) A secured party after default may sell, lease or otherwise dispose of any or all of collateral in its then condition or following any commercially reasonable preparation or processing. Any sale of goods is subject to the division on sales (Division 2). The proceeds of disposition shall be applied in the order following to

(a) The reasonable expenses of retaking, holding, preparing for sale or lease, selling, leasing and the like and, to the extent provided for in the agreement and not prohibited by law, the reasonable attorneys’ fees and legal expenses incurred by the secured party;
(b) The satisfaction of indebtedness secured by the security interest under which the disposition is made;

(c) The satisfaction of indebtedness secured by any subordinate security interest in the collateral if written notification of demand therefor is received before distribution of the proceeds is completed. If requested by the secured party, the holder of a subordinate security interest must seasonably furnish reasonable proof of his interest, and unless he does so, the secured party need not comply with his demand.
(2) If the security interest secures an indebtedness, the secured party must account to the debtor for any surplus, and unless otherwise agreed,

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the debtor is liable for any deficiency. But if the underlying transaction was a sale of accounts or chattel paper, the debtor is entitled to any surplus or is liable for any deficiency only if the security agreement so provides.

(3) Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms, but ever aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale. In the case of consumer goods no other notification need be sent. In other cases notification shall be sent to any other secured party from whom the secured party has received (before sending his notification to the debtor or before the debtor’s renunciation of his rights) written notice of a claim of an interest in the collateral. The secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, he may buy at private sale.

(4) When collateral is disposed of by a secured party after default, the disposition transfers to a purchaser for value all of the debtor’s rights therein, discharges the security interest under which it is made and any security interest or lien subordinate thereto. The purchaser takes free of all such rights and interest even though the secured party fails to comply with the requirements of this chapter or of any judicial proceedings

(a) In the case of a public sale, if the purchaser has no knowledge of any defects in the sale and if he does not buy in collusion with the secured party, other bidders or the person conducting the sale; or
(b) In any other case, if the purchase acts in good faith.

(5) A person who is liable to a secured party under a guaranty, indorsement, repurchase agreement or the like and who receives a trans-

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fer of collateral from the secured party or is subrogated to his rights has thereafter the rights and duties of the secured party. Such a transfer of collateral is not a sale or disposition of the collateral under this division.

COMMENT: Section 9504 conforms substantively to Section 9-504 of the 1972
Official Text of the Uniform Commercial Code. For purpose and effect, see Official Comment. The California version is the same except that subdivision (3) provides certain rules relating to notice of sale. The California variations were rejected by the Permanent Editorial Board on the grounds that they destroy the desirable
flexibility provided in the Official Text. For further discussion, see Report of the Permanent Editorial Board for the Uniform Commercial Code quoted in West Ann. Cal. Comm. Code § 9504, California Code Comment (Supp. 1975).

COURT DECISIONS: SUPERIOR COURT 1980. Subsection (3) of this § 9504 contains notice requirements which differ for public and private sale. Sale in this
case was private, and notice under private sale requires only Areasonable
notification of the time after which a sale or other disposition would be made@ and
such notification was made. Further, assignee is not required to provide notice because assignee of a secured party Aacquires the rights and duties of the secured party@. Jones & Guerrero Co., Inc., d/b/a/ Datsun Motors Sale v. Fausto, et al,
Civil Case No. 185-80.

§ 9505. Compulsory Disposition of Collateral; Acceptance of the
Collateral as Discharge of Obligation.
(1) If the debtor has paid 60 percent of the cash price in the case of a purchase money security interest in consumer goods or 60 percent of the loan in the case or another security interest in consumer goods, and has not signed after default a statement renouncing or modifying his rights, under this chapter a secured party who has taken possession of collateral must dispose of it under Section 9504 and if he fails to do so within 90 days after he takes possession or within a reasonable time after such 90- day period, the debtor at his option may recover in conversion or under Section 9507(1) on secured party’s liability.
(2) In any other case involving consumer goods or any other collateral a secured party in possession may, after default, propose to retain the collateral in satisfaction of the obligation. Written notice of such proposal shall be sent to the debtor if he has not signed after default a statement renouncing or modifying his rights under this subdivision. In the case of consumer goods no other notice need be given. In other cases notice shall be sent to any other secured party from whom the secured party has received (before sending his notice to the debtor or before the debtor’s renunciation of his rights) written notice of a claim of an interest in the collateral. If the secured party receives objection in writing from a

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person entitled to receive notification within 21 days after the notice was sent, the secured party must dispose of the collateral under Section 9504. In the absence of such written objection the secured party may retain the collateral in satisfaction of the debtor’s obligation.