Louisiana Senate Bill SB89 Engrossed / Bill

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Regular Session, 2014
SENATE BILL NO. 89
BY SENATOR PEACOCK (On Recommendation of the Louisiana State Law Institute)
PRIVILEGES/LIENS.  Provides for revisions to the Civil Code and Revised Statutes that
pertain to security, pledge, and recordation.
AN ACT1
To amend and reenact Title XX of Book III of the Civil Code, to be comprised of Articles2
3133 through 3140, Civil Code Articles 3346, 3354, 3355, 3356, 3357, 3358, 3361,3
3362, 3363, 3365, 3366, 3367, and 3368, the heading of Part IV of Chapter 1 of4
Code Title XX-A of Code Book III of Title 9 of the Louisiana Revised Statutes of5
1950, R.S. 9:4401 and 5386, and R.S. 10:9-102(a)(2), to enact Title XX-A of Book6
III of the Civil Code to consist of Articles 3141 through 3175, R.S. 9:4402 and 4403,7
to repeal Civil Code Articles 3176, 3177, 3178, 3179, 3180, 3181, 3182, 3183, and8
3184, to authorize the Louisiana State Law Institute to add Comments for Civil Code9
Articles 3359 and 3364, to authorize the Louisiana State Law Institute to amend or10
to provide headings in the Civil Code and the Louisiana Revised Statutes of 1950,11
relative to security, pledge, and registry; to provide for the liability of an obligor for12
his obligation; to provide for ratable treatment of creditors; to provide for limitations13
upon recourse; to provide for a definition of security; to provide for personal or real14
security; to provide for kinds of security; to provide for the law governing a security15
interest; to provide for the nullity of an agreement of forfeiture; to provide for the16
general provisions of pledge; to provide a definition of pledge; to provide for17 SB NO. 89
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property susceptible of pledge; to provide for the pledge of property susceptible of1
encumbrance by a security interest; to provide for the accessory nature of pledge; to2
provide for the preference afforded by pledge; to provide for obligations for which3
pledge may be given; to provide for pledge securing an obligation that is not for the4
payment of money; to provide for pledge securing an obligation of another person;5
to provide the formal requirements of a contract of pledge; to provide for the6
acceptance of a pledge; to provide for who has the power to pledge; to provide for7
the pledge of a thing not owned; to provide the general requirements for8
effectiveness of pledge against third persons; to provide for effectiveness against9
third persons of the pledge of the lease of an immovable; to provide for effectiveness10
against third persons of the pledge of other obligations; to provide for the pledgee's11
right of retention; to provide for the indivisibility of pledge; to provide for the12
enforcement of a pledge of a movable; to provide for fruits of thing pledged; to13
provide for the pledge of the obligation of a third person; to provide for performance14
by an obligor of a pledged obligation; to provide for defenses available to the obligor15
of a pledged obligation; to provide for a clause prohibiting pledge; to provide for the16
modification of a contract from which a pledge obligation arises; to provide for the17
attachment of pledge obligations arising under modified or substituted contract; to18
provide for modification as default by pledgor; to provide that pledgee is not bound19
for pledgor's obligations; to provide for the requirements of a contract of the pledge20
of the lessor's rights in the lease of an immovable and its rents; to provide for the21
effectiveness of a pledge of the lessor's rights in the lease of an immovable and its22
rents against third persons; to provide for a pledge contained in act of mortgage; to23
provide for pledge of all or part of the leases of an immovable; to provide for pledge24
of mineral payments by owner of land or holder of mineral servitude; to provide for25
accounting to other pledgees for rent collected; to provide for the prohibition of a26
judicial sale of the lessor's rights in the lease of an immovable and its rents; to27
provide for the applicability of the general rules of Chapter 1 of Title XX-A of Book28
III of the Civil Code to the pledge of the lessor's rights in the lease of an immovable29 SB NO. 89
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and its rents when no special provision is made in Chapter 2 of Title XX-A of Book1
III of the Civil Code; to provide for the place of recordation of instrument creating,2
establishing, or relating to a mortgage or privilege over an immovable, or the pledge3
of the lessor's rights in the lease of an immovable and its rents and the duty of4
recorder; to provide for the general provisions of mortgage records; to provide for5
the applicability of Chapter 2 of Title XXII-A of Book III of the Civil Code to6
mortgages, privileges, and pledges; to provide for a mortgage, pledge, or privilege7
affecting property in several parishes; to provide for transfers, amendments, and8
releases; to provide for a general rule of duration of the recordation of an instrument9
creating a mortgage, pledge, or evidencing a privilege; to provide for the duration of10
recordation of certain mortgages, pledges, and privileges; to provide for the duration11
of recordation of judicial mortgages; to provide for the effect of amendment; to12
provide for the method of reinscription; to provide for the exclusiveness of the13
method of reinscription; to provide for the effect of timely recordation of notice of14
reinscription; to provide for the effect of notice recorded after cessation of effect of15
recordation; to provide for the form and content of cancellation upon written request;16
to provide for the cancellation of recordation after effect of recordation has ceased;17
to provide for cancellation of judicial mortgage arising from judgment that has18
prescribed; to provide for the pledge of leases and rents of an immovable; to provide19
for the pledge of the lessor's rights in the lease of an immovable and its rents; to20
provide for the right of pledgee to cash proceeds of rent; to provide for transitional21
filing rules for assignments of leases and rents recorded prior to January 1, 2015; to22
provide for mortgage to include pledge of mortgagor's rights to insurance; to provide23
a definition of an account for Chapter 9 of Title 10 of the Louisiana Revised Statutes24
of 1950; to provide authorization for the Louisiana State Law Institute to add25
Comments for Civil Code Articles 3359 and 3364; to provide authorization for the26
Louisiana State Law Institute to amend or to provide headings in the Civil Code and27
the Louisiana Revised Statutes of 1950; to provide for an effective date; and to28
provide for related matters.29 SB NO. 89
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Be it enacted by the Legislature of Louisiana:1
Section 1. Title XX of Book III of the Civil Code, comprised of Articles 31332
through 3140, and Civil Code Articles 3346, 3354, 3355, 3356, 3357, 3358, 3361, 3362,3
3363, 3365, 3366, 3367, and 3368 are hereby amended and reenacted and Title XX-A of4
Book III of the Civil Code, comprised of Articles 3141 through 3175, is hereby enacted to5
read as follows:6
TITLE XX. OF PLEDGE7
Art. 3133. Pledge, definition8
The pledge is a contract by which one debtor gives something to his creditor9
as a security for his debt.10
Art. 3133.1. Relation to Chapter 9 of the Louisiana Commercial Laws11
This Title shall apply to pledges of movables that are delivered prior to the12
time Chapter 9 of the Louisiana Commercial Laws becomes effective, including13
without limitation those pledges that may secure future obligations and lines of14
credit, as well as to pledges entered into on or after the time Chapter 9 of the15
Louisiana Commercial Laws becomes effective that are exempt or otherwise16
excluded from coverage thereunder.17
Art. 3134.  Kinds of Pledge18
There are two kinds of pledge:19
The pawn.20
The antichresis.21
Art. 3135. Pawn and antichresis distinguished22
A thing is said to be pawned when a movable thing is given as a security; and23
the antichresis, when the security given consists in immovables.24
CHAPTER 1. GENERAL PROVISIONS25
Art. 3136. Obligations enforceable by pledge26
Every lawful obligation may be enforced by the auxiliary obligation of27
pledge.28
Art. 3137.  Conditional obligation as basis for pledge29 SB NO. 89
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If the principal obligation be conditional, that of the pledge is confirmed or1
extinguished with it.2
Art. 3138. Effect of nullity of principal obligation3
If the obligation is null, so also is the pledge.4
Art. 3139.  Natural obligation as basis for pledge5
The obligation of pledge annexed to an obligation which is purely naturel, is6
rendered valid only when the latter is confirmed and becomes executory.7
Art. 3140. Object of principal obligation8
Pledge may be given not only for an obligation consisting in money, but also9
for one having any other object; for example, a surety.  Nothing prevents one person10
from giving a pledge to another for becoming his surety with a third.11
Art. 3141. Pledge for debt of another12
A person may give a pledge, not only for his own debt, but for that of another13
also.14
Art. 3142. Things susceptible of being pledged15
A debtor may give in pledge whatever belongs to him.16
But with regard to those things, in which he has an ownership which may be17
divested or which is subjected to incumbrance, he can not confer on the creditor, by18
the pledge, any further right than he had himself.19
Art. 3143. Pledgor's rights at date of pledge20
To know whether the thing given in pledge belonged to the debtor, reference21
must be had to the time when the pawn was made.22
Art. 3144. Subsequent acquisition of ownership of thing pledged23
If at the time of the contract the debtor had not the ownership of the thing24
pledged, but has acquired it since, by what tile soever, his ownership shall relate25
back to the time of the contract, and the pledge shall stand good.26
Art. 3145. Pledge of property of another, necessity for consent of owner27
One person may pledge the property of another, provided it be with the28
express or tacit consent of the owner.29 SB NO. 89
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Art. 3146. Implied consent of owner1
But this tacit consent must be inferred from circumstances, so strong as to2
have [leave] no doubt of the owner's intention; as if he was present at the making of3
the contract, or if he himself delivered to the creditor the thing pawned.4
Art. 3147. Binding effect of pledge of thing of another5
Although the property of another can not be given in pledge without his6
consent, yet so long as the owner refrains from claiming it, the debtor who has given7
it in pledge, can not seek to have it restored until his debt has been entirely8
discharged.9
Art. 3148. Pledge by fiduciaries, authorization required10
Tutors of minors and curators of persons under interdiction, curators of11
vacant estates and of absent heirs, testamentary executors and other administrators12
named or confirmed by a judge, can not give in pledge the property confided to their13
administration, without being expressly authorized in the manner prescribed by law.14
Art. 3149. Pledge by mandatary, authorization15
An attorney can not give in pledge the property of his principal without the16
consent of the latter, or an express power to that effect.17
Nevertheless, where the power of attorney contains a general authority to18
mortgage the property of the principal, this power includes that of giving it in pledge.19
Art. 3150. Pledges by cities and other corporations20
The property of cities and other corporations can only be given in pledge,21
according to the rules and subject of [to] the restrictions prescribed on that head by22
their respective acts of incorporation.23
Art. 3152. Delivery and possession of thing pledged24
It is essential to the contract of pledge that the creditor be put in possession25
of the thing given to him in pledge, and consequently that actual delivery of it be26
made to him, unless he has possession of it already by some other right.27
Art. 3153. Delivery of incorporeal rights28
But this delivery is only necessary with respect to corporeal things; as to29 SB NO. 89
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incorporeal rights, such as credits, which are given in pledge, the delivery is merely1
fictitious and symbolical.2
CHAPTER 2. OF PAWN3
Art. 3154. Things subject to pawn4
One may pawn every corporeal thing, which is susceptible of alienation.5
One may even pawn money as a security for performing or refraining to6
perform some act.7
Art. 3155.Incorporeal movables8
One may, in fine, pawn incorporeal movables, such as credits and other9
claims of that nature.10
Art. 3156. Claims against other persons11
When a debtor wishes to pawn a claim on another person, he must make a12
transfer of it in the act of pledge, and deliver to the creditor to whom it is transferred13
the note or instrument which proves its existence.14
Art. 3157. Privilege and preference of pledge creditor15
The pawn invests the creditor with the right of causing his debt to be satisfied16
by privilege and in preference to the other creditors of his debtor, out of the product17
of the movable, corporeal or incorporeal, which has been thus burdened.18
Art. 3158. Formalities and contents of pledge; requirements for pledge of19
promissory notes and other written obligations20
A. But this privilege shall take place against third persons only in case the21
pledge is proved by some written instrument, in which shall be stated the amount of22
the debt intended to be secured thereby, and the species and nature of the thing given23
in pledge; or the description of the thing pledged may be contained in a list or24
statement annexed to the instrument of pledge and giving its number, weight, or25
descriptive marks.26
B. (1) When a debtor wishes to pledge promissory notes, bills of exchange,27
bills of lading, stocks, bonds, policies of life insurance, or written obligations of any28
kind, he shall deliver to the creditor the notes, bills of exchange, bills of lading,29 SB NO. 89
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stocks, bonds, policies of life insurance, or other written obligations, so pledged, and1
such pledge so made, except as hereinafter provided with regard to life insurance2
policies, shall without further formalities be valid as well against third persons as3
against the pledgor thereof, if made in good faith.4
(2)(a) All pledges may be made by private writing of any kind if only the5
intention to pledge be shown in writing, but all pledges, except of a life insurance6
policy in favor of the insurer, must be accompanied by actual delivery.7
(b) The pledge of a life insurance policy must also be evidenced by a written8
assignment thereof as security to the pledgee and by delivery of the pledge or9
assignment to the insurer and, unless the beneficiary thereof may be changed upon10
the sole request of the insured, or unless pledge or assignment without the consent11
of the beneficiary be specifically provided for in the policy, must be accompanied12
by the consent of any named beneficiary who is not the insured or his estate.13
C. (1) Whenever a pledge of any instrument or item of the kind listed in this14
Article is made or has been made to secure a particular loan or debt, or to secure15
advances to be made up to a certain amount, and, if so desired or provided, to secure16
any other obligations or liabilities of the pledgor or any other person, to the pledgee,17
or its successor, then existing or thereafter arising, up to the limit of the pledge, such18
as may be included in a cross-collateralization clause, and the pledged instrument or19
item remains and has remained in the hands of the pledgee or its successor, the20
instrument or item may remain in pledge to the pledgee or its successor, or without21
withdrawal from the hands of the pledgee or its successor, be repledged to the22
pledgee or its successor to secure at any time any renewal or renewals of the original23
loan or any part thereof or any new or additional loans, even though the original loan24
has been reduced or paid, up to the total limit which it was agreed should be secured25
by the pledge, and, if so desired or provided, to secure any other obligations or26
liabilities of the pledgor or any other person to the pledgee or its successor, then27
existing or thereafter arising, up to the limit of the pledge, without any added28
notification or other formality, and the pledge shall be valid as well against third29 SB NO. 89
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persons as against the pledgor thereof, if made in good faith; and such renewals,1
additional loans and advances or other obligations or liabilities shall be secured by2
the collateral to the same extent as if they came into existence when the instrument3
or item was originally pledged and the pledge was made to secure them.4
(2) Such cross-collateralization clauses include but are not limited to pledges5
securing obligations of more than one person; pledges securing more than one6
obligation or future obligations; or any combination of these, whether such7
obligations are direct or indirect, absolute or contingent, liquidated or unliquidated,8
or otherwise. Such clauses are not and never have been against the public policy of9
Louisiana.10
D. (1) The assignment or transfer of the principal obligation does not:11
extinguish the pledge; constitute a new pledge or issuance; or affect the retroactive12
effect given by this Article for obligations to the original pledgee or its successor. In13
all cases, if the pledge at the time of its delivery, issuance, or reissuance was14
intended to secure obligations that may arise in the future, the pledge relates back to15
the time of delivery, issuance, or reissuance if and when such future obligations are16
incurred, as long as the pledgee, the pledgee's agents, or the pledgee's successors17
have maintained possession of the pledged item.18
(2)  Such future obligations include but are not limited to:19
(a)  Lines of credit;20
(b) Situations where monies have been advanced, paid in whole or in part,21
one or more times, and readvanced pursuant to one or more obligations that the22
pledge was given to secure; or23
(c) Situations in which the pledgor or any other persons could not have24
required the pledgee or its successors to advance funds under one or more25
obligations that the pledge was given to secure.26
E. The delivery of property on deposit in a warehouse, cotton press, or on27
storage with a third person, or represented by a bill of lading, shall pass to the28
pledgee by the mere delivery of the warehouse receipt, cotton press receipt, bill of29 SB NO. 89
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lading, or storage receipt, showing the number, quantity or weight of the thing1
pledged; and such pledge so made, without further formalities, shall be valid as well2
against third persons as against the pledgor thereof, if made in good faith. Such3
receipts shall be valid and binding in the order of time in which they are issued for4
the number, quantity, or weight of the things pledged, if there should not be enough5
to meet all receipts so issued.6
F. Nothing herein contained shall be construed to repeal any part of Title 9,7
Sections 4301 to 4382, both inclusive of the Louisiana Revised Statutes of 1950.8
Art. 3159. Act of pledge in favor of banks9
Act of pledge in favor of any banks in this State, whether State banks or10
National banks, shall be considered as forming authentic proof, it they have been11
passed before the cashiers of those banks, and contain such description of the objects12
given in pledge, as is required by the preceding Article.13
Art. 3162.  Delivery to creditor or to third person14
In no case does this privilege subsist on the pledge, except when the thing15
pledged, if it be a corporeal movable or the evidence of the credit if it be a note or16
other instrument under private signature, has been actually put and remained in the17
possession of the creditor, or of a third person agreed on by the parties.18
Art. 3163.  Partial payment of debt secured by pledge of several things19
When several things have been pawned, the owner can not retake one of these20
without satisfying the whole debt, though he offers to pay a certain amount of it in21
proportion to the thing which he wishes to get.22
Art. 3164. Right of retention until payment of debt23
The creditor who is in possession of the pledge, can only be compelled to24
return it, but when he has received the whole payment of the principal as well as the25
interest and costs.26
Art. 3165.  Rights of pledgee on default of debtor; procedure27
The creditor cannot, in case of failure of payment, dispose of the pledge; but28
when there have been pledges of stock, bonds or other property, for the payment of29 SB NO. 89
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any debt or obligation, it shall be necessary before such stocks, bonds or other1
property so pledged shall be sold for the payment of the debt, for which such pledge2
was made, that the holder of such pledge be compelled to obtain a judgment in the3
ordinary course of law, and the same formalities in all respects shall be observed in4
the sale of property so pledged as in ordinary cases; but in all pledges of movable5
property, or rights, or credits, stocks, bonds or other movable property, it shall be6
lawful for the pledger to authorize the sale or other disposition of the property7
pledged, in such manner as may be agreed upon by the parties without the8
intervention of courts of justice; provided, that all existing pledges shall remain in9
force and be subject to the provisions of this act.10
Art. 3166.  Ownership of thing pledged11
Until the debtor be divested from his property (if it is the case), he remains12
the proprietor of the pledge, which is in the hands of the creditor only as a deposit13
to secure his privilege on it.14
Art. 3167. Pledgee's liability for loss or decay of thing pledge; reimbursement of15
expenses of preservation16
The creditor is answerable agreeably to the rules which have been established17
under the title: Of Conventional Obligations, for the loss or decay of the pledge18
which may happen through his fault.19
On his part, the debtor is bound to pay to the creditor all the useful and20
necessary expenses which the latter has made for the preservation of the pledge.21
Art. 3168.  Ownership of fruits of thing pledged22
The fruits of the pledge are deemed to make a part of it, and therefore they23
remain, like the pledge, in the hands of the creditor; but he can not appropriate them24
to his own use; he is bound, on the contrary, to give an account of them to the debtor,25
