Idaho State Statutes - Idaho Attorney Directory

RIGHTS AND DUTIES OF SECURED PARTY HAVING POSSESSION OR CONTROL
OF COLLATERAL. (a) Except as otherwise provided in subsection (d) of this
section, a secured party shall use reasonable care in the custody and
preservation of collateral in the secured party's possession. In the case of
chattel paper or an instrument, reasonable care includes taking necessary
steps to preserve rights against prior parties unless otherwise agreed.
(b) Except as otherwise provided in subsection (d) of this section, if a
secured party has possession of collateral:
(1) Reasonable expenses, including the cost of insurance and payment of
taxes or other charges, incurred in the custody, preservation, use or
operation of the collateral are chargeable to the debtor and are secured
by the collateral;
(2) The risk of accidental loss or damage is on the debtor to the extent
of a deficiency in any effective insurance coverage;
(3) The secured party shall keep the collateral identifiable, but
fungible collateral may be commingled; and
(4) The secured party may use or operate the collateral:
(A) for the purpose of preserving the collateral or its value;
(B) as permitted by an order of a court having competent
jurisdiction; or
(C) except in the case of consumer goods, in the manner and to the
extent agreed by the debtor.
(c) Except as otherwise provided in subsection (d) of this section, a
secured party having possession of collateral or control of collateral under
section 28-7-106, 28-9-104, 28-9-105, 28-9-106 or 28-9-107:
(1) May hold as additional security any proceeds, except money or funds,
received from the collateral;
(2) Shall apply money or funds received from the collateral to reduce the
secured obligation, unless remitted to the debtor; and
(3) May create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper, payment
intangibles, or promissory notes or a consignor:
(1) Subsection (a) of this section does not apply unless the secured
party is entitled under an agreement:
(A) to charge back uncollected collateral; or
(B) otherwise to full or limited recourse against the debtor or a
secondary obligor based on the nonpayment or other default of an
account debtor or other obligor on the collateral; and
(2) Subsections (b) and (c) of this section do not apply.

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