2012 Pennsylvania Consolidated Statutes
Title 13 - COMMERCIAL CODE
Chapter 92 - Effectiveness of Security Agreement, Attachment of Security Interest and Rights of Parties to Security Agreement
Section 9207 - Rights and duties of secured party having possession or control of collateral

                               SUBCHAPTER B
                            RIGHTS AND DUTIES

     Sec.
     9207.  Rights and duties of secured party having possession or
            control of collateral.
     9208.  Additional duties of secured party having control of
            collateral.
     9209.  Duties of secured party if account debtor has been
            notified of assignment.
     9210.  Request for accounting; request regarding list of
            collateral or statement of account.
     § 9207.  Rights and duties of secured party having possession or
                control of collateral.
        (a)  Duty of care when secured party in possession.--Except
     as otherwise provided in subsection (d), a secured party shall
     use reasonable care in the custody and preservation of
     collateral in the secured party's possession. In the case of
     chattel paper or an instrument, reasonable care includes taking
     necessary steps to preserve rights against prior parties unless
     otherwise agreed.
        (b)  Expenses, risks, duties and rights when secured party in
     possession.--Except as otherwise provided in subsection (d), if
     a secured party has possession of collateral:
            (1)  Reasonable expenses, including the cost of insurance
        and payment of taxes or other charges, incurred in the
        custody, preservation, use or operation of the collateral are
        chargeable to the debtor and are secured by the collateral.
            (2)  The risk of accidental loss or damage is on the
        debtor to the extent of a deficiency in any effective
        insurance coverage.
            (3)  The secured party shall keep the collateral
        identifiable, but fungible collateral may be commingled.
            (4)  The secured party may use or operate the collateral:
                (i)  for the purpose of preserving the collateral or
            its value;
                (ii)  as permitted by an order of a court having
            competent jurisdiction; or
                (iii)  except in the case of consumer goods, in the
            manner and to the extent agreed by the debtor.
        (c)  Duties and rights when secured party in possession or
     control.--Except as otherwise provided in subsection (d), a
     secured party having possession of collateral or control of
     collateral under section 7106 (relating to control of electronic
     document of title), 9104 (relating to control of deposit
     account), 9105 (relating to control of electronic chattel
     paper), 9106 (relating to control of investment property) or
     9107 (relating to control of letter-of-credit right):
            (1)  may hold as additional security any proceeds, except
        money or funds, received from the collateral;
            (2)  shall apply money or funds received from the
        collateral to reduce the secured obligation unless remitted
        to the debtor; and
            (3)  may create a security interest in the collateral.
        (d)  Buyer of certain rights to payment.--If the secured
     party is a buyer of accounts, chattel paper, payment intangibles
     or promissory notes or a consignor:
            (1)  Subsection (a) does not apply unless the secured
        party is entitled under an agreement:
                (i)  to charge back uncollected collateral; or
                (ii)  otherwise to full or limited recourse against
            the debtor or a secondary obligor based on the nonpayment
            or other default of an account debtor or other obligor on
            the collateral.
            (2)  Subsections (b) and (c) do not apply.
     (Apr. 16, 2008, P.L.57, No.13, eff. 60 days)

        2008 Amendment.  Act 13 amended subsec. (c) intro. par.
        Cross References.  Section 9207 is referred to in sections
     9601, 9602 of this title.