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Section: 400.009.0313 When possession by or delivery to secured party perfects security interest without filing. RSMO 400.09-313


Published: 2015

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Missouri Revised Statutes













Chapter 400

Uniform Commercial Code

←400.09-312

Section 400.9-313.1

400.09-314→

August 28, 2015

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

400.9-313. (a) 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

400.8-301.



(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

400.9-316(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 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) A security interest in a certificated security in registered form is

perfected by delivery when delivery of the certificated security occurs under

section 400.8-301 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) or section

400.8-301(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) 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) 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.



(L. 1963 p. 503 § 9-313, A.L. 1988 S.B. 583, A.L. 1998 H.B. 1066,

A.L. 2001 S.B. 288)



Effective 7-01-01





1998



1998



400.9.313. (1) In this section and in the provisions of part 4 of

this article referring to fixture filing, unless the context otherwise

requires



(a) goods are "fixtures" when they become so related to particular

real estate that an interest in them arises under real estate law;



(b) a "fixture filing" is the filing in the office where a mortgage

on the real estate would be filed or recorded of a financing statement

covering goods which are or are to become fixtures and conforming to the

requirements of subsection (5) of section 400.9-402;



(c) a mortgage is a "construction mortgage" to the extent that it

secures an obligation incurred for the construction of an improvement on

land including the acquisition cost of the land, if the recorded writing so

indicates.



(2) A security interest under this article may be created in goods

which are fixtures or may continue in goods which become fixtures, but no

security interest exists under this article in ordinary building materials

incorporated into an improvement on land.



(3) This article does not prevent creation of an encumbrance upon

fixtures pursuant to real estate law.



(4) A perfected security interest in fixtures has priority over the

conflicting interest of an encumbrancer or owner of the real estate where



(a) the security interest is a purchase money security interest, the

interest of the encumbrancer or owner arises before the goods become

fixtures, the security interest is perfected by a fixture filing before the

goods become fixtures or within ten days thereafter, and the debtor has an

interest of record in the real estate or is in possession of the real

estate; or



(b) the security interest is perfected by a fixture filing before the

interest of the encumbrancer or owner is of record, the security interest

has priority over any conflicting interest of a predecessor in title of the

encumbrancer or owner, and the debtor has an interest of record in the real

estate or is in possession of the real estate; or



(c) the fixtures are readily removable factory or office machines or

readily removable replacements of domestic appliances which are consumer

goods, and before the goods become fixtures the security interest is

perfected by any method permitted by this article; or



(d) the conflicting interest is a lien on the real estate obtained by

legal or equitable proceedings after the security interest was perfected by

any method permitted by this article.



(5) A security interest in a manufactured home as defined in section

700.010, RSMo, which has been perfected pursuant to sections 700.350 to

700.390, RSMo, has priority over the conflicting interest of an

encumbrancer or owner of the real estate if the security agreement was made

before the manufactured home was placed upon the real estate. This

subdivision shall apply only to security interests in manufactured homes

which are placed on real property after August 28, 1998. This subdivision

shall not prevent the use of fixture filings for manufactured homes.



(6) A security interest in fixtures, whether or not perfected, has

priority over the conflicting interest of an encumbrancer or owner of the

real estate where



(a) the encumbrancer or owner has consented in writing to the

security interest or has disclaimed an interest in the goods as fixtures;

or



(b) the debtor has a right to remove the goods as against the

encumbrancer or owner. If the debtor's right terminates, the priority of

the security interest continues for a reasonable time.



(7) Notwithstanding paragraph (a) of subsection (4) but otherwise

subject to subsections (4), (5) and (6), a security interest in fixtures is

subordinate to a construction mortgage recorded before the goods become

fixtures if the goods become fixtures before the completion of the

construction. To the extent that it is given to refinance a construction

mortgage, a mortgage has this priority to the same extent as the

construction mortgage.



(8) In cases not within the preceding subsections, a security

interest in fixtures is subordinate to the conflicting interest of an

encumbrancer or owner of the related real estate who is not the debtor.



(9) When the secured party has priority over all owners and

encumbrancers of the real estate, he may, on default, subject to the

provisions of part 5, remove his collateral from the real estate, but he

must reimburse any encumbrancer or owner of the real estate who is not the

debtor and who has not otherwise agreed for the cost of repair of any

physical injury, but not for any diminution in value of the real estate

caused by the absence of the goods removed or by any necessity of replacing

them. A person entitled to reimbursement may refuse permission to remove

until the secured party gives adequate security for the performance of this

obligation.



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