the guardian or personal representative shall ex­ecute and file the disclaimer on behalf of the beneficiary within the time and in the manner in which the beneficiary himself could disclaim if he were living, of legal age, and competent.

(3) DISPOSITION OF DISCLAIMED IN-TERESTS.- .

(a) Unless the grantor, or a donee of a power of appointment, has otherwise provided by a nontestamentary instrument with reference to the possibility of a disclaimer by the bene­ficiary, the interest disclaimed shall descend, be distributed, or otherwise be disposed of in the same manner as if the disclaimant had died immediately preceding the death or other event which causes him to become finally ascertained as a beneficiary and his interest to become indefeasibly fixed both in quality and quantity, and, in any case, the disclaimer shall relate for all purposes to such date, whether filed before or after such death or other event. An interest in property disclaimed shall never vest in the disclaimant.

(b) A beneficiary who disclaims any in­terest which would pass to him in any manner described in paragraph (2)(a) shall not be ex­cluded, unless his disclaimer instrument so provides, from sharing in any other interest to which he may be entitled in any manner describ­ed in this section, including subparagraph (2)(a)9., even though such interest includes, by virtue of the beneficiary's disclaimer, disclaimed assets.

(4) FORM, FILING, RECORDING, AND SERVICE OF DISCLAIMER INSTRUMENTS.­

(a) Any writing to be a disclaimer shall: 1. Declare the disclaimer and its extent; 2. Describe the interest in property dis­

claimed; and 3. Be signed, witnessed, and acknowledged

in the manner provided for deeds of real estate.

(b) A disclaimer shall be effective and irrevocable when the instrument is filed for recording in the office of any circuit .court in this state.

(c) A copy of the disclaimer instrument shall be delivered by hand or by certified mail to the personal representative, trustee, or other person having legal title to or possession of the property in which the disclaimed interest exists. No such representative, trustee, or other person shall be liable for any otherwise proper distribu­tion or other disposition made without actual notice of the disclaimer, or, in the event such disclaimer is waived or barred as hereinafter provided, for any otherwise proper distribution or other disposition made in reliance on such disclaimer, provided such distribution or dis­position is made without actual notice of the facts constituting the waiver or barring the right to disclaim.

(d) If an interest in or relating to real estate is disclaimed, a certified copy of the disclaimer instrument shall be filed in the office of the clerk of the circuit court of the county or counties wherein the real estate is located for recording, and shall constitute notice to all persons from the time of filing.

(5) TIME IN WHICH DISCLAIMER SHALL BE MADE.-A disclaimer shall be filed at any time after the creation of the interest but, in any event, within twelve months after the effective date of the non testamentary instrument creating the interest, or, if the disclaimant is not then finally ascertained as a beneficiary or his interest has not then become indefeasibly fixed both in quality and quantity, such disclaimer shall be filed not later than twelve months after the event which would cause him so to become finally ascertained and his interest to become indefeasibly fixed both in quality and quantity.

(6) WAIVER OR BAR TO RIGHT TO DISCLAIM.-The right to disclaim otherwise conferred by this section shall be barred if the beneficiary is insolvent at the time of the event giving rise to the right to disclaim. Any voluntary assignment or transfer of, or contract to assign or transfer, or encumbrance of, an interest in real or personal property, or written waiver of the right to disclaim an interest in real or per­sonal property, by any beneficiary, or any sale or other disposition of an interest in real or per­sonal property pursuant to judicial process, made before he has filed a disclaimer as herein pro­vided bars the right otherwise hereby conferred on such beneficiary to disclaim as to such interest. The acceptance, assignment, transfer, encumbrance, or written waiver of the right to disclaim, or sale pursuant to judicial process, of a part of an interest in property shall not bar the right to disclaim any other part of the interest in property.

(7) EFFECT OF RESTRAINTS; SPOUSE'S CONSENT.-The right to disclaim granted by this section shall exist irrespective of any limita-

1839

Ch. 689 CONVEYANCES OF LAND AND DECLARATIONS OF TRUST Ch. 689

tion imposed on the interest of the disclaimant in the nature of an express or implied spend­thrift provision or similar restriction. If an interest in real estate is disclaimed, the wife of the disclaimant, if such wife has consented to the disclaimer in writing, shall thereupon be automatically debarred from dower in such real estate. Disclaimer by a married woman shall be effective without the joinder or consent of her husband.

(8) EFFECT ON RIGHTS OUTSIDE THIS SECTION.-This section shall not abridge the right of any person, apart from this section, to

disclaim, renounce, alienate, release, or other­wise transfer or dispose of any interest in property under any existing or future rule of law.

(9) EFFECTIVE DATE.-Any interest in property coming into existence after October 1, 1971 and any interest in property which exists on October 1, 1971 but which has not then become indefeasibly fixed both in quality and quantity, or the beneficiary of which has not then become finally ascertained, may be dis­claimed in the manner provided herein.

History.-§1, ch. 71·31; §26, ch. 73-334.

1840

Ch. 690 UNIFORM PRINCIPAL AND INCOME LAW Ch. 690

CHAPTER 690

UNIFORM PRINCIPAL AND INCOME LAW 690.01 690.02 690.03

Short title. Definition of terms. Application of chapter; powers of set-

tlor. 690.04 Income and principal; disposition. 690.05 Apportionment of income. 690.06 Corporate dividends and share rights. 690.07 Premium and discount bonds.

690.01 Short title.-This chapter may be cited as the "Uniform Principal and Income Law."

Blatoi"J'.-116, ch. 18392, 1937; CGL 1940 Supp. 15671(2).

