2010 New York Code
UCC - Uniform Commercial Code
Article 9 - SECURED TRANSACTIONS
Part 3 - PERFECTION AND PRIORITY
Sub Part 2 - (9-308 - 9-316) PERFECTION
9-313 - When Possession by or Delivery to Secured Party Perfects Security Interest Without Filing.

Section 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
  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.
    (j) Cooperative interests. Subsections (a) through (i) do not apply to
  cooperative interests.