34-21-1106. Sales subject to security interest; release of security interest.

(a) In the case of a farm product produced in Wyoming, a buyer in the ordinary course of business buying farm products takes subject to a security interest created by the seller, and a commission merchant or selling agent who sells a farm product for others shall be subject to a security interest created by the seller in such farm product, if:

(i) The buyer, commission merchant or selling agent has failed to register with the secretary of state prior to the purchase of farm products, and the secured party has filed an effective financing statement or notice that covers the farm products being sold; or

(ii) The buyer, commission merchant or selling agent received from the secretary of state written notice as provided in W.S. 34-21-1102(a)(v) that specifies both the seller and the farm products being sold by the seller as being subject to an effective financing statement or notice, and does not secure a waiver or release of the security interest specified in the effective financing statement or notice from the secured party by performing any payment obligation or otherwise. If a buyer in the ordinary course of business buying farm products covered by the central filing system tenders to the seller the total purchase price by means of a check or other instrument payable to the seller and each security interest holder of the seller identified in the central filing system for those products and if the security interest holder authorizes the negotiation of the check or other instrument, the authorization or endorsement and payment thereof constitutes a waiver or release of the security interest specified to the extent of the amount of the instrument.

(b) A buyer in the ordinary course of business buying farm products covered by the central filing system shall take subject to the security interest identified under the system, except that a registrant or a buyer in the ordinary course of business making an inquiry under W.S. 34-21-1105 shall not take subject to the security interest if the central filing system's failure to correctly provide any of the information specified in W.S. 34-21-1101(a)(v)(D) prevents the buyer from having knowledge of the effective financing statement.