690.02 Definition of terms.-(1) "Principal" as used in this chapter

means any realty or personalty which has been so set aside or limited by the owner thereof or a person thereto empowered that it and any substitutions for it are eventually to be conveyed, delivered or paid to a person, while the return therefrom or use thereof or any part of such return or use is in the mean­time to be taken or received by or held for the same or another person.

(2) "Income" as used in this chapter means the return derived from a principal.

(3) "Tenant" as used in this chapter means the person to whom income is presently or cur­rently payable, or for whom it is accumulated or who is entitled to the beneficial use of the principal presently and for the time prior to its distribution.

(4) "Remainderman" as used in this chap­ter means the person ultimately entitled to the principal, whether named or designated by the terms of the transaction by which the prin­cipal was established or determined by oper­ation of law.

(5) "Trustee" as used in this chapter in­cludes the original trustee of any trust to which the principal may be subject and also any succeeding or added trustee. Blato~T.-11, ch. 18392, 1937; CGL 1940 Supp. 15671(2·a);

am. 17, ch. 22858, 1946. ct.-11.01, General deftnltlons.

690.03 Application of chapter; powers of settlor.-This chapter shall govern the ascer­tainment of income and principal, and the apportionment of receipts and expenses be­tween tenants and remaindermen, in all cases where a principal has been established with or, unless otherwise stated hereinafter, witho'ut the interposition of a trust; except that in the establishment of the principal provision may be made touching all matters covered by this chapter, and the person establishing the principal may himself direct the manner of ascertainment of income and principal and the apportionment of receipts and expenses or grant discretion to the trustee or other person to do so, and such provision and direction, where not otherwise contrary to law, shall control notwithstanding this chapter.

Rl•torF.-12. ch. 18392, 1887; CGL 1940 Supp. 6671(8).

690.08 Principal used in business. 690.09 Principal comprising animals. 690.10 Disposition of natural resources. 690.11 Principal subject to depletion. 690.12 Unproductive estate. 690.13 Expenses; trust estates. 690.14 Expenses; non trust estates. 690.15 Uniformity of interpretation.

690.04 Income and principal; disposition.­(1) All receipts of money or other property

paid or delivered as rent of realty or hire of personalty or dividends on corporate shares payable other than in shares of the corpora­tion itself, or interest on money loaned, or interest on or the rental or use value of prop­erty wrongfully withheld or tortiously dam­aged, or otherwise in return for the use of principal, shall be deemed income unless other­wise expressly provided in this chapter.

(2) All receipts of money or other property paid or delivered as the consideration for the sale or other transfer, not a leasing or letting, of property forming a part of the principal, or as a repayment of loans, or in liquidation of the assets of a corporation, or as the pro­ceeds of property taken on eminent domain proceedings where separate awards to tenant and remainderman are not made, or as pro­ceeds of insurance upon property forming a part of the principal except where such insur­ance has been issued for the benefit of either tenant or remainderman alone, or otherwise as a refund or replacement or change in form of principal, shall be deemed principal unless otherwise expressly provided in this chapter. Any profit or loss resulting upon any change in form of principal shall enure to or fall upon principal.

(3) All income after payment of expenses properly chargeable to it shall be paid and delivered to the tenant or retained by him if already in his possession; or held for accumu­lation where legally so directed by the terms of the transaction by which the principal was established; while the principal shall be held for ultimate distribution as determined by the terms of the transaction by which it was established or by law.

Blatoi"J'.-13, ch. 18392, 1987; CGL 1940 Supp. 6671(4).

690.05 Apportionment of income. - When­ever a tenant shall have the right to income from periodic payments, which shall include rent, interest on loans, and annuities, but shall not include dividends on corporate shares, and such right shall cease and determine by death or in any other manner at a time other than the date when such periodic payments should be paid, he or his personal representative shall be entitled to that portion of any such income next payable which amounts to the same per­centage thereof as the time elapsed 'from the last due date of such periodic payments to and including the day of the determination of

1841

Ch. 690 UNIFORM PRINCIPAL AND INCOME LAW Ch. 690

his right is of the total period during which such income would normally accrue. The re­maining income shall be paid to the person next entitled to income by the terms of the transaction by which the principal was estab­lished. But no action shall be brought by the trustee or tenant to recover such apportioned income or any portion thereof until the day on which it would have become due to the tenant but for the determination of the right of the tenant entitled thereto. The provisions of this section shall apply whether an ulti­mate remainderman is specifically named or not. Likewise when the right of the first ten­ant accrues at a time other than the payment dates of such periodic payments, he shall only receive that portion of such income which amounts to the same percentage thereof as the time during which he has been so entitled is of the total period during which such income would normally accrue; the balance shall be a part of the principal.

BlatorJ'.-14, ch. 18392, 1987; CGL 1940 Supp. 6671(6). Am. flO, ch. 27891, 1853.

690.06 Corporate dividends and share rights.-

( I) All dividends on shares of a corpora­tion which form a part of the principal and are payable in the shares of the corporation, or in shares or other securities or obligations of corporations other than the declaring corpora­tion, shall be deemed principal. Subject to the provision of this section, all dividends payable otherwise than in the shares of the declaring corporation, and otherwise than in the shares or other securities or obligations of corporations other than the declaring corporation, shall be deemed income. Where the trustee shall have the option of receiving a dividend either in cash or in the shares of the declaring corporation, it shall be considered as a cash dividend and deemed income, irrespective of the choice made by the trustee, provided however, that all dis­tributions of capital of mutual investment trusts shall be deemed principal irrespective of the choice made by the trustee.

