                                 CODE OF VIRGINIA

COMMINGLED GOODS (§ 8.9A-336)

a. &#8220;Commingled goods.&#8221; In this section, &#8220;commingled
goods&#8221; means goods that are physically united with other goods in such a
manner that their identity is lost in a product or mass.

b. No security interest in commingled goods as such. A security interest does
not exist in commingled goods as such. However, a security interest may attach
to a product or mass that results when goods become commingled goods.

c. Attachment of security interest to product or mass. If collateral becomes
commingled goods, a security interest attaches to the product or mass.

d. Perfection of security interest. If a security interest in collateral is
perfected before the collateral becomes commingled goods, the security interest
that attaches to the product or mass under subsection (c) is perfected.

e. Priority of security interest. Except as otherwise provided in subsection
(f), the other provisions of this part determine the priority of a security
interest that attaches to the product or mass under subsection (c).

f. Conflicting security interests in product or mass. If more than one security
interest attaches to the product or mass under subsection (c), the following
rules determine priority:

   1. a security interest that is perfected under subsection (d) has priority
   over a security interest that is unperfected at the time the collateral
   becomes commingled goods.

   2. if more than one security interest is perfected under subsection (d), the
   security interests rank equally in proportion to the value of the collateral
   at the time it became commingled goods.

HISTORY: 2000, c. 1007.