13 Pa.C.S. Ch. 93

in effect

13 Pa.C.S. § 9301 Law governing perfection and priority of security interests.

(a) General rule; location of debtor.--Except as otherwise provided in this section, while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of a security interest in collateral. (b) Possessory security interests; location of collateral.--While collateral is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of a possessory security interest in that collateral. (c) Fixture filings, timber to be cut, priority of nonpossessory tangible personal property security interests; location of collateral.--Except as otherwise provided in subsection (d), while collateral is located in a jurisdiction, the local law of that jurisdiction governs: (1) perfection of a security interest in goods by filing a fixture filing; (2) perfection of a security interest in timber to be cut; and (3) the effect of perfection or nonperfection and the priority of a nonpossessory security interest in tangible negotiable documents, goods, instruments or money. (d) As-extracted collateral; location of wellhead or minehead.--The local law of the jurisdiction in which the wellhead or minehead is located governs perfection, the effect of perfection or nonperfection and the priority of a security interest in as-extracted collateral. (e) Other exceptions.--The rules of this section are subject to: (1) Section 9303 (relating to law governing perfection and priority of security interests in goods covered by certificate of title). (2) Section 9304 (relating to law governing perfection and priority of security interests in deposit accounts). (3) Section 9305 (relating to law governing perfection and priority of security interests in investment property). (4) Section 9306.1 (relating to law governing perfection and priority of security interests in chattel paper). (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsecs. (c) and (e). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9301 is referred to in section 9316 of this title.

13 Pa.C.S. § 9302 Law governing perfection and priority of agricultural liens.

While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of an agricultural lien on the farm products.

13 Pa.C.S. § 9303 Law governing perfection and priority of security interests in goods covered by certificate of title.

(a) Applicability of section.--This section applies to goods covered by a certificate of title even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor. (b) When goods covered by certificate of title.--Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered subsequently by a certificate of title issued by another jurisdiction. (c) Applicable law.--The local law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of perfection or nonperfection and the priority of a security interest in goods covered by a certificate of title from the time the goods become covered by the certificate of title until the goods cease to be covered by the certificate of title. Cross References. Section 9303 is referred to in section 9301 of this title.

13 Pa.C.S. § 9304 Law governing perfection and priority of security interests in deposit accounts.

(a) Law of bank's jurisdiction governs.--The local law of a bank's jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of a security interest in a deposit account maintained with that bank even if the transaction does not bear any relation to the bank's jurisdiction. (b) Bank's jurisdiction.--The following rules determine a bank's jurisdiction for purposes of this chapter: (1) If an agreement between the bank and its customer governing the deposit account expressly provides that a particular jurisdiction is the bank's jurisdiction for purposes of this chapter or this division, that jurisdiction is the bank's jurisdiction. (2) If paragraph (1) does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank's jurisdiction. (3) If neither paragraph (1) nor paragraph (2) applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank's jurisdiction. (4) If none of the preceding paragraphs applies, the bank's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer's account is located. (5) If none of the preceding paragraphs applies, the bank's jurisdiction is the jurisdiction in which the chief executive office of the bank is located. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (a). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. 2008 Amendment. Act 13 amended subsec. (b)(1). Cross References. Section 9304 is referred to in section 9301 of this title.

13 Pa.C.S. § 9305 Law governing perfection and priority of security interests in investment property.

(a) Governing law; general rules.--Except as otherwise provided in subsection (c), the following rules apply: (1) While a security certificate is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of a security interest in the certificated security represented thereby. (2) The local law of the issuer's jurisdiction as specified in section 8110(d) (relating to applicability; choice of law) governs perfection, the effect of perfection or nonperfection and the priority of a security interest in an uncertificated security. (3) The local law of the securities intermediary's jurisdiction as specified in section 8110(e) governs perfection, the effect of perfection or nonperfection and the priority of a security interest in a security entitlement or securities account. (4) The local law of the commodity intermediary's jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of a security interest in a commodity contract or commodity account. (5) Paragraphs (2), (3) and (4) apply even if the transaction does not bear any relation to the jurisdiction. (b) Commodity intermediary's jurisdiction.--The following rules determine a commodity intermediary's jurisdiction for purposes of this part: (1) If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary's jurisdiction for purposes of this chapter, this division or this title, that jurisdiction is the commodity intermediary's jurisdiction. (2) If paragraph (1) does not apply and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction. (3) If neither paragraph (1) nor paragraph (2) applies and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction. (4) If none of the preceding paragraphs applies, the commodity intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer's account is located. (5) If none of the preceding paragraphs applies, the commodity intermediary's jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located. (c) When perfection governed by law of jurisdiction where debtor located.--The local law of the jurisdiction in which the debtor is located governs: (1) perfection of a security interest in investment property by filing; (2) automatic perfection of a security interest in investment property created by a broker or securities intermediary; and (3) automatic perfection of a security interest in a commodity contract or commodity account created by a commodity intermediary. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 added subsec. (a)(5). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9305 is referred to in sections 9301, 9316 of this title.

13 Pa.C.S. § 9306 Law governing perfection and priority of security interests in letter-of-credit rights.

(a) Governing law; issuer's or nominated person's jurisdiction.--Subject to subsection (c), the local law of the issuer's jurisdiction or a nominated person's jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of a security interest in a letter-of-credit right if the issuer's jurisdiction or nominated person's jurisdiction is a state. (b) Issuer's or nominated person's jurisdiction.--For purposes of this chapter, an issuer's jurisdiction or nominated person's jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in section 5116 (relating to choice of law and forum). (c) When section not applicable.--This section does not apply to a security interest which is perfected only under section 9308(d) (relating to supporting obligation).

13 Pa.C.S. § 9306.1 Law governing perfection and priority of security interests in chattel paper.

(a) Chattel paper evidenced by authoritative electronic copy.--Except as provided in subsection (d), if chattel paper is evidenced only by an authoritative electronic copy of the chattel paper or is evidenced by an authoritative electronic copy and an authoritative tangible copy, the local law of the chattel paper's jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of a security interest in the chattel paper, even if the transaction does not bear any relation to the chattel paper's jurisdiction. (b) Chattel paper's jurisdiction.--The following rules determine the chattel paper's jurisdiction under this section: (1) If the authoritative electronic copy of the record evidencing chattel paper, or a record attached to or logically associated with the electronic copy and readily available for review, expressly provides that a particular jurisdiction is the chattel paper's jurisdiction for purposes of this division or title, that jurisdiction is the chattel paper's jurisdiction. (2) If paragraph (1) does not apply and the rules of the system in which the authoritative electronic copy is recorded are readily available for review and expressly provide that a particular jurisdiction is the chattel paper's jurisdiction for purposes of this division or title, that jurisdiction is the chattel paper's jurisdiction. (3) If paragraphs (1) and (2) do not apply and the authoritative electronic copy, or a record attached to or logically associated with the electronic copy and readily available for review, expressly provides that the chattel paper is governed by the law of a particular jurisdiction, that jurisdiction is the chattel paper's jurisdiction. (4) If paragraphs (1), (2) and (3) do not apply and the rules of the system in which the authoritative electronic copy is recorded are readily available for review and expressly provide that the chattel paper or the system is governed by the law of a particular jurisdiction, that jurisdiction is the chattel paper's jurisdiction. (5) If paragraphs (1), (2), (3) and (4) do not apply, the chattel paper's jurisdiction is the jurisdiction in which the debtor is located. (c) Chattel paper evidenced by authoritative tangible copy.--If an authoritative tangible copy of a record evidences chattel paper and the chattel paper is not evidenced by an authoritative electronic copy, while the authoritative tangible copy of the record evidencing chattel paper is located in a jurisdiction, the local law of that jurisdiction governs: (1) Perfection of a security interest in the chattel paper by possession under section 9314.1 (relating to perfection by possession and control of chattel paper). (2) The effect of perfection or nonperfection and the priority of a security interest in the chattel paper. (d) When perfection governed by law of jurisdiction where debtor located.--The local law of the jurisdiction in which the debtor is located governs perfection of a security interest in chattel paper by filing. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 added section 9306.1. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9306.1 is referred to in sections 9301, 9316 of this title.

