Louisiana Civil Code

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TITLE XX-A – PLEDGE

CHAPTER 1 – GENERAL PROVISIONS

Art. 3141. Pledge is a real right established by contract over property of the kind described in Article 3142 to secure performance of an obligation. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3142. The only things that may be pledged are the following:

(1) A movable that is not susceptible of encumbrance by security interest.

(2) The lessor’s rights in the lease of an immovable and its rents.

(3) Things made susceptible of pledge by law. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3143. 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 be effective to create a security interest in the thing. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3144. Pledge is accessory to the obligation that it secures and may be enforced by the pledgee only to the extent that he may enforce the secured obligation. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3145. Pledge gives the pledgee the right to be satisfied from the thing pledged and its fruits in preference to unsecured creditors of the pledgor and to other persons whose rights become effective against the pledgee after the pledge has become effective as to them. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3146. A pledge may be given to secure the performance of any lawful obligation, including obligations that arise in the future. As to all obligations, present and future, secured by the pledge, notwithstanding the nature of the obligations or the date they arise, the pledge has effect between the parties from the time that the requirements for formation of the contract of pledge are satisfied and has effect as to third persons from the time that the applicable requirements of Articles 3153 through 3155 are satisfied. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3147. A pledge that secures an obligation other than one for the payment of money, such as an obligation for the performance of an act, secures the claim of the pledgee for the damages he may suffer from the breach of the obligation. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3148. A person may pledge his property to secure an obligation of another person. In such a case, the pledgor may assert against the pledgee any defense that the obligor could assert except lack of capacity or discharge in bankruptcy of the obligor. The pledgor may also assert any other defenses available to a surety. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3149. The pledge of a corporeal movable is effective between the parties only if the thing pledged has been delivered to the pledgee or a third person who has agreed to hold the thing for the benefit of the pledgee. The pledge of other things is effective between the parties only if established by written contract, but delivery is not required. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3150. A written contract of pledge need not be signed by the pledgee, whose consent is presumed and whose acceptance may be tacit. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3151. A contract of pledge may be established only by a person having the power to alienate the thing pledged. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3152. 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. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3153. A pledge is without effect as to third persons unless it has become effective between the parties and is established by written contract. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3154. The pledge of the lessor’s rights in the lease of an immovable and its rents has effect against third persons in accordance with the provisions of Chapter 2 of this Title. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3155. 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. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3156. If the thing pledged has been delivered to the pledgee or a third person for the benefit of the pledgee, the pledgee is not obligated to return it until all secured obligations have been extinguished. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3157. The contract of pledge is indivisible, notwithstanding the divisibility of the secured obligations, and the pledgor may not demand return of all or part of the thing pledged until all secured obligations have been extinguished. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3158. If agreed in a written contract of pledge of a movable, the pledgee may, upon failure of performance of the secured obligation, dispose of the thing pledged at public auction or by private sale, but he shall act reasonably in disposing of the thing and shall account to the pledgor for any proceeds of the disposition in excess of the amount needed to satisfy the secured obligation. Otherwise, the pledgee may cause the sale of the thing pledged only by having it seized and sold under judicial process. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3159. The pledgee is entitled to receive the fruits of the thing pledged and to retain them as security. He may also apply them to the secured obligation, even if not yet due. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3160. If the thing pledged is an obligation of a third person, the pledgee is entitled to enforce performance of the third person’s obligation when it becomes due and to retain as security any payment or other thing received from the third person. The pledgee may apply any money collected to the secured obligation, even if not yet due. He must account to the pledgor for any payment or other thing remaining after the secured obligation has been satisfied. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3161. A third person obligated on a pledged obligation is bound to render performance to the pledgee only from the time that the pledgor or pledgee notifies him of the pledge and directs him in writing to render performance to the pledgee. Performance that the third person renders to the pledgor before that time extinguishes the pledged obligation and is effective against the pledgee. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3162. Unless the obligor of a pledged obligation makes a contrary agreement with the pledgor or pledgee, he may assert against the pledgee any defense arising out of the transaction that gave rise to the pledged obligation. He may also assert against the pledgee any other defense that arises against the pledgor before the obligor has been given written notice of the pledge. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3163. A clause in a contract restricting the pledge of the rights of a party to payments that are or will become due under the contract, making the pledge or its enforcement a default under the contract, or providing that the other party is excused from performance or may terminate the contract on account of the pledge, is without effect. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3164. The parties to a contract from which a pledged obligation arises may agree to modify or terminate the contract or to substitute a new contract. If made in good faith, the agreement is effective against the pledgee without his consent. Nevertheless, after written notice of the pledge is given to the obligor of a pledged obligation that has been fully earned by the pledgor’s performance, an agreement modifying or extinguishing the pledged obligation is without effect against the pledgee unless made with his consent. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3165. Upon the modification of a contract from which a pledged obligation arises, or the substitution of a new contract, the pledge encumbers the corresponding rights of the pledgor under the modified or substituted contract. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3166. The pledgor and pledgee may agree that a modification or termination of the contract from which a pledged obligation of a third person arises, or the substitution of a new contract, is a default by the pledgor. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

Art. 3167. In the absence of an assumption by the pledgee, the existence of a pledge does not impose upon the pledgee liability for the pledgor’s acts or omissions, nor does it bind the pledgee to perform the pledgor’s obligations. [Acts 2014, No. 281, §1, eff. Jan. 1, 2015]

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