Pennsylvania § 9317 - Interests which take priority over or take free of security interest or agricultural lien.

§ 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.