13 Pa.C.S. § 9306.2 Law governing perfection and priority of security interests in controllable accounts, controllable electronic records and controllable payment intangibles.

(a) General rule.--Except as provided in subsection (b), the local law of the controllable electronic record's jurisdiction specified in section 12107(c) and (d) (relating to governing law) governs perfection, the effect of perfection or nonperfection and the priority of a security interest in a controllable electronic record and a security interest in a controllable account or controllable payment intangible evidenced by the controllable electronic record. (b) When perfection governed by law of jurisdiction where debtor located.--The local law of the jurisdiction in which the debtor is located governs: (1) Perfection of a security interest in a controllable account, controllable electronic record or controllable payment intangible by filing. (2) Automatic perfection of a security interest in a controllable payment intangible created by a sale of the controllable payment intangible. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 added section 9306.2. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9306.2 is referred to in section 9316 of this title.

13 Pa.C.S. § 9307 Location of debtor.

(a) Place of business.--As used in this section, the term "place of business" means a place where a debtor conducts its affairs. (b) Debtor's location: general rules.--Except as otherwise provided in this section, the following rules determine a debtor's location: (1) A debtor who is an individual is located at the individual's principal residence. (2) A debtor which is an organization and has only one place of business is located at its place of business. (3) A debtor which is an organization and has more than one place of business is located at its chief executive office. (c) Limitation of applicability of subsection (b).--Subsection (b) applies only if a debtor's residence, place of business or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording or registration system as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral. If subsection (b) does not apply, the debtor is located in the District of Columbia. (d) Continuation of location: cessation of existence, etc.--A person that ceases to exist, ceases to have a residence or ceases to have a place of business continues to be located in the jurisdiction specified by subsections (b) and (c). (e) Location of registered organization organized under state law.--A registered organization which is organized under the law of a state is located in that state. (f) Location of registered organization organized under Federal law; bank branches and agencies.--Except as otherwise provided in subsection (i), a registered organization which is organized under the law of the United States and a branch or agency of a bank which is not organized under the law of the United States or a state are located: (1) in the state which the law of the United States designates, if the law designates a state of location; (2) in the state which the registered organization, branch or agency designates, if the law of the United States authorizes the registered organization, branch or agency to designate its state of location, including by designating its main office, home office or other comparable office; or (3) in the District of Columbia, if neither paragraph (1) nor paragraph (2) applies. (g) Continuation of location: change in status of registered organization.--A registered organization continues to be located in the jurisdiction specified by subsection (e) or (f) notwithstanding: (1) the suspension, revocation, forfeiture or lapse of the registered organization's status as such in its jurisdiction of organization; or (2) the dissolution, winding up or cancellation of the existence of the registered organization. (h) Location of United States.--The location of the United States is the District of Columbia. (i) Location of foreign bank branch or agency if licensed in only one state.--A branch or agency of a bank which is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed, if all branches and agencies of the bank are licensed in only one state. (j) Location of foreign air carrier.--A foreign air carrier under the Federal Aviation Act of 1958 (Public Law 85-726, 72 Stat. 731), as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier. (k) Section applies only to this chapter.--This section applies only for purposes of this chapter. (June 27, 2013, P.L.154, No.30, eff. July 1, 2013) 2013 Amendment. Act 30 amended subsec. (f)(2).

13 Pa.C.S. § 9308 When security interest or agricultural lien is perfected; continuity of perfection.

(a) Perfection of security interest.--Except as otherwise provided in this section and section 9309 (relating to security interest perfected upon attachment), a security interest is perfected if it has attached and all of the applicable requirements for perfection in sections 9310 (relating to when filing required to perfect security interest or agricultural lien; security interests and agricultural liens to which filing provisions do not apply) through 9316 (relating to effect of change in governing law) have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches. (b) Perfection of agricultural lien.--An agricultural lien is perfected if it has become effective and all of the applicable requirements for perfection in section 9310 have been satisfied. An agricultural lien is perfected when it becomes effective if the applicable requirements are satisfied before the agricultural lien becomes effective. (c) Continuous perfection; perfection by different methods.--A security interest or agricultural lien is perfected continuously if it is originally perfected by one method under this division and is later perfected by another method under this division without an intermediate period when it was unperfected. (d) Supporting obligation.--Perfection of a security interest in collateral also perfects a security interest in a supporting obligation for the collateral. (e) Lien securing right to payment.--Perfection of a security interest in a right to payment or performance also perfects a security interest in a security interest, mortgage or other lien on personal or real property securing the right. (f) Security entitlement carried in securities account.--Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account. (g) Commodity contract carried in commodity account.-- Perfection of a security interest in a commodity account also perfects a security interest in the commodity contracts carried in the commodity account. (June 27, 2013, P.L.154, No.30, eff. July 1, 2013) 2013 Amendment. Act 30 amended subsec. (a). Cross References. Section 9308 is referred to in sections 9109, 9306, 9310, 9312 of this title; sections 1134, 7712.12 of Title 75 (Vehicles).

13 Pa.C.S. § 9309 Security interest perfected upon attachment.

The following security interests are perfected when they attach: (1) A purchase-money security interest in consumer goods, except as otherwise provided in section 9311(b) (relating to perfection of security interests in property subject to certain statutes, regulations and treaties) with respect to consumer goods which are subject to a statute or treaty described in section 9311(a). (2) An assignment of accounts or payment intangibles which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor's outstanding accounts or payment intangibles. (3) A sale of a payment intangible. (4) A sale of a promissory note. (5) A security interest created by the assignment of a health-care-insurance receivable to the provider of the health-care goods or services. (6) A security interest arising under section 2401 (relating to passing of title; reservation for security; limited application of section), 2505 (relating to shipment by seller under reservation), 2711(c) (relating to security interest of buyer in rejected goods) or 2A508(e) (relating to security interest in goods in lessee's possession) until the debtor obtains possession of the collateral. (7) A security interest of a collecting bank arising under section 4210 (relating to security interest of collecting bank in items, accompanying documents and proceeds). (8) A security interest of an issuer or nominated person arising under section 5118 (relating to security interest of issuer or nominated person). (9) A security interest arising in the delivery of a financial asset under section 9206(c) (relating to security interest in payment against delivery transaction). (10) A security interest in investment property created by a broker or securities intermediary. (11) A security interest in a commodity contract or a commodity account created by a commodity intermediary. (12) An assignment for the benefit of all creditors of the transferor and subsequent transfers by the assignee thereunder. (13) A security interest created by an assignment of a beneficial interest in a decedent's estate. (14) A sale by an individual of an account that is a right to payment of winnings in a lottery or other game of chance. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days) 2008 Amendment. Act 13 added par. (14). Cross References. Section 9309 is referred to in sections 9308, 9310, 9323 of this title.

13 Pa.C.S. § 9310 When filing required to perfect security interest or agricultural lien; security interests and agricultural liens to which filing provisions do not apply.