or to deduct them from what may be due to him.26
Art. 3169.  Imputation of interest earned by credit pledged27
If it is a credit which has been given in pledge, and if this credit brings28
interest, the creditor shall deduct this interest from those which may be due to him;29 SB NO. 89
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but if the debt, for the security of which the claim has been given, brings no interest1
itself, the deduction shall be made on the principal of the debt.2
Art. 3170. Pledgee's right to enforce payment of credit pledged; imputation of3
proceeds4
If the credit which has been given in pledge becomes due before it is5
redeemed by the person pawning it, the creditor, by virtue of the transfer which has6
been made to him, shall be justified in receiving the amount, and in taking measures7
to recover it. When received, he must apply it to the payment of the debt due to8
himself, and restore the surplus, should there be any, to the person from whom he9
held it in pledge.10
Art. 3171.  Indivisibility of pawn as to heirs of debtor and creditor11
The pawn can not be divided, notwithstanding the divisibility of the debt12
between the heirs of the debtor and those of the creditor.13
The debtor's heir, who has paid his share of the debt, can not demand the14
restitution of his share in the pledge, so long as the debt is not fully satisfied.15
And respectively the heir of the creditor, who has received his share of the16
debt, can not return the pledge to the prejudice of those of his coheirs who are not17
satisfied.18
Art. 3172.  Surplus or deficiency after sale19
If the proceeds of the sale exceed the debt, the surplus shall be restored to the20
owner; if, on the contrary, they are not sufficient to satisfy it, the creditor is entitled21
to claim the balance out of the debtor's other property.22
Art. 3173.  Debtor taking pledge without creditor's consent23
The debtor who takes away the pledge without the creditor's consent,24
commits a sort of theft.25
Art. 3174.  Rights of creditor deceived as to pledge26
When the creditor has been deceived on the substance or quality of the thing27
given in pledge, he may claim another thin in its stead, or demand immediately his28
payment, though the debtor be solvable.29 SB NO. 89
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Art. 3175.  Acquisitive prescription of pledge impossible1
The creditor can not acquire the pledge by prescription, whatever may be the2
time of his possession.3
CHAPTER 3. OF ANTICHRESIS4
Art. 3176.  Necessity for written instrument; rights acquired by creditor5
The antichresis shall be reduced to writing.6
The creditor acquires by this contract the right of reaping the fruits or other7
revenues of the immovables to him given in pledge, on condition of deducting8
annually their proceeds from the interest, if any be due him, and afterwards from the9
principal of his debt.10
Art. 3177.  Taxes, annual charges and repairs11
The creditor is bound, unless the contrary be agreed on, to pay the taxes, as12
well as the annual charges of the property which have been given to him in pledge.13
He is likewise bound, under penalty of damages, to provide for the keeping14
and useful and necessary repairs of the pledged estate, saving himself the right of15
levying on their fruits and revenues all the expenses respecting such charges.16
Art. 3178. Reclamation of property by debtor; return by creditor17
The debtor can not, before the full payment of the debt, claim the enjoyment18
of the immovables which he has given in pledge.19
But the creditor who wishes to free himself from the obligations mentioned20
in the preceding articles, may always, unless he has renounced this right, compel the21
debtor to retake the enjoyment of his immovable.22
Art. 3179. Ownership of property pledged; rights of creditor upon default of debtor23
The creditor does not become owner of the pledged immovable by failure of24
payment at the stated time; any clause to the contrary is null, and in this case it is25
only lawful for him to sue his debtor before the court in order to obtain a sentence26
against him, and to cause the objects which have been put in his hands in pledge to27
be seized and sold.28
Art. 3180.  Agreement that fruits or revenues be compensated with interest29 SB NO. 89
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When the parties have agreed that the fruits or revenues shall be compensated1
with the interest, either in whole or only to a certain amount, this covenant is2
performed as every other which is not prohibited by law.3
Art. 3181.  Rights of third persons on immovable pledged not affected4
Every provision, which is contained in the present title with respect to the5
antichresis, can not prejudice the rights which third persons may have on the6
immovable, given in pledge by way of antichresis, such as a privilege or mortgage.7
The creditor, who is in possession by way of antichresis can not have any8
right of preference on the other creditors; but if he has by any other title, some9
privilege or mortgage lawfully established or preserved thereon, he will come in his10
rank as any other creditor.11
TITLE XX. SECURITY12
Art. 3133.  Liability of an obligor for his obligations13
Whoever is personally bound for an obligation is obligated to fulfill it out14
of all of his property, movable and immovable, present and future.15
Revision Comment - 201416
This Article, which restates the substance of Article 3182 of the Louisiana17
Civil Code of 1870, provides the general principle that an obligor is bound to fulfill18
his obligations out of all of his property. This general principle is subject to19
exceptions established by law for certain kinds of property that are exempt from20
seizure for the satisfaction of creditors' claims. See, e.g., La. Const. Art. 12, Section21
9 (1974); R.S. 9:2004-2006; R.S. 13:3881; R.S. 20:1; R.S. 20:33. La. Const. Art. 12,22
Section 10(C) (1974) exempts all public property from seizure, and that provision23
as well as R.S. 13:5109(B)(2) limits the enforcement of a judgment against the state,24
a state agency, or a political subdivision of the state to funds appropriated for that25
purpose by the legislature or political subdivision.  See Newman Marchive26
Partnership, Inc. v. City of Shreveport, 979 So.2d 1262 (La. 2008).27
Art. 3134.  Ratable treatment of creditors28
In the absence of a preference authorized or established by legislation,29
an obligor's property is available to all his creditors for the satisfaction of his30
obligations, and the proceeds of its sale are distributed ratably among them.31
Revision Comments - 201432
(a) This Article, derived from Article 3183 of the Louisiana Civil Code of33
1870, carries forward the familiar principle that the property of the debtor is the34
"common pledge of his creditors." The reference in the source Article to the concept35
of "pledge" has been deleted, because the term was used in that Article in a36 SB NO. 89
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non-technical sense that was different from the security device known as pledge. See1
Slovenko, Of Pledge, 33 Tul. L. Rev. 59, 62-63 (1958).2
(b) This Article does not imply that all of an obligor's creditors will have an3
immediate right to share in the proceeds of each sale of the obligor's property.  In the4
case of a voluntary sale of property, the obligor retains whatever portion of the price5
remains after satisfying those creditors having secured rights in the thing sold, and6
both the price that he retains, and anything he may later acquire with it, form part of7
his patrimony that remains available to his creditors for satisfaction of the8
obligations owed to them. Even in the case of the enforcement of a mortgage or9
other security in a thing, the proceeds from the sale that remain after payment of the10
claims of the seizing creditor and those holding inferior security rights in the thing11
are delivered to the obligor, rather than to his other creditors. See C.C.P. Art. 2373.12
Art. 3135.  Limitations upon recourse13
A written contract may provide that the obligee's recourse against the14
obligor is limited to particular property or to a specified class or kind of15
property.16
Revision Comments - 201417
(a) This Article is new.  It expands a concept that was introduced by the18
1991 revision of the Articles on mortgage.  A similar provision is found in Article19
2645 of the Québec Civil Code.20
(b) When a contract limits an obligee's recourse to certain property, the21
limitation serves as an exception to the provisions of Article 3134 (Rev. 2014), and22
the obligee has no right to have the obligation owed to him satisfied from the23
obligee's other property.24
(c) An obligee's right of recourse may be limited to the security given for the25
performance of the obligation owed to the obligee. Under this Article, however, an26
obligee's right of recourse could be limited to specified property of the obligor even27
if the obligee holds no security at all.28
(d) The limitation contemplated by this Article may be made either by29
identifying the property against which the obligee will have recourse or, inversely,30
by identifying property against which the obligee will have no recourse.  The31
property may be identified with specificity or by employing general classifications32
of property, such as those found in Articles 448 (Rev. 1978) and 2335 (Rev. 1979).33
Art. 3136.  Security defined34
Security is an accessory right established by legislation or contract over35
property, or an obligation undertaken by a person other than the principal36
obligor, to secure performance of an obligation. It is accessory to the obligation37
it secures and is transferred with the obligation without a special provision to38
that effect.39
Revision Comments - 201440
(a) This Article is new, but it furthers the concepts stated in Article 191341
(Rev. 1984), which identifies certain types of security agreements as examples of42
accessory contracts.  This Article is broader in its scope, however, because it is not43
limited to rights established by contract. For instance, privileges, which are44 SB NO. 89
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established only by law and never by contract, are a form of security.1
(b) The concept of security arises in numerous other Articles found2
throughout the Civil Code.  See, e.g., C.C. Arts. 474 (Rev. 1978); 571 (Rev. 1976;3
Amended 2004); 573 and 624 (Rev. 1976; Amended 2010); 1499 (Rev. 1996;4
Amended 2003); 1514 (Rev. 1996; Amended 2003); 1783, 1884, 1887, 1891, 1913,5
and 2023 (Rev. 1984); 2557 and 2569 (Rev. 1993); 3047, 3053, 3054, 3062, 3068,6
and 3070 (Rev. 1987).7
(c) When security consists of rights over property, it is a preference8
authorized or established by legislation and thus constitutes an exception to the9
ratable treatment principle of Article 3134 (Rev. 2014).10
Art. 3137.  Personal or real security11
Security is personal or real.12
It is personal when it consists of an obligation undertaken to secure13
performance of the obligation of another.14
It is real when it consists of a right of preference established over15
property of the obligor or of a third person to secure performance of an16
obligation.17
Revision Comments - 201418
(a) This Article is new, but it is not intended to change the law. On the19
distinction between real and personal security, see Slovenko, Of Pledge, 33 Tul. L.20
Rev. 59, 60 (1958).21
(b) Suretyship is personal security. Security consisting of a right over22
property, such as mortgage, pledge, security interest, or privilege, is real security.23
(c) Forms of real security are not necessarily real rights. Many privileges do24
not constitute real rights, even though they are a form of real security.  See Liquid25
Carbonic Corporation v. Leger, 169 So. 170 (La. App. 1st Cir. 1936).  See also26
Planiol et Ripert, Traité élémentaire de droit Civil, Volume 2, Part 2, No. 2548, 261827
(1939)(English translation by the Louisiana State Law Institute, 1959);28
Yiannopoulos, Real Rights in Louisiana and Comparative Law: Part 1, 23 La. Law29
Rev. 161, 223 (1963).30
Art.  3138. Kinds of security31
Kinds of security include suretyship, privilege, mortgage, and pledge.32
A security interest established to secure performance of an obligation is also a33
kind of security.34
Revision Comments - 201435
(a)  This Article is new, but it is not intended to change the law.36
(b) Article 3184 of the Louisiana Civil Code of 1870 defined lawful causes37
of preferences to include only privilege and mortgage.  Those lawful causes of38
preference are forms of security that are mentioned in this Article along with39
privileges and security interests, as well as the contract of suretyship, which is a form40
of personal security.41
(c)  The list contained in this Article is merely illustrative.  Other forms of42
security exist, such as a pignorative contract in the form of a sale with a right of43 SB NO. 89
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redemption in favor of a seller who remains in possession. See C.C. Art. 2569 (Rev.1
1993); Latiolais v. Breaux, 154 La. 1006, 98 So. 620 (La. 1924); Jackson v. Golson,2
91 So.2d 394 (La. App. 2d Cir. 1956).3
(d) This Article gives express recognition to the concept of security interest,4
which has been the exclusive means of creating security by contract in most kinds5
of movable property since Louisiana's adoption of Chapter 9 of the Uniform6
Commercial Code effective January 1, 1990. See Acts 1988, No. 528 and Acts 1989,7
No. 135, enacting Chapter 9 of Title 10 of the Louisiana Revised Statutes of 1950.8
The definition of "security interest" in the Uniform Commercial Code, however, is9
broader than interests in movable property intended as security; it also includes10
outright sales of certain kinds of property, such as accounts receivable.  See R.S.11
10:1-201(35).  Only those security interests established for the purpose of securing12
an obligation qualify as "security" under this Title.13
Art. 3139.  Law governing security interest14
Security interest is defined by the Uniform Commercial Code, which15
specifies the kinds of property susceptible of encumbrance by a security interest16
and governs the manner of creation of security interests and the rights of the17
holders of security interests against obligors and third persons.18
Revision Comments - 201419
(a) This Article is new. It signals that security interests, though obviously a20
form of security when granted for the purpose of securing an obligation, are21
governed by special legislation.22
(b) Security interest, as defined in the Uniform Commercial Code, also23
includes certain transactions that do not secure the performance of an obligation. See24
R.S. 10:1-201(35). This Title is not intended to limit the definition of the term25
"security interest" found in the Uniform Commercial Code or the application of the26
Uniform Commercial Code to those transactions. 27
Art. 3140.  Nullity of agreement of forfeiture28
Unless expressly permitted by law, a clause in a contract providing in29
advance that ownership of a thing given as security will transfer upon default30
in performance of the secured obligation is absolutely null.31
A clause in a contract obligating the owner of a thing to give it to an32
obligee in payment of a debt upon a future default in performance of an33
obligation is absolutely null.34
Revision Comments - 201435
(a) The first paragraph of this Article furthers a longstanding civilian concept36
that an agreement of forfeiture of a thing given as security, known in Roman law as37
the lex commissoria, is null. An express prohibition of agreements of that nature in38
contracts of pledge was contained in Article 3132 of the Louisiana Civil Code of39
1825 and also in the second paragraph of Article 3165 of the Louisiana Civil Code40
of 1870, until the repeal of that paragraph by Acts 1872, No. 9.  Despite the repeal,41
agreements of forfeiture have continued to be viewed as unenforceable in Louisiana.42 SB NO. 89
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See Alcolea v. Smith, 150 La. 482, 90 So. 769 (La. 1922), holding that agreements1
of forfeiture have been prohibited by the civil law "since the edict of Constantine"2
and that "it would require something more than a doubtful implication (i.e., the 18723
amendment of Article 3165) to justify any court in any civilized country in now4
reading it into a statute."5
(b) The prohibition of this Article is not limited to contracts of pledge but6
rather applies to all forms of security. Thus, a mortgage may not provide that7
ownership of the mortgaged property will transfer to the mortgagee upon default.8
(c) Many civil law jurisdictions continue to prohibit the lex commissoria.9
See, e.g., Québec Civil Code Art. 1801; Luxembourg Civil Code Art. 2078;10
Argentine Civil Code Art. 3222; B.G.B. § 1229; Spanish Civil Code Art. 1859.  In11
France, the agreement of forfeiture, known as the pacte commissoire, is now12
sometimes permitted. See French Civil Code Arts. 2348, 2459, and 2460 (Rev.13
2006).14
(d) The second paragraph of the Article addresses a related concept: the15
inability of a debtor to promise before default to make a giving in payment. This16
paragraph follows, and makes more general, the holding of Guste v. Hibernia17
National Bank in New Orleans, 655 So.2d 724 (La. App. 4th Cir. 1995), writ denied18
660 So.2d 852 (La. 1995), which found to be absolutely null a dation en paiement19
executed at the time of an act of credit sale and held in escrow under an agreement20
providing for its release upon a future default. The reasoning of the court was that21
the law provides for the exclusive means of foreclosure of a mortgage and any22
attempt to "completely bypass and waive the laws concerning foreclosure" violates23
public policy. This Article does not by its terms prohibit an obligor from promising24
after default to make a future giving in payment in favor of the obligee, but other25
public policy considerations may nonetheless make such a promise unenforceable26
according to the circumstances.  On the invalidity of a promise to make a giving in27
payment, see Slovenko, Of Pledge, 33 Tul. L. Rev. 59, 116 (1958).28
(e) Chapter 9 of the Uniform Commercial Code permits a creditor, after29
default, to propose a "strict foreclosure" whereby he will acquire the collateral in full30
or partial satisfaction of the secured obligation without the necessity of a judicial sale31
or other disposition.  See R.S. 10:9-620 through 9-622.  This Article does not limit32
the availability of strict foreclosure under the Uniform Commercial Code.33
TITLE XX-A. PLEDGE34
CHAPTER 1. GENERAL PROVISIONS35
Art. 3141. Pledge defined36
Pledge is a real right established by contract over property of the kind37
described in Article 3142 to secure performance of an obligation.38
Revision Comments - 201439
(a) This Article is new.  Article 3133 of the Louisiana Civil Code of 187040
defined pledge as a contract by which a debtor gives something to his creditor as41
security for his debt. Though that Article defined the term as a type of contract,42
ensuing Articles referred to "the obligation of pledge", and certain Articles referred43
to "the pledge" as the thing pledged. See, e.g., C.C. Art. 3175 (1870).  This Article44
defines pledge as the real right that arises from a contract of pledge, rather than the45
contract itself. 46
(b) Pledge is defined by the domain of things that are susceptible of pledge,47
as specified in Article 3142 (Rev. 2014). A pledge under this Title cannot exist over48
other kinds of property.49
(c) Since Louisiana's adoption of Chapter 9 of the Uniform Commercial50
Code effective January 1, 1990, the Articles on pledge contained in the Louisiana51 SB NO. 89
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Civil Code of 1870 have been greatly reduced in their operation and to a large extent1
supplanted by the Uniform Commercial Code. The revision of this Title harmonizes2
the law of pledge with the Uniform Commercial Code by eliminating any overlap3
between the two wholly different regimes.  Because of the very broad scope of4
Chapter 9 of the Louisiana Uniform Commercial Code, this Title has quite limited5
applicability to movables. It nonetheless fills a gap in the law that would otherwise6
exist with respect to encumbrance of movable property that is presently, or in the7
future becomes, excluded from coverage under the Uniform Commercial Code. See8
generally R.S. 10:9-109.9
(d) Under the Louisiana Civil Code of 1870, two kinds of pledge existed:10
the pledge of a movable, known as the pawn, and the pledge of an immovable,11
known as the antichresis. See C.C. Arts. 3134 and 3135 (1870).  With an antichresis,12
the creditor was given possession of an immovable for the purpose of reaping its13
fruits and other revenues and undertook the correlative obligations of paying taxes14
and providing for the upkeep and repair of the immovable. See C.C. Art. 3176-318115
(1870). Because of the obligations imposed on the creditor, antichresis fell into16
disuse. See Slovenko, Of Pledge, 33 Tul. L. Rev. 59, 130 (1958).  Over a century17
ago, the Louisiana Supreme Court termed it "an antiquated contract."  See Harang18
v. Ragan, 134 La. 201, 63 So. 875, 877 (La. 1913).  Antichresis is suppressed in this19
revision and is no longer a form of pledge. Despite the suppression of the nominate20
contract of antichresis, parties might nonetheless, through the exercise of the21
freedom of contract recognized by Article 1971 (Rev. 1984), enter into an22
innominate contract providing for an arrangement similar to what was previously23
known as an antichresis, but the contract would create neither a pledge under this24
Title nor a real right in the immovable enforceable against third persons who acquire25
rights in it.  See Comment (d) to C.C. Art. 476 (Rev. 1978).26
(e) In modern times, the antichresis has given way to other forms of security27
that allow the creditor to be secured by the revenues of an immovable without the28
disadvantages of an antichresis. For instance, in France, antichresis was effectively29
replaced by the cession of anticipated rent.  Planiol et Ripert, Traité élémentaire de30
droit civil, Volume 2, Part 2, No. 2507-07 (1939)(English translation by the31
Louisiana State Law Institute, 1959).  A similar evolution has taken place in32
Louisiana; the assignment of leases and rents, which has become almost universal33
in commercial real estate financings and which requires no dispossession of the34
debtor, has supplanted antichresis. Since 1980, the assignment of leases and rents35
has been governed by former R.S. 9:4401. This Title gives express recognition and36
treatment within the Civil Code to this modern form of pledge.37
Art. 3142.  Property susceptible of pledge38
The only things that may be pledged are the following:39
(1) A movable that is not susceptible of encumbrance by security40