(2) All rights to subscribe to the shares or other securities or obligations of a corpora­tion accruing on account of the ownership of shares or other securities in such corporation, and the proceeds of any sale of such rights. shall be deemed principal. All rights to sub­scribe to the shares or other securities or ob­ligations of a corporation accruing Cln account of the ownership of shares or other securities in another corporation, and the proceeds of the sale of such rights, shall likewise be deemed principal.

(3) Where the assets of a corporation are liquidated, amounts paid upon corporate shares as cash dividends declared before such liqui­dation occurred or as arrears of preferred or guaranteed dividends shall be deemed income; all other amounts paid upon corporate shares on disbursement of the corporate assets to the stockholders shall be deemed principal. All

disbursements of corporate assets to the stockholders, whenever made, which are desig­nated by the corporation as a return of capital or division of corporate property shaH be deemed principal.

( 4) Where a corporation succeeds another by merger, consolidation or reorganization or otherwise acquires its assets, and the corporate shares of the succeeding corporation are issued in substitution for those of the original cor­poration, the two corporations shall be con­sidered a single corporation in applying the provisions of this section. But two corpora­tions shall not be considered a single corpora­tion under this section merely because one owns corporate shares of or otherwise controls or directs the other.

(5) In applying this section the date when a dividend accrues to the person who is entitled to it shall be held to be the date specified by the corporation as- the one on which the stockholders entitled thereto are determined, or in default thereof the date of declaration of the dividend.

History .-f 5, ch. 18392, 1937 : COL 1940 Supp. 6871 ((!) ; (1), 121 a . by f 1, ch. 81-72.

690.07 Premium and discount bonds.­(1) When any part of the principal consists

of bonds or other obligations for the payment of money, they shall be deemed principal at their inventory value or in default thereof at their market value at the time the principal was established, or at their cost when purchased later, regardless of their par or maturity value, except as provided in subsection (2) for discount bonds, and upon their respective maturities or upon their redemption, sale, or other disposition, any loss or gain realized thereon shall fall upon or inure to the principal.

(2) The increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable or re­deemable at maturity or at a future time or times at an amount in excess of the amount in consideration oLw-hich it was issued is income. If the income accrues and becomes payable pursuant to a fixed schedule of appreciation such income is distributable, and the trustee may distribute the same to the beneficiary at the time the increment occurs. However, whenever, prior to actual receipt of such an increment which has accrued, the amount thereof is dis­tributed as income but out of p.'incipal, the principal shall be reimbursed from the income when received.

History.-§6, ch . ! 8392, 1937; CGL 1940 Supp. 5671(7); §I, ch . 71 -63.

690.08 Principal used in business.-( I) Whenever a trustee or a tenant is au­

thorized by the terms of the transaction by which the principal was established, or by law, to use any part of the principal in the continu­ance of a business which the original owner of the property comprising the principal had been carrying on, the net profits of such business

1842

Ch. 690 UNIFORM PRINCIPAL AND INCOME LAW Ch. 690

attributable to such principal shall be deemed income.

(2) Where such business consists of buy­ing and selling property the net profits for any period shall be ascertained by deducting from the gross returns during and the inventory value of the property at the end of such period, the expenses during and the inventory value of the property at the beginning of such period.

(3) Where such business does not consist of buying and selling property, the net income shall be computed in accordance with the cus­tomary practice of such business, but not in such way as to decrease the principal.

( 4) Any increase in the value of the prin­cipal used in such business shall be deemed principal, and all losses, after the income from such business has been exhausted, shall fall upon principal.

Blator:r.-17, cb. 11892, 1987; CGL 1940 Supp. 158'71(1).

690.09 Principal compr1smg animals. -Where any part of the principal consists of animals employed in business, the provisions of §690.08 shaH apply; and in other cases where the animals are held as a part of the principal partly or wholly because of the off­spring or increase which they are expected to produce, all offspring or increase shall be deemed principal to the extent necessary to maintain the original number of such animals and the remainder shall be deemed income; and in all other cases such offspring or increase shall be deemed income.

Blator:r.-18, ch. 18892, 1987; CGL 1940 Supp. 6671(9).

690.10 Disposition of natural resources.­Where any part of the principal consists of lands from which may be taken timber, min­erals, oils, gas or other natural resources 'lnd the trustee or tenant is authorized by law or by the terms of the transaction by which the principal was established to sell or dispose of such natural resources, and no provision is made for the disposition of the proceeds there­of, such proceeds shall be considered principal. Nothing in this section shall be construed to abrogate or extend any right which a tenant may otherwise have by law to exploit or de­velop such natural resources for his own benefit.

Blator;r.-19, cb. 18892, 1987; CGL 1940 Supp. 6671(10).

690.11 Principal subject to depletion.­Where any part of the principal consists of property subject to depletion, such as lease­holds, patents, copyrights and royalty rights, and the trustee or tenant in possession is not under a duty to change the form of the in­vestment of the principal, the full amount of rents, royalties or return from the property shall be income to the tenant; but where the trustee or tenant is under a duty, arising either by law or by the terms of the transaction by which the principal was established, to change the form of the investment, either at once or as soon as it may be done without loss, then the return from such property not in excess

of five per cent per annum of its inventory value or in default thereof its market value at the time the principal was established, or at its cost where purchased later, shall be deemed income and the remainder principal.

Blator;r.-110, cb. 18892, 1987; CGL 1940 Supp. 158'71(11).

