57A-9-205. Effect of debtor's right to use or dispose of collateral--Requirement of possession.(a) A security interest is not invalid or fraudulent against creditors solely because:(1)The debtor has the right or ability to:(A)Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;(B)Collect, compromise, enforce, or otherwise deal with collateral;(C)Accept the return of collateral or make repossessions; or(D)Use, commingle, or dispose of proceeds; or(2)The secured party fails to require the debtor to account for proceeds or replace collateral.(b) This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party. Source: SL 2000, ch 231.
South Dakota Legal Code