If a security interest or agricultural lien is perfected by a filed financing statement providing information described in Section 36-9-516(b)(5) which is incorrect at the time the financing statement is filed:

1. (1) the security interest or agricultural lien is subordinate to a conflicting perfected security interest in the collateral to the extent that the holder of the conflicting security interest gives value in reasonable reliance upon the incorrect information; and
2. (2) a purchaser, other than a secured party, of the collateral takes free of the security interest or agricultural lien to the extent that, in reasonable reliance upon the incorrect information, the purchaser gives value and, in the case of tangible chattel paper, tangible documents, goods, instruments, or a security certificate, receives delivery of the collateral.

HISTORY: 2001 Act No. 67, Section 12; 2014 Act No. 213 (S.343), Section 44, eff October 1, 2014. "Agricultural lien" Section 36-9-102(a)(5) "Chattel paper" Section 36-9-102(a)(11) "Document" Sections 36-9-102(a)(30), 36-7-102(1)(e), 36-1-201(15) "Financing statement" Section 36-9-102(a)(39) "Goods" Section 36-9-102(a)(44) "Instrument" Section 36-9-102(a)(47) "Reasonable reliance" See Section 36-9-338, Official Comment 2 "Receives delivery of chattel paper, documents, instruments, security certificates" Section 36-1-201(14) "Receives delivery of goods" See Section 36-2-103(1)(c) "Security certificates" Section 36-8-102(a)(16) "Security interest" Section 36-1-201(37) [see now Section 36-1-203] "Value" Section 36-1-201(44) [see now Section 36-1-204]