TITLE XVIII – OF PLEDGE
Art. 1. The pledge is a contract by which one debtor gives something to his creditor as a security for his debt.
Art. 2. There are two kinds of pledge;
And the antichresis.
Art. 3. A thing is said to be pawned when a moveable thing is given as security, and the antichresis when the security given consists in immoveables or slaves.
Art. 4. One may pawn every moveable which is into commerce.
Art. 5. The pawn invests the creditor with the right of causing his debt to be satisfied out of the moveable thing which is given to him as a pledge by privilege and preference to the other creditors.
Art. 6. This privilege shall take place against third persons only in case the pawn is proved by an act made either in a public form or under private signature, provided that in this last case it should be duly registered in the office of a notary public at a time not suspicious, provided also that whatever may be the form of the act, it mentions the amount of the debt as well as the species and nature of the thing given in pledge or has a statement annexed thereto of its number, weight and measure.
Art. 7. The privilege mentioned in the preceding article, is established with respect to incorporeal moveable things, as moveable credits, only by an authentic act or by an act under private signature recorded as aforesaid and notified to the debtor of the credits given in pledge.
Art. 8. In no case this privilege subsists on the pledge except when the thing has been actually put and remained in the possession of the creditor or of a third person agreed on by the party.
Art. 9. The pledge may be given by a third person for another.
Art. 10. When several things have been pawned, the owner cannot retake one of these, without satisfying the whole debt, though he offers to pay a certain amount of it in proportion to the thing which he wishes to get.
Art. 11. The creditor who is in possession of the pledge cannot be compelled to return it, but when he has received the whole payment of the principal as well as the interest and costs.
Art. 12. The creditor cannot, in case of failure of payment, dispose of the pledge, saving to him the right of applying to the judge to order that the thing shall remain to him in payment for as much as it shall be estimated by two appraisers or shall be sold at public auction.
Any clause which should authorise the creditor to appropriate the pledge to himself or dispose thereof without the aforesaid formalities shall be null.
Art. 13. Until the debtor be divested from its property, if it is the case, he remains the proprietor of the pledge which is in the hands of the creditor only as a deposit to secure his privilege on it.
Art. 14. The creditor is answerable agreeably to the rules which have been established under the title of the contracts and conventional obligations in general, of the loss or decay of the pledge which may happen through his negligence.
On his part, the debtor is bound to pay to the creditor all the useful and necessary expences which the latter has made for the preservation of the pledge.
Art. 15. The fruits of the pledge are deemed to make a part of it and therefore they remain like the pledge in the hands of the creditor, but he cannot appropriate them to his own use and he is bound on the contrary to give an account of them to the debtor or to deduct them from what may be due to him.
Art. 16. If it is a credit which has been given on pledge and if this credit brings interest, the creditor shall deduct this interest from those which may be due to him, but if the debt for the security of which the claim has been given brings no interest by itself, the deduction shall be made on the principal of the debt.
Art. 17. The pawn cannot be divided notwithstanding the divisibility of the debt, between the heirs of the debtor and those of the creditor.
The debtor’s heir who has paid his share of the debt, cannot demand the restitution of his share in the pledge so long as the debt is not fully satisfied.
And respectively the heir of the creditor who has received his share of the debt, cannot return the pledge to the prejudice of those of his co-heirs who are not satisfied.
Art. 18. If the proceeds of the sale exceed the debt, the surplus shall be restored to the proprietor, if on the contrary they are not sufficient to satisfy it, the creditor is entitled to claim the balance out of the debtor’s other property.
Art. 19. The debtor who takes away the pledge without the creditor’s consent, commits a sort of theft.
Art. 20. When the creditor has been deceived on the substance or quality of the thing given in pledge, he may claim another thing in its stead or demand immediately his payment, though the debtor be solvable.
Art. 21. The creditor cannot acquire the pledge by prescription, whatever may be the time of his possession.
Art. 22. The antichresis shall be reduced into writing.
The creditor acquires by this contract, the right of reaping the fruits or other revenues of the immoveables or slaves to him given in pledge, on condition of deducting annually their proceeds from the interest, if any are due to him, and afterwards from the principal of his debt.
Art. 23. The creditor is bound, unless the contrary be agreed on, to pay the taxes as well as the annual charges of the property which have been given to him in pledge.
He is likewise bound, under penalty of damages, to provide for the keeping and useful and necessary repairs of the pledged estate, saving himself the right of levying on their fruits and revenues all the expences respecting said charges.
He ought also to provide for the expences respecting the maintenance of the slaves who have been given to him in pledge.
Art. 24. The detor cannot before the full payment of the debt, claim the enjoyment of the immoveables or slaves which he has given in pledge.
But the creditor who wishes to free himself from the obligations mentioned in the preceding articles, may always, unless he has renounced this right, compel the debtor to retake the enjoyment of his immoveable or slaves.
Art. 25. The creditor does not become proprietor of the pledged immoveable or slaves by failure of payment at the stated time; any clause on the contrary is null and in this case it is only lawful for him to sue his debtor before the court in order to obtain a sentence against him and to cause the objects which have been put in his hands in pledge, to be seized and sold.
Art. 26. When the parties have agreed that the fruits or revenues shall be compensated with the interest either in whole or only to a certain amount this covenant is performed as every other which is not prohibited by law.
Art. 27. Every provision which is contained in the present title with respect to the antichresis, cannot prejudice the rights which third persons may have on the immoveable or on the slaves given in pledge by way of antichresis, such as a privilege or mortgage.
The creditor who is in possession by way of antichresis, cannot have any right of preference on the other creditors at the difference of the pawn, but if he has, at any other title some privilege or mortgage lawfully established or preserved thereon, he will come in his rank as every other creditor.