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Arkansas Code Annotated

Ark. Code Ann. § 4-9-313 (2026)

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

✓ current as of May 2026
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  1. Except as otherwise provided in subsection (b), a secured party may perfect a security interest in tangible negotiable documents, goods, instruments, money, or tangible chattel paper by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery of the certificated securities under § 4-8-301.
  2. With respect to goods covered by a certificate of title issued by this state, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in § 4-9-316(d).
  3. With respect to collateral other than certificated securities and goods covered by a document, a secured party takes possession of collateral in the possession of a person other than the debtor, the secured party, or a lessee of the collateral from the debtor in the ordinary course of the debtor's business, when:
    1. the person in possession authenticates a record acknowledging that it holds possession of the collateral for the secured party's benefit; or
    2. the person takes possession of the collateral after having authenticated a record acknowledging that it will hold possession of collateral for the secured party's benefit.
  4. If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no earlier than the time the secured party takes possession and continues only while the secured party retains possession.
  5. A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under § 4-8-301 and remains perfected by delivery until the debtor obtains possession of the security certificate.
  6. A person in possession of collateral is not required to acknowledge that it holds possession for a secured party's benefit.
  7. If a person acknowledges that it holds possession for the secured party's benefit:
    1. the acknowledgment is effective under subsection (c) or § 4-8-301(a), even if the acknowledgment violates the rights of a debtor; and
    2. unless the person otherwise agrees or law other than this chapter otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.
  8. A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor's business if the person was instructed before the delivery or is instructed contemporaneously with the delivery:
    1. to hold possession of the collateral for the secured party's benefit; or
    2. to redeliver the collateral to the secured party.
  9. 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 chapter otherwise provides.

History. Acts 2001, No. 1439, § 1; 2007, No. 342, § 34.

Research References

ALR.

Perfection of Security Interests by Possession, Delivery, or Control under Revised Article 9 of Uniform Commercial Code. 53 A.L.R.6th 159.

Definition and Treatment of “Instruments” Under Revised Article 9 of Uniform Commercial Code. 42 A.L.R.7th Art. 5 (2019).

Case Notes

Certificates of Deposit.

Certificates of deposit are “instruments” as defined in the pre-2001 version of the UCC and security interests in such instruments may be perfected through possession. GE Co. v. M & C Mfg., Inc., 283 Ark. 110, 671 S.W.2d 189 (1984) (decision under prior law).

Where (1) the creditor acquired, by assignment, a promissory note issued to a third party, the debtor's guaranties pertaining to the note, and an agreement pledging the CD as security on the debtor's guarantee obligations, (2) the assignor had perfected its security interest in the CD under § 4-9-312(b)(1) by obtaining “control” of the CD, and (3) § 4-9-313, which provided for perfection by possession, was not applicable to the CD, which was a “deposit account” as defined in § 4-9-102(a)(29), the creditor did not have to take any additional steps, such as obtaining control over the CD, to perfect its security interest in the CD because the assignor had perfected its security interest and the security interest remained perfected, through the assignment, as against the debtor. Beal Bank, S.S.B. v. Fewell (In re Fewell), 352 B.R. 98 (Bankr. E.D. Ark. 2006).

Possession.

Having failed to comply with § 27-14-801 et seq., a creditor was not a lien encumbrancer in so far as third parties were concerned under the motor vehicle registration requirements when another creditor took possession of the subject automobile. Commercial Credit Corp. v. National Credit Corp., 251 Ark. 702, 473 S.W.2d 881 (1971) (decision under prior law).

Bank which surrendered possession of note which it held as security for a loan lost its security interest in the note. McIlroy Bank v. First Nat'l Bank, 252 Ark. 558, 480 S.W.2d 127 (1972) (decision under prior law).

Where the senior secured party in possession of the collateral acknowledges and accepts the instructions of the pledgor to deliver the collateral to the junior secured party after the debt to the senior secured party is satisfied, then the senior secured party is considered to possess the collateral as the agent or bailee of the junior secured party. In re Russell, 101 B.R. 62 (Bankr. W.D. Ark. 1989) (decision under prior law).