(a) General rule: perfection by filing.--Except as otherwise provided in subsection (b) and section 9312(b) (relating to perfection of security interests in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, documents, goods covered by documents, instruments, investment property, letter-of-credit rights and money; perfection by permissive filing; temporary perfection without filing or transfer of possession), a financing statement must be filed to perfect all security interests and agricultural liens. (b) Exceptions: filing not necessary.--The filing of a financing statement is not necessary to perfect a security interest: (1) which is perfected under section: (i) 9308(d) (relating to supporting obligation); (ii) 9308(e) (relating to lien securing right to payment); (iii) 9308(f) (relating to security entitlement carried in securities account); or (iv) 9308(g) (relating to commodity contract carried in commodity account); (2) which is perfected under section 9309 (relating to security interest perfected upon attachment) when it attaches; (3) in property subject to a statute, regulation or treaty described in section 9311(a) (relating to perfection of security interests in property subject to certain statutes, regulations and treaties); (4) in goods in possession of a bailee which is perfected under section 9312(d)(1) or (2); (5) in certificated securities, documents, goods or instruments which is perfected without filing, control or possession under section: (i) 9312(e); (ii) 9312(f); or (iii) 9312(g); (6) in collateral in the secured party's possession under section 9313 (relating to when possession by or delivery to secured party perfects security interest without filing); (7) in a certificated security which is perfected by delivery of the security certificate to the secured party under section 9313; (8) in controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents, investment property or letter-of-credit rights which is perfected by control under section 9314 (relating to perfection by control); (8.1) in chattel paper which is perfected by possession and control under section 9314.1 (relating to perfection by possession and control of chattel paper); (9) in proceeds which is perfected under section 9315 (relating to secured party's rights on disposition of collateral and in proceeds); or (10) which is perfected under section 9316 (relating to effect of change in governing law). (c) Assignment of perfected security interest.--If a secured party assigns a perfected security interest or agricultural lien, a filing under this division is not required to continue the perfected status of the security interest against creditors of and transferees from the original debtor. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; June 27, 2013, P.L.154, No.30, eff. July 1, 2013; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsecs. (a) and (b)(4), (5) and (8) and added subsec. (b)(8.1). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. 2013 Amendment. Act 30 amended subsec. (b)(10). Cross References. Section 9310 is referred to in sections 9102, 9308, 9311 of this title.

13 Pa.C.S. § 9311 Perfection of security interests in property subject to certain statutes, regulations and treaties.

(a) Security interest subject to other law.--Except as otherwise provided in subsection (d), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to: (1) a statute, regulation or treaty of the United States whose requirements for a security interest's obtaining priority over the rights of a lien creditor with respect to the property preempt section 9310(a) (relating to when filing required to perfect security interest or agricultural lien; security interests and agricultural liens to which filing provisions do not apply); (2) a statute of this Commonwealth or regulations promulgated thereunder, to the extent such statute or regulations provide for a security interest to be indicated on certificate of title as a condition or result of perfection; or (3) a statute of another jurisdiction which provides for a security interest to be indicated on a certificate of title as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the property. (b) Compliance with other law.--Compliance with the requirements of a statute, regulation or treaty described in subsection (a) for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this division. Except as otherwise provided in subsection (d) and sections 9313 (relating to when possession by or delivery to secured party perfects security interest without filing) and 9316(d) and (e) (relating to effect of change in governing law) for goods covered by a certificate of title, a security interest in property subject to a statute, regulation or treaty described in subsection (a) may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral. (c) Duration and renewal of perfection.--Except as otherwise provided in subsection (d) and section 9316(d) and (e), duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation or treaty described in subsection (a) are governed by the statute, regulation or treaty. In other respects, the security interest is subject to this division. (d) Inapplicability to certain inventory.--During any period in which collateral subject to a statute specified in subsection (a)(2) is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person. (June 27, 2013, P.L.154, No.30, eff. July 1, 2013) 2013 Amendment. Act 30 amended subsecs. (a)(2) and (3) and (b). Cross References. Section 9311 is referred to in sections 9308, 9309, 9310, 9316, 9334, 9335, 9337, 9505, 9611, 9621 of this title; section 5323 of Title 30 (Fish); sections 7712.8, 7712.13 of Title 75 (Vehicles).

13 Pa.C.S. § 9312 Perfection of security interests in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, documents, goods covered by documents, instruments, investment property, letter-of-credit rights and money; perfection by permissive filing; temporary perfection without filing or transfer of possession.

(a) Perfection by filing permitted.--A security interest in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, instruments, investment property or negotiable documents may be perfected by filing. (b) Control or possession of certain collateral.--Except as otherwise provided in section 9315(c) (relating to perfection of security interest in proceeds) and (d) (relating to continuation of perfection) for proceeds: (1) a security interest in a deposit account may be perfected only by control under section 9314 (relating to perfection by control); (2) except as otherwise provided in section 9308(d) (relating to supporting obligation), a security interest in a letter-of-credit right may be perfected only by control under section 9314; and (3) a security interest in money may be perfected only by the secured party's taking possession under section 9313 (relating to when possession by or delivery to secured party perfects security interest without filing). (c) Goods covered by negotiable document.--While goods are in the possession of a bailee that has issued a negotiable document covering the goods: (1) a security interest in the goods may be perfected by perfecting a security interest in the document; and (2) a security interest perfected in the document has priority over any security interest which becomes perfected in the goods by another method during that time. (d) Goods covered by nonnegotiable document.--While goods are in the possession of a bailee that has issued a nonnegotiable document covering the goods, a security interest in the goods may be perfected by: (1) issuance of a document in the name of the secured party; (2) the bailee's receipt of notification of the secured party's interest; or (3) filing as to the goods. (e) Temporary perfection: new value.--A security interest in certificated securities, negotiable documents or instruments is perfected without filing or the taking of possession or control for a period of 20 days from the time it attaches to the extent that it arises for new value given under a signed security agreement. (f) Temporary perfection: goods or documents made available to debtor.--A perfected security interest in a negotiable document or goods in possession of a bailee, other than one that has issued a negotiable document for the goods, remains perfected for 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of: (1) ultimate sale or exchange; or (2) loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with them in a manner preliminary to their sale or exchange. (g) Temporary perfection: delivery of security certificate or instrument to debtor.--A perfected security interest in a certificated security or instrument remains perfected for 20 days without filing if the secured party delivers the security certificate or instrument to the debtor for the purpose of: (1) ultimate sale or exchange; or (2) presentation, collection, enforcement, renewal or registration of transfer. (h) Expiration of temporary perfection.--After the 20-day period specified in subsection (e), (f) or (g) expires, perfection depends upon compliance with this division. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended the section heading and subsecs. (a) and (e). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9312 is referred to in sections 9310, 9323, 9324 of this title.

13 Pa.C.S. § 9313 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 money by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery under section 8301 (relating to delivery). (b) Goods covered by certificate of title.--With respect to goods covered by a certificate of title issued by the Commonwealth, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in section 9316(d) (relating to effect of change in governing law). (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 acknowledging that the person holds possession of the collateral for the secured party's benefit; or (2) the person takes possession of the collateral after having signed a record acknowledging that the person will hold possession of the 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 not 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 8301 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 the person holds possession for a secured party's benefit. (g) Effectiveness of acknowledgment; no duties or confirmation.--If a person acknowledges that the person holds possession for the secured party's benefit: (1) the acknowledgment is effective under subsection (c) or section 8301(a) (relating to delivery of certificated security) even if the acknowledgment violates the rights of a debtor; and (2) unless the person otherwise agrees or law other than this division 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 division otherwise provides. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; June 27, 2013, P.L.154, No.30, eff. July 1, 2013; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsecs. (a), (c) and (d). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Amendment . Act 30 amended subsec. (b). Cross References. Section 9313 is referred to in sections 9203, 9310, 9311, 9312, 9314.1, 9316, 9320, 9328 of this title.

13 Pa.C.S. § 9314 Perfection by control.

(a) Perfection by control.--A security interest in controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents, investment property or letter-of-credit rights may be perfected by control of the collateral under section 7106 (relating to control of electronic document of title), 9104 (relating to control of deposit account), 9106 (relating to control of investment property), 9107 (relating to control of letter-of-credit right) or 9107.1 (relating to control of controllable electronic record, controllable account or controllable payment intangible). (b) Specified collateral: time of perfection by control; continuation of perfection.--A security interest in controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents or letter-of-credit rights is perfected by control under section 7106, 9104, 9107 or 9107.1 not earlier than the time the secured party obtains control and remains perfected by control only while the secured party retains control. (c) Investment property: time of perfection by control; continuation of perfection.--A security interest in investment property is perfected by control under section 9106 not earlier than the time the secured party obtains control and remains perfected by control until both of the following paragraphs apply: (1) The secured party does not have control. (2) One of the following occurs: (i) If the collateral is a certificated security, the debtor has or acquires possession of the security certificate. (ii) If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner. (iii) If the collateral is a security entitlement, the debtor is or becomes the entitlement holder. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9314 is referred to in sections 9308, 9310, 9312, 9327, 9328, 9329 of this title.

