Written by attorneys · grounded in primary & secondary sources — see below
Goods that are physically united with other goods in such a manner that the identity of the original goods is not lost. A security interest may be created in an accession and continues in the collateral after unification. If the security interest is perfected at the time the collateral becomes an accession, the security interest remains perfected in the collateral.
Sources & Authorities
How it applies
Common Examples
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Robotic Arm Welded to Assembly Line
Southern Precision purchased a robotic arm from Blue Works under a purchase-money security agreement that Blue Works promptly perfected by filing. Southern Precision then welded the arm into its existing assembly line with permanent brackets and wiring. When Southern Precision defaulted on loans from both Blue Works and Nova Production, Blue Works asserted its interest in the arm alone. The security interest created in the arm continued after the arm became an accession to the line.
Sound System Mounted on Outreach Van
Lake Community sold a modular sound system to Crown Alliance under a security agreement and perfected its interest by filing before any installation. Crown Alliance mounted the amplifiers and speakers onto its outreach van, which was already subject to a certificate-of-title lien held by Crest Council. After default, Lake Community's perfected security interest in the sound equipment remained perfected even though the equipment had become an accession to the van.
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Uniform Acts
Restatements
Casebooks
Course Outlines
Study Supplements
Dictionaries
Museum Tracks Missing Artwork
The Guggenheim Foundation purchased specialized climate-control units under a security agreement that it perfected by filing. The units were later bolted into the museum's existing HVAC system as accessions. After default, the foundation's perfected interest continued in the units even after they became physically united with the larger system.
Solomon R. Guggenheim Foundation v. Lubell569 N.E.2d 426 (N.Y. 1991)
Tax Exemption for Religious Property
A religious organization financed new heating equipment for its house of worship under a security agreement perfected before installation. The equipment was affixed to the existing structure and became an accession. After default the secured party retained its perfected interest in the equipment notwithstanding unification with the larger exempt property.
Walz v. Tax Comm’n of New York City397 U.S. 664, 668-669 (1970)
Common questions
Frequently Asked
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Does a security interest in an accession continue after the collateral is physically united with other goods?+
Yes. A security interest may be created in an accession and continues in the collateral that becomes an accession. The rule protects the secured party's interest even after integration occurs.
Supporting sources
What happens to perfection when collateral becomes an accession?+
If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral. No new filing is required solely because of the accession.
Supporting sources
How is priority determined between a security interest in an accession and an interest in the whole?+
Priority is governed by the other provisions of Part 3 of Article 9, except when a certificate-of-title statute applies. In that case the interest in the accession is subordinate to a perfected interest in the whole noted on the title.
Supporting sources
569 N.E.2d 426 (N.Y. 1991)Property
…It was donated to the museum in 1937 by Solomon R. Guggenheim. The museum keeps track of its collection through the use of “accession cards,” which indicate when individual pieces leave the museum on loan, when they are returned and when they are transferred between the museum and storage. The museum lent the painting to…
Secured TransactionsRights of third parties; perfected and unperfected security interests; rules of priority (§ 9-301, et seq.) · Fixtures (§ 9-334)UBEFoundational