690.12 Unproductive estate.-(1) Where any part of the principal in the

possession of a trustee consists of realty or personalty which, for more than a year and un­til disposed of as hereinafter stated, has not produced an average net income of at least one per cent per annum of its inventory value or in default thereof its market value at the time the principal was established or of its cost where purchased later, and the trustee is under a duty to change the form of the invest­ment as soon as it may be done without sacri­fice of value and such change is delayed, but is made before the principal is finally distrib­uted, then the tenant, or in case of his death his personal representative, shall be entitled to share in the net proceeds received from the property as delayed income to the extent here­inafter stated.

(2) Such income shall be the difference be­tween the net proceeds received from the prop­erty and the amount which, had it been placed at simple interest at the rate of five per cent per annum for the period during which the change was delayed, would have produced the net proceeds at the time of change, but in no event shall such income be more than the amount by which the net proceeds exceed the inventory value of the property or in default thereof its market value at the time the prin­cipal was established or its cost where pur­chased later. The net proceeds shall consist of the gross proceeds received from the prop­erty less any expenses incurred in disposing of it and less all carrying charges which have been paid out of principal during the period while it has been unproductive.

(3) The change shall be taken to have been delayed from the time when the duty to make it first arose, which shall be presumed, in the absence of evidence to the contrary, to be one year after the trustee first received the prop­erty if then unproductive, otherwise one year after it became unproductive.

( 4) If the tenant has received any income from the property or has had any beneficial use thereof during the period while the change has been delayed, his share of the delayed income shall be reduced by the amount of such income received or the value of the use had.

(5) In the case of successive tenants the delayed income shall be divided among them or their representatives according to the length of the periods for which each was entitled to income.

Hlator:r.-111, ch. 18892, 1987; CGL 1940 Supp. 158'71(12).

690.13 Expenses; trust estates.-(1) All ordinary expenses incurred in con-

1843

Ch. 690 UNIFORM PRINCIPAL AND INCOME LAW Ch. 690

nection with the trust estate or with its admin­istration and management, including regularly recurring taxes assessed against any portion of the principal, water rates, premiums on in­surance taken upon the estates of both tenant and remainderman, interest on mortgages on the principal, ordinary repairs, trustee's com­pensation except commissions computed on principal, compensation of assistants, and court and other fees on regular accountings, shall be paid out of income. But such expenses where incurred in connection with unproduc­tive estate as defined in §690.12 shall be paid out of principal, subject to the provisions of subsection (2) of §690.12.

(2) All other expenses, including trustee's commissions computed upon principal, cost of investing or reinvesting principal, attorney's fees and other costs incurred in maintaining or defending any action to protect the property or assure the title thereof, unless due to the fault or cause of the ten.ant, and costs of, or assessments for, improvements to property forming part of the principal, shall be paid out of principal. Any tax levied by any author­ity, federal, state or foreign, upon profit or gain defined as principal under the terms of subsection (2) of §690.04 shall be paid out of principal, notwithstanding said tax may be denominated a tax upon income by the taxing authority.

(3) Expenses paid out of income accord­ing to subsection (1) hereof which represent regularly recurring charges shall be consid­ered to have accrued from day to day, and shall be apportioned on that basis whenever the right of the tenant begins or ends at some date other than the payment date of the ex­penses. Where the expenses to be paid out of income are of unusual amount, the trustee may distribute them throughout an entire year or part thereof~ or throughout a series of years. After such distribution, where the right of the tenant begins or ends during the period, the expenses shall be apportioned between ten­ant and remainderman on the basis of such distribution.

( 4) Where the costs of, or special taxes or assessments for, an improvement represent­ing an addition of value to property held by

the trustee as part of principal are paid out of principal, as provided in subsection (2) hereof, the trustee shall reserve out of income and add to the principal each year a sum equal to the cost of the improvement divided by the number of years of the reasonably expected duration of the improvement.

Bl•toi'J'.-IU, ch. 111SH, lJIIT; CGL 1NO Supp. 118'71(11).

690.14 Expenses; nontrust estates.-(1) The provisions of §690.13, so far as ap­

plicable and excepting those dealing with costs of, or assessments for improvements to prop­erty, shall govern the apportionment of ex­penses between tenants and remaindermen where no trust has been created, subject, how­ever, to any legal agreement of the parties or any specific direction of the taxing or other statutes; but where either tenant or remainder­man has incurred an expense for the benefit of his own estate and without the consent or agreement of the other, he shall pay such ex­pense in full.

(2) Subject to the exceptions stated in sub­section (1) the cost of, or special taxes or assessments for, an improvement representing an addition of value to property forming part of the principal shall be paid by the tenant, where such improvement is not reasonably ex­pected to outlast the estate of the tenant. In all other cases a portion thereof only shall be paid by the tenant, while the remainder shall be paid by the remainderman. Such portion shall be ascertained by taking that percentage of the total which is found by dividing the present value of the tenant's estate by the present value of an estate of the · same form as that of the tenant except that it is limited for a period corresponding to the reasonably expected duration of the improvement. The computation of present values of the estates shall be made on the expectancy basis set forth in the official mortality tables and no other evidence of duration or expectancy shall be considered.

Bl•toi'J'.-111, ch. 18391, lNT; CGL 1NO Supp. 118'71(14).

690.15 Uniformity of interpretation.-This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.

Bl•toi'J'.-114, ch. 18891, lJIIT; CGL 1NO Supp. R'll(U).

1844

Ch. 691 TRUST ADMINISTRATION LAW Ch. 691

CHAPTER 691

TRUST ADMINISTRATION LAW PART I UNIFORM TRUST ADMINISTRATION LAW (§§691.01-691.05)

PART II CHARITABLE TRUST ACT (§§691.10-691.22)

PART I UNIFORM TRUST ADMINISTRATION LAW

691.01 Short title. 691.02 Definitions. 691.03 Powers of trustees.

691.01 Short title.-Part I of this chapter may be cited or referred to as the "Uniform Trust Administration Law."

Bt•&of7.-16, ch. 18897, 11181; CGL 11140 Bupp. 1811(1e).