13 Pa.C.S. § 9314.1 Perfection by possession and control of chattel paper.

(a) Perfection by possession and control.--A secured party may perfect a security interest in chattel paper by taking possession of each authoritative tangible copy of the record evidencing the chattel paper and obtaining control of each authoritative electronic copy of the electronic record evidencing the chattel paper. (b) Time of perfection; continuation of perfection.--A security interest is perfected under subsection (a) not earlier than the time the secured party takes possession and obtains control and remains perfected under subsection (a) only while the secured party retains possession and control. (c) Application of section 9313 to perfection by possession of chattel paper.--Section 9313(c), (f), (g), (h) and (i) (relating to when possession by or delivery to secured party perfects security interest without filing) applies to perfection by possession of an authoritative tangible copy of a record evidencing chattel paper. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 added section 9314.1. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9314.1 is referred to in sections 9203, 9306.1, 9310 of this title.

13 Pa.C.S. § 9315 Secured party's rights on disposition of collateral and in proceeds.

(a) Disposition of collateral: continuation of security interest or agricultural lien; proceeds.--Except as otherwise provided in this division and in section 2403(b) (relating to transfer by merchant entrusted with possession of goods): (1) a security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and (2) a security interest attaches to any identifiable proceeds of collateral. (b) When commingled proceeds identifiable.--Proceeds which are commingled with other property are identifiable proceeds: (1) if the proceeds are goods, to the extent provided by section 9336 (relating to commingled goods); and (2) if the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this division with respect to commingled property of the type involved. (c) Perfection of security interest in proceeds.--A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected. (d) Continuation of perfection.--A perfected security interest in proceeds becomes unperfected on the 21st day after the security interest attaches to the proceeds unless one of the following paragraphs applies: (1) The conditions set forth in all of the following subparagraphs are satisfied: (i) A filed financing statement covers the original collateral. (ii) The proceeds are collateral in which a security interest may be perfected by filing in the office in which the financing statement has been filed. (iii) The proceeds are not acquired with cash proceeds. (2) The proceeds are identifiable cash proceeds. (3) The security interest in the proceeds is perfected other than under subsection (c) when the security interest attaches to the proceeds or within 20 days thereafter. (e) When perfected security interest in proceeds becomes unperfected.--If a filed financing statement covers the original collateral, a security interest in proceeds which remains perfected under subsection (d)(1) becomes unperfected at the later of: (1) when the effectiveness of the filed financing statement lapses under section 9515 (relating to duration and effectiveness of financing statement; effect of lapsed financing statement) or is terminated under section 9513 (relating to termination statement); or (2) the 21st day after the security interest attaches to the proceeds. Cross References. Section 9315 is referred to in sections 9109, 9203, 9204, 9308, 9310, 9312, 9509, 9607 of this title; section 5323 of Title 30 (Fish); sections 1137, 7712.8 of Title 75 (Vehicles).

13 Pa.C.S. § 9316 Effect of change in governing law.

(a) General rule: effect on perfection of change in governing law.--A security interest perfected pursuant to the law of the jurisdiction designated in section 9301(a) (relating to general rule: location of debtor), 9305(c) (relating to when perfection governed by law of jurisdiction where debtor located), 9306.1(d) (relating to law governing perfection and priority of security interests in chattel paper) or 9306.2(b) (relating to law governing perfection and priority of security interests in controllable accounts, controllable electronic records and controllable payment intangibles) remains perfected until the earliest of: (1) the time perfection would have ceased under the law of that jurisdiction; (2) the expiration of four months after a change of the debtor's location to another jurisdiction; or (3) the expiration of one year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction. (b) Security interest perfected or unperfected under law of new jurisdiction.--If a security interest described in subsection (a) becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (c) Possessory security interest in collateral moved to new jurisdiction.--A possessory security interest in collateral, other than goods covered by a certificate of title and as-extracted collateral consisting of goods, remains continuously perfected if: (1) the collateral is located in one jurisdiction and subject to a security interest perfected under the law of that jurisdiction; (2) thereafter the collateral is brought into another jurisdiction; and (3) upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction. (d) Goods covered by certificate of title from the Commonwealth.--Except as otherwise provided in subsection (e), a security interest in goods covered by a certificate of title which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from the Commonwealth remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered. (e) When subsection (d) security interest becomes unperfected against purchasers.--A security interest described in subsection (d) becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection under section 9311(b) (relating to perfection of security interests in property subject to certain statutes, regulations and treaties) or 9313 (relating to when possession by or delivery to secured party perfects security interest without filing) are not satisfied before the earlier of: (1) the time the security interest would have become unperfected under the law of the other jurisdiction had the goods not become covered by a certificate of title from the Commonwealth; or (2) the expiration of four months after the goods had become so covered. (f) Change in jurisdiction of chattel paper, controllable electronic record, bank, issuer, nominated person, securities intermediary or commodity intermediary.--A security interest in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, letter-of-credit rights or investment property which is perfected under the law of the chattel paper's jurisdiction, the controllable electronic record's jurisdiction, the bank's jurisdiction, the issuer's jurisdiction, a nominated person's jurisdiction, the securities intermediary's jurisdiction or the commodity intermediary's jurisdiction, as applicable, remains perfected until the earlier of: (1) the time the security interest would have become unperfected under the law of that jurisdiction; or (2) the expiration of four months after a change of the applicable jurisdiction to another jurisdiction. (g) Subsection (f) security interest perfected or unperfected under law of new jurisdiction.--If a security interest described in subsection (f) becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (h) Effect on filed financing statement of change in governing law.--The following rules apply to collateral to which a security interest attaches within four months after the debtor changes its location to another jurisdiction: (1) A financing statement filed before the change pursuant to the law of the jurisdiction designated in section 9301(a) or 9305(c) is effective to perfect a security interest in the collateral if the financing statement would have been effective to perfect a security interest in the collateral had the debtor not changed its location. (2) If a security interest perfected by a financing statement that is effective under paragraph (1) becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in section 9301(a) or 9305(c) or the expiration of the four-month period, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (i) Effect of change in governing law on financing statement filed against original debtor.--If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in section 9301(a) or 9305(c) and the new debtor is located in another jurisdiction, the following rules apply: (1) The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within four months after, the new debtor becomes bound under section 9203(d) (relating to attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites), if the financing statement would have been effective to perfect a security interest in the collateral had the collateral been acquired by the original debtor. (2) A security interest perfected by the financing statement and which becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in section 9301(a) or 9305(c) or the expiration of the four-month period remains perfected thereafter. A security interest that is perfected by the financing statement but which does not become perfected under the law of the other jurisdiction before the earlier time or event becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (June 27, 2013, P.L.154, No.30, eff. July 1, 2013; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsecs. (a) and (f). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Amendment. Act 30 amended the section heading and added subsecs. (h) and (i). Cross References. Section 9316 is referred to in sections 9308, 9310, 9311, 9313, 9320, 9326 of this title; section 5323 of Title 30 (Fish); sections 1137, 7712.8 of Title 75 (Vehicles).

