47-9313

47-9313. 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 47-8301.

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 section 47-9316, subsection D.

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 on 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 47-8301 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 section
47-8301, subsection A, even if the acknowledgment violates the rights of a debtor; and

2. Unless the person otherwise agrees or law other than this chapter 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 of this section violates the rights of a debtor. A person to which
collateral is delivered under subsection H of this section 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.