691.02 Definitions.-The term "trust" as used in this part includes any express trust, except trust deeds in the nature of a mortgage to secure the payment of money due on notes, bonds or other like obligations, and also excepting what are commonly known as voting trusts. "Trust instrument" includes any writing which legally creates, limits, declares, manifests or otherwise evidences the existence of a trust. ''Trustee" includes corporations, individuals and any other legal entity authorized to act and that is acting as a trustee.

Hl•tof7.-ll, ch. 188117, 11187; CGL 11140 Supp. 6171(17), ct.-11.01, General deftnltlona.

691.03 Powers of trustees.-In the absence of contrary or limiting provisions in the trust instrument or a subsequent order or decree of a court of competent jurisdiction, the trustee of an express trust is authorized:

(1) To exchange, re-exchange, subdivide, develop, improve, dedicate to public use, make or obtain the vacation of public plats, adjust boundaries, partition .real property and on ex­change or partition to adjust differences in valuation by giving or receiving money or money's worth. Easements may be dedicated to public use without consideration if deemed by the trustee to be for the best interests of the trust.

(2) To grant options and to sell real prop­erty at public auction or at private sale for cash or upon credit, secured by lien upon the property sold or upon other property deemed to be adequate security. Where a trustee is authorized to sell, mortgage, lease, or other­wise dispose of land, such authority shall in­clude the right to sell, mortgage, lease, or otherwise dispose of part thereof whether the division is horizontal, vertical, or made in any other way.

(3) To grant leases of real property· of which the trustee is the fee owner, to begin at once or within three years from the date there­of, and to grant leases of all rights and privi­leges above or below the surface of such real property for any term of years not exceeding

691.04 Investments; mortgages, etc.; survivor and successor trustees; action of less than all ; notice to trustee.

691.05 Provisions not deemed exclusive.

ninety-nine years, with or without option of purchase and with or without covenants as to erection of buildings, or as to renewals, there­of though the term of the lease or renewals th~reof or of such options extends beyond the term of the trust.

l4) To raze existing party walls or build­ings and erect new party walls or buildings, alone or jointly with owners of adJacent property.

( 5) To make ordinary or extraordinary re­pairs or alterations in buildings or other structures.

(6) To effect and keep in force, fire, rent, title liability, casualty or other insurance of any 'nature, in any form and in any amount, for the proper protection of the property and the ownership thereof.

(7) (a) To hold without liability, other than that involved in holding property legal for investment of trust funds, any and all property, whether or not permissible for in­vestment of funds of that particular trust, received from or through the settlor of the trust, and any property lawfully coming into the hands of the trustees in lieu of or in sub­stitution therefor, including power to exchange capital stock of any bank or trust company, including capital stock of the corporate trustee, for capital stock in any registered bank hold­ing company, such bank holding company being subject to the provisions of Title 12, U.S.C., §1841 et seq., as amended, commonly known as "Bank Holding Company Act of 1956." This provision shall not be construed to cover reinvestments of cash made by the trustee.

(b) This subsection as amended by chap­ter 70-425, Laws of Florida, shall become effective January 2, 1971 and shall be appli­cable to all trusts executed before or after said date.

(8) To make division, allotment and dis­tribution of principal to legatees, beneficiaries, distributees, and remaindermen. wholly or partly in property in kind.

(9) To compromise, contest, submit to arbi­tration or otherwise settle any and all claims in favor of or against the trust estate or the trustee.

(10) To vote at corporate meetings in person or by proxy.

1845

Ch. 691 TRUST ADMINISTRATION LAW Ch. 691

( 11) To pay calls, assessments, and any other sums chargeable or accruing against or on account of shares of stocks, bonds, deben­tures or other corporate securities in the hands of the trustee, where such payment may be legally enforceable against the trustee or any property of the trust, or the trustee deems payment expedient and for the best interests of the trust. To sell or exercise stock sub­scription or conversion rights, participate in foreclosures, reorganizations, consolidations, mergers, liquidations, pooling agreements and voting trusts; and to assent to corporate sales, leases and encumbrances. In the exercise of the powers named in this subsection, the trus­tee shall be authorized, where he deems such course expedient, to deposit stocks, bonds or other securities with any protective or other similar committee, under such terms and con­ditions respecting the deposit thereof as the trustee may approve.

(12) To dispose of, call in or change and make new investments legal for such trust. An authority in general terms to invest in such securities or in such manner as the trus­tee may deem or think best or fit or to the advantage of the estate or in good safe se­curities, or in other terms conferring a dis­cretion not expressly limited to property legal for investment of trust funds, shall be con­strued as not so limited.

(13) To hold any corporate stock, mutual investment trust shares, registered bonds, notes, debentures, and revenue certificates is­sued by any corporation, government, munici­pality, or subdivisions or agencies thereof in his own name or in the name of a nominee, with or without disclosing any fiduciary rela­tionship, but the trustee, however, shall be re­sponsible for all acts and omissions of such nominee relating to such property.

(14) To create reserves out of income for depreciation, obsolescence, amortization or to insure prompt payment of taxes or assess­ments, general or special and other obligations, and to restore to income such reserves as may be unused.

(15) To make payments of income directly to minor beneficiaries over the age of eighteen years as though they were of full age; and when income is directed to be paid to minors, to apply and expend the same for their benefit either with or without the intervention of a guardian.

