Title II: Security interests

Where the same asset is the subject of several successive non-possessory pledges, the ranking of the creditors is governed by the order of their registration. Where an asset given as a non-possessory pledge is subsequently the subject of a dispossessory pledge, the preferential right of the earlier pledgee may be set up against the later pledgee where it is duly published notwithstanding the latter’s right of retention.

Where a pledge with dispossession relates to fungible things, the creditor must keep them separate from things of the same kind which belong to him. Failing this, the pledgor may rely on the provisions of the first paragraph of Article 2344. If the agreement releases the creditor from this obligation, he acquires ownership of the things pledged on condition that he returns the same quantity of equivalent things. In the…

Where the non-possessory pledge relates to fungible things, the pledgor may, unless otherwise agreed, dispose of them on condition that he replaces them with the same quantity of equivalent things.

Where the settlor has the option of disposing of the pledged assets under the conditions provided for in Articles 2341 or 2342, the goods acquired in replacement are automatically included in the basis of the pledge.

The pledgor must reimburse the creditor or the agreed third party for useful or necessary expenses incurred by the latter for the preservation of the pledge.

Where the pledge is constituted with dispossession, the pledgor may claim the return of the pledged property, without prejudice to damages, if the creditor or the agreed third party fails to fulfil its obligation to preserve the pledge. Where the pledge is constituted without dispossession, the creditor may invoke the acceleration of the secured debt or seek an additional pledge if the pledgor fails to fulfil its obligation to preserve…

Unless otherwise agreed, where the holder of the pledged asset is the creditor of the secured debt, he shall receive the fruits of that asset and set them off against the interest or, failing that, against the principal of the debt.

If the secured debt is not paid, the creditor may pursue the sale of the pledged asset. This sale shall take place in accordance with the procedures set out in the Code of Civil Enforcement Procedures, without the pledge agreement being able to derogate therefrom. Where the pledge is constituted as security for a professional debt, the creditor may arrange for the public sale of the pledged property by a…

The creditor may also obtain a court order that the property shall remain in payment to him. Where the value of the property exceeds the amount of the secured debt, the sum equal to the difference shall be paid to the grantor or, if there are other pledgees, shall be consigned.

It may be agreed, at the time the pledge is created or subsequently, that if the secured obligation is not performed, the creditor will become the owner of the pledged asset. The value of the asset is determined on the day of the transfer by an expert appointed amicably or judicially, in the absence of an official quotation of the asset on a trading platform within the meaning of the…