interest.41
(2)  The lessor's rights in the lease of an immovable and its rents.42
(3)  Things made susceptible of pledge by law.43
Revision Comments - 201444
(a) This Article is new. It contains an exhaustive list of things susceptible of45
pledge.46
(b) Civil law jurisdictions typically permit all movable property, corporeal47
or incorporeal, to be encumbered by pledge. See, e.g., French Civil Code Arts. 233348
and 2355 and B.G.B. § 1204. Similarly, Articles 3154 and 3155 of the Louisiana49
Civil Code of 1870 provided that every corporeal or incorporeal movable could be50
pawned. With the adoption of Chapter 9 of the Uniform Commercial Code in51 SB NO. 89
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Louisiana effective January 1, 1990, however, security interest became the exclusive1
means of encumbrance of most kinds of movable property, thereby greatly narrowing2
the kinds of movable property that can be pledged under the Civil Code.3
Nonetheless, the exclusions that do remain, or that might exist in the future, require4
the continued existence of the legal framework under which property outside the5
scope of Chapter 9 of the Uniform Commercial Code can be encumbered. This6
Article makes the set of things susceptible of pledge and the set of things susceptible7
of encumbrance by a security interest mutually exclusive.8
(c) There are presently few, if any, corporeal movables that are excluded9
from coverage under Chapter 9 of the Uniform Commercial Code.  The few10
incorporeal movables that are excluded include rights under policies of insurance11
other than life insurance.  Even then, Chapter 9 still has limited applicability to the12
extent that amounts payable under an insurance policy constitute proceeds of other13
collateral.  See R.S. 10:9-109(d)(8).14
(d) Under this Article, the lessor's rights in the lease of an immovable and15
its rents are also susceptible of pledge. Chapter 2 of this Title contains rules that are16
specifically applicable to a pledge of that nature. Under prior law, the lessor's rights17
in the leases and rents of an immovable could be encumbered by an assignment or18
pledge effected under former R.S. 9:4401, a statute whose provisions suggested19
heavy influence from both the common law and the Uniform Commercial Code.20
This revision places the encumbrance of the lessor's rights in the lease of an21
immovable and its rents within the civil law framework of pledge and gives nearly22
complete treatment to pledges of that nature within the Civil Code itself.23
Art. 3143. Pledge of property susceptible of encumbrance by security interest24
A contract by which a person purports to pledge a thing that is25
susceptible of encumbrance by security interest does not create a pledge under26
this Title but may be effective to create a security interest in the thing.27
Revision Comment - 201428
This Article is new. In the case of property susceptible of encumbrance by29
a security interest, the Uniform Commercial Code contains the exclusive regime30
under which it can be encumbered as security, and parties are not permitted to negate31
the applicability of the Uniform Commercial Code by styling their contract as one32
of pledge. Nevertheless, it remains a common practice for property to be "pledged"33
under a contract styled as a "pledge," even though the property in question is34
susceptible of encumbrance under the Uniform Commercial Code and the security35
right created by the contract is actually a security interest. An example of this is the36
"pledge" of a collateral mortgage note. This Article provides that a contract37
purporting to pledge property that is susceptible of encumbrance under the Uniform38
Commercial Code does not create a pledge under this Title. Whether the contract is39
sufficient to create a security interest is a matter governed exclusively by the40
Uniform Commercial Code.41
Art. 3144.  Accessory nature of pledge42
Pledge is accessory to the obligation that it secures and may be enforced43
by the pledgee only to the extent that he may enforce the secured obligation.44
Revision Comment - 201445
This Article is new. As a form of security, pledge is always accessory to the46
obligation that it secures. Consequently, a pledge may be enforced only to the extent47 SB NO. 89
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of the obligation that it secures.  Another consequence of the accessory nature of1
pledge is that it is transferred with the obligation that it secures without a special2
provision to that effect.  See C.C. Art. 3136 (Rev. 2014).3
Art. 3145.  Preference afforded by pledge4
Pledge gives the pledgee the right to be satisfied from the thing pledged5
and its fruits in preference to unsecured creditors of the pledgor and to other6
persons whose rights become effective against the pledgee after the pledge has7
become effective as to them.8
Revision Comments - 20149
(a) This provision, which is based on Article 3157 of the Louisiana Civil10
Code of 1870, adds a ranking rule similar to that applicable to mortgages in Article11
3307(3)(Rev. 1992).12
(b) Because the kinds of property subject to security interest and pledge are13
mutually exclusive, there is no need for a rule ranking security interests against14
pledges except perhaps in the special case of insurance proceeds payable with respect15
to collateral that is subject to a security interest under the Uniform Commercial16
Code. Under R.S. 10:9-315, a security interest continues in the insurance proceeds,17
even though claims under insurance policies, other than life insurance, are otherwise18
outside the scope of Chapter 9 of the Uniform Commercial Code.  See R.S.19
10:9-109(d)(8). If, however, the owner of the collateral desires to encumber a claim20
to insurance proceeds in favor of another creditor, he must do so by granting a pledge21
under this Title. In that limited instance, there is the possibility of a ranking dispute22
between the secured party claiming rights to the insurance as proceeds of his23
collateral and the pledgee of the claim under the insurance policy.  This Article24
supplies the ranking rule: if the security interest was perfected under the Uniform25
Commercial Code before the pledge was made effective against third persons, the26
security interest primes the pledge of rights under the insurance policy.27
Art. 3146.  Obligations for which pledge may be given28
A pledge may be given to secure the performance of any lawful29
obligation, including obligations that arise in the future. As to all obligations,30
present and future, secured by the pledge, notwithstanding the nature of the31
obligations or the date they arise, the pledge has effect between the parties from32
the time that the requirements for formation of the contract of pledge are33
satisfied and has effect as to third persons from the time that the applicable34
requirements of Articles 3153 through 3155 are satisfied.35
Revision Comments - 201436
(a) This Article restates the substance of Article 3136 of the Louisiana Civil37
Code of 1870 and expressly permits a pledge to secure future obligations, an38
arrangement that was also permitted under the complicated provisions of Article39
3158 of the 1870 Code, as amended.40
(b) Article 3158 of the Louisiana Civil Code of 1870 required, as a condition41 SB NO. 89
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for effectiveness against third persons, that a pledge state the amount of the debt that1
it secured or a limit on the amount of the secured obligations.  In contrast, Chapter2
9 of the Uniform Commercial Code does not require that a security agreement state3
the amount or limit of secured obligations. This Article follows the approach of the4
Uniform Commercial Code by omitting any requirement for a statement of the5
amount of the secured obligation. Chapter 2 of this Title requires, however, that a6
contract pledging the lessor's interest in the leases and rents of an immovable state7
the amount of the secured obligation or the maximum amount of secured obligations8
that may be outstanding from time to time.  See C.C. Art. 3168 (Rev. 2014).9
(c)  In the case of a pledge securing future obligations, the rights created by10
the pledge as security for the future obligations relate back to the time the pledge11
became effective between the parties or, insofar as third persons are concerned, from12
the time the pledge was made effective against third persons.  On that issue, this13
Article follows the pattern of Article 3298(B) (Rev. 1991; As Amended), which14
provides a similar rule for mortgages.15
(d) Article 3140 of the Louisiana Civil Code of 1870 permitted a pledge to16
be given not only for an obligation consisting of money but also for one having17
another object. By permitting a pledge to secure any lawful obligation, this Article18
also allows a pledge to secure an obligation that is not for the payment of money.19
Article 3147 (Rev. 2014) specifies the effect of such a pledge.20
Art. 3147.  Pledge securing obligation that is not for the payment of money21
A pledge that secures an obligation other than one for the payment of22
money, such as an obligation for the performance of an act, secures the claim23
of the pledgee for the damages he may suffer from the breach of the obligation.24
Revision Comment - 201425
This Article is new.  Although it has no counterpart in the Civil Code of26
1870, it is patterned after Article 3294 (Rev. 1991), which provides a similar rule for27
contracts of mortgage.28
Art. 3148.  Pledge securing an obligation of another person29
A person may pledge his property to secure an obligation of another30
person. In such a case, the pledgor may assert against the pledgee any defense31
that the obligor could assert except lack of capacity or discharge in bankruptcy32
of the obligor.  The pledgor may also assert any other defenses available to a33
surety.34
Revision Comments - 201435
(a) The first sentence of this Article is derived from Article 3141 of the36
Louisiana Civil Code of 1870. The second sentence expresses the same principle37
found in Article 3295 (Rev. 1991), which applies when a person mortgages his38
property as security for another person's obligation.39
(b)  When a person encumbers his property as security for the obligation of40
another, his status is similar to that of a surety against whom recourse has been41
limited by contract to the thing given as security.  French commentators refer to a42
third person who has mortgaged an immovable as security for the debt of another43
without obligating himself personally as a caution réelle, or real surety.  Planiol,44 SB NO. 89
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Traité élémentaire de droit civil, Vol. 2, Part 2, No. 2368 (English translation by the1
Louisiana State Law Institute, 1959); Baudry-Lacantinerie, Traité de droit civil2
français § 1292 (3d ed. 1906); T. 2. 18 Laurent, Principes de droit civil français §3
126 at 160 (3d ed. 1878). See also Boyter v. Shreveport Bank & Trust, 65 B.R. 9444
(W.D. La.1986). Because the status of a person who has pledged his property as5
security for the debt of another is akin to that of a surety, this Article grants to him6
the same defenses that are available to a surety under Article 3046 (Rev. 1987).  In7
the event of a modification of the principal obligation without his consent, the8
pledgor is also entitled to assert the defenses available to a surety under Article 30629
(Rev. 1987).10
Art. 3149.  Formal requirements of contract of pledge11
The pledge of a corporeal movable is effective between the parties only12
if the thing pledged has been delivered to the pledgee or a third person who has13
agreed to hold the thing for the benefit of the pledgee.  The pledge of other14
things is effective between the parties only if established by written contract, but15
delivery is not required.16
Revision Comments - 201417
(a) This Article greatly simplifies the complicated rules that were provided18
in Article 3158 and other Articles of the Louisiana Civil Code of 1870 governing the19
formal requirements of the contract of pledge, at the same time adopting a number20
of concepts from Chapter 9 of the Uniform Commercial Code. Between the parties,21
this Article retains the requirement that a pledged corporeal movable must be placed22
into the pledgee's possession; indeed, that remains the essence of a pledge, as it is in23
many civil law systems. See, e.g., Argentine Civil Code Art. 3212; B.G.B. § 1205;24
Luxembourg Civil Code Art. 2076; Spanish Civil Code Art. 1863. In the case of the25
pledge of an incorporeal, however, delivery is unnecessary, and the requirement of26
a written pledge agreement is substituted as the essential element that must exist for27
the pledge to have effect between the parties.28
(b) Under Article 3152 of the Louisiana Civil Code of 1870, delivery of the29
thing pledged was essential to the very existence of the contract of pledge, even30
between the parties. This provision was tempered, however, by Article 3153 (1870),31
which provided that delivery was necessary only with respect to corporeal things and32
that, in the case of incorporeal rights, delivery was merely fictitious and symbolical.33
Nevertheless, if the incorporeal right was evidenced by a writing, Articles 3156 and34
3162 (1870) required delivery to the pledgee of the note or other instrument35
evidencing the right. This Article continues the requirement of delivery of a pledged36
corporeal movable but removes that requirement entirely in the case of the pledge37
of an incorporeal. In modern practice, contracts are often executed in multiple38
originals, and parties frequently treat mere scanned facsimiles exchanged by39
electronic means as the equivalent of signed original documents.  Thus, a40
requirement of delivery of a contract or other instrument to the pledgee would further41
no purpose, except perhaps in the case of special types of writings such as42
promissory notes and certificates evidencing securities.  The rights evidenced by43
those writings, however, are susceptible of encumbrance under the Uniform44
Commercial Code and therefore cannot be encumbered under this Title in any event.45
See C.C. Art. 3142 (Rev. 2014).46
(c) Though this Article requires delivery in the case of the pledge of a47
corporeal movable, there may actually be no corporeal movables to which that rule48
would presently apply, for Chapter 9 of the Uniform Commercial Code may cover49
all corporeal movables without exception. The first sentence of this Article is50 SB NO. 89
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intended to apply only if, under present law or under some future change in the law,1
a particular corporeal movable is insusceptible of encumbrance under the Uniform2
Commercial Code and therefore is properly susceptible of encumbrance by pledge.3
See Article 3142 (Rev. 2014). The first sentence of this Article is not intended to4
apply to a corporeal movable that is susceptible of encumbrance by a security5
interest under the Uniform Commercial Code. In that case, Chapter 9 of the Uniform6
Commercial Code applies exclusively.7
(d)  Article 3162 of the Civil Code of 1870 allowed the thing pledged to be8
placed into the possession of "a third person agreed on by the parties." Though not9
expressly required by the text of the Article, the jurisprudence held that the third10
person must have knowledge of the arrangement and accept delivery with the11
obligation to hold the property in trust for the pledgee.  See Wells v. Dean, 211 La.12
132, 29 So.2d 590 (La. 1947). This rule did not, however, necessarily require a13
written acknowledgment, and one case even presumed, in the absence of any other14
explanation why the pledgor of a life insurance policy had come into possession of15
the original policy before his death, that the pledgor's possession was as an agent pro16
hac vice for the pledgee. See Scott v. Corkern, 231 La. 368, 91 So.2d 569 (La.17
1956). By comparison, when a third party's possession is used as the means of18
perfection of a security interest, the Uniform Commercial Code requires that the19
third party authenticate a record acknowledging that he holds possession of the20
collateral for the secured party's benefit. See R.S. 10:9-313(c)(1).  This Article21
requires that the third person agree to hold the thing for the benefit of the pledgee but22
does not require that agreement to be in writing.23
(e)  As a condition to the effectiveness of a pledge between the parties, this24
Article requires a written contract of pledge except in one instance: when the thing25
pledged is a corporeal movable that has been placed into the possession of the26
pledgee or a third person who has agreed to hold the thing for the benefit of the27
pledgee.  In all other cases, a pledge cannot exist, even between the parties, unless28
it is established by a written contract.  The Louisiana Civil Code of 1870 generally29
did not require a writing for a pledge to exist between the parties; delivery of30
possession sufficed to evidence the pledge.31
(f)  Rules concerning the effectiveness of a pledge against third persons are32
contained in Articles 3153 through 3155 (Rev. 2014).33
Art. 3150.  Acceptance34
A written contract of pledge need not be signed by the pledgee, whose35
consent is presumed and whose acceptance may be tacit.36
Revision Comments - 201437
This Article is new. Although it has no counterpart in the Civil Code of 1870,38
it is patterned after Article 3289 (Rev. 1991), which provides a similar rule for39
contracts of mortgage.40
Art. 3151.  Power to pledge41
A contract of pledge may be established only by a person having the42
power to alienate the thing pledged.43
Revision Comments - 201444
This Article is new, although the Louisiana Civil Code of 1870 contained a45
number of Articles addressing a person's power to pledge the property of another.46
See C.C. Arts. 3148-3150 (1870).  This Article follows the simpler approach of47
Article 3290 (Rev. 1992), which provides the identical rule for contracts of48 SB NO. 89
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mortgage.  Similar provisions limiting the power to encumber a thing to those1
persons having the power to alienate it exist in the civil codes of other jurisdictions.2
See, e.g., Argentine Civil Code Art. 3213; Québec Civil Code Art. 2681; Zakona o3
Založnom Pravu na Pokretnim Stvarima Upisanim u Registar (The Law on Pledge4
of Movable Assets in the Pledge Registry) art. 17 (Serbia); Spanish Civil Code Art.5
1857.6
Art. 3152.  Pledge of a thing not owned7
A pledge given over a thing that the pledgor does not own is established8
when the thing is acquired by the pledgor and the other requirements for the9
establishment of the pledge have been satisfied.10
Revision Comments - 201411
This Article is derived from Article 3144 of the Louisiana Civil Code of12
1870.13
Art. 3153.  General requirements for effectiveness of pledge against third14
persons15
A pledge is without effect as to third persons unless it has become16
effective between the parties and is established by written contract.17
Revision Comments - 201418
(a) This Article is derived from Paragraph A of Article 3158 of the Louisiana19
Civil Code of 1870, which stated the general rule that a pledge could have effect20
against third persons only if evidenced by a writing. Paragraph B of the same Article21
contained a number of exceptions to the writing requirement, in the case of22
promissory notes, bills of exchange, bills of lading, stocks, bonds, or other "written23
obligations of any kind." Other than the catch-all category of "written obligations24
of any kind," those kinds of collateral are all now encumbered under the Uniform25
Commercial Code, and an exception to the writing requirement for them in this Title26
is unnecessary.  Thus, this Article follows the simpler approach of Paragraph A of27
Article 3158 of the 1870 Code, requiring in all cases a written contract for a pledge28
to be effective against third persons. In the case of the pledge of an incorporeal, a29
written pledge is required under Article 3153 even for the pledge to be effective30
between the parties. In that case, therefore, this Article adds no additional31
requirement in order for the pledge to have effect against third persons.32
(b) This Article sets forth only the general requirements imposed upon all33
pledges in order for them to have effect against third persons.  Additional34
requirements must be satisfied in the case of the pledge of the lessor's rights in the35
lease of an immovable and its rents and in the case of the pledge of other third-party36
obligations.  See C.C. Arts. 3154 and 3155 (Rev. 2014).37
Art. 3154.  Effectiveness against third persons of the pledge of the lease of an38
immovable39
The pledge of the lessor's rights in the lease of an immovable and its40
rents has effect against third persons in accordance with the provisions of41 SB NO. 89
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Chapter 2 of this Title.1
Revision Comments - 20142
This Article is new.  Chapter 2 of this Title specifies the requirements that3
must be satisfied for a pledge of the lessor's rights in the lease of an immovable and4
its rents to have effect against third persons.  See C.C. Art. 3169 (Rev. 2014).5
Art. 3155. Effectiveness against third persons of the pledge of other obligations6
If the thing pledged is another person's obligation not arising under the7
lease of an immovable, the pledge is effective against third persons only from8
the time that the obligor has actual knowledge of the pledge or has been given9
notice of it.10
Revision Comments - 201411
(a) This Article is new.  The Louisiana Civil Code of 1870 did not require12
notification to the person obligated on a pledged obligation in order for the pledge13
to have effect against third persons. In contrast, Article 2643 (Rev. 1993) requires14
notice to or knowledge by the person obligated on an assigned right in order for an15
assignment of that right to be effective against him or other third persons.  This16
Article applies the same rule to pledges, other than a pledge of the lessor's rights in17
the lease of an immovable and its rents.  See C.C. Art. 3169 (Rev. 2014).18
(b)  This Article does not require the obligor's consent to the pledge, nor an19
acknowledgment by the obligor that notice has been given.20
(c) This Article does not address the issue of when the obligor is obligated21
to render performance to the pledge.  That issue is governed by Article 3161 (Rev.22
2014), which requires not only the obligor's knowledge of the existence of the pledge23
but also a written direction to the obligor to render performance to the pledgee.24
(d) In the case of a mortgage that includes a pledge of the mortgagor's rights25
under policies of insurance covering the mortgaged immovable, R.S. 9:538626