(16) To borrow money and to mortgage or otherwise encumber or pledge trust property or future income or principal as security for its repayment.

(17) To advance income to or for the use of the beneficiaries for which advance such trustee shall have a lien on the future benefits of such beneficiary.

(18) To advance money for the protection of the trust or its property and for all expenses. losses and liabilities incurred in or about the execution or protection of the trust or because

of the holding or ownership of any property subject thereto. For all such advances, the trustee shall have a lien on the trust property and may reimburse himself with interest there­for out of the trust property.

Hlstory .- 12. ch . 18397, 1937 ; COL 1940 Supp. 5671 f!Sl; H. ch. 29876, 1955; §24, ch . 57-1; §1, ch . 65-106; §§1 , 2, ch. 70-425.

691.04 Investments; mortgages, etc.; sur­vivor and successor trustees; action of less than all; notice to trustee.-The following pro­visions shall apply to all trusts but shall not be exclusive of others imposed by law unless contrary thereto:

(1) A trustee in making investments of trust funds may rely upon information and opinions deemed by him reliable concerning facts necessary or proper to be taken into con­sideration in determining whether such in­vestment conforms to the requirements of such trust.

(2) The trustee shall not be liable for breach of trust by reason only of his continu­ing to hold an investment. which because of changing conditions has ceased to be an in­vestment authorized by the trust instrument or the law applicable thereto.

(3) A trustee shall not be responsible for the genuineness or validity of execution of any instrument representing an investment made by him in good faith and without negligence.

( 4) Where a trustee is authorized by the trust instrument or by law to pay or apply capital money subject to the trust for any purpose or in any manner, he shall have power to raise the money required by sale, conver­sion, mortgage, calling in, or by otherwise encumbering all or any part of the trust proP­erty for the time being in his possession.

(5) Where a power or trust is given to or imposed on two or more trustees jointly, the same may be exercised or performed by the survivors or survivor of them for the time being.

(6) A .successor trustee shall succeed to all of the powers, duties and discretionary authority of an original trustee.

(7) Where there are three or more trus­tees of a trust, the action of a majority shall be sufficient unless the trust instrument pro­vides otherwise.

( 8) A trustee shall be answerable and accountable only for his own acts, receipts, neglects, or defaults, and not for those of any co-trustee, nor for any banker, broker or other person with whom any trust money or securi­ties may be lawfully deposited, nor for any loss unless the same occurs through his own default or negligence. Whenever the trust in­strument reserves unto the trustor, or vests in an advisory or investment committee or in any other person or persons, including a co-trustee, to the exclusion of the trustee or to the exclu­sion of one or more of several trustees, au­thority to direct the making or retention of

1846

TRUST ADMINISTRATION LAW Ch. 691

investments or of any investment, the excluded trustee or co-trustee shall be liable, if at all, only as a ministerial agent and shall not be liable as trustee or co-trustee for any loss re­sulting from the making or retention of any investment pursuant to such authorized direc­tion.

(9) A trustee, acting for more than one trust, shall not, in the absence of fraud, be affected by notice of any instrument, matter, fact or thing in relation to any particular trust if he has obtained notice thereof merely

by reason of his acting or having acted for another trust or in some other fiduciary capacity.

Blotorr.-13. ch. 183117. 11137; COL 1HO Supp. 6871(111); (I) a. bJ 11. cb. 81-7,. cf.-11118.01 et ..... IaYeetmeat of 84uelu)' fua4a.

691.05 Provisions not deemed exclusive.­The powers, duties and liabilities stated in this part shall not be deemed to exclude other powers, duties and liabilities not inconsistent herewith.

History.-§4, ch. 18397, 1937; CGL 1940 Supp. 5671(20).

PART II

CHARITABLE TRUST ACT

691.10 691.11 691.12 691.13

691.14

691.15 691.16

Short title. Definitions. Application of this part. Trustee of a private foundation trust

or a split interest trust. Powers and duties of trustee of a

private foundation trust or a split interest trust.

Notice that this part does not apply. Power to amend trust instrument.

691.10 Short title.-This part may be known as the charitable trust act of 1971.

History.-~! . ch. 71-256.

691.11 Definitions.- As used in this part: (1) Section references, unless otherwise

indicated, relate to the Internal Revenue Code of 1954, as in effect on January 1, 1971, and such references are to sections of Title 26 of the United States Code as in effect on said date.

(2) "Charitable organization" means an or­ganization described in §501(c)(3) and exempt from tax under §501(a).

(3) "Private foundation trust" means a trust, including a trust described in §4947(a)(1), as defined in §509(a).

(4) "Split interest trust" means a trust for individual and charitable beneficiaries that is subject to the provisions of §4947(a)(2).

(5) "State attorney" means: (a) The state attorney for the judicial

circuit having original jurisdiction of the trust if a proceeding under the F1orida trust accounting law has been instituted in respect of the trust; or

(b) If no such proceeding has been in­stituted, the state attorney for the judicial circuit in which the trustee is domiciled or has his principal place of business; or

(c) If no such proceeding has been in­stituted and neither the domicile nor the prin­cipal place of business of the trustee is in Florida, then the state attorney for the judicial circuit which would have had original jurisdic­tion of the trust if a proceeding had been in­stituted under the F1orida trust accounting law.

(6) "Trust" means an express trust created by a trust instrument, including a will.

691.17

691.18

691.19 691.20

691.21 691.22

Power of court to permit deviation from terms of trust.

Release; property and persons affected; manner of effecting.