13 Pa.C.S. § 9317 Interests which take priority over or take free of security interest or agricultural lien.

(a) Conflicting security interests and rights of lien creditors.--A security interest or agricultural lien is subordinate to the rights of all of the following: (1) A person entitled to priority under section 9322 (relating to priorities among conflicting security interests in and agricultural liens on same collateral). (2) Except as otherwise provided in subsection (e), a person that becomes a lien creditor before the earlier of the time: (i) the security interest or agricultural lien is perfected; or (ii) one of the conditions specified in section 9203(b)(3) (relating to enforceability) is met and a financing statement covering the collateral is filed. (b) Buyers that receive delivery.--Except as otherwise provided in subsection (e), a buyer, other than a secured party, of goods, instruments, tangible documents or a certificated security takes free of a security interest or agricultural lien if the buyer gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected. (c) Lessees that receive delivery.--Except as otherwise provided in subsection (e), a lessee of goods takes free of a security interest or agricultural lien if the lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected. (d) Licensees and buyers of certain collateral.--Subject to subsections (f), (g), (h) and (i), a licensee of a general intangible or a buyer, other than a secured party, of collateral other than goods, instruments, tangible documents or a certificated security takes free of a security interest if the licensee or buyer gives value without knowledge of the security interest and before it is perfected. (e) Purchase-money security interest.--Except as otherwise provided in sections 9320 (relating to buyer of goods) and 9321 (relating to licensee of general intangible and lessee of goods in ordinary course of business), if a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee or lien creditor which arise between the time the security interest attaches and the time of filing. (f) Buyers of chattel paper.--A buyer, other than a secured party, of chattel paper takes free of a security interest if, without knowledge of the security interest and before it is perfected, the buyer gives value and: (1) receives delivery of each authoritative tangible copy of the record evidencing the chattel paper; and (2) if each authoritative electronic copy of the record evidencing the chattel paper can be subjected to control under section 9105 (relating to control of electronic copy of record evidencing chattel paper), obtains control of each authoritative electronic copy. (g) Buyers of electronic documents.--A buyer of an electronic document takes free of a security interest if, without knowledge of the security interest and before it is perfected, the buyer gives value and, if each authoritative electronic copy of the document can be subjected to control under section 7106 (relating to control of electronic document of title), obtains control of each authoritative electronic copy. (h) Buyers of controllable electronic records.--A buyer of a controllable electronic record takes free of a security interest if, without knowledge of the security interest and before it is perfected, the buyer gives value and obtains control of the controllable electronic record. (i) Buyers of controllable accounts and controllable payment intangibles.--A buyer, other than a secured party, of a controllable account or a controllable payment intangible takes free of a security interest if, without knowledge of the security interest and before it is perfected, the buyer gives value and obtains control of the controllable account or controllable payment intangible. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; June 27, 2013, P.L.154, No.30, eff. July 1, 2013; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsecs. (b) and (d) and added subsecs. (f), (g), (h) and (i). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9317 is referred to in section 2A307 of this title.

13 Pa.C.S. § 9318 No interest retained in right to payment which is sold; rights and title of seller of account or chattel paper with respect to creditors and purchasers.

(a) Seller retains no interest.--A debtor that has sold an account, chattel paper, payment intangible or promissory note does not retain a legal or equitable interest in the collateral sold. (b) Deemed rights of debtor if buyer's security interest unperfected.--For purposes of determining the rights of creditors of and purchasers for value of an account or chattel paper from a debtor that has sold an account or chattel paper, while the buyer's security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold.

13 Pa.C.S. § 9319 Rights and title of consignee with respect to creditors and purchasers.

(a) Consignee has consignor's rights.--Except as otherwise provided in subsection (b), for purposes of determining the rights of creditors of and purchasers for value of goods from a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer. (b) Applicability of other law.--For purposes of determining the rights of a creditor of a consignee, law other than this division determines the rights and title of a consignee while goods are in the consignee's possession if, under this chapter, a perfected security interest held by the consignor would have priority over the rights of the creditor.

13 Pa.C.S. § 9320 Buyer of goods.

(a) Buyer in ordinary course of business.--Except as otherwise provided in subsection (e), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer's seller, even if the security interest is perfected and the buyer knows of its existence. (b) Buyer of consumer goods.--Except as otherwise provided in subsection (e), a buyer of goods from a person who used or bought the goods for use primarily for personal, family or household purposes takes free of a security interest, even if perfected, if the buyer buys: (1) without knowledge of the security interest; (2) for value; (3) primarily for the buyer's personal, family or household purposes; and (4) before the filing of a financing statement covering the goods. (c) Effectiveness of filing for subsection (b).--To the extent that it affects the priority of a security interest over a buyer of goods under subsection (b), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by section 9316(a) and (b) (relating to effect of change in governing law). (d) Buyer in ordinary course of business at wellhead or minehead.--A buyer in ordinary course of business buying oil, gas or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance. (e) Possessory security interest not affected.--Subsections (a) and (b) do not affect a security interest in goods in the possession of the secured party under section 9313 (relating to when possession by or delivery to secured party perfects security interest without filing). (June 27, 2013, P.L.154, No.30, eff. July 1, 2013) 2013 Amendment. Act 30 amended subsec. (c). Cross References. Section 9320 is referred to in sections 7209, 7503, 9317 of this title.

13 Pa.C.S. § 9321 Licensee of general intangible and lessee of goods in ordinary course of business.

(a) Licensee in ordinary course of business.--As used in this section, the term "licensee in ordinary course of business" means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor's own usual or customary practices. (b) Rights of licensee in ordinary course of business.--A licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor even if the security interest is perfected and the licensee knows of its existence. (c) Rights of lessee in ordinary course of business.--A lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor even if the security interest is perfected and the lessee knows of its existence. Cross References. Section 9321 is referred to in sections 2A307, 7209, 7503, 9317 of this title.

13 Pa.C.S. § 9322 Priorities among conflicting security interests in and agricultural liens on same collateral.

(a) General priority rules.--Except as otherwise provided in this section, priority among conflicting security interests and agricultural liens in the same collateral is determined according to the following rules: (1) Conflicting perfected security interests and agricultural liens rank according to priority in time of filing or perfection. Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest or agricultural lien is first perfected, if there is no period thereafter when there is neither filing nor perfection. (2) A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien. (3) The first security interest or agricultural lien to attach or become effective has priority if conflicting security interests and agricultural liens are unperfected. (b) Time of perfection: proceeds and supporting obligations.--For the purposes of subsection (a)(1): (1) the time of filing or perfection as to a security interest in collateral is also the time of filing or perfection as to a security interest in proceeds; and (2) the time of filing or perfection as to a security interest in collateral supported by a supporting obligation is also the time of filing or perfection as to a security interest in the supporting obligation. (c) Special priority rules: proceeds and supporting obligations.--Except as otherwise provided in subsection (f), a security interest in collateral which qualifies for priority over a conflicting security interest under section 9327 (relating to priority of security interests in deposit account), 9328 (relating to priority of security interests in investment property), 9329 (relating to priority of security interests in letter-of-credit right), 9330 (relating to priority of purchaser of chattel paper or instrument) or 9331 (relating to priority of rights of purchasers of controllable accounts, controllable electronic records, controllable payment intangibles, documents, instruments and securities under other divisions; priority of interests in financial assets and security entitlements and protection against assertion of claim under Divisions 8 and 12) also has priority over a conflicting security interest in all of the following: (1) Any supporting obligation for the collateral. (2) Proceeds of the collateral if: (i) the security interest in proceeds is perfected; (ii) the proceeds are cash proceeds or of the same type as the collateral; and (iii) in the case of proceeds which are proceeds of proceeds, all intervening proceeds are: (A) cash proceeds; (B) proceeds of the same type as the collateral; or (C) an account relating to the collateral. (d) First-to-file priority rule for certain collateral.--Subject to subsection (e) and except as otherwise provided in subsection (f), if a security interest in chattel paper, deposit accounts, negotiable documents, instruments, investment property or letter-of-credit rights is perfected by a method other than filing, conflicting perfected security interests in proceeds of the collateral rank according to priority in time of filing. (e) Applicability of subsection (d).--Subsection (d) applies only if the proceeds of the collateral are not cash proceeds, chattel paper, negotiable documents, instruments, investment property or letter-of-credit rights. (f) Limitations on subsections (a) through (e).--Subsections (a) through (e) are subject to: (1) subsection (g) and the other provisions of this chapter; (2) section 4210 (relating to security interest of collecting bank in items, accompanying documents and proceeds); (3) section 5118 (relating to security interest of issuer or nominated person); and (4) section 9110 (relating to security interests arising under Division 2 or 2A). (g) Priority under agricultural lien statute.--A perfected agricultural lien on collateral has priority over a conflicting security interest in or agricultural lien on the same collateral if the statute creating the agricultural lien so provides. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (c). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9322 is referred to in sections 9109, 9317, 9323, 9324, 9325, 9328, 9330, 9709 of this title.