provides an exception to the notice requirement of this Article: the pledge has effect27
as to third persons when the act of mortgage is recorded, without the necessity of28
notice to the insurer.29
Art. 3156.  Pledgee's right of retention30
If the thing pledged has been delivered to the pledgee or a third person31
for the benefit of the pledgee, the pledgee is not obligated to return it until all32
secured obligations have been extinguished.33
Revision Comments - 201434
(a) This Article restates the principle of Civil Code Article 3164 (1870)35
without intending to change the law.  The pledgee's right of retention is commonly36
recognized under the law of pledge in civilian jurisdictions. See, e.g., French Civil37
Code Art. 2339; Argentine Civil Code Art. 3229; Luxembourg Civil Code Art. 2083;38
Spanish Civil Code Art. 1866;39
(b)  This Article does not alter the longstanding rule that a pledgee may not40
resist seizure under judicial process, even if instituted by a creditor holding an41
inferior security right. See Pickens v. Webster, 31 La. Ann. 870 (1879) and Case v.42
Kloppenburg, 27 La. Ann. 482 (1875).43 SB NO. 89
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Art. 3157.  Indivisibility of pledge1
The contract of pledge is indivisible, notwithstanding the divisibility of2
the secured obligations, and the pledgor may not demand return of all or part3
of the thing pledged until all secured obligations have been extinguished.4
Revision Comments - 20145
This Article restates the principle of indivisibility found in Civil Code Article6
3163 (1870), without intending to change the law. This principle is a common7
feature of the law of pledge in civilian jurisdictions.  See, e.g., French Civil Code8
Art. 2349; Argentine Civil Code Art. 3233; Luxembourg Civil Code Art. 2083;9
Spanish Civil Code Art. 1860.10
Art. 3158.  Enforcement of pledge of a movable11
If agreed in a written contract of pledge of a movable, the pledgee may,12
upon failure of performance of the secured obligation, dispose of the thing13
pledged at public auction or by private sale, but he shall act reasonably in14
disposing of the thing and shall account to the pledgor for any proceeds of the15
disposition in excess of the amount needed to satisfy the secured obligation.16
Otherwise, the pledgee may cause the sale of the thing pledged only by having17
it seized and sold under judicial process.18
Revision Comments - 201419
This Article is derived from Articles 3165 and 3172 of the Louisiana Civil20
Code of 1870. The requirement to act reasonably in the disposition of the thing21
pledged is similar to the requirement of the Uniform Commercial Code that every22
aspect of a secured party's actions in disposing of collateral after default must be23
"commercially reasonable."  See R.S. 10: 9-610.24
Art. 3159.  Fruits of things pledged25
The pledgee is entitled to receive the fruits of the thing pledged and to26
retain them as security. He may also apply them to the secured obligation, even27
if not yet due.28
Revision Comments - 201429
This Article is a restatement and simplification of Article 3168 of the30
Louisiana Civil Code of 1870. The entitlement of a pledgee to fruits of the thing31
pledged is a common feature of the law of pledge in civilian jurisdictions. See, e.g.,32
French Civil Code Art. 2345 (2006); Argentine Civil Code Art. 3231; Zakona o33
Založnom Pravu na Pokretnim Stvarima Upisanim u Registar (The Law on Pledge34
of Movable Assets in the Pledge Registry) art. 21 (Serbia). 35
Art. 3160.  Pledge of obligation of a third person36 SB NO. 89
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If the thing pledged is an obligation of a third person, the pledgee is1
entitled to enforce performance of the third person's obligation when it becomes2
due and to retain as security any payment or other thing received from the third3
person. The pledgee may apply any money collected to the secured obligation,4
even if not yet due. He must account to the pledgor for any payment or other5
thing remaining after the secured obligation has been satisfied.6
Revision Comments - 20147
(a) This Article is derived from Articles 3168 through 3170 of the Louisiana8
Civil Code of 1870. It clarifies that the pledgee may apply collections from the third9
person's obligation to the secured obligation, even if the secured obligation has not10
yet matured.11
(b) Article 3169 of the Louisiana Civil Code of 1870 provided that interest12
accruing on a pledged credit was imputed to the interest owing on the obligation13
secured by the pledge and to principal if the latter obligation did not bear interest.14
That Article, which obviously did not cover all possible circumstances, has been15
omitted, because the second paragraph of Article 1866 (Rev. 1985) supplies the16
operative imputation rule: The payment received from the third-party obligor is17
imputed first to interest and then to principal of the secured obligation.18
Art. 3161.  Performance by obligor of a pledged obligation19
A third person obligated on a pledged obligation is bound to render20
performance to the pledgee only from the time that the pledgor or pledgee21
notifies him of the pledge and directs him in writing to render performance to22
the pledgee. Performance that the third person renders to the pledgor before23
that time extinguishes the pledged obligation and is effective against the pledgee.24
Revision Comments - 201425
(a) This Article expands the principle expressed in Article 3170 of the26
Louisiana Civil Code of 1870 that the pledgee was "justified in receiving" the27
amount due from the obligor of a pledged obligation. That Article did not, however,28
directly address the duty of the obligor to render performance of the pledged29
obligation to the pledgee.  This Article and Article 3162 (Rev. 2014) supply the30
operative rules, borrowing heavily from the Articles on assignment of rights.  See31
C.C. Arts. 2642-2654 (Rev. 1993).32
(b)  Under Article 2643 (Rev. 1993), an assignment of a right is effective33
against the debtor only from the time the debtor has actual knowledge or has been34
given notice of the assignment. Article 2644 (Rev. 1993) provides that if the debtor35
renders performance to the assignor without knowledge or notice of the assignment,36
the performance extinguishes the obligation of the debtor and is effective against the37
assignee. Thus, notice of an assignment automatically obligates the third person to38
render performance to the assignee.  In contrast, in order to bind an account debtor39
to pay the assignee following an assignment of the account debtor's obligation under40
the Uniform Commercial Code, the account debtor must not only receive a41
notification of the assignment but also a direction that payment is to be made to the42
assignee. See R.S. 10:9-406(a).  The reason for this added requirement is obvious:43 SB NO. 89
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in the case of a mere secured transaction, rather than an outright assignment of1
ownership, the parties may very well intend that the assignor retain the right to2
collect payments on the pledged obligation until some later event, such as the3
occurrence of a default by the assignor.  This Article adopts the same concept: the4
obligor is not obligated to render performance to the pledgee until he has been5
notified of the pledge and directed in writing to render performance to the pledgee.6
Since mere notification to the third-party obligor of the existence of a pledge is not7
sufficient to require him to render performance to the pledgee, a fortiori the third8
party's actual knowledge of the pledge would not so obligate him in the absence of9
an express, written direction to render performance to the pledgee.10
(c) In addition to the pledge of other kinds of obligations, this Article applies11
to the pledge of the lessor's interest in the lease of an immovable and its rents.  It12
replaces former R.S. 9:4401(G), which provided that a lessee was not discharged13
from his debt if he paid anyone other than an assignee after receiving written notice14
that the assignment had become "absolute."15
Art. 3162.  Defenses available to obligor of a pledged obligation16
Unless the obligor of a pledged obligation makes a contrary agreement17
with the pledgor or pledgee, he may assert against the pledgee any defense18
arising out of the transaction that gave rise to the pledged obligation. He may19
also assert against the pledgee any other defense that arises against the pledgor20
before the obligor has been given written notice of the pledge.21
Revision Comments - 201422
(a) This Article is new.  It combines concepts found in the Uniform23
Commercial Code and elsewhere in the Civil Code.24
(b) Article 1900 (Rev. 1984) provides that an obligor who has been given25
notice of an assignment to which he did not consent may not claim compensation26
against the assignee for an obligation of the assignor arising after that notice.  The27
Civil Code does not expressly address the circumstances under which other defenses28
might be asserted by the obligor against the assignee.  By contrast, the Uniform29
Commercial Code provides that an account debtor, in the absence of an agreement30
to the contrary, retains the right to assert against a secured party any defense or claim31
arising from the transaction that gave rise to the account debtor's obligation32
irrespective of when the claim or defense arises. He may also assert against the33
secured party any other defense or claim he has against the assignor, even if not34
related to the contract in question, to the extent that the defense or claim accrues35
before he receives a notification of the assignment. See R.S. 10:9-404(a).  This36
Article largely adopts the approach of the Uniform Commercial Code.37
Art. 3163.  Clause prohibiting pledge38
A clause in a contract restricting the pledge of the rights of a party to39
payments that are or will become due under the contract, making the pledge or40
its enforcement a default under the contract, or providing that the other party41
is excused from performance or may terminate the contract on account of the42
pledge, is without effect.43 SB NO. 89
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Revision Comments - 20141
(a) This Article is new.  It adopts concepts expressed in Chapter 9 of the2
Uniform Commercial Code and in former R.S. 9:4401. Under certain circumstances,3
it may effect a change in the law.4
(b) Under Article 2653 (Rev. 1993), a right cannot be assigned when the5
contract from which it arises prohibits the assignment of that right. Interpreting that6
Article, the Supreme Court has held that there is no public policy precluding a clause7
prohibiting assignment of rights under an insurance contract.  See In Re Katrina8
Canal Breaches Litigation, 63 So.3d 955 (La. 2011). By its terms, however, Article9
2653 (Rev. 1993) applies to sales and does not necessarily apply to a mere pledge or10
the granting of a security interest. Chapter 9 of the Uniform Commercial Code11
generally voids anti-assignment clauses that prohibit a security interest and12
specifically provides this rule prevails over Article 2653 (Rev. 1993). See13
R.S.10:9-406. Similarly, former R.S. 9:4401(G)(4) provided that any term in a lease14
was ineffective if it prohibited assignment of rent, prohibited creation of a security15
right in rent or required the lessee's consent to the assignment or security right.16
(c) This Article applies to all pledges of an obligation of a third person to17
make payment, including both pledges of movables that are outside the scope of18
Chapter 9 of the Uniform Commercial Code and pledges of the lessor's interest in the19
lease of an immovable and its rents.  The effect of this Article is, however, limited20
to the pledge of payments that are or will become due under a contract. This Article21
does not apply to the encumbrance of other rights that the pledgor may have under22
the contract.23
(d) This Article does not invalidate the arrangement commonly known as a24
"negative pledge" by which an obligor agrees with one of his creditors that he will25
not encumber one or more of his assets in favor of another creditor. Thus, a lessor26
may validly agree with one of his creditors that he will not pledge to another creditor27
his rights to rents arising under a lease of an immovable. The reason that this Article28
does not apply to such an agreement is that the contract restricting the pledge is not29
the contract under which the pledged payments will become due under the same30
contract. In the example given, the payments arise under the lease between the lessor31
and lessee, while the prohibition against pledging those payments arises under the32
contract between the lessor and his creditor.  On the other hand, this Article33
invalidates a stipulation in a lease whereby the lessor agrees with the lessee that the34
rents under the lease may not be pledged to the lessor's creditors.  Such a stipulation,35
if it were permitted under this Article, would in effect make the rents under the lease36
insusceptible of pledge.  There is no similar consequence with a negative pledge,37
which is a mere contractual covenant that does not have the effect of nullifying a38
pledge made in violation of its terms.39
Art. 3164.  Modification of contract from which a pledged obligation arises40
The parties to a contract from which a pledged obligation arises may41
agree to modify or terminate the contract or to substitute a new contract. If42
made in good faith, the agreement is effective against the pledgee without his43
consent. Nevertheless, after written notice of the pledge is given to the obligor44
of a pledged obligation that has been fully earned by the pledgor's performance,45
an agreement modifying or extinguishing the pledged obligation is without46
effect against the pledgee unless made with his consent.47
Revision Comments - 201448 SB NO. 89
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(a) This Article is new.  It addresses an issue for which no treatment was1
given in the Louisiana Civil Code of 1870: the circumstances under which the2
contract from which a pledged obligation arises can be modified or terminated by the3
parties to that contract without the consent of the pledgee.4
(b) For contracts that are susceptible of encumbrance by a security interest,5
Chapter 9 of the Uniform Commercial Code states the general rule that a6
modification of or substitution for an assigned contract is effective against the7
assignee (i.e., the secured party) if made in good faith.  R.S. 10:9-405(a). R.S.8
10:9-405(b) hinges the applicability of this rule, however, on two factors: whether9
the right to payment has been fully earned by performance and whether the account10
debtor has received notification of the assignment. Only where the right to payment11
has been fully earned by performance and the account debtor has been notified of the12
assignment is the general rule of R.S. 10:9-405(a) inapplicable. In other words, only13
in that event is the consent of the assignee necessary for a modification made in good14
faith. Of course, under any circumstances in which a modification is made by the15
parties in bad faith, the modification is, by inference from R.S. 10:9-405(a),16
unenforceable against the assignee.17
(c) This Article restates the substance of R.S. 10:9-405. An agreement made18
in good faith by the parties to a contract from which a pledged obligation arises is19
generally effective against the pledgee without the necessity of his consent.  An20
exception arises after written notice of a pledge has been given to the obligor of a21
pledged obligation that has been fully earned by performance. In that specific case,22
an agreement for the modification of that obligation is without effect as to the23
pledgee unless made with his consent.24
(d) The rules expressed in this Article apply to all pledges of a third person's25
obligation, including the obligations of a lessee under a lease that is the subject of26
a pledge made under Chapter 2 of this Title.  In the case of an assignment of leases27
and rents, former R.S. 9:4401(G) addressed the topic using terminology and concepts28
similar to those found in R.S. 10:9-405 but with somewhat different results.29
Art. 3165. Attachment of pledge to obligations arising under modified or30
substituted contract31
Upon the modification of a contract from which a pledged obligation32
arises, or the substitution of a new contract, the pledge encumbers the33
corresponding rights of the pledgor under the modified or substituted contract.34
Revision Comments - 201435
This Article is new.  It makes more general a principle that applied to36
assignments of leases and rents under former R.S. 9:4401(G)(3). Chapter 9 of the37
Uniform Commercial Code contains a similar principle.  See R.S. 10:9-405.38
Art. 3166.  Modification as default by pledgor39
The pledgor and pledgee may agree that a modification or termination40
of the contract from which a pledged obligation of a third person arises, or the41
substitution of a new contract, is a default by the pledgor.42
Revision Comments - 201443
(a) This Article is new.  It makes more general a principle that applied to44
assignments of leases and rents under former R.S. 9:4401(G)(3).  Chapter 9 of the45 SB NO. 89
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Uniform Commercial Code contains a similar principle.  See R.S. 10:9-405.1
(b) Under Article 3164 (Rev. 2014), a modification or termination of a2
contract from which a pledged obligation arises is generally effective against the3
pledgee without his consent if it is made in good faith. Nevertheless, a pledge may4
provide that a modification or termination of the contract, or the substitution of a5
new contract, is a default by the pledgor.6
Art. 3167.  Pledgee not bound for pledgor's obligations7
In the absence of an assumption by the pledgee, the existence of a pledge8
does not impose upon the pledgee liability for the pledgor's acts or omissions,9
nor does it bind the pledgee to perform the pledgor's obligations.10
Revision Comments - 201411
This Article is new. It expands to all pledges a principle that applied to12
assignments of leases and rents under former R.S. 9:4401(G)(5).  Chapter 9 of the13
Uniform Commercial Code contains a similar principle.  See R.S. 10:9-402.14
CHAPTER 2.  THE PLEDGE OF THE LESSOR'S RIGHTS IN THE15
LEASE OF AN IMMOVABLE AND ITS RENTS16
Art. 3168.  Requirements of contract17
A contract establishing a pledge of the lessor's rights in the lease of an18
immovable and its rents must state precisely the nature and situation of the19
immovable and must state the amount of the secured obligation or the20
maximum amount of secured obligations that may be outstanding from time to21
time.22
Revision Comments - 201423
(a) This Chapter, which supplements the general provisions of Chapter 1,24
contains provisions that are specifically applicable to the pledge of the lessor's rights25
in the lease of an immovable and its rents.26
(b) There is no requirement that a pledge encumber both leases and rents, for27
the parties may choose to encumber in a pledge only leases or only rents.  There is28
also no requirement that all leases or all rents of an immovable be pledged; the29
parties may choose to encumber only one or more specific leases or the rents from30
those specific leases. See C.C. Art. 3170 (Rev. 2014).  The scope of what is pledged31
is a matter of contract between the parties.32
(c) This Article restates a number of formal requirements contained in33
former R.S. 9:4401(A) but in a manner that more closely follows the formal34
requirements applicable to a contract of mortgage. Cf  C.C. Art. 3288 (Rev. 1991).35
The degree of specificity required in the description of the immovable subject to the36
pledge and the requirements for description of the secured obligation are identical37
to the corresponding requirements that apply to a contract of mortgage.  See38
Comments (b) and (c) to C.C. Art. 3288 (Rev. 1991).39
(d) A pledge under this Chapter may be created by a sublessor.  In that event,40
the pledge encumbers his rights under the sublease, but not his rights under the41
underlying lease of the property from his own lessor.  The rights of a lessee under42 SB NO. 89
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a lease, as well as the rights of a sublessee under a sublease, are not susceptible of1
pledge under this Chapter but instead are encumbered by mortgage.  See C.C. Art.2
3286 (Rev. 1991; Amended 1993); R.S. 9:4401 (Rev. 2014).3
Art. 3169.  Effectiveness against third persons4
The pledge of the lessor's rights in the lease of an immovable and its5
rents is without effect as to third persons unless the contract establishing the6
pledge is recorded in the manner prescribed by law.7
Nevertheless, the pledge is effective as to the lessee from the time that he8
is given written notice of the pledge, regardless of whether the contract9
establishing the pledge has been recorded.10
Revision Comments - 201411
(a) This Article is new.  Recordation of a contract establishing a pledge of12
the lessor's rights in the lease of an immovable and its rents is required for the pledge13
to have effect against third persons other than the lessee. To that extent, the Article14
restates a requirement that was contained in former R.S. 9:4401. Unlike that statute,15
however, this Article does not specify the place where recordation must occur. The16
place of recordation is specified in Article 3346 (Rev. 2014), which changes the law17
by requiring recordation in the mortgage records, rather than in the conveyance18
records, as former R.S. 9:4401 previously provided.19
(b) This Article does not address the issue of when the lessee is obligated to20
render performance to the pledgee. That issue is governed by Article 3161 (Rev.21
2014). Article 3164 (Rev. 2014) prescribes the circumstances under which an22
agreement by the lessor and lessee to modify a lease has effect against a pledgee.23
Art. 3170.  Pledge contained in act of mortgage24
A pledge of the lessor's rights in the lease of an immovable and its rents25
may be established in an act of mortgage of the immovable.  In that event, the26
pledge is given the effect of recordation for so long as the mortgage is given that27
effect and is extinguished when the mortgage is extinguished.28
Revision Comments - 201429
This Article is new. It recognizes the longstanding practice of the inclusion30
within a contract of mortgage of the pledge of the mortgagor's rights in the leases and31
rents of the mortgaged immovable. Similar recognition was contained in former R.S.32
9:4401(A). This Article omits, however, the provision of former R.S. 9:4401(A) to33
the effect that recordation of the contract of mortgage in the mortgage records34
obviated the need for separate recordation in the conveyance records in order for the35