Election to come under this . part. Supervision by public charitable

organization. Interpretation. Inapplicability to certain trusts.

(7) "Trustee" means the trustee, trustees, person, or persons possessing a power or powers referred to in this part in respect of a private foundation trust or a split interest trust.

History.-~2. ch. 71-256.

691.12 Application of this part.-Except as may be otherwise specifically provided in the trust, the provisions of this part apply to all private foundation trusts and split interest trusts, whether created or established before or after November 1, 1971, and to all trust assets acquired by the trustee before or after November 1,1971.

History.-§3, ch. 71-256.

691.13 Trustee of a private foundation trust or a split interest trust.-Except as pro­vided in §691.15, the trustee of a private founda­tion trust or a split interest trust has the duties and powers conferred upon him by this part.

History.-§4, ch. 71-256.

691.14 Powers and duties of trustee of a private foundation trust or a split interest trust.-

(1) In the exercise of his powers, including the powers granted by this part, a trustee has a duty to act with due regard to his obligation as a fiduciary, including a duty not to exercise any power in such a way as to deprive the tn;.st of an otherwise available tax exemption, deduction, or credit for tax purposes or deprive a donor of a trust asset of a tax deduction or credit or operate to impose a tax upon a donor, trust, or other person. "Tax" includes, but is not limited to, any federal, state, or local excise, income, gift, estate, or inheritance tax.

(2) A trustee of a private foundation trust, 1847

Ch. 691 . TRUST ADMINISTRATION LAW Ch. 691

except as provided in §691.15, of this part, shall make distributions at such time and in such manner as not to subject the trust to tax under §4942.

(3) A trustee of a private foundation trust, or a split interest trust to the extent that the split interest trust is subject to the provisions of §4947(a)(2), in the exercise of his powers, except as provided in subsection (4) and in §691.15 of this part, shall not:

(a) Engage in any act of self dealing as defined in §4941(d);

(b) Retain any excess business holdings as defined in §4943(c);

(c) Make any investments in such manner as to subject the foundation to tax under §4944; and

(d) Make any taxable expenditures as de­fined in §4945(d).

( 4) Paragraphs (3)(b) and (c) shall not apply to a split interest trust if:

(a) All the income interest, and none of the remainder interest, of such trust is devoted solely to one or more of the purposes described in §170(c)(2XB), and all amounts in such trust for which a deduction was allowed under §1 70, §545(b)(2), §556(b)(2), §642(c), §2055, §2106 (a)(2), or §2522 have an aggregate fair market value not more than 60 percent of the aggregate fair market value of all amounts in such trust, or

(b) A deduction was allowed under §170, §545(b)(2), §556(b)(2), §642(c), §2055, §2106 (a)(2), or §2522 for amounts payable under the terms of such trust to every remainder benefi­ciary, but not to any income beneficiary.

Hlstory.-§5, ch . 71·256.

691.15 Notice that this part does not apply. -If the trustee determines that the governing instrument contains provisions, in the case of a power to make distributions, which are more restrictive than §691.14(2) of this part or if the trust contains other powers which specifically direct acts by the trustee that are inconsistent with the provisions of §691.14(3) of this part, the trustee shall notify the state attorney within six months after November 1, 1971 or when the trust becomes subject to this part, whichever last occurs. Section 691.14 of this part shall not apply to any trust with respect to which notice has been given unless the trust is amended to comply with the terms of this part.

History.-§6, ch . 71-256.

691.16 Power to amend trust instrument.­(!) In the case of a trust which is solely for

a named charitable organization or organiza­tions and as to which the trustee does not possess aily discretion with regard to the dis­tribution of income or principal among two or more such organizations, the trustee, with the consent of the named charitable organization or organizations, may amend the governing instru­ment to comply with the provisions of §691.14(2) of this part.

(2) In the case of a charitable trust which

is not subject to the provisions of subsection (f), the trustee, with the consent of the state attorney; may amend the governing instrument to comply with the provisions of §691.14(2) of this part.

History.- §?, ch . 71-256.

691.17 Power of court to permit deviation from terms of trust.-This part does not affect the power of a court of competent jurisdiction, for cause shown and upon petition of the trustee, state attorney or affected beneficiary and upon appropriate notice to the affected parties, to relieve a trustee from any restrictions on his powers and duties that are placed upon him by the governing instrument or applicable law.

History.-§8, ch. 71-256.

691.18 Release; property and persons affected; manner of effecting.-

(!) The trustee of a trust all of the unexpired interests in which are devoted to one or more charitable purposes, unless the creating instru­ment expressly provides otherwise, may release a power to select charitable donees.

(2) The release of a power to select chari­table donees may apply to all or any part of the property subject to the power and may reduce or limit the charitable organizations or classes of charitable organizations in whose favor the power is exercisable.

(3) A release shall be effected by a duly acknowledged written instrument signed by the trustee and delivered as provided in subsection (4).

( 4) Delivery of a release shall be accom­plished as follows:

(a) If the release is accomplished by spec­ifying a charitable organization or organizations as beneficiary or beneficiaries of the trust, by delivery of a copy of the release to each desig­nated charitable organization.

(b) If the release is accomplished by re­ducing the class of permissible charitable organizations, by delivery of a copy of the release to the state attorney.

(5) If a release is accomplished by speci­fying a public charitable organization or organi­zations as beneficiary or beneficiaries of the trust, the trust at all times thereafter shall be operated exclusively for the benefit of, and supervised by, the specified public charitable organization or organizations.

History.-§9, ch . 71-256.