13 Pa.C.S. § 9323 Future advances.

(a) When priority based on time of advance.--Except as otherwise provided in subsection (c), for purposes of determining the priority of a perfected security interest under section 9322(a)(1) (relating to general priority rules), perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance which: (1) is made while the security interest is perfected only: (i) under section 9309 (relating to security interest perfected upon attachment) when it attaches; or (ii) temporarily under any of the following sections: (A) 9312(e) (relating to perfection of security interests in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, documents, goods covered by documents, instruments, investment property, letter-of-credit rights and money; perfection by permissive filing; temporary perfection without filing or transfer of possession); (B) 9312(f); or (C) 9312(g); and (2) is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under section 9309 or 9312(e), (f) or (g). (b) Lien creditor.--Except as otherwise provided in subsection (c), a security interest is subordinate to the rights of a person that becomes a lien creditor to the extent that the security interest secures an advance made more than 45 days after the person becomes a lien creditor unless the advance is made: (1) without knowledge of the lien; or (2) pursuant to a commitment entered into without knowledge of the lien. (c) Buyer of receivables.--Subsections (a) and (b) do not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles or promissory notes or a consignor. (d) Buyer of goods.--Except as otherwise provided in subsection (e), a buyer of goods takes free of a security interest to the extent that it secures advances made after the earlier of: (1) the time the secured party acquires knowledge of the buyer's purchase; or (2) 45 days after the purchase. (e) Advances made pursuant to commitment: priority of buyer of goods.--Subsection (d) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer's purchase and before the expiration of the 45-day period. (f) Lessee of goods.--Except as otherwise provided in subsection (g), a lessee of goods takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of: (1) the time the secured party acquires knowledge of the lease; or (2) 45 days after the lease contract becomes enforceable. (g) Advances made pursuant to commitment: priority of lessee of goods.--Subsection (f) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the 45-day period. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsecs. (a)(1)(ii), (d) and (f). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9323 is referred to in sections 2A307, 9328 of this title.

13 Pa.C.S. § 9324 Priority of purchase-money security interests.

(a) General rule: purchase-money priority.--Except as otherwise provided in subsection (g), a perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, and, except as otherwise provided in section 9327 (relating to priority of security interests in deposit account), a perfected security interest in its identifiable proceeds also has priority if the purchase-money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter. (b) Inventory purchase-money priority.--Subject to subsection (c) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory; has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper if so provided in section 9330 (relating to priority of purchaser of chattel paper or instrument); and, except as otherwise provided in section 9327, also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if: (1) the purchase-money security interest is perfected when the debtor receives possession of the inventory; (2) the purchase-money secured party sends a signed notification to the holder of the conflicting security interest; (3) the holder of the conflicting security interest receives the notification within five years before the debtor receives possession of the inventory; and (4) the notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory. (c) Holders of conflicting inventory security interests to be notified.--Subsection (b)(2) through (4) apply only if the holder of the conflicting security interest had filed a financing statement covering the same types of inventory: (1) if the purchase-money security interest is perfected by filing, before the date of the filing; or (2) if the purchase-money security interest is temporarily perfected without filing or possession under section 9312(f) (relating to perfection of security interests in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, documents, goods covered by documents, instruments, investment property, letter-of-credit rights and money; perfection by permissive filing; temporary perfection without filing or transfer of possession), before the beginning of the 20-day period thereunder. (d) Livestock purchase-money priority.--Subject to subsection (e) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in livestock which are farm products has priority over a conflicting security interest in the same livestock; and, except as otherwise provided in section 9327, a perfected security interest in their identifiable proceeds and identifiable products in their unmanufactured state also has priority, if: (1) the purchase-money security interest is perfected when the debtor receives possession of the livestock; (2) the purchase-money secured party sends a signed notification to the holder of the conflicting security interest; (3) the holder of the conflicting security interest receives the notification within six months before the debtor receives possession of the livestock; and (4) the notification states that the person sending the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock. (e) Holders of conflicting livestock security interests to be notified.--Subsection (d)(2) through (4) apply only if the holder of the conflicting security interest had filed a financing statement covering the same types of livestock: (1) if the purchase-money security interest is perfected by filing, before the date of the filing; or (2) if the purchase-money security interest is temporarily perfected without filing or possession under section 9312(f), before the beginning of the 20-day period thereunder. (f) Software purchase-money priority.--Except as otherwise provided in subsection (g), a perfected purchase-money security interest in software has priority over a conflicting security interest in the same collateral; and, except as otherwise provided in section 9327, a perfected security interest in its identifiable proceeds also has priority, to the extent that the purchase-money security interest in the goods in which the software was acquired for use has priority in the goods and proceeds of the goods under this section. (g) Conflicting purchase-money security interests.--If more than one security interest qualifies for priority in the same collateral under subsection (a), (b), (d) or (f): (1) a security interest securing an obligation incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral; and (2) in all other cases, section 9322(a) (relating to general priority rules) applies to the qualifying security interests. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsecs. (b), (c)(2) and (d). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9324 is referred to in section 9325 of this title.

13 Pa.C.S. § 9325 Priority of security interests in transferred collateral.

(a) Subordination of security interest in transferred collateral.--Except as otherwise provided in subsection (b), a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if: (1) the debtor acquired the collateral subject to the security interest created by the other person; (2) the security interest created by the other person was perfected when the debtor acquired the collateral; and (3) there is no period thereafter when the security interest is unperfected. (b) Limitation of subsection (a) subordination.--Subsection (a) subordinates a security interest only if the security interest: (1) otherwise would have priority solely under section 9322(a) (relating to general priority rules) or 9324 (relating to priority of purchase-money security interests); or (2) arose solely under section 2711(c) (relating to security interest of buyer in rejected goods) or 2A508(e) (relating to security interest in goods in lessee's possession).

13 Pa.C.S. § 9326 Priority of security interests created by new debtor.

(a) Subordination of security interest created by new debtor.--Subject to subsection (b), a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and is perfected solely by a filed financing statement which would be ineffective to perfect the security interest but for the application of section 9316(i)(1) (relating to effect of change in governing law) or 9508 (relating to effectiveness of financing statement if new debtor becomes bound by security agreement) is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement. (b) Priority under other provisions; multiple original debtors.--The other provisions of this chapter determine the priority among conflicting security interests in the same collateral perfected by filed financing statements described in subsection (a). However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor's having become bound. (June 27, 2013, P.L.154, No.30, eff. July 1, 2013)

13 Pa.C.S. § 9326.1 Priority of security interest in controllable account, controllable electronic record and controllable payment intangible.

A security interest in a controllable account, controllable electronic record or controllable payment intangible held by a secured party having control of the account, electronic record or payment intangible has priority over a conflicting security interest held by a secured party that does not have control. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 added section 9326.1. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations.

13 Pa.C.S. § 9327 Priority of security interests in deposit account.

The following rules govern priority among conflicting security interests in the same deposit account: (1) A security interest held by a secured party having control of the deposit account under section 9104 (relating to control of deposit account) has priority over a conflicting security interest held by a secured party that does not have control. (2) Except as otherwise provided in paragraphs (3) and (4), security interests perfected by control under section 9314 (relating to perfection by control) rank according to priority in time of obtaining control. (3) Except as otherwise provided in paragraph (4), a security interest held by the bank with which the deposit account is maintained has priority over a conflicting security interest held by another secured party. (4) A security interest perfected by control under section 9104(a)(3) has priority over a security interest held by the bank with which the deposit account is maintained. Cross References. Section 9327 is referred to in sections 9322, 9324, 9330 of this title.