pledge to have effect against third persons. Under this revision, all pledges of the36
lessor's interest in the lease of an immovable and its rents must be recorded in the37
mortgage records, rather than the conveyance records, in order to have effect against38
third persons, regardless of whether the pledge is contained in a contract of mortgage39
or in a separate contract of pledge.  See C.C. Art. 3346 (Rev. 2014).40
Art. 3171.  Pledge of all or part of the leases of an immovable41 SB NO. 89
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A pledge may be established over all or part of the leases of an1
immovable, including those not yet in existence, without the necessity of specific2
description of the leases in the contract establishing the pledge. If the pledge is3
established over leases not yet in existence, the pledge encumbers future leases4
as they come into existence. The pledge has effect as to third persons, even with5
respect to leases not in existence at the time of formation of the contract6
establishing the pledge, from the time that the contract establishing the pledge7
is recorded in the manner prescribed by law.8
Revision Comments - 20149
This Article is new. It restates the provisions of former R.S. 9:4401(A)(2),10
without any intent to change the law.11
Art. 3172.  Pledge of mineral payments by owner of land or holder of mineral12
servitude13
By express provision in a contract establishing a pledge, the owner of14
land or holder of a mineral servitude may pledge bonuses, delay rentals,15
royalties, and shut-in payments arising from mineral leases, as well as other16
payments that are classified as rent under the Mineral Code.  Other kinds of17
payments owing under a contract relating to minerals are not susceptible of18
pledge under this Title.19
Revision Comments - 201420
(a) This Article, which is derived from former R.S. 9:4401(D), clarifies the21
law.22
(b) Like the source provision, this Article permits a landowner or holder of23
a mineral servitude to pledge mineral payments. This Article makes clear, however,24
that a contract of pledge encumbers mineral payments only if the contract includes25
an express statement to that effect. A mere statement that all leases and rents of the26
immovable are pledged will not suffice for the pledge to encumber mineral27
payments.28
(c) "Accounts" as defined in Chapter 9 of the Uniform Commercial Code and29
the kinds of mineral payments susceptible of encumbrance by pledge under this30
Chapter are mutually exclusive.  See R.S. 10: 9-102(a)(2) (Rev. 2014).31
(d) This Article clarifies an issue that was uncertain under former R.S.32
9:4401: whether mineral lease bonus payable to a landowner or holder of a mineral33
servitude is susceptible of encumbrance by a pledge, rather than by a security interest34
under Chapter 9 of the Uniform Commercial Code. Under prior law, mineral35
payments that were classified as rent under the Mineral Code were susceptible of36
encumbrance under former R.S. 9:4401 and were excluded from the definition of37
"account" in Section 9-102 of the Uniform Commercial Code. Both that definition38
and the provisions of former R.S. 9:4401 were written, however, in a manner that39 SB NO. 89
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seemed to presuppose that mineral lease bonus payable to a landowner or holder of1
a mineral servitude was not rent and would therefore be an "account" susceptible of2
encumbrance only by a security interest under Chapter 9 of the Uniform Commercial3
Code. Nevertheless, after the adoption of those statutes, the Supreme Court held, in4
a case involving claims of collation among heirs, that mineral lease bonus is a form5
of rent.  Succession of Doll v. Doll, 593 So.2d 1239 (La. 1992).6
This Article provides that mineral lease bonus payable to a landowner or7
holder of a mineral servitude is encumbered by a pledge under this Chapter, rather8
than by a security interest under Chapter 9 of the Uniform Commercial Code,9
without regard to whether the bonus is classified as rent under the Mineral Code.10
Similarly, delay rentals, royalties, and shut-in payments arising from mineral leases11
are encumbered by a pledge under this Chapter, as is any other payment that is owed12
to a landowner or holder of a mineral servitude and that is classified as rent under the13
Mineral Code. This treatment is in accord with cases holding a mineral lease bonus14
to be a civil fruit (See, e.g., Milling v. Collector of Revenue, 220 La. 773, 57 So.2d15
679 (La. 1952)), as well as the law of community property, which classifies as16
community property bonuses, delay rentals, royalties, and shut-in payments arising17
from mineral leases covering separate property.  See C.C. Art. 2339 (Rev. 1979;18
Amended 2008).19
(e) Mineral payments owing to a person other than a landowner or holder of20
a mineral servitude are not susceptible of pledge under this Title.21
Art. 3173.  Accounting to other pledgees for rent collected22
Except as provided in this Article, a pledgee is not bound to account to23
another pledgee for rent collected.24
A pledgee shall account to the holder of a superior pledge for rent the25
pledgee collects more than one month before it is due and for rent he collects26
with actual knowledge that the payment of rent to him violated written27
directions given to the lessee to pay rent to the holder of the superior pledge.28
After all secured obligations owed to a pledgee have been extinguished,29
he shall deliver any remaining rent collected to another pledgee who has made30
written demand upon him for the rent before he delivers it to the pledgor.31
Revision Comments - 201432
(a)  This Article is new.  It changes the law by generally permitting an33
inferior pledgee to collect rent from the lessee without a duty to account to a superior34
pledgee for the rent collected. Nevertheless, the inferior pledgee must account to the35
superior pledgee for any rent he collects more than one month before it is due. The36
inferior pledgee must also account for any rent he collects with actual knowledge37
that payment of the rent to him violated written instructions to the lessee to pay rent38
to the superior pledgee.39
(b) Former R.S. 9:4401(G)(2) provided that, if a pledgee had not notified the40
lessee to make direct payment to him, the lessee was exonerated of liability for rent41
paid to the lessor or a subsequent assignee; however, the person to whom payment42
was remitted was nevertheless liable to the pledgee for the sums received.  Thus, an43
inferior pledgee who collected rent was exposed to liability to a superior pledgee for44
any rent he might collect. This Article now permits the inferior pledgee to retain rent45
he collects as it falls due, unless a superior pledgee has notified the lessee to make46 SB NO. 89
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payment to him and the inferior pledgee has knowledge of these instructions. At any1
time, of course, the superior pledgee can give a direct payment notification to the2
lessee, in which event the lessee will no longer be able safely to pay the inferior3
pledgee.  See C.C. Art. 3161 (Rev. 2014).  The inferior pledgee would still be able4
to retain any payments that the lessee might make to him in violation of these5
instructions if the inferior pledgee were unaware of those instructions.6
(c) The principles expressed in this Article are analogous to rules under7
Chapter 9 of the Uniform Commercial Code, which generally permit an inferior8
secured party to collect proceeds of collateral without liability to a superior secured9
party, provided that the inferior secured party does not know that his receipt of the10
proceeds violates the rights of the superior secured party. See Uniform Commercial11
Code Official Comment 5 to R.S. 10:9-331; Uniform Commercial Code Official12
Comment 7 to R.S. 10:9-330 and Uniform Commercial Code Official Comment 513
to R.S. 10:9-607.14
(d) This Article does not grant inferior pledgees the right to collect rent more15
than one month in advance of the date due. Without a rule limiting the ability of an16
inferior pledgee to collect future rents, a superior pledgee might have discovered that17
all future rents for the balance of the term of the lease had been paid in advance to18
an inferior pledgee.19
(e) Under Article 3160 (Rev. 2014), after the secured obligation has been20
satisfied, a pledgee must account to the pledgor for any excess payment received on21
a pledged obligation of a third person. This obligation applies to any excess22
proceeds of rent collected from a lessee. Under this Article, if before delivering the23
excess proceeds to the pledgor the pledgee receives a demand for them from another24
pledgee, the pledgee who collected the rent is bound to turn the excess proceeds over25
to the other pledgee, rather than delivering them to the lessor.  Chapter 9 of the26
Uniform Commercial Code contains a similar rule.  See R.S. 10:9-608.27
(f) R.S. 9:4402 (Rev. 2014) addresses the rights of competing pledgees to28
rental collections that have been deposited into a deposit account maintained with29
a financial institution.30
(g) The provisions of this Article may be altered by agreement between31
pledgees.32
Art. 3174.  Judicial sale prohibited33
A pledge of the lessor's rights in the lease of an immovable and its rents34
does not entitle the pledgee to cause the rights of the lessor to be sold by judicial35
process.  Any clause to the contrary is absolutely null.36
Revision Comments - 201437
(a) This Article, which is new and has no counterpart in either the Louisiana38
Civil Code of 1870 or former R.S. 9:4401, highlights a fundamental distinction39
between the enforcement of the pledge of a movable and the enforcement of the40
pledge of the lessor's rights under the lease of an immovable. In the case of the41
pledge of a movable, Article 3158 (Rev. 2014) permits an extra-judicial disposition42
by the pledgee, if authorized in the contract of pledge, as well as seizure and sale by43
judicial process of the thing pledged.  This Article precludes the pledgee of the44
lessor's rights in the lease of an immovable and its rents from proceeding with either45
kind of disposition. Allowing the pledgee to sell the lessor's rights under the lease,46
whether by private or judicial sale, would, in a sense, effect an undesirable47
dismemberment of ownership of the immovable.48
(b) The pledge of lessor's rights in the lease of an immovable and its rents49
is enforced only by collection of rents and enforcement of other obligations of the50
lessee under the lease. The pledgee is given the right to collect rents by Article 316051
(Rev. 2014) and, to effectuate this right, is permitted by Article 3161 (Rev. 2014) to52 SB NO. 89
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direct the lessee to pay rent to him. If necessary, the pledgee may enforce his rights1
by bringing suit directly against the lessee. He may also employ remedies available2
under the Code of Civil Procedure to seize the rents in the hands of the lessee, but3
he cannot cause the lessor's rights under the lease to be sold by judicial process. See4
C.C.P. Arts. 2411 and 3503.5
Art. 3175.  Applicability of general rules of pledge6
In all matters for which no special provision is made in this Chapter, the7
pledge of the lessor's rights in the lease of an immovable and its rents is8
governed by the provisions of the first Chapter of this Title.9
Revision Comments - 201410
This Article is new.  It states explicitly that the entirety of Chapter 1 of this11
Title applies fully to the pledge of the lessor's rights in the lease of an immovable12
and its rents except to the extent inconsistent with the provisions of this Chapter.13
*          *          *14
TITLE XXII-A OF REGISTRY15
CHAPTER 1. GENERAL PROVISIONS16
*          *          *17
Art. 3346.  Place of recordation; duty of the recorder18
A. An instrument creating, establishing, or relating to a mortgage or19
privilege over an immovable, or the pledge of the lessor's rights in the lease of an20
immovable and its rents, is recorded in the mortgage records of the parish in which21
the immovable is located. All other instruments are recorded in the conveyance22
records of that parish.23
B. The recorder shall maintain in the manner prescribed by law all24
instruments that are recorded with him.25
Revision Comments - 201426
Effective as of January 1, 2015, this Article provides that a pledge of the27
lessor's rights in the lease of an immovable and its rents is recorded in the mortgage28
records of the parish in which the immovable is located.  This represents a change29
in the law, which formerly required recordation in the conveyance records. For30
transitional rules applicable to the continued effectiveness of assignments of leases31
and rents filed in the conveyance records in accordance with former R.S. 9:440132
prior to January 1, 2015, as well as rules that apply to the reinscription, release,33
transfer, amendment, or other modification of those assignments, see R.S. 9:4403.34
After January 1, 2015, despite the filing of the original assignment of leases and rents35
in the conveyance records, an instrument effecting the reinscription, release, transfer,36
amendment, or other modification of the assignment must be filed in the mortgage37
records, and a filing in the conveyance records is neither necessary nor effective to38 SB NO. 89
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cause the instrument to have effect against third persons.1
*          *          *2
CHAPTER 2. MORTGAGE RECORDS3
SECTION 1. GENERAL PROVISIONS4
Art. 3354.  Applicability5
The provisions of this Chapter apply only to the mortgages records and6
privileges encumbering immovables and to pledges of the lessor's rights in the7
lease of an immovable and its rents.8
Revision Comments - 20149
(a) The primary purpose of the 2014 revision of this Chapter is to include the10
pledge of the lessor's rights in the lease of an immovable and its rents within its11
scope. Effective as of January 1, 2015, Article 3346 provides that the pledge of the12
lessor's rights in the lease of an immovable and its rents is recorded in the mortgage13
records of the parish in which the immovable is located.  This represents a change14
in the law, which formerly required recordation in the conveyance records. For15
transitional rules applicable to the continued effectiveness of assignments of leases16
and rents filed in the conveyance records in accordance with former R.S. 9:440117
prior to January 1, 2015, as well as rules that apply to the reinscription, release,18
transfer, amendment, or other modification of those assignments, see R.S. 9:4403.19
 After January 1, 2015, despite the filing of the original assignment of leases and20
rents in the conveyance records, an instrument effecting the reinscription, release,21
transfer, amendment, or other modification of the assignment must be filed in the22
mortgage records, and a filing in the conveyance records is neither necessary nor23
effective to cause the instrument to have effect against third persons.24
(b) This Chapter applies only to encumbrances upon immovables.  Privileges25
and pledges that encumber movable property are not subject to the registry or26
reinscription requirements of this Chapter or other provisions of this Title. See C.C.27
Arts. 3153 and 3155 (Rev. 2014); Art. XIX, Sec. 19 of the La. Const. of 1921, made28
statutory by Art. XIV, Sec. 16 of the La. Const. of 1974.  References to pledges in29
later Articles of this Chapter are limited to pledges of the lessor's rights in the lease30
of an immovable and its rents.31
Art. 3355.  Mortgage, pledge, or privilege affecting property in several parishes32
An act of mortgage, contract of pledge, instrument evidencing a privilege,33
or other instrument that affects property located in more than one parish may be34
executed in multiple originals for recordation in each of the several parishes. An35
original that is filed with a recorder need only describe property that is within the36
parish in which it is filed.37
A certified copy of an instrument that is recorded in the records of a parish38
need only describe property that is within the parish in which it is filed.39
Revision Comments - 201440 SB NO. 89
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This provision is consistent with Article 3345 (Rev. 2005) and reflects1
practices that have long been followed by practitioners. It expressly recognizes that2
recordation of a multiple original that omits the description of encumbered property3
located in other parishes does not affect the validity of the recordation.4
Art. 3356.  Transfers, amendments, and releases5
A. A transferee of an obligation secured by a mortgage	, pledge, or privilege6
is not bound by any unrecorded act releasing, amending, or otherwise modifying the7
mortgage, pledge, or privilege if he is a third person with respect to that unrecorded8
act.9
B. A recorded transfer, modification, amendment, or release of a mortgage,10
pledge, or privilege made by the obligee of record is effective as to a third person11
notwithstanding that the obligation secured by the mortgage, pledge, or privilege has12
been transferred to another.13
C. For the purpose of this Chapter, the obligee of record of a mortgage,14
pledge, or privilege is the person identified by the mortgage records as the obligee15
of the secured obligation.16
Revision Comments - 201417
Prior to the revision of the Title on Mortgages effective January 1, 1993,18
some courts, relying upon the general principle that one cannot transfer a greater19
right than he has under a contract, held that a transferee of the secured obligation was20
bound by unrecorded acts between the mortgagor and previous mortgagee. Other21
courts, seemingly recognizing that a mortgage is a real right and hence subject to the22
principle that contracts modifying or amending such rights must be recorded to affect23
third persons, held that a transferee of an obligation secured by a mortgage was not24
bound by a separate unrecorded contract between the mortgagor and mortgagee25
modifying, releasing or amending the mortgage. See Harrell, "Developments in the26
Law, Security Devices," 47 La.L.Rev. 452, 464 (1986). This Article adopts the latter27
view and requires that any act releasing a mortgage, pledge, or privilege, or28
amending or otherwise modifying the contract creating or evidencing it, be recorded29
in order to affect subsequent assignees of the secured obligation.30
SECTION 2. METHOD AND DURATION OF RECORDATION31
Art. 3357.  Duration; general rule32
Except as otherwise expressly provided by law, the effect of recordation of33
an instrument creating a mortgage or pledge or evidencing a privilege ceases ten34
years after the date of the instrument.35
Revision Comments - 201436
(a) This and the succeeding four Articles state the rules relative to the lapse37 SB NO. 89
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of inscriptions of mortgages, pledges, and privileges in the mortgage records.1
(b) This Article establishes a general rule that the effect of an inscription2
ceases ten years after the date of the document evidencing the mortgage, pledge, or3
privilege. This departs from the rule of Article 3369 of the Louisiana Civil Code of4
1870 that the period of inscription was counted from the date of the secured5
obligation.6
Art. 3358. Duration of recordation of certain mortgages, pledges, and vendor's7
privileges8
If an instrument creating a mortgage or pledge or evidencing a vendor's9
privilege describes the maturity of any obligation secured by the mortgage, pledge,10
or privilege and if any part of the described obligation matures nine years or more11
after the date of the instrument, the effect of recordation ceases six years after the12
latest maturity date described in the instrument.13
Revision Comments - 201414
Under this Article, the effect of recording a mortgage, pledge, or privilege15
that secures an obligation having a stated maturity of nine years or more ceases six16
years after the maturity of the obligation. This Article recognizes, however, that the17
particular terms of the secured obligations may or may not be apparent from the18
recorded instruments creating the mortgage or pledge or evidencing the privilege19
securing them. Consequently, this Article extends the period of inscription beyond20
the ten-year limit prescribed by Article 3357 (Rev. 2014) only in those cases in21
which the recorded instrument describes the maturity of a particular obligation that22
it secures. If the maturity occurs nine years or more from the date of the instrument,23
the effect of registry continues for six years from the date of the described maturity.24
*          *          *25
Art. 3361.  Effect of amendment26
If before the effect of recordation ceases an instrument is recorded that27
amends a recorded mortgage, pledge, or privilege to describe or modify the maturity28
of a particular obligation that it secures, then the time of cessation of the effect of the29
recordation is determined by reference to the maturity of the obligation last30
becoming due described in the mortgage, pledge, or privilege as amended.31
Revision Comments - 201432
If, before the effect of recordation ceases, an amendment to a mortgage,33
pledge, or privilege is filed that would bring about a longer period of effectiveness,34
as in the case of an amendment describing a note with a maturity of nine years or35
more from the date of the original instrument, then the period of inscription is36
calculated with reference to the maturity of the obligations described by the37
instrument as amended.38
Art. 3362.  Method of reinscription39 SB NO. 89
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A person may reinscribe a recorded instrument creating a mortgage or pledge1
or evidencing a vendor's privilege by recording a signed written notice of2
reinscription. The notice shall state the name of the mortgagor or pledgor, or the3
name of the obligor of the debt secured by the privilege, as it appears in the recorded4
instrument and, as well as the registry number or other appropriate recordation5
information of the instrument or of a prior notice of reinscription, and shall declare6
that the instrument is reinscribed.7
Revision Comments - 20148
The method of reinscription provided for in this Article, which has been the9
exclusive means of reinscription since January 1, 1993, is much simpler than the10
method that was previously required. Formerly, one had to file a copy of the original11
mortgage with the recorder accompanied by a request for reinscription. Reinscription12
occurred when the recorder again copied the reinscribed act into his records. No13
useful purpose was served by refiling an instrument that was already filed, or by14
copying an existing document into the records again. This Article instead simply15
