Illinois General Assembly - Illinois Compiled Statutes

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810 ILCS 5/9-313

    (810 ILCS 5/9-313) (from Ch. 26, par. 9-313)
    (Text of Section before amendment by P.A. 103-1036)
    Sec. 9-313.

When possession by or delivery to secured party perfects
security interest without filing.

(a) Perfection by possession or delivery.  Except as otherwise provided
in subsection (b), 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 8-301.

(b) Goods covered by certificate of title.  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 9-316(d).

(c) Collateral in possession of person other than debtor.  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) Time of perfection by possession; continuation of perfection.  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) Time of perfection by delivery; continuation of perfection.  A security
interest in a certificated security in registered form is perfected by
delivery when delivery of the certificated security occurs under Section 8-301
and remains perfected by delivery until the debtor obtains possession of the
security certificate.

(f) Acknowledgment not required.  A person in possession of
collateral is not required to acknowledge that it holds possession for a
secured party's benefit.

(g) Effectiveness of acknowledgment; no duties or confirmation.
If a person acknowledges that it holds possession for the secured party's
benefit:

(1) the acknowledgment is effective under subsection

(c) or Section 8-301(a), 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) Secured party's delivery to person other than debtor.  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) Effect of delivery under subsection (h); no duties or confirmation.
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.

(Source: P.A. 95-895, eff. 1-1-09.)

    (Text of Section after amendment by P.A. 103-1036)
    Sec. 9-313. When possession by or delivery to secured party perfects security interest without filing.

(a) Perfection by possession or delivery. Except as otherwise provided in subsection (b), a secured party may perfect a security interest in goods, instruments, negotiable tangible documents, or tangible money 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 8-301.

(b) Goods covered by certificate of title. 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 9-316(d).

(c) Collateral in possession of person other than debtor. 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 signs a record