13 Pa.C.S. § 9328 Priority of security interests in investment property.

The following rules govern priority among conflicting security interests in the same investment property: (1) A security interest of a secured party having control of investment property under section 9106 (relating to control of investment property) has priority over a security interest of a secured party that does not have control over the investment property. (2) Except as otherwise provided in paragraphs (3) and (4), conflicting security interests held by secured parties each of which has control under section 9106 rank according to priority in time of: (i) if the collateral is a security, obtaining control; (ii) if the collateral is a security entitlement carried in a securities account and: (A) if the secured party obtained control under section 8106(d)(1) (relating to control), the secured party's becoming the person for which the securities account is maintained; (B) if the secured party obtained control under section 8106(d)(2), the securities intermediary's agreement to comply with the secured party's entitlement orders with respect to security entitlements carried or to be carried in the securities account; or (C) if the secured party obtained control through another person under section 8106(d)(3), the time on which priority would be based under this subsection if the other person were the secured party; or (iii) if the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in section 9106(b)(2) with respect to commodity contracts carried or to be carried with the commodity intermediary. (3) A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party. (4) A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party. (5) A security interest in a certificated security in registered form which is perfected by taking delivery under section 9313(a) (relating to perfection by possession or delivery) and not by control under section 9314 (relating to perfection by control) has priority over a conflicting security interest perfected by a method other than control. (6) Conflicting security interests created by a broker, securities intermediary or commodity intermediary which are perfected without control under section 9106 rank equally. (7) In all other cases, priority among conflicting security interests in investment property is governed by sections 9322 (relating to priorities among conflicting security interests in and agricultural liens on same collateral) and 9323 (relating to future advances). Cross References. Section 9328 is referred to in section 9322 of this title.

13 Pa.C.S. § 9329 Priority of security interests in letter-of-credit right.

The following rules govern priority among conflicting security interests in the same letter-of-credit right: (1) A security interest held by a secured party having control of the letter-of-credit right under section 9107 (relating to control of letter-of-credit right) has priority to the extent of its control over a conflicting security interest held by a secured party that does not have control. (2) Security interests perfected by control under section 9314 (relating to perfection by control) rank according to priority in time of obtaining control. Cross References. Section 9329 is referred to in section 9322 of this title.

13 Pa.C.S. § 9330 Priority of purchaser of chattel paper or instrument.

(a) Purchaser's priority: security interest claimed merely as proceeds.--A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds of inventory subject to a security interest if: (1) in good faith and in the ordinary course of the purchaser's business, the purchaser gives new value, takes possession of each authoritative tangible copy of the record evidencing the chattel paper and obtains control under section 9105 (relating to control of electronic copy of record evidencing chattel paper) of each authoritative electronic copy of the record evidencing the chattel paper; and (2) the authoritative copies of the record evidencing the chattel paper do not indicate that the chattel paper has been assigned to an identified assignee other than the purchaser. (b) Purchaser's priority: other security interests.--A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed other than merely as proceeds of inventory subject to a security interest if the purchaser gives new value, takes possession of each authoritative tangible copy of the record evidencing the chattel paper and obtains control under section 9105 of each authoritative electronic copy of the record evidencing the chattel paper in good faith, in the ordinary course of the purchaser's business and without knowledge that the purchase violates the rights of the secured party. (c) Chattel paper purchaser's priority in proceeds.--Except as otherwise provided in section 9327 (relating to priority of security interests in deposit account), a purchaser having priority in chattel paper under subsection (a) or (b) also has priority in proceeds of the chattel paper to the extent that: (1) section 9322 (relating to priorities among conflicting security interests in and agricultural liens on same collateral) provides for priority in the proceeds; or (2) the proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods even if the purchaser's security interest in the proceeds is unperfected. (d) Instrument purchaser's priority.--Except as otherwise provided in section 9331(a) (relating to priority of rights of purchasers of controllable accounts, controllable electronic records, controllable payment intangibles, documents, instruments and securities under other divisions; priority of interests in financial assets and security entitlements and protection against assertion of claim under Divisions 8 and 12), a purchaser of an instrument has priority over a security interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party. (e) Holder of purchase-money security interest gives new value.--For purposes of subsections (a) and (b), the holder of a purchase-money security interest in inventory gives new value for chattel paper constituting proceeds of the inventory. (f) Indication of assignment gives knowledge.--For purposes of subsections (b) and (d), if the authoritative copies of the record evidencing chattel paper or an instrument indicate that the chattel paper or instrument has been assigned to an identified secured party other than the purchaser, a purchaser of the chattel paper or instrument has knowledge that the purchase violates the rights of the secured party. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsecs. (a), (b), (d) and (f). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9330 is referred to in sections 9322, 9324 of this title.

13 Pa.C.S. § 9331 Priority of rights of purchasers of controllable accounts, controllable electronic records, controllable payment intangibles, documents, instruments and securities under other divisions; priority of interests in financial assets and security entitlements and protection against assertion of claim under Divisions 8 and 12.

(a) Rights under Divisions 3, 7, 8 and 12 not limited.--This division does not limit the rights of a holder in due course of a negotiable instrument, a holder to which a negotiable document of title has been duly negotiated, a protected purchaser of a security or a qualifying purchaser of a controllable account, controllable electronic record or controllable payment intangible. These holders or purchasers take priority over an earlier security interest, even if perfected, to the extent provided in Divisions 3 (relating to negotiable instruments), 7 (relating to warehouse receipts, bills of lading and other documents of title), 8 (relating to investment securities) and 12 (relating to controllable electronic records). (b) Protection under Divisions 8 and 12.--This division does not limit the rights of or impose liability on a person to the extent that the person is protected against the assertion of a claim under Division 8 or 12. (c) Filing not notice.--Filing under this division does not constitute notice of a claim or defense to the holders, purchasers or persons described in subsections (a) and (b). (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended the section heading and subsecs. (a) and (b). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9331 is referred to in sections 9322, 9330 of this title.

13 Pa.C.S. § 9332 Transfer of money; transfer of funds from deposit account.

(a) Transferee of money.--A transferee of money takes the money free of a security interest if the transferee receives possession of the money without acting in collusion with the debtor in violating the rights of the secured party. (b) Transferee of funds from deposit account.--A transferee of funds from a deposit account takes the funds free of a security interest in the deposit account if the transferee receives the funds without acting in collusion with the debtor in violating the rights of the secured party. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations.

13 Pa.C.S. § 9333 Priority of certain liens arising by operation of law.

(a) Possessory lien.--As used in this section, the term "possessory lien" means an interest, other than a security interest or an agricultural lien: (1) which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person's business; (2) which is created by statute or rule of law in favor of the person; and (3) whose effectiveness depends on the person's possession of the goods. (b) Priority of possessory lien.--A possessory lien on goods has priority over a security interest in the goods unless the lien is created by a statute which expressly provides otherwise. Cross References. Section 9333 is referred to in section 9109 of this title.

