Also known as: collaterals · collateralized · collateralization · collateral security · collateral estoppel
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
Property that is subject to a security interest or agricultural lien. The term encompasses proceeds of the collateral as well as accounts, chattel paper, payment intangibles, and promissory notes that have been sold.
Property that is subject to a security interest or agricultural lien. The term encompasses proceeds of the collateral as well as accounts, chattel paper, payment intangibles, and promissory notes that have been sold.
Colin Chambers devised Blackacre to his daughter for life, remainder to her heirs. The daughter died without lineal descendants. Her uncle, a collateral relative, claimed the remainder. The limitation permitted inheritance by collateral as well as lineal heirs, so the uncle took the property.
Cascade Manufacturing held a senior mortgage on an office building that also encumbered rents. When the borrower defaulted, Cascade sought appointment of a receiver. A junior mortgagee also requested a receiver. Because the senior mortgagee held a collateral agreement on rents, its request took priority.
A promise or agreement that is independent of the primary conveyance of real property. Such promises survive merger of the contract into the deed and may be enforced after closing.
Curtis Cannon sold land to Chloe Chen under a contract that required Cannon to build a boundary fence within six months after closing. The deed contained no mention of the fence. After Chen accepted the deed, Cannon refused to build the fence. Chen sued for breach. Because the fence obligation was independent of the conveyance itself, the promise survived merger and remained enforceable.
A promise or agreement that is independent of the primary conveyance of real property. Such promises survive merger of the contract into the deed and may be enforced after closing.
Each sense below has its own examples, sources, and questions.
Crown Pharmaceuticals granted a security interest in its accounts receivable to Crestview Holdings. The accounts were secured by a separate letter of credit. When Crestview perfected its interest in the accounts, that perfection automatically perfected its interest in the letter of credit as a supporting obligation.
Yes. Under UCC § 9-308(d), perfection of a security interest in collateral also perfects a security interest in any supporting obligation for that collateral.
Claire Campbell moved to dismiss a suit on grounds of qualified immunity. The district court denied the motion. Campbell appealed immediately. The order conclusively resolved an important issue separate from the merits and would be effectively unreviewable after final judgment, satisfying the collateral order doctrine.
Connor Clark married Christine Castro solely to obtain immigration benefits. The couple executed a side agreement stating they would not live together or support each other. Because the collateral agreement contradicted the essential obligations of marriage, the marriage was held invalid.
A promise collateral to the transfer survives merger and remains enforceable after closing. The court examines the parties' intent and the independent nature of the promise to decide whether it merged into the deed.
An order is immediately appealable if it conclusively determines the disputed question, resolves an important issue completely separate from the merits, and is effectively unreviewable on appeal from a final judgment.
…in this opinion is directed to the main questions decided by the Court and necessary to its decision; in ignoring some of the collateral points, I do not mean to imply agreement. [^maj-2]: The case was Bram v. United States , 168 U. S. 532 (quoted, ante , p. 461). Its historical premises were afterwards disproved by…