requires the person desiring to reinscribe an instrument to do so by expressing that16
intent in a signed document that identifies the instrument and the records where its17
inscription is found.18
Art. 3363.  Method of reinscription exclusive19
The method of reinscription provided in this Chapter is exclusive.  Neither20
an amendment of an instrument creating a mortgage, or pledge or evidencing a21
privilege, nor an acknowledgment of the existence of a mortgage, pledge, or22
privilege by the mortgagor, pledgor, or obligor, constitutes a reinscription of the23
instrument.24
Revision Comments - 201425
(a) This Article makes clear that the filing of a signed, written notice of26
reinscription is the exclusive means of reinscription. The Article rejects27
jurisprudence under former Civil Code Article 3369 (1870) to the effect that any28
document filed by the mortgagor which recognized an existing mortgage effected a29
reinscription of that mortgage. One case even appears to hold that a reinscription30
could occur if the acknowledgement was in an act filed in the conveyance records.31
Exxon Process & Mechanical v. Moncrieffe, 498 So.2d 158 (La. App. 1 Cir.1986).32
(b) Under Article 3367 (Rev. 2014), the recorder is required upon simple33
request to cancel from his records any mortgage, pledge, or privilege that has not34
been reinscribed within the required period. The rule under the 1870 Code placed a35
considerable burden upon both the recorder and the persons examining the records.36
Nor was the rule necessarily advantageous to the obligee. The present rule, which37
has been in effect since January 1, 1993, requires that there be an express notice that38
reinscription is sought, which is then accomplished when that notice is filed.39
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Art. 3365. Effect of request notice recorded after cessation of effect of recordation1
A. A notice of reinscription that is recorded after the effect of recordation of2
the instrument sought to be reinscribed has ceased, again produces the effects of3
recordation, but only from the time that the notice of reinscription is recorded. The4
effect of recordation pursuant to this Paragraph Article shall continue for ten years5
from the date on which the notice of reinscription is recorded, and the instrument6
may be reinscribed thereafter from time to time as provided by Article 3362.7
B. Reinscription pursuant to Paragraph A of this Article does not require that8
the mortgage or pledge or evidence of privilege be again recorded, even if the9
original recordation has been cancelled.10
Revision Comments - 201411
This Article restates a rule that the courts held was implied by provisions of12
the Louisiana Civil Code of 1870. If the notice of reinscription is timely recorded,13
it extends the period of inscription for ten years from its date of recordation in all14
cases. If it is recorded after the effect of recordation ceases, the reinscription gives15
the mortgage, pledge, or privilege the effect it would have if that were the first time16
the instrument was recorded.17
SECTION 3. CANCELLATION18
Art. 3366.  Cancellation upon written request; form and content19
A. The recorder of mortgages shall cancel, in whole or in part and in the20
manner prescribed by law, the recordation of a mortgage, pledge, or privilege upon21
receipt of a written request for cancellation in a form prescribed by law and that:22
(1) Identifies the mortgage, pledge, or privilege by reference to the place in23
the records where it is recorded; and24
(2)  Is signed by the person requesting the cancellation.25
B. The effect of recordation of the instrument ceases upon cancellation by26
the recorder pursuant to the provisions of this Article.27
Art. 3367.  Cancellation of recordation after effect of recordation has ceased28
If the effect of recordation of a mortgage, pledge, or privilege has ceased for29
lack of reinscription, the recorder upon receipt of a written signed application shall30
cancel its recordation.31
Art. 3368. Cancellation of prescribed judicial mortgage arising from judgment32 SB NO. 89
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that has prescribed1
Notwithstanding the reinscription of a judicial mortgage created by the2
filing of a judgment of a court of this state, The the recorder shall cancel the3
judicial mortgage from his records a judicial mortgage created by the filing of a4
judgment of a court of this state that has been reinscribed, upon the written request5
of any person's written request to which is attached a certificate from the clerk of6
the court rendering the judgment that no suit or motion has been was filed for its7
revival within the time required by Article 3501 or of a certified copy of a final and8
definitive judgment of the court rejecting the demands of the plaintiff in a suit or9
motion to revive the judgment.10
Revision Comments - 201411
As Comment (b) to Article 3359 (Rev. 2014) explains, reinscription of a12
judicial mortgage and revival of the underlying judgment are entirely different13
concepts. Both timely reinscription and a timely suit for revival are necessary for a14
judicial mortgage to continue to have effect.  Under this Article, even if a judicial15
mortgage is reinscribed, the recorder must cancel the inscription of the judicial16
mortgage from his records upon any person's request accompanied by a certificate17
from the clerk of the court rendering the underlying judgment that no suit was filed18
for its revival within the time required by Article 3501 (Rev. 1983) or by a final and19
definitive judgment of that court rejecting the demands of the plaintiff in a suit to20
revive it.21
*          *          *22
Section 2. The heading of Part IV of Chapter 1 of Code Title XX-A of Code23
Book III of Title 9 of the Louisiana Revised Statutes of 1950, and R.S. 9:4401 and24
9:5386 are hereby amended and reenacted and R.S. 9:4402 and 4403 are hereby25
enacted to read as follows:26
CODE TITLE XX - OF PLEDGE SECURITY27
*          *          *28
CODE TITLE XX-A - PLEDGE29
CHAPTER 1. PLEDGES30
PART IV.  PLEDGE OR ASSIGNMENT OF LEASES31
AND RENTS OF AN IMMOVABLE32
§4401.  Conditional or collateral assignment of leases or rents33
A. Any obligation may be secured by an assignment by a lessor or sublessor34 SB NO. 89
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of leases or rents, or both leases and rents, pertaining to immovable property.  Such1
assignment may be expressed as a conditional or collateral assignment, and may be2
effected in an act of mortgage, by a separate written instrument of assignment, or by3
a separate written instrument of pledge, and may be referred to, denominated, or4
described as a pledge or an assignment, or both.  The instrument shall state the5
amount of the obligation secured thereby or the maximum amount of the obligation6
that may be outstanding at any time from time to time that such assignment secures.7
If such conditional or collateral assignment is made, it shall become absolute upon8
the assignor's default in respect to the obligation thereby secured or in accordance9
with the terms of the instrument creating such assignment, and shall become10
operative as to the debtor upon written notice to the debtor from or on behalf of the11
assignee or the assignor that such assignment has so become absolute.12
(1) An assignment relating to a lease or rent of an immovable is given the13
effect of recordation when an original or a certified copy of the instrument creating14
the assignment is filed in the conveyance records of the parish in which the15
immovable is situated; however, an assignment contained in an act of mortgage filed16
in the mortgage records of such parish on or after September 1, 1995, shall be given17
the effect of recordation when, to the extent, and for so long as the act of mortgage18
is given such effect, without the need for separate recordation in the conveyance19
records. An assignment given the effect of recordation has such effect with regard20
to all obligations, present and future, secured thereby notwithstanding the date of the21
incurrence of such obligations or the nature of such obligations.22
(2)  Such assignment may include all or any portion of the assignor's23
presently existing and anticipated future leases and rents pertaining to the described24
immovable property.  As future leases or rents of an immovable come into existence25
the assignee's rights as to such leases and rents shall have effect as to third persons26
from the date of the filing of the instrument. It shall not be necessary to specifically27
describe the presently existing or future arising leases or rents; to affect the assignor,28
the assignee, the debtor, or other third parties the instrument shall suffice if it29 SB NO. 89
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contains a general description of the leases and rents together with a description of1
the immovable affected by the lease.  The immovable property description shall be2
the kind of description which, if contained in a mortgage of the immovable, would3
cause such mortgage to be effective as to third persons if the mortgage were properly4
filed for record under the laws of this state.5
(3) Once an assignment relating to leases or rents of an immovable is so6
filed, the assignee shall have a superior claim to the leases and rents assigned and7
their proceeds as against all other creditors whose claims or security interests arise8
or are perfected after the filing of the assignment, notwithstanding the fact that the9
debtor is not notified of or does not consent to the assignment or that the assignee is10
not in possession of the immovable property.11
(4) Except for purposes of Subsection G, the term "lease" as used in this12
Section includes a sublease.13
B. This Section is intended to recognize one method of securing obligations,14
and shall not have the effect of repealing any other provision of law in respect to15
pledge, pawn, and assignment of incorporeal rights.16
C. This Section is remedial and shall be retroactive.  All assignments of17
leases or rents heretofore made in compliance with the provisions of this Section are18
hereby validated.19
D. A landowner or mineral servitude owner may make a conditional or20
collateral assignment pursuant to this Section of rents, royalties, delay rentals,21
shut-in payments, and other payments which are rent or rentals under Title 31 of the22
Louisiana Revised Statutes attributable to the landowner's sale, lease, or other23
disposition of his right to explore and develop his land for production of minerals or24
to the mineral servitude owner's sale, lease, or other disposition of his mineral right.25
This Section shall not otherwise apply to rents, royalties, overriding royalties,26
bonuses, and other payments and other rights under mineral leases and other27
contracts relating to minerals.28
E. This Section shall apply to assignments of leases of movable property29 SB NO. 89
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subject to the Louisiana Lease of Movables Act entered into prior to the time Chapter1
9 of the Louisiana Commercial Laws (R.S. 10:9-101, et seq.) becomes effective,2
including without limitation those assignments of leases that affect rights arising3
after the effective date of Chapter 9 and those continuing assignments that may4
secure future obligations, lines of credit, and other ongoing credit facilities.  This5
Section shall further apply to assignments of leases of immovable property located6
in this state without regard to the time Chapter 9 becomes effective.7
F.(1)  Except as otherwise agreed to by the parties, the assignee's interest in8
the leases or rents assigned continues in any identifiable proceeds including9
collections received by the assignor.10
(2) In the event of insolvency proceedings instituted by or against an11
assignor, the assignee has a perfected security interest in proceeds of the leases or12
rents or both leases and rents assigned, as follows:13
(a) In identifiable noncash proceeds and in separate deposit accounts14
containing only proceeds.15
(b) In identifiable cash proceeds in the form of money which is neither16
commingled with other money nor deposited in a deposit account prior to the17
insolvency proceedings.18
(c) In identifiable cash proceeds in the form of checks and the like which are19
not deposited in a deposit account prior to the insolvency proceedings.20
(d)  In all cash and deposit accounts of the assignor in which proceeds have21
been commingled with other funds, but the perfected security interest under this22
Section is subject to any right of set-off. It is further limited to an amount not greater23
than the amount of any cash proceeds received by the assignor within ten days before24
the institution of the insolvency proceedings, less the sum of:25
(i) the payments to the assignee on account of cash proceeds received by the26
assignor during such period; and27
(ii)  the cash proceeds received by the assignor during such period to which28
the assignee is entitled under Paragraphs (a) through (c) of Subsection F(2).29 SB NO. 89
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G.(1) The rights of an assignee against the debtor shall be subject to any1
dealing by the debtor with the assignor, any other assignee, or other successor in2
interest of the assignor until the debtor receives written notice from or on behalf of3
the assignee or the assignor that the assignment of the particular lease or rent of4
which he is debtor has become absolute.  A notification which does not reasonably5
identify the rights assigned is ineffective. If requested by the debtor, the assignee6
must seasonably furnish reasonable proof that the assignment has been made and7
unless he does so the debtor may pay the assignor.8
(2) Except as provided in this Subsection (G), a debtor who has received9
written notice that the assignment has become absolute will not be discharged from10
his debt if he pays anyone other than the assignee.  In any case in which a debtor is11
not notified of the assignment made in compliance with the provisions of this Section12
and, in good faith, makes payment of rent in whole or in part to the assignor or the13
assignor's successor, or to a subsequent assignee of the rent who shall have notified14
the debtor of that assignment, then to the extent of payment, the debtor shall be15
exonerated of liability to make payment to the first assignee; however, the person to16
whom payment was made shall be accountable and liable to the assignee for the17
sums received. The debtor may, at its option, commence concursus proceedings18
instead of making payment to the assignor or the assignee.19
(3) Notwithstanding the debtor's receipt of written notice of the assignment,20
a modification of or substitution for the lease made in good faith and in accordance21
with reasonable commercial standards is effective against an assignee, unless the22
debtor has otherwise agreed with the assignee. In either event the assignee acquires23
rights under the modified or substituted lease corresponding to the assignee's rights24
under the original lease. No termination or modification of or substitution for a lease25
shall be effective against an assignee as to the right to the payment of rent or a part26
thereof under an assigned lease which has been fully earned by performance.  The27
assignment may provide that modification of or substitution for the lease is a default28
by the assignor.29 SB NO. 89
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(4)  A term in any lease between a debtor and an assignor is ineffective if it1
prohibits assignment of rent or prohibits creation of a security right in rent due or to2
become due or requires the debtor's consent to such assignment of rent or security3
interest in rent.4
(5) The mere existence of a conditional or collateral assignment does not5
impose contract or tort liability upon the assignee for the assignor's acts or omissions6
relating to such leases.7
H.(1) The  effect of recordation of all assignments recorded on or after8
September 1, 1990, ceases ten years after the date of the instrument creating the9
assignment, except, that if an instrument creating an assignment describes the10
maturity of an obligation secured thereby and if any part of the described obligation11
matures nine years or more after the date of the instrument, the effect of recordation12
ceases six years after the described maturity date.  A recorded instrument creating13
an assignment may be reinscribed by filing a signed, written notice of reinscription.14
The notice shall state the name of the assignor as it appears in the recorded15
instrument and recordation number or other appropriate recordation information of16
the instrument or of a prior notice of reinscription and shall declare that the17
instrument is reinscribed.  A notice of reinscription that is filed before the effect of18
recordation ceases continues that effect for ten years from the date the notice is filed.19
A notice of reinscription that is filed after the effect of recordation ceases produces20
the effects of recordation, but only from the date the notice is filed. The method of21
reinscription provided in this Section is exclusive, and neither an amendment of an22
instrument creating an assignment nor an acknowledgment of the existence of an23
assignment by the assignor constitutes a reinscription of the instrument.24
Notwithstanding the foregoing, the effect of recordation of an assignment contained25
in an act of mortgage filed on or after September 1, 1995, continues for so long as26
the act of mortgage is given the effect of recordation. In such cases, reinscription of27
the act of mortgage constitutes reinscription of the assignment contained therein.28
(2) Notwithstanding the foregoing provisions, the effect of registry of all29 SB NO. 89
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assignments recorded on or before August 31, 1990, shall be determined by the other1
laws of registry applicable thereto.2
(3) The recordation of an assignment may be cancelled by the consent of the3
assignee evidenced by any written release, under private signature or otherwise.4
Cancellation or erasure of an act of mortgage containing an assignment constitutes5
cancellation of the assignment contained therein, whether the act of mortgage was6
recorded in the mortgage records or conveyance records, or both.7
I. The provisions of R.S. 9:4401(A), as amended and reenacted, and the8
provisions of R.S. 9:4401(G) and (H) as enacted by Acts of the 1990 Regular Session9
are remedial and shall, wherever possible, be given retroactive effect.  All10
assignments of present and future leases or rents heretofore made in compliance11
herewith are hereby validated.12
§4401.  Pledge of the lessor's rights in the lease of an immovable and its rents13
Any obligation may be secured by a pledge of the rights of a lessor or14
sublessor in the lease or sublease of an immovable and its rents made in15
accordance with Chapter 2 of Title XX-A of Book III of the Civil Code.  The16
rights of the lessee under a lease, or of a sublessee under a sublease, are not17
susceptible of pledge.18
Revision Comments - 201419
(a) From its enactment in 1980, former R.S. 9:4401 contained detailed20
provisions governing the assignment, or pledge, of the lessor's rights in leases and21
rents of an immovable. The 2014 enactment of Title XX-A of Book III of the Civil22
Code places the encumbrance of the lessor's rights in the lease of an immovable and23
its rents within the civil law framework of pledge and gives nearly complete24
treatment to pledges of that nature within the Civil Code itself. The provisions of the25
Civil Code are supplemented by this Section and those that follow.26
(b) This Section expressly provides that a pledge may be created by either27
a lessor or a sublessor. In the case of a pledge created by a sublessor, the pledge28
encumbers his rights under the sublease, but not his rights under the underlying lease29
from his own lessor. The rights of a lessee under a lease, as well as the rights of a30
sublessee under a sublease, are not susceptible of pledge but instead are encumbered31
by a mortgage.  See C.C. Art. 3286 (Rev. 1991; Amended 1993).32
(c) Former R.S. 9:4401 provided for the filing of the assignment or pledge33
in the conveyance records of the parish in which the immovable was located.  The34
2014 revision of the law of pledge amended Civil Code Article 3346 (Rev. 2014) to35
require recordation of the pledge of the lessor's rights in the lease of an immovable36
and its rents in the mortgage records, rather than the conveyance records.37
Transitional rules applicable to the continued effectiveness of assignments of leases38
and rents filed in the conveyance records in accordance with former R.S. 9:440139 SB NO. 89
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prior to January 1, 2015, as well as rules that apply to the reinscription, release,1
transfer, amendment, or other modification of these assignments, are contained in2
R.S. 9:4403.3
§4402.  Right of pledgee to cash proceeds of rent4
A. Unless otherwise agreed, a pledge of the lessor's interest in the rents5
of an immovable encumbers any identifiable cash proceeds of rent, such as6
money, checks, deposit accounts, or the like.7
B. The right of a pledgee to proceeds of rent deposited into a deposit8
account maintained with a financial institution are subject to the rights of the9
following persons:10
(1) The financial institution with which the deposit account is11
maintained.12
(2) A transferee of funds from the deposit account, unless the transferee13
acts in collusion with the pledgor in violating the rights of the pledgee.14
(3) A secured party holding a security interest perfected by control of15
the deposit account in accordance with R.S. 10:9-104.16
(4)  Another pledgee holding a superior pledge of the rent.17
C. Notwithstanding Subsection B, the right of a pledgee to collections of18
rent deposited into a deposit account maintained by him or for his benefit is19
superior to the right of another pledgee to those collections, unless the pledgee20
who collected the rent has an obligation to account for the collections to the21
other pledgee under Civil Code Article 3172.22
Revision Comments - 201423
(a) Former R.S. 9:4401(F) provided that the assignee's interest in leases and24
rents continued in any identifiable proceeds, including collections. Subsection A of25
this Section limits the reach of the pledge of a lessor's interest in the rents of an26
immovable to identifiable cash proceeds, such as money, checks, deposit accounts,27
or the like.28
(b)  When proceeds of rent are deposited into a deposit account maintained29
with a financial institution, Subsection B provides that the rights of the pledgee are30
subject to the rights of the depository bank, the rights of a secured party who holds31
