Sec. 42a-9-313. When possession by or delivery to secured party perfects security interest without filing.
Sec. 42a-9-313. When possession by or delivery to secured party perfects security interest without filing. (a) Except as otherwise provided in subsection (b) of this
section, a secured party may perfect a security interest in tangible negotiable documents,
goods, instruments, money or tangible chattel paper by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking
delivery of the certificated securities under section 42a-8-301.
(b) With respect to goods covered by a certificate of title issued by this state, a
secured party may perfect a security interest in the goods by taking possession of the
goods only in the circumstances described in subsection (d) of section 42a-9-316.
(c) With respect to collateral other than certificated securities and goods covered
by a document, a secured party takes possession of collateral in the possession of a
person other than the debtor, the secured party or a lessee of the collateral from the
debtor in the ordinary course of the debtor's business, when:
(1) The person in possession authenticates a record acknowledging that it holds
possession of the collateral for the secured party's benefit; or
(2) The person takes possession of the collateral after having authenticated a record
acknowledging that it will hold possession of collateral for the secured party's benefit.
(d) If perfection of a security interest depends upon possession of the collateral
by a secured party, perfection occurs no earlier than the time the secured party takes
possession and continues only while the secured party retains possession.
(e) A security interest in a certificated security in registered form is perfected by
delivery when delivery of the certificated security occurs under section 42a-8-301 and
remains perfected by delivery until the debtor obtains possession of the security certificate.
(f) A person in possession of collateral is not required to acknowledge that it holds
possession for a secured party's benefit.
(g) If a person acknowledges that it holds possession for the secured party's benefit:
(1) The acknowledgment is effective under subsection (c) of this section or subsection (a) of section 42a-8-301, even if the acknowledgment violates the rights of a
debtor; and
(2) Unless the person otherwise agrees or law other than this article otherwise provides, the person does not owe any duty to the secured party and is not required to
confirm the acknowledgment to another person.
(h) A secured party having possession of collateral does not relinquish possession
by delivering the collateral to a person other than the debtor or a lessee of the collateral
from the debtor in the ordinary course of the debtor's business if the person was instructed before the delivery or is instructed contemporaneously with the delivery:
(1) To hold possession of the collateral for the secured party's benefit; or
(2) To redeliver the collateral to the secured party.
(i) A secured party does not relinquish possession, even if a delivery under subsection (h) violates the rights of a debtor. A person to which collateral is delivered under
subsection (h) does not owe any duty to the secured party and is not required to confirm
the delivery to another person unless the person otherwise agrees or law other than this
article otherwise provides.
(1959, P.A. 133, S. 9-313; P.A. 76-369, S. 26; P.A. 01-132, S. 33; P.A. 04-64, S. 68.)
History: P.A. 76-369 deleted former Subsecs. (1) to (4) re security interests in fixtures with new provisions incorporated
as Subsecs. (1) to (7) and renumbered former Subsec. (5) as (8); P.A. 01-132 replaced former provisions re priority of
security interests in fixtures with provisions re when a secured party may perfect a security interest without filing by taking
possession or delivery; P.A. 04-64 amended Subsec. (a) by adding "tangible" to conform to revisions made to article 7 by
the same act.
Annotation to former section 42a-9-305:
Security interest was perfected by the secured party taking possession of the collateral and prevailed against an attempt
to take possession under a tax warrant the following day. 168 C. 152.