Where debtor assigned promissory note to his parents, but thereafter filed suit to collect the note, and transferred some of the proceeds to them, the parents did not “possess” the note while the debtor was enforcing it, and thus they did not have a perfected security interest in the note or its proceeds, and the trustee was entitled to avoid the preferential transfer of the proceeds. Luker v. Reeves, 65 F.3d 670 (8th Cir. 1995) (decision under prior law).

Priority.

Where a creditor was neither a lien encumbrancer, in so far as third parties are concerned under the Motor Vehicle Registration Act, nor the holder of a perfected security interest, a “lien creditor” or a buyer in the ordinary course of business under the Uniform Commercial Code, even though it held the title its security interest did not have priority over the security interest another creditor had perfected by possession. Commercial Credit Corp. v. National Credit Corp., 251 Ark. 702, 473 S.W.2d 881 (1971) (decision under prior law).

Stock.

No UCC provision prohibits junior creditors from asserting a security interest in stock already pledged to a senior secured party. In re Russell, 101 B.R. 62 (Bankr. W.D. Ark. 1989) (decision under prior law).

Cited: Henson v. Government Employees Fin. & Indus. Loan Corp., 257 Ark. 273, 516 S.W.2d 1 (1974); Integon Indem. Corp. v. Bull, 311 Ark. 61, 842 S.W.2d 1 (1992) (decisions under prior law).

Notes of Decisions
Cited in 5 cases, 1989–2011 · leading case: Womack v. Newman Fixture Co., 766 S.W.2d 949 (Ark. Ct. App. 1989).
Sort: Relevance Newest Treatment
Womack v. Newman Fixture Co., 766 S.W.2d 949 (Ark. Ct. App. 1989). · cites it 6× “1977) (now Ark. Code Ann. § 4-9-313 (1) (a) (1987)), to be so related to the land on which they were located as to be fixtures and therefore a part of the real estate.”
Womack v. Newman Fixture Co., 785 S.W.2d 226 (Ark. Ct. App. 1990). · cites it 6× “1977) (now Ark.Code Ann. § 4-9-313(1)(a) (1987)), to be so related to the land on which they were located as to be fixtures and therefore a part of the real estate.”
Grayson v. Bank of Little Rock, 971 S.W.2d 788 (Ark. 1998). “) Under the same tide, “goods” are defined as “all things which are moveable at the time the security interest attaches or which are fixtures (§ 4-9-313), but does not include money . .”
Timberland Bancshares, Inc. v. Garrison (In re Lee), 462 B.R. 666 (Bankr. W.D. Ark. 2011). · cites it 2× “Ark. Code Ann. § 4-9-313 (a) (Michie 2001); Or.”
Beal Bank, S.S.B. v. Fewell (In Re Fewell), 352 B.R. 98 (Bankr. E.D. Ark. 2006). · cites it 11× “ArkCode Ann. § 4-9-313, cmt. 2. The parties stipulated that the Certificate of Deposit was a deposit account (Stip.”
— Ark. Code Ann. § 4-9-313(1)(a) — 1 case
Womack v. Newman Fixture Co., 785 S.W.2d 226 (Ark. Ct. App. 1990). “1977) (now Ark.Code Ann. § 4-9-313(1)(a) (1987)), to be so related to the land on which they were located as to be fixtures and therefore a part of the real estate.”
— Ark. Code Ann. § 4-9-313(1)(b) — 1 case
Womack v. Newman Fixture Co., 785 S.W.2d 226 (Ark. Ct. App. 1990). “1977) (now Ark.Code Ann. § 4-9-313(1)(a) (1987)), to be so related to the land on which they were located as to be fixtures and therefore a part of the real estate.”
— Ark. Code Ann. § 4-9-313(2) — 1 case
Womack v. Newman Fixture Co., 785 S.W.2d 226 (Ark. Ct. App. 1990). “1977) (now Ark.Code Ann. § 4-9-313(1)(a) (1987)), to be so related to the land on which they were located as to be fixtures and therefore a part of the real estate.”
— Ark. Code Ann. § 4-9-313(a) — 1 case
Beal Bank, S.S.B. v. Fewell (In Re Fewell), 352 B.R. 98 (Bankr. E.D. Ark. 2006). “ArkCode Ann. § 4-9-313, cmt. 2. The parties stipulated that the Certificate of Deposit was a deposit account (Stip.”
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