a security interest perfected by control of the deposit account, and the rights of a32
transferee of funds from the deposit account who does not act in collusion with the33
pledgor in violating the rights of the pledgee.  Except as otherwise provided in34
Subsection C, the rights of a pledgee to proceeds held in the deposit account are also35
subject to the rights of another pledgee holding a superior pledge of the rent. Thus,36
if a lessor who has granted pledges in favor of two or more pledgees deposits rent he37 SB NO. 89
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has collected into a deposit account, the ranking of the rights of the competing1
pledgees to the deposited rent is preserved.2
(c) Subsection C applies when a pledgee collects rent which he then deposits3
into a deposit account that he maintains or that someone else maintains on his behalf.4
If the pledgee collected those rents without any obligation under Civil Code Article5
3172 (Rev. 2014) to account to a superior pledgee for them, the superior pledgee has6
no right to claim the collections held in the deposit account to the prejudice of the7
pledgee who collected them.8
§4403.  Transitional filing rules for assignments of leases and rents recorded9
prior to January 1, 201510
A. An assignment of leases and rents that was recorded prior to January11
1, 2015, shall be subject to the reinscription requirements of Chapter 2 of Title12
XXII-A of Book III of the Civil Code, with the modifications provided in this13
Section.14
B. Except as otherwise provided in Subsection C, the effect of15
recordation of an assignment of leases and rents that was recorded in the16
conveyance records prior to January 1, 2015, and that remained effective17
against third persons on that date shall continue, without the necessity of18
recordation in the mortgage records, until the date that filing of a notice of19
reinscription is required under Chapter 2 of Title XXII-A of Book III of the20
Civil Code or December 31, 2024, whichever first occurs.  On that date, the21
effect of recordation of the assignment shall cease unless a notice of22
reinscription of the assignment has been filed in the mortgage records, as23
provided in Article 3362 of the Civil Code. This Subsection shall not apply to24
assignments contained in an act of mortgage filed in the mortgage records.25
C. The effect of recordation of an assignment of leases and rents that26
was recorded on or before August 31, 1990, or was made effective against third27
persons on or before that date in another manner permitted by the law then in28
effect, and that remained effective against third persons on January 1, 2015,29
shall continue, without the necessity of recordation in the mortgage records,30
until the date that the effect of recordation would cease under the law in effect31
at the time the assignment was first made effective against third persons or until32
December 31, 2024, whichever first occurs. On that date, the effect of33 SB NO. 89
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recordation of the assignment shall cease unless a notice of reinscription of the1
assignment has been filed in the mortgage records, as provided in Article 33622
of the Civil Code.3
D. The effect of recordation of an assignment of leases and rents as to4
which a notice of reinscription is filed in the mortgage records shall continue for5
ten years from the date on which the notice of reinscription is filed, and the6
assignment may be reinscribed thereafter from time to time as provided in7
Article 3362 of the Civil Code.8
E. The filing of a notice of reinscription in the conveyance records on or9
after January 1, 2015, is neither necessary nor effective to continue the effect of10
recordation of an assignment of leases and rents, regardless of whether the11
assignment or a previous notice of reinscription was filed in the conveyance12
records.13
F. Unless filed in the conveyance records before January 1, 2015, an14
instrument releasing, transferring, amending or otherwise modifying an15
assignment of leases and rents shall be without effect as to third persons until16
filed in the mortgage records. Filing the instrument in the conveyance records17
on and after January 1, 2015, is neither necessary nor effective to cause the18
instrument to have effect against third persons, regardless of whether the19
original assignment or any previous transfer, amendment, or other modification20
was filed in the conveyance records.21
G. An assignment of leases and rents that was recorded in the mortgage22
records within the period of ten years prior to January 1, 2015, shall be given23
the effect of recordation, without further action, on January 1, 2015, as if it24
were first filed on that date. This Subsection shall not apply to assignments that25
were also filed in the conveyance records prior to January 1, 2015, nor to26
assignments contained in an act of mortgage.27
Revision Comments - 201428
(a)  Former R.S. 9:4401 required recordation of an assignment or pledge of29
leases and rents in the conveyance records of the parish in which the immovable is30 SB NO. 89
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located. Effective as of January 1, 2015, Civil Code Artricle 3346 (Rev. 2014)1
requires recordation of the pledge of the lessor's rights in the lease of an immovable2
and its rents in the mortgage records. This Section provides transitional rules3
applicable to the effect of recordation of assignments of leases and rents filed in the4
conveyance records in accordance with former R.S. 9:4401 prior to January 1, 2015,5
as well as transitional rules that apply to the reinscription, release, transfer,6
amendment, or other modification of those assignments. Subsection A applies the7
reinscription rules of Chapter 2 of Title XXII-A of Book III of the Civil Code, as8
amended in 2014, to assignments of leases and rents that were filed prior to January9
1, 2015, but with the modifications provided under this Section.10
(b) Subsection B states the general rule that an assignment or pledge of11
leases and rents filed in the conveyance records prior to January 1, 2015 continues12
to have the effect of recordation, without the necessity of recordation in the mortgage13
records, until reinscription is required. Before the date that reinscription is required,14
a notice of reinscription must be filed in the mortgage records in order for the15
assignment to continue to have the effect of recordation.  The filing of a notice of16
reinscription in the conveyance records on or after January 1, 2015 is not only17
unnecessary, it is wholly without effect, regardless of whether the assignment or a18
previous notice of reinscription was filed in the conveyance records.  This is19
expressly stated in Subsection E.20
(c) The period within which reinscription of assignments or pledges of leases21
and rents filed prior to January 1, 2015 is required is not changed by this Section,22
except in two instances. First, Subsection B imposes an outside deadline of23
December 31, 2024 for the reinscription in the mortgage records of assignments or24
pledges of leases and rents that were filed in the conveyance records prior to January25
1, 2015. Thus, even if an assignment filed in the conveyance records prior to that26
date secures an obligation that is described to have a maturity such that reinscription27
would not have been required under prior law until after December 31, 2024, a notice28
of reinscription must nonetheless be recorded in the mortgage records on or before29
December 31, 2024 in order for the assignment to continue to have the effect of30
recordation after that date. The second change in the reinscription period is31
discussed in Comment (d), infra.32
(d) Under former R.S. 9:4401(H)(2), assignments of leases and rents33
recorded in the conveyance records on or before August 31, 1990 were subject to no34
reinscription requirement at all. Subsection C of this Section imposes a reinscription35
requirement upon those assignments and a reinscription deadline of December 31,36
2024. If a notice of reinscription of an assignment of leases and rents that was37
recorded on or before August 31, 1990 is not filed in the mortgage records on or38
before December 31, 2024, the assignment will cease to be effective against third39
persons after that date. Subsection C applies by its terms only to assignments that40
were recorded on or before August 31, 1990 and that remain effective against third41
persons on January 1, 2015.  If, for any reason, the effect of recordation of the42
assignment ceased prior to January 1, 2015, Subsection C would not operate to43
revive the assignment.44
(e) Between January 1, 1990 and August 31, 1990, it was possible to effect45
an assignment of the rents of an immovable through an assignment of accounts46
receivable in accordance with the Louisiana Assignment of Accounts Receivable47
Act, former R.S. 9:3101 et seq. (repealed by Acts 2001, No. 128).  The assignment48
was made effective against third persons by the filing of a financing statement in the49
U.C.C. records. This practice was ended by Acts 1990, No. 1079; however, Section50
9 of that act specifically provided that the change in the Assignment of Accounts51
Receivable Act "shall not impair or make invalid any assignments of accounts52
arising out of the leasing of immovable property entered into prior to the effective53
date of this Act."  Subsection C of this Section provides that any such assignments54
that might continue to be effective against third persons on January 1, 2015 are55
subject to the requirement of the filing of a notice of reinscription in the mortgage56
records by no later than December 31, 2024.  This is an outside deadline, however,57
and effectiveness of the assignment against third persons will be lost even sooner if58 SB NO. 89
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a notice of reinscription is not filed in the mortgage records before lapse of the1
financing statement that is the basis of the perfection of the assignment.  The filing2
of further continuation statements in the U.C.C. records on or after January 1, 20153
will not continue the effectiveness of the financing statement.4
(f) Subsection F is patterned after Civil Code Article 3356 (Rev. 2005),5
which provides a similar rule for instruments affecting acts of mortgage.  After6
January 1, 2015, instruments that release, transfer, amend, or otherwise modify an7
assignment of leases and rents are filed in the mortgage records, rather than the8
conveyance records, even if the original assignment was filed in the conveyance9
records.10
(g) Subsection G deals with the effectiveness against third persons of an11
assignment of leases and rents that, within the period of ten years prior to January12
1, 2015, was recorded, inappropriately, only in the mortgage records, rather than in13
the conveyance records as former R.S. 9:4401 required.  Subsection G grants these14
assignments the effect of recordation as of January 1, 2015, as if the assignment15
were first filed on that date. The effect of recordation is not retroactive to the actual16
date of filing. Moreover, the reinscription deadline for such an assignment is not17
reckoned from January 1, 2015, but rather according to the normal rules of Chapter18
2 of Title XXII-A of Book III of the Civil Code.  Subsection G does not grant the19
effect of recordation to an assignment of leases and rents that was recorded in the20
mortgage records more than ten years prior to January 1, 2015.  Such assignments21
(unless contained in an act of mortgage) were not given the effect of recordation22
when they were filed and are not given the effect of recordation by Subsection G.23
See Prudential Ins. Co. of America v. CC & F Baton Rouge Development Co., 64724
So.2d 1131 (La. App. 1st Cir.1994).25
(h) Former R.S. 9:4401 accorded the effect of recordation to an assignment26
of leases and rents contained in an act of mortgage filed in the mortgage records, to27
the extent and for so long as the act of mortgage was given such effect, without the28
need for separate recordation in the conveyance records. For this reason, Subsection29
G by its terms does not apply to assignments of leases and rents contained in an act30
of mortgage.  Similarly, the outside reinscription deadline of December 31, 202431
contained in Subsection B does not apply to assignments contained in an act of32
mortgage recorded in the mortgage records. The purpose of that outside deadline is33
to cause evidence of all assignments or pledges of leases and rents to appear in the34
mortgage records in all events no later than December 31, 2024.  In the case of an35
assignment contained in a properly recorded act of mortgage, the assignment already36
appears in the mortgage records through a filing that was effective at the time made.37
The general rule of Subsection A applies to such assignments: they are subject to the38
normal reinscription requirements of Chapter 2 of Title XXII-A of Book III of the39
Civil Code.40
*          *          *41
§5386. Mortgage including collateral assignment and pledge of certain42
mortgagor's incorporeal rights to insurance43
A. A mortgage of an immovable property may provide for the contain a44
collateral assignment or pledge of the mortgagor's rights right to receive proceeds45
attributable to the insurance loss of the mortgaged property under policies of46
insurance covering the immovable. Such collateral assignment or In that event,47
the pledge shall have has effect, other than between the immediate parties, or those48
on whose behalf or for whose benefit they act, and shall be deemed perfected by the49 SB NO. 89
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proper recordation of the mortgage in the mortgage records of the parish in which the1
immovable is situated as to third persons when the act of mortgage is recorded2
in the manner prescribed by law, without the necessity of notice to the insurer,3
and continues to have that effect for so long as the mortgage is given the effect4
of recordation.5
B.  The rights of the mortgagee against the insurer shall be subject to any6
dealing by the insurer with the mortgagor, any other assignee or pledgee, or other7
successor in interest of the mortgagor until the insurer receives written notice from8
or on behalf of the mortgagee or the mortgagor of the collateral assignment or pledge9
of the right to receive the insurance proceeds. In any case in which an insurer is not10
notified in writing of the assignment or pledge of the right to receive insurance11
proceeds made in compliance with the provisions of this Section and, in good faith,12
makes payment of the insurance proceeds attributable to the loss of the mortgaged13
property in whole or in part to the mortgagor, any other assignee or pledgee, or other14
successor in interest of the mortgagor, then, to the extent of payment, the insurer15
shall be exonerated of liability to make payment to the mortgagee; however, the16
person to whom payment was made shall be accountable and liable to the mortgagee17
for the sums received.  Nothing contained in this Section shall be construed to The18
pledge of the mortgagor's rights to insurance does not modify the obligations of19
any the insurer under any simple or standard or other loss payee clause of its20
insurance policy.21
C. A mortgage pledge of the mortgagor's rights under policies of22
insurance covering an immovable shall not be invalid, ineffective, or fraudulent23
against other creditors by reason of the mortgagor's freedom to use, commingle, or24
dispose of proceeds from of the insurance loss of the mortgaged property, or by25
reason of the mortgagee's failure to require the mortgagor to account therefor for the26
proceeds.27
Section 3. R.S. 10:9-102(a)(2) is hereby amended and reenacted to read as follows:28
§9-102.  Definitions and index of definitions29 SB NO. 89
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words in boldface type and underscored are additions.
(a)  Chapter 9 definitions. In this Chapter:1
*          *          *2
(2) "Account," except as used in "account for," means a right to payment of3
a monetary obligation, whether or not earned by performance, (i) for property that4
has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (ii) for5
services rendered or to be rendered, (iii) for a policy of insurance issued or to be6
issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy7
provided or to be provided, (vi) for the use or hire of a vessel under a charter or other8
contract, (vii) arising out of the use of a credit or charge card or information9
contained on or for use with the card, or (viii) as winnings in a lottery or other game10
of chance operated or sponsored by a state, governmental unit of a state, or person11
licensed or authorized to operate the game by a state or governmental unit of a state.12
The term includes health-care-insurance receivables. The term further includes any13
right to payment owed to a landowner or the owner of a mineral right, such as a14
bonus, rent, or royalty, which is payable out of or measured by production of oil, gas,15
or other minerals, or is otherwise attributable to the mineral right, whether or not16
such payment is rent under Title 31 of the Louisiana Revised Statutes of 1950,17
except for rent payable to a landowner or mineral servitude owner that is payable18
out of or measured by production of oil, gas, or other minerals, or is otherwise19
attributable to a mineral right, whether or not the payment is classified as rent20
under the Mineral Code, except that the term does not include bonuses, delay21
rentals, royalties, or shut-in payments payable to a landowner or mineral22
servitude owner under a mineral lease, nor does the term include other23
payments to them that are classified as rent under the Mineral Code. The term24
does not include (i) rights to payment evidenced by chattel paper or an instrument,25
(ii) tort claims, (iii) deposit accounts, (iv) investment property, (v) letter-of-credit26
rights or letters of credit, (vi) rights to payment for money or funds advanced or sold,27
other than rights arising out of the use of a credit or charge card or information28
contained on or for use with the card, (vii) life insurance policies or rights to29 SB NO. 89
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payment or claims thereunder, or (viii) judgments or rights to payment represented1
thereby.2
Revision Comments - 20143
The 2014 revision of the definition of "account" in this Section, made in4
tandem with the enactment of Civil Code Article 3172 (Rev. 2014), is intended to5
ensure that "accounts" as defined in this section and the kinds of mineral payments6
susceptible of encumbrance by pledge under Civil Code Article 3172 (Rev. 2014)7
are mutually exclusive. Bonus, delay rentals, royalties, and shut-in payments8
payable to a landowner or mineral servitude owner under a mineral lease, as well as9
any other payments to them that are classified as rent under the Mineral Code, do not10
constitute "accounts" susceptible of encumbrance by a security interest under this11
Chapter but instead are encumbered by a pledge under Civil Code Art. 3172. See12
Comment (d) to Civil Code Art. 3172 (Rev. 2014).13
Section 4. Civil Code Articles 3176, 3177, 3178, 3179, 3180, 3181, 3182, 3183, and14
3184 are hereby repealed. 15
Section 5. The Louisiana State Law Institute is hereby authorized to add Comments16
for Civil Code Articles 3359 and 3364 to read as follows:17
Art. 3359.  Duration of recordation of judicial mortgage18
*          *          *19
Revision Comments - 201420
(a) This Article expressly declares that the effect of recording a judgment21
ceases ten years after the date of the judgment. This continues the interpretation of22
Article 3369 of the Louisiana Civil Code of 1870 and is implicit in present Article23
3357 (Rev. 2014).24
 (b) The failure to reinscribe a judicial mortgage within ten years of its date25
causes the effect of recordation to cease. As the courts have observed, there is a26
common misunderstanding as to the relationship between reinscribing a judicial27
mortgage and obtaining a judgment of revival under C.C.P. Art. 3334.  Bank One28
Louisiana v. Lacobee, 811 So.2d 164 (La. App. 2d Cir. 2002). See also Brunston v.29
Hoover, 945 So.2d 852 (La. App. 3d Cir. 2006) and Mouton v. Watson, 500 So.2d30
792 (La. App. 1st Cir.1986). Under Article 3300 (Rev. 2014), a judicial mortgage31
is created by the filing of a money judgment in the mortgage records. This Article32
provides that the effect of recordation of a judgment creating a judicial mortgage33
ceases ten years after the date of the judgment.  A notice of reinscription filed in34
accordance with Article 3362 (Rev. 2014) continues the effect of recordation of a35
judicial mortgage, without the necessity of filing a judgment reviving the original36
judgment. The judgment itself prescribes, however, if a suit to revive it is not filed37
within ten years of its date and a judgment reviving it obtained in due course. If the38
judicial mortgage is not reinscribed, the effect of recordation ceases whether or not39
prescription on the underlying judgment is interrupted by a suit for revival. If the40
judicial mortgage is reinscribed, it nevertheless becomes unenforceable when the41
underlying judgment prescribes. Accordingly, Article 3368 (Rev. 2014) permits the42
recorder to cancel the inscription from his records upon the request of any person if43
the request is accompanied by a certificate from the clerk of the court rendering the44
judgment that no suit has been filed for its revival within the time required by Article45
3501 (Rev. 1983) or is accompanied by a final and definitive judgment of that court46
rejecting the demands of the plaintiff in a suit to revive it.47 SB NO. 89
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*          *          *1
Art. 3364.  Effect of timely recordation of notice or reinscription2
*          *          *3
Revision Comments - 20144
Under this Article, reinscription is effective when a notice of reinscription is5
filed. The effect of the original recordation is extended for ten years from that time.6
Section 6. The Louisiana State Law Institute is hereby authorized to amend or to7
provide headings in the Civil Code and the Louisiana Revised Statues of 1950.8
Section 7. This Act shall become effective on January 1, 2015.9
The original instrument was prepared by Julie J. Baxter. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Jerry G. Jones.
DIGEST
Peacock (SB 89)
Present law Title XX provides for "Of Pledge."
Proposed law provides for "Security" and provides for "Pledge" in new Title XX-A.
Present law (C.C. Art. 3133) provides the definition of pledge.
Proposed law provides that an obligor is obligated to fulfill his obligation out of all of his
property, present and future.