13 Pa.C.S. § 9334 Priority of security interests in fixtures and crops.

(a) Security interest in fixtures under this division.--A security interest under this division may be created in goods which are fixtures or may continue in goods which become fixtures. A security interest does not exist under this division in ordinary building materials incorporated into an improvement on land. (b) Security interest in fixtures under real property law.--This division does not prevent creation of an encumbrance upon fixtures under real property law. (c) General rule: subordination of security interest in fixtures.--In cases not governed by subsections (d) through (h), a security interest in fixtures is subordinate to a conflicting interest of an encumbrancer or owner of the related real property other than the debtor. (d) Fixtures purchase-money priority.--Except as otherwise provided in subsection (h), a perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property and: (1) the security interest is a purchase-money security interest; (2) the interest of the encumbrancer or owner arises before the goods become fixtures; and (3) the security interest is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter. (e) Priority of security interest in fixtures over interests in real property.--A perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if any of the following paragraphs apply: (1) The debtor has an interest of record in the real property or is in possession of the real property and the security interest: (i) is perfected by a fixture filing before the interest of the encumbrancer or owner is of record; and (ii) has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner. (2) Before the goods become fixtures, the security interest is perfected by any method permitted by this division and the fixtures are readily removable: (i) factory or office machines; (ii) equipment which is not primarily used or leased for use in the operation of the real property; or (iii) replacements of domestic appliances which are consumer goods. (3) The conflicting interest is a lien on the real property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this division. (4) The security interest is: (i) created in a manufactured home in a manufactured-home transaction; and (ii) perfected pursuant to a statute described in section 9311(a)(2) (relating to perfection of security interests in property subject to certain statutes, regulations and treaties). (f) Priority based on consent, disclaimer or right to remove.--A security interest in fixtures, whether or not perfected, has priority over a conflicting interest of an encumbrancer or owner of the real property if: (1) the encumbrancer or owner has, in a signed record, consented to the security interest or disclaimed an interest in the goods as fixtures; or (2) the debtor has a right to remove the goods as against the encumbrancer or owner. (g) Continuation of subsection (f)(2) priority.--The priority of the security interest under subsection (f)(2) continues for a reasonable time if the debtor's right to remove the goods as against the encumbrancer or owner terminates. (h) Priority of construction mortgage.--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 a recorded record of the mortgage so indicates. Except as otherwise provided in subsections (e) and (f), a security interest in fixtures is subordinate to a construction mortgage if a record of the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction. A mortgage has this priority to the same extent as a construction mortgage to the extent that it is given to refinance a construction mortgage. (i) Priority of security interest in crops.--A perfected security interest in crops growing on real property has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (f). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9334 is referred to in section 9109 of this title.

13 Pa.C.S. § 9335 Accessions.

(a) Creation of security interest in accession.--A security interest may be created in an accession and continues in collateral which becomes an accession. (b) Perfection of security interest.--If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral. (c) Priority of security interest.--Except as otherwise provided in subsection (d), the other provisions of this chapter determine the priority of a security interest in an accession. (d) Compliance with certificate-of-title statute.--A security interest in an accession is subordinate to a security interest in the whole which is perfected by compliance with the requirements of a certificate-of-title statute under section 9311(b) (relating to perfection of security interests in property subject to certain statutes, regulations and treaties). (e) Removal of accession after default.--After default, subject to Chapter 96 (relating to default), a secured party may remove an accession from other goods if the security interest in the accession has priority over the claims of every person having an interest in the whole. (f) Reimbursement following removal.--A secured party that removes an accession from other goods under subsection (e) shall promptly reimburse any holder of a security interest or other lien on, or owner of, the whole or of the other goods, other than the debtor, for the cost of repair of any physical injury to the whole or the other goods. The secured party need not reimburse the holder or owner for any diminution in value of the whole or the other goods caused by the absence of the accession removed or by any necessity for replacing it. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.

13 Pa.C.S. § 9336 Commingled goods.

(a) Commingled goods.--As used in this section, the term "commingled goods" means goods which are physically united with other goods in such a manner that their identity is lost in a product or mass. (b) No security interest in commingled goods as such.--A security interest does not exist in commingled goods as such. However, a security interest may attach to a product or mass which results when goods become commingled goods. (c) Attachment of security interest to product or mass.--If collateral becomes commingled goods, a security interest attaches to the product or mass. (d) Perfection of security interest.--If a security interest in collateral is perfected before the collateral becomes commingled goods, the security interest which attaches to the product or mass under subsection (c) is perfected. (e) Priority of security interest.--Except as otherwise provided in subsection (f), the other provisions of this chapter determine the priority of a security interest which attaches to the product or mass under subsection (c). (f) Conflicting security interests in product or mass.--If more than one security interest attaches to the product or mass under subsection (c), the following rules determine priority: (1) A security interest which is perfected under subsection (d) has priority over a security interest which is unperfected at the time the collateral becomes commingled goods. (2) If more than one security interest is perfected under subsection (d), the security interests rank equally in proportion to the value of the collateral at the time it became commingled goods. Cross References. Section 9336 is referred to in sections 9204, 9315 of this title.

13 Pa.C.S. § 9337 Priority of security interests in goods covered by certificate of title.

If, while a security interest in goods is perfected by any method under the law of another jurisdiction, the Commonwealth issues a certificate of title which does not show that the goods are subject to the security interest or contain a statement that they may be subject to security interests not shown on the certificate: (1) a buyer of the goods, other than a person in the business of selling goods of that kind, takes free of the security interest if the buyer gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security interest; and (2) the security interest is subordinate to a conflicting security interest in the goods which attaches, and is perfected under section 9311(b) (relating to perfection of security interests in property subject to certain statutes, regulations and treaties), after issuance of the certificate and without the conflicting secured party's knowledge of the security interest.

13 Pa.C.S. § 9338 Priority of security interest or agricultural lien perfected by filed financing statement providing certain incorrect information.

If a security interest or agricultural lien is perfected by a filed financing statement providing information described in section 9516(b)(5) (relating to what constitutes filing; effectiveness of filing) which is incorrect at the time the financing statement is filed: (1) the security interest or agricultural lien is subordinate to a conflicting perfected security interest in the collateral to the extent that the holder of the conflicting security interest gives value in reasonable reliance upon the incorrect information; and (2) a purchaser, other than a secured party, of the collateral takes free of the security interest or agricultural lien to the extent that, in reasonable reliance upon the incorrect information, the purchaser gives value and, in the case of tangible chattel paper, tangible documents, goods, instruments or a security certificate, receives delivery of the collateral. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days) 2008 Amendment. Act 13 amended par. (2). Cross References. Section 9338 is referred to in section 9520 of this title.

13 Pa.C.S. § 9339 Priority subject to subordination.

This division does not preclude subordination by agreement by a person entitled to priority.

13 Pa.C.S. § 9340 Effectiveness of right of recoupment or set-off against deposit account.

(a) Exercise of recoupment or set-off.--Except as otherwise provided in subsection (c), a bank with which a deposit account is maintained may exercise any right of recoupment or set-off against a secured party that holds a security interest in the deposit account. (b) Recoupment or set-off not affected by security interest.--Except as otherwise provided in subsection (c), the application of this division to a security interest in a deposit account does not affect a right of recoupment or set-off of the secured party as to a deposit account maintained with the secured party. (c) When set-off ineffective.--The exercise by a bank of a set-off against a deposit account is ineffective against a secured party that holds a security interest in the deposit account which is perfected by control under section 9104(a)(3) (relating to requirements for control) if the set-off is based on a claim against the debtor. Cross References. Section 9340 is referred to in sections 9109, 9341 of this title.

13 Pa.C.S. § 9341 Bank's rights and duties with respect to deposit account.

Except as otherwise provided in section 9340(c) (relating to when set-off ineffective) and unless the bank otherwise agrees in a signed record, a bank's rights and duties with respect to a deposit account maintained with the bank are not terminated, suspended or modified by: (1) the creation, attachment or perfection of a security interest in the deposit account; (2) the bank's knowledge of the security interest; or (3) the bank's receipt of instructions from the secured party. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations.

13 Pa.C.S. § 9342 Bank's right to refuse to enter into or disclose existence of control agreement.

This division does not require a bank to enter into an agreement of the kind described in section 9104(a)(2) (relating to requirements for control) even if its customer so requests or directs. A bank which has entered into such an agreement is not required to confirm the existence of the agreement to another person unless requested to do so by its customer.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=13Fetched: 10/16/2026