§ 41-09-33 — (9-313) When possession by or delivery to secured party perfects security interest without filing

North Dakota § 41-09-33

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-09: Secured Transactions

Text

interest without filing.
1. Except as otherwise provided in subsection 2, a secured party may perfect a security
interest in certificated certificates of deposit, 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 41-08-27.
2. 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 4 of section 41-09-36.
3. 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:
a. The person in possession signs a record acknowledging that it holds possession
of the collateral for the secured party's benefit; or
b. The person takes possession of the collateral after having signed a record
acknowledging that it will hold possession of the collateral for the secured party's
benefit.
4. If perfection of a security interest depends upon possession of the collateral by a
secured party, perfection occurs not earlier than the time the secured party takes
possession and continues only while the secured party retains possession.
5. A security interest in a certificated security in registered form is perfected by delivery
when delivery of the certificated security occurs under section 41-08-27 and remains
perfected by delivery until the debtor obtains possession of the security certificate.
6. A person in possession of collateral is not required to acknowledge that it holds
possession for a secured party's benefit.
7. If a person acknowledges that it holds possession for the secured party's benefit:
a. The acknowledgment is effective under subsection 3 or subsection 1 of section
41-09-21, even if the acknowledgment violates the rights of a debtor; and
b. 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.
8. 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:
a. To hold possession of the collateral for the secured party's benefit; or
b. To redeliver the collateral to the secured party.
9. A secured party does not relinquish possession, even if a delivery under subsection 8
violates the rights of a debtor. A person to which collateral is delivered under
subsection 8 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 chapter otherwise provides.