Present law (C.C. Art. 3133.1) provides how pledges relate to Chapter 9 of the Louisiana
Commercial Laws.
Proposed law suppresses this provision.
Present law (C.C. Art. 3134) provides that there are the two kinds of pledge; pawn and
antichresis.
Proposed law provides that in the absence of a preference an obligor's property is available
to all of his creditors and the proceeds of its sale are distributed ratably.
Present law (C.C. Art. 3135) provides the distinction between pawn and antichresis.
Proposed law provides that a written contract can restrict the obligee's recourse against the
obligor to a particular property or a specified class or kind of property.
Present law (C.C. Art. 3136) provides that every lawful obligation can be enforceable by
pledge.
Proposed law provides a definition of "security" but it does not change the law.
Present law (C.C. Art. 3137) provides that if the principal obligation is conditional then the
pledge is confirmed or extinguished with it. SB NO. 89
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words in boldface type and underscored are additions.
Proposed law clarifies the law by providing that security can be either personal or real and
provides definitions of "personal" and "real" property.
Present law (C.C. Art. 3138) provides that if the obligation is null then so too is the pledge.
Proposed law provides that suretyship, privilege, mortgage, pledge, and a security interest
established to secure a performance of an obligation are kinds of security.
Present law (C.C. Art. 3139) provides that a natural obligation can be the basis of a pledge.
Proposed law does not change the law. It provides that the laws of security interest are
defined by the Uniform Commercial Code.
Present law (C.C. Art. 3140) provides that pledge can be given in money and for any other
object.
Proposed law provides that unless expressly permitted by law, a clause in a contract that
provides in advance that the ownership of a thing given as security will transfer upon default
in performance of the obligation is absolutely null.
Proposed law provides for a new Title XX-A, "Pledge".
Present law (C.C. Art. 3141) provides that a pledge can be given for another's debt.
Proposed law provides a definition of "pledge".
Present law (C.C. Art. 3142) provides that a debtor can give in pledge whatever belongs to
him, but cannot confer to a creditor any further right than what he himself has.
Proposed law clarifies the law by providing an exhaustive list of things susceptible of
pledge.
Present law (C.C. Art. 3143) provides that to determine whether a thing given in pledge
belonged to the debtor, reference must be made to the time when the pawn was made.
Proposed law clarifies that a contract by which a person purports to pledge a thing that is
susceptible of encumbrance by security interest does not create a pledge under this Title, but
may create a security interest in the thing.
Present law (C.C. Art. 3144) provides that when the debtor pledges a thing not owned and
then subsequently acquires ownership of thing pledged, his ownership relates back to the
time of the contract and the pledge is good.
Proposed law provides that a pledge is an accessory to the obligation that it secures.
Present law (C.C. Art. 3145) provides that one may pledge another's property so long as it
is with the express or tacit consent of the owner.
Proposed law provides that a pledge gives the pledgee the right to be satisfied from the thing
pledged and its fruits in preference to unsecured creditors of the pledgor.
Present law (C.C. Art. 3146) provides that the tacit consent of the owner must be inferred
from circumstances so strong as to leave no doubt of the owner's intention.
Proposed law provides that a pledge may be given to secure the performance of any lawful
obligation.
Present law (C.C. Art. 3147) provides that as long as the owner of the thing pledged refrains SB NO. 89
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from claiming it, the debtor cannot seek to have it restored until his debt has been
discharged.
Proposed law provides a new rule that is similar to the rule for contracts of mortgage
wherein a pledge that secures an obligation other than the payment of money secures the
claim of the pledgee for the damages he may suffer from the breach of the obligation.
Present law (C.C. Art. 3148) provides that the pledge of a thing by fiduciaries requires
authorization in the manner prescribed by law.
Proposed law provides that a person may pledge his property to secure an obligation of
another person.
Present law (C.C. Art. 3149) provides that a mandatary cannot give a thing in pledge unless
he has express power to do so or the principal gives his consent.
Proposed law provides the formal requirements of a contract of pledge.
Present law (C.C. Art. 3150) provides that pledges by cities or other corporations can only
be given in pledge according to their acts of incorporation.
Proposed law provides a new rule, which is similar to a similar rule for contracts of
mortgage, that a written contract of pledge need not be signed by the pledgee because his
acceptance is presumed.
Present law (C.C. Art. 3151) was repealed by Acts 1980, No. 150.
Proposed law provides that a contract of pledge may be established only by a person having
the power to alienate the thing pledged.
Present law (C.C. Art. 3152) provides that it is essential that the creditor be put in possession
of the thing pledged and that he receive actual delivery.
Proposed law provides that a pledge given over a thing that the pledgor does not own is
established when the thing is acquired by the pledgor and the other requirements for the
establishment of the pledge have been satisfied.
Present law (C.C. Art. 3153) provides that delivery is only necessary for corporeal things
pledged.
Proposed law provides that a pledge is without effect as to third persons unless it has become
effective between the parties and is established by written contract.
Present law (C.C. Art. 3154) provides that every corporeal thing susceptible of alienation can
be pawned, even money.
Proposed law provides for the requirements that must be satisfied for a pledge of the lessor's
rights in the lease of an immovable and its rents to have effect against third persons.
Present law (C.C. Art. 3155) provides that incorporeal movables, such as credits, can be
pawned.
Proposed law provides that if the thing pledged is another person's obligation not arising
under the lease of an immovable, the pledge is effective against third persons only from the
time that the obligor has actual knowledge of the pledge or has been given notice of it.
Present law (C.C. Art. 3156) provides that when a debtor wishes to pawn a claim on another
person, he must make a transfer of it in the act of pledge and deliver to the creditor to whom SB NO. 89
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it is transferred the note or instrument that provides its existence.
Proposed law provides that the pledgee is not obligated to return the pledged thing until all
secured obligations have been extinguished.
Present law (C.C. Art. 3157) provides that pawn invests the creditor with the right of having
his debt satisfied by privilege in preference to other creditors out of the thing pledged.
Proposed law provides that the contract of pledge is indivisible.
Present law (C.C. Art. 3158) provides for the formalities and contents of a pledge and the
requirements for pledge of promissory notes and other written obligation to be effective
against third persons.
Proposed law provides a new rule wherein if agreed in a written contract of pledge of a
movable upon failure of performance of the secured obligation, the pledgee may dispose of
the thing pledged.
Present law (C.C. Art. 3159) provides for the necessary formalities for an act of pledge in
favor of banks to be effective.
Proposed law provides that the pledgee is entitled to receive the fruits of the thing pledged,
to retain it as security, and to apply it to the secured obligation.
 
Present law (C.C. Art. 3160) was repealed by Acts 1988, No. 243.
Proposed law provides that the pledgee may apply collections from the third person's
obligation to the secured obligation even if the secured obligation has not yet matured.
Present law (C.C. Art. 3161) was repealed by Acts 1900, No. 157.
Proposed law provides the notice that is required when performance is to be made by an
obligor of a pledged obligation and what performance of that obligation accomplishes.
Present law (C.C. Art. 3162) provides that if thing pledged was a corporeal movable or
evidence of a credit or other instrument under private signature the privilege does not subsist
on the pledge unless the thing is actually put and remains in the possession of the creditor
or agree-upon third person.
Proposed law provides a new rule wherein the obligor may assert against the pledgee any
defense arising out of the transaction that gave rise to the pledged obligation, or assert any
other defense that arises against the pledgor before the obligor has been given written notice
of the pledge.
Present law (C.C. Art. 3163) provides that when several things have been pawned, the owner
cannot retake one of the things unless the whole debt is satisfied.
Proposed law provides a new rule wherein a clause prohibiting pledge is without effect.
Present law (C.C. Art. 3164) provides that creditors in possession of the pledge enjoy a right
of retention until the whole debt is paid.
Proposed law provides that parties to a contract from which a pledged obligation arises can
agree to modify or terminate the contract or substitute a new contract, and if made in good
faith is effective against the pledgee without his consent.
Present law (C.C. Art. 3165) provides the rights of a pledgee upon debtor's default and the
procedure to enforce those rights. SB NO. 89
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words in boldface type and underscored are additions.
Proposed law provides that upon the modification of a contract from which a pledged
obligation arises, the substitution of a new contract encumbers the corresponding rights of
the pledgor.
Present law (C.C. Art. 3166) provides that until the debtor is divested of his property, he
remains the proprietor of the pledge.
Proposed law provides that the pledgor and pledgee may agree that a modification or
termination of the contract from which the pledged obligation of a third person arises or a
new contract is substituted is a default by the pledgor.
Present law (C.C. Art. 3167) provides that the creditor is responsible for loss or decay of the
pledge that is the result of his fault; the debtor is responsible to the creditor for necessary
expenses incurred for the preservation of the thing pledged.
Proposed law provides that the pledgee is not bound for the pledgor's obligations.
Present law (C.C. Art. 3168) provides that the fruits of the thing pledged are part of it so they
remain in the hands of the creditor; but the creditor must give an account of them to the
debtor or deduct them from the amount due him.
Proposed law provides the requirements for a contract establishing a pledge of the lessor's
rights in the lease of an immovable and its rents.
Present law (C.C. Art. 3169) provides for the imputation of interest earned by credit that is
pledged.
Proposed law provides that the pledge of the lessor's rights in the lease of an immovable and
its rents is without effect as to third persons unless the contract establishing the pledge is
recorded in the manner prescribed by law, nevertheless, the pledge is effective against the
lessee from the time that he is given written notice of the pledge.
Present law (C.C. Art. 3170) provides that the creditor can enforce the pledgee's right to
enforce payment of credit pledged but when received, he must apply it to the payment of the
debt due and any excess given to the pledgor.
Proposed law provides that a pledge of the lessor's rights in the lease of an immovable and
its rents may be established in an act of mortgage of the immovable.
Present law (C.C. Art. 3171) provides that the pawn cannot be divided between the heirs of
the debtor or creditor.
Proposed law provides that a pledge can be established over all or part of the leases of an
immovable, even those not yet in existence, and that it can be made effective against third
persons.
Present law (C.C. Art. 3172) provides that if the proceeds of the sale exceed the debt, the
surplus shall be given to the owner; if there is a deficit, the creditor can claim the balance
from the debtor's other property.
Proposed law provides that the owner of land or holder of a mineral servitude can pledge
bonuses, delay rentals, royalties, and shut-in payments by express provision in a contract
establishing a pledge.
Present law (C.C. Art. 3173) provides that debtor taking pledge without the creditor's
consent commits a sort of theft.
Proposed law provides under what circumstances a pledgee shall account to other pledgees SB NO. 89
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for rent collected.
Present law (C.C. Art. 3174) provides that a creditor who has been deceived on the substance
or quality of the thing pledged can demand another thing or immediate payment.
Proposed law provides that a pledge of the lessor's rights in the lease of an immovable and
its rents does not entitle the pledgee to cause the rights of the lessor to be sold by judicial
process, any clause to the contrary is absolutely null.
Present law (C.C. Art. 3175) provides that the creditor cannot acquire the thing through
acquisitive prescription.
Proposed law provides that in all matters not provided for in Chapter 2 of this Title, the
pledge of the lessor's rights in the lease of an immovable and its rents is governed by the
provisions of the first Chapter of this Title.
Present law (C.C. Art. 3176) provides that the antichresis shall be written; the creditor
acquires the right of reaping the fruits the immovable produces so long as he annually
deducts their proceeds from the interest and then from the principal of the debt.
Proposed law repeals this provision.
Present law (C.C. Art. 3177) provides that the creditor must pay the taxes, annual charges,
and repairs for the property, unless agreed otherwise.
Proposed law repeals this provision.
Present law (C.C. Art. 3178) provides that before full payment the debtor cannot claim the
enjoyment of the immovable given in pledge; however, the creditor can compel the debtor
to retake the enjoyment of the immovable.
Proposed law repeals this provision.
Present law (C.C. Art. 3179) provides that the creditor does not become owner of the
pledged immovable upon failure of payment at a stated time; any clause to the contrary is
null.
Proposed law repeals this provision.
Present law (C.C. Art. 3180) provides that an agreement that fruits or revenues be
compensated with interest can be performed in any way not prohibited by law.
Proposed law repeals this provision.
Present law (C.C. Art. 3181) provides that every provision on antichresis cannot prejudice
the rights that a third person may have on the immovable; the creditor in possession of the
immovable cannot have any right of preference to other creditors.
Proposed law repeals this provision.
Present law (C.C. Art. 3182) relative to privileges, provides that the debtor has general
liability.
Proposed law repeals this provision.
Present law (C.C. Art. 3183) relative to privileges, provides that the property of the debtor
is the common pledge of his creditors and the proceeds of its sale must be distributed among
them ratable unless otherwise there exist some lawful causes of preference. SB NO. 89
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Proposed law repeals this provision.
Present law (C.C. Art. 3184) relative to privilege, provides that privilege and mortgages are
lawful causes of preference.
Proposed law repeals this provision.
Present law (C.C. Art. 3346) relative to recordation, provides for the place of recordation and
the duty of the recorder relative to an instrument creating, establishing, or relating to a
mortgage or privilege over an immovable.
Proposed law provides the place where the instrument creating, establishing, or relating to
a mortgage or privilege over an immovable, or the pledge of the lessor's rights in the lease
of an immovable and its rents must be recorded and the duty of the recorder.
Present law (C.C. Art. 3354) relative to recordation, provides the applicability of Chapter
2 of Title XXII-A of Book III of the Civil Code.
Proposed law provides that the provisions of Chapter 2 of Title XXII-A of Book III of the
Civil Code apply to mortgages and privileges encumbering immovables and to pledges of
the lessor's rights in the lease of an immovable and its rents.
Present law (C.C. Art. 3355) provides that mortgages or privileges affecting property in
several parishes may be executed in multiple originals for recordation in each of the several
parishes; a certified copy of an instrument that recorded in the records of a parish need only
describe property that is within the parish where it is filed.
Proposed law retains present law but adds pledges to this provision.
Present law (C.C. Art. 3356) provides for the transfers, amendments, and releases of an
obligation secured by a mortgage.
Proposed law retains present law but adds pledges to this provision.
 
Present law (C.C. Art. 3357) provides that the effect of recordation of an instrument creating
a mortgage or evidencing a privilege ceases ten years after the date of the instrument. 
Proposed law retains present law but adds pledges to this provision.
Present law (C.C. Art. 3358) provides that the duration of recordation of an instrument
creating a mortgage or evidencing a vendor's privilege matures nine years or more after the
date of the instrument, the effect of recordation ceases six years after the latest maturity date
described in the instrument.
Proposed law retains present law but adds pledges to this provision.
Present law (C.C. Art. 3359) provides that the effect of recordation of a judgment creating
a judicial mortgage ceases ten years after the date of the judgment.
Proposed law retains present law but clarifies it with new Comments.
Present law (C.C. Art. 3360) provides for the duration of recordation of a mortgage given
by a tutor, curator, or succession representative.
Proposed law retains present law.
Present law (C.C. Art. 3361) provides that if prior to the cessation of the effect of
recordation, an instrument is recorded that amends a recorded mortgage or privilege then the SB NO. 89
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effect of recordation is determined by reference to the maturity of the obligation last
becoming due as amended.
Proposed law retains present law but adds pledges to this provision.
Present law (C.C. Art. 3362) provides for the method of reinscribing a recorded instrument
that has created a mortgage or evidenced a vendor's privilege by recording a signed written
notice of reinscription. 
Proposed law retains present law but adds pledges to this provision. 
Present law (C.C. Art. 3363) provides that the method of reinscribing provided in the
Chapter is exclusive.
Proposed law retains present law but adds pledges to this provision.
Present law (C.C. Art. 3364) provides that the effect of a timely recorded notice of
reinscription continues for ten years from the date the notice is recorded.
Proposed law retains present law but clarifies it with a Comment.
Present law (C.C. Art. 3365) provides that if the notice of reinscription was recorded after
the effect of recordation has ceased, the effects of recordation continue but only for ten years
from the time the notice of reinscription was recorded.
Proposed law retains present law with some technical clarification to the text, adds pledges
to this provision, and removes some of the text of the accompanying Comments. 
Present law (C.C. Art. 3366) provides for the form and consent for the cancellation upon
request of a mortgage or privilege by the recorder of mortgages.
Proposed law retains present law but adds pledges to this provision.
Present law (C.C. Art. 3367) provides that if the effect of recordation ceases for lack of
reinscription, the recorder upon receipt of a written signed application shall cancel the
recordation of the mortgage or privilege.
Proposed law retains present law but adds pledges to this provision.
Present law (C.C. Art. 3368) provides for the cancellation of a prescribed judicial mortgage.
Proposed law clarifies the law by providing that both a timely reinscription and a timely suit
for revival are necessary for a judicial mortgage to continue to have effect.
Present law (R.S. 9:4401) provides for conditional or collateral assignment of leases or rents.
Proposed law provides that any obligation may be secured by a pledge of the rights of a
lessor or sublessor in the lease or sublease of an immovable and its rents.
Present law (R.S. 9:4402) there is no present law.
Proposed law provides the right of the pledgee to cash proceeds of rent.
Present law (R.S. 9:4403) there is no present law.
Proposed law provides the transitional filing rules for assignments of leases and rents
recorded prior to January 1, 2015. SB NO. 89
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Present law (R.S. 9:5386) provides for mortgages including collateral assignments and the
pledge of certain incorporeal rights.
Proposed law clarifies the law by providing that a mortgage of an immovable may contain
a pledge of the mortgagor's rights under policies of insurance covering the immovable and
the procedure detailing how to pledge a mortgagor's right to insurance.
Present law (R.S. 10:9-102) provides for the definition of "Account" for Chapter 9 of Title
10 of the Louisiana Revised Statutes of 1950.
Proposed law provides a new definition of "Account" for Chapter 9 of Title 10 of the
Louisiana Revised Statutes of 1950.
Proposed law repeals Civil Code Articles 3176, 3177, 3178, 3179, 3180, 3181, 3182, 3183,
and 3184.
Proposed law authorizes the Louisiana State Law Institute to add Comments for Civil Code
Articles 3359 and 3364.
Proposed law authorizes the Louisiana State Law Institute to amend or to provide headings
in the Civil Code and the Louisiana Revised Statutes of 1950.
Effective January 1, 2015.
(Amends Title XX of Book III of the Civil Code, consisting of C.C. Arts. 3133 through
3140, C.C. Arts. 3346, 3354, 3355, 3356, 3357, 3358, 3361, 3362, 3363, 3365, 3366, 3367,
and 3368, the heading of Part IV of Chapter 1 of Code Title XX-A of Code Book III of Title
9 of the Louisiana Revised Statutes of 1950, R.S. 9:4401 and 5386, and R.S. 10:9-102(a)(2);
adds Title XX-A of Book III of the Civil Code to consist of C.C. Arts. 3141 through 3175,
R.S. 9:4402 and 4403; repeals C.C. Arts. 3176, 3177, 3178, 3179, 3180, 3181, 3182, 3183,
and 3184).
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Judiciary A to the
original bill
1. Amends proposed law CC 3140 relative to nullity of agreement of forfeiture
to provide exception for a clause expressly permitted by law.