S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
           S. 963                                                    A. 690
                              2011-2012 Regular Sessions
                             S E N A T E - A S S E M B L Y
                                      (PREFILED)
                                    January 5, 2011
                                      ___________
       IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
         ed, and when printed to be committed to the Committee on Judiciary
       IN  ASSEMBLY  -- Introduced by M. of A. THIELE -- read once and referred
         to the Committee on Consumer Affairs and Protection
       AN ACT to amend the uniform commercial  code,  in  relation  to  deeming
         goods  to be on sale or return as to creditor claims when goods deliv-
         ered to person dealing in goods of the kind involved
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  The  section heading and subsection 2 of section 2-326 of
    2  the uniform commercial code, as amended by chapter 84  of  the  laws  of
    3  2001, are amended and a new subsection 4 is added to read as follows:
    4    Sale  on  Approval and Sale or Return; CONSIGNMENT SALES AND Rights of
    5  Creditors.
    6    (2) [Goods] EXCEPT AS  PROVIDED  IN  SUBSECTION  (4),  GOODS  held  on
    7  approval  are  not  subject to the claims of the buyer's creditors until
    8  acceptance; goods held on sale or return  are  subject  to  such  claims
    9  while in the buyer's possession.
   10    (4)  WHERE  GOODS  ARE  DELIVERED TO A PERSON FOR SALE AND SUCH PERSON
   11  MAINTAINS A PLACE OF BUSINESS AT WHICH HE DEALS IN  GOODS  OF  THE  KIND
   12  INVOLVED,  UNDER  A NAME OTHER THAN THE NAME OF THE PERSON MAKING DELIV-
   13  ERY, THEN WITH RESPECT TO CLAIMS OF CREDITORS OF THE  PERSON  CONDUCTING
   14  THE  BUSINESS  THE  GOODS  ARE  DEEMED  TO  BE  ON SALE OR RETURN.   THE
   15  PROVISIONS OF THIS SUBSECTION ARE APPLICABLE EVEN  THOUGH  AN  AGREEMENT
   16  PURPORTS TO RESERVE TITLE TO THE PERSON MAKING DELIVERY UNTIL PAYMENT OR
   17  RESALE OR USES SUCH WORDS AS "ON CONSIGNMENT" OR "ON MEMORANDUM". HOWEV-
   18  ER, THIS SUBSECTION IS NOT APPLICABLE IF THE PERSON MAKING DELIVERY
   19    (A) COMPLIES WITH AN APPLICABLE LAW PROVIDING FOR A CONSIGNOR'S INTER-
   20  EST OR THE LIKE TO BE EVIDENCED BY A SIGN, OR
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD03746-01-1
       S. 963                              2                             A. 690
    1    (B)  ESTABLISHES  THAT THE PERSON CONDUCTING THE BUSINESS IS GENERALLY
    2  KNOWN BY HIS CREDITORS TO BE SUBSTANTIALLY ENGAGED IN SELLING THE  GOODS
    3  OF OTHERS, OR
    4    (C)  COMPLIES  WITH  THE  FILING  PROVISIONS OF THE ARTICLE ON SECURED
    5  TRANSACTIONS (ARTICLE 9).
    6    S 2. This act shall take effect immediately.