HERBERT R. O'CONOR, GOVERNOR. 389

(3) A transaction shall not be deemed a trust receipt
transaction unless the possession of the trustee there-
under is for a purpose substantially equivalent to any one
of the following:

(a) in the case of goods, documents or instruments,
for the purpose of selling or exchanging them, or of pro-
curing their sale or exchange; or

(b) in the case of goods or documents, for the pur-
pose of manufacturing or processing the goods delivered
or covered by the documents, with the purpose of ultimate
sale, or for the purpose of loading, unloading, storing,
shipping, trans-shipping, or otherwise dealing with them
in a manner preliminary to or necessary to their sale; or

(c) in the case of instruments, for the purpose of de-
livering them to a principal, under whom the trustee is
holding them, or for consummation of some transaction
involving delivery to a depositary or registrar, or for their
presentation, collection, or renewal.

3. (Attempted Creation or Continuance of Pledge
Without Delivery or Retention of Possession. )

(1) An attempted pledge or agreement to pledge not
accompanied by delivery of possession, which does not
fulfill the requirements of a trust receipt transaction, shall
be valid as against creditors of the pledgor only as follows:

(a) to the extent that new value is given by the
pledgee in reliance thereon, such pledge or agreement to
pledge shall be valid as against all creditors with or with-
out notice, for ten days from the time the new value is
given;

(b) to the extent that the value given by the pledgee
is not new value, and in the case of new value after the
lapse of ten days from the giving thereof, the pledge shall
have validity as against lien creditors without notice, who
become such as prescribed in Section 8, only as of the time
the pledgee takes possession, and without relation back.

(2) Purchasers (including entrusters) for value and
without notice of the pledgee's interest shall take free of
any such pledge or agreement to pledge unless, prior to
the purchase, it has been perfected by possession taken.

(3) Where, under circumstances not constituting a
trust receipt transaction, a person, for a temporary and
limited purpose, delivers goods, documents, or instruments,
in which he holds a pledgee's or other security interest, to
the person holding the beneficial interest therein, the trans-
action has like effect with a purported pledge for new value
under this section.