Book IV: Securities

The pledge is perfected by the drawing up of a writing containing the designation of the debt secured, the quantity of the goods pledged and their type or nature.

The pledge is enforceable against third parties by the publication made of it. It is also enforceable against third parties by the dispossession in the hands of the creditor or an agreed third party of the property which is the subject of it or of the document of title which, such as a bill of lading, represents it. Where the pledge has been duly published, the successors in title of…

The pledge is published by an entry in a special register, the terms of which are regulated by decree in the Conseil d’Etat. Unless it is subject to article 2342, a pledge relating to a registered land motor vehicle or trailer is published by an entry in a register kept by the administrative authority under the conditions laid down by decree in the Conseil d’Etat. The registration of such a…

The pledgor may not demand the cancellation of the registration or the return of the pledged asset until he has fully paid the secured debt in principal, interest and costs.

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…