691.19 Election to come under · this part.­A trustee of a trust for the benefit of a public charitable organization or organizations may, with the consent of such organization or organi­zations, come under §691.18(5) of this part by filing an election, accompanied by the consents, with the state attorney. Thereafter, the trust shall be subject to §§691.18(5) and 691.20 of this part

History.-§10, ch . 71 -256.

1848

Ch. 691 TRUST ADMINISTRATION LAW Ch. 691

691.20 Supervision by public charitable organization.-

( I) The trustee of a trust subject to the supervision by a specified public charitable organization or organizations, as provided in §691.18(5) of this part, shall file with each specified charitable organization:

(a) A true copy of the governing instrument, together with a written report, under oath, setting forth complete information as to the nature of the assets and liabilities, with the delivery of the release pursuant to §691.18(4) of this part or the filing of the election under §691.19 of this part;

(b) An annual report within four and one half months following the close of each year, setting forth a complete statement of receipts, disbursements, assets (together with cost and market value of each asset), and liabilities; and

(c) Such other information as may be necessary to compel proper administration of the trust.

(2) The trustee, by delivery of the release or execution of the election, as the case may be, and each specified public charitable organiza­tion, by accepting delivery of the release as provided in §691.18(4) of this part or by con­senting to the election in §69(19 of this part, agree that the public charitable organization or organizations shall have:

(a) The power and duty to compel the proper administration of the trust;

(b) The power to inspect the books, records, memoranda, papers, documents of title, and evidence of assets, liabilities, receipts, or dis­bursements in the possession or control of the trustee or other person having custody of the books and records; and

(c) The power to require such other infor­mation as may be necessary to compel proper administration of the trust.

History.-§11 , ch. 71-256.

691.21 Interpretation.-This part shall be interpreted to effectuate the intent of the state to preserve, foster, and encourage gifts to, or· for the benefit of, charitable organizations.

History.-§12, ch. 71-256.

691.22 Inapplicability to certain trusts.­The provisions of this part shall not apply to any trust to the extent that a court of competent jurisdiction shall determine, in a proceeding initiated prior to November 1, 1971, that such application would be contrary to the terms of the instrument governing such trust and that the same may not properly be changed to con­form to the provisions of this part, but nothing herein shall be construed as creating or imposing on the trustee of any trust any obligation to initiate a proceeding to obtain any court deter­mination with respect to the application of the provisions of this part.

History.-§14, ch. 71 -256.

1849

Ch. 692 CONVEYANCES BY CORPORATIONS Ch. 692

CHAPTER 692

CONVEYANCES BY CORPORATIONS

692.01 Conveyances by corporations. 692.02 Validation of conveyances. 692.03 Validity of conveyances by certain

foreign corporations recorded for seven years; limitation.

692.01 Conveyances by corporations.­Any corporation may execute instruments conveying, mortgaging, or affecting any interest in its lands by instruments sealed with the common or corporate seal and signed in its name by its president or any vice-president or chief executive officer. Satisfactions or partial releases of mortgages and acquittances for debts may be similarly executed by any corporate officer. No corporate resolution need be recorded to evidence the authority of the person executing the deed, mortgage, or other instrument for the corporation, and .an instrument so executed shall be valid whether or not the officer signing for the corporation was authorized to do so by the board of directors, in the absence of fraud in the transaction by the person receiving it. In cases of fraud, subsequent transactions with good faith purchasers for value and without notice of the fraud shall be valid and binding on the corporation.

Bleto17.-RS 18116; GS J46t; 11, ch. 1111, ltll; RGS 3799; CGL 5672; §l ch. 71-10. .

692.02 Validation of conveyances.-Convey­ances by corporations of lands in this state, bP.retofore executed, which have been sealed with the common or corporate seal of such corporation and signed in its name by a vice­president or the chief executive officer thereof, shall be as valid and effective and shall bear the same presumptions as if signed in the name of such corporation by its president.

BletorJ'.-12. ch. 1188, ltll; RGS 8800; CGL 11678. ct.-f801.U, Ktmomer of corporation ID deede and I.Datru­

menta.

692.03 Validity of conveyances by certain foreign corporations recorded for seven years; limitation.-

( I) Whenever any conveyance, by the sur-

692.04 Validation of deeds, etc., executed by corporations.

viving directors or trustees of a foreign corpor­ation, which has been dissolved for any cause, or which has had its permit to transact busi­ness in the state cancelled for failure to pay fees due the department of state, or which has failed to comply with the provisions of laws of this state, has been executed and delivered to any grantee or grantees, and has for a period of seven years or more been spread upon the records of a county wherein the land therein described is situated, the same shall be taken and held by all the courts of this state in the absence of any showing of fraud, adverse possession, or pending litigation, to have authorized the conveyance of, or to have conveyed, the fee simple title, or any in­terest therein, of the corporation on whose behalf said instrument has been executed to the land therein described.

(2) This section shall not apply to any con­veyance, the validity of which shall be contested or shall have been contested by suit commenced heretofore or prior to July 1, 1954.

Hlatory.-1§1, 2, ch. 28078, 1953; l flO, 35, ch. 69-106.

692.04 Validation of deeds, etc., executed by corporations.-All deeds and other instru­ments relating to the conveyance, transfer, lease, assignment, release, subordination, en­cumbrance or satisfaction of any right, title, interest, claim, lien or demand in, to or upon real property, heretofore made or hereafter made, and in all other respects executed in due form, by a corporation, not dissolved or expired, but delinquent for six months or more as to payment of capital stock taxes at the time of the making or executing of such deed or other instrument, are, notwithstanding said delin­quency, hereby validated.

Hlotory.-fl, ch. 57-26•.

1850