RDCSB89 447 4121
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Peacock SB No. 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.
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. RDCSB89 447 4121
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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
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. RDCSB89 447 4121
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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
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.
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.
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. RDCSB89 447 4121
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Present law (C.C. Art. 3162) provides that if the 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.
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. RDCSB89 447 4121
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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
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. RDCSB89 447 4121
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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.
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 RDCSB89 447 4121
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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
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. RDCSB89 447 4121
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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.
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.
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Civil Law and Procedure
to the reengrossed bill.
1. Made technical corrections to the title of the bill.