Pledge Definition A contract by virtue of which the debtor delivers to the creditor or the third person a movable (Art

2094), a document evidencing incorporeal rights (Art. 2095) for the purpose of securing the fulfilment of a principal obligation with the understanding the time the obligation is fulfilled, the thing delivered shall be returned with all its fruits and accessions.

Guaranty A person called a guarantor binds himself to the creditor to fulfil the obligation of a principal debtor in case the latter should fail to do so (Art. 2047).

Chattel Mortgage A contract by virtue of which, personal property is recorded in the Chattel Mortgage Registry as a security for the performance of an obligation.

Characteristic

Accessory, subsidiary and conditional, unilateral Purpose Security for Security the fulfilment of an obligation Parties to the Pledgor Guarantor contract Pledgee Principal

Real, accessory, unilateral, subsidiary

Accessory, formal, unilateral Security

Real Mortgage A contract whereby the debtor secures to the creditor the fulfilment of a principal obligation, specially subjecting to such security immovable property or real rights over immovable property which obligation shall be satisfied with the proceeds of the sale or rights in case the said obligation is not complied with at the time stipulated. Real, subsidiary, accessory, unilateral Security

Suretyship Exists when one person (principal or obligor) has undertaken an obligation and another person (surety) is also under a direct and primary obligation or other duty to a third person (obligee), who is entitled to but one performanc e, and as between them the two are bound, the one rather than the other should perform.

Antichresis The creditor acquires the right to receive the fruits of an immovable of his debtor, with an obligation to apply them to the payment of the interest, if owing, and thereafter to the principal of his credit (Art. 2132).

Solidary

Accessory, formal

Security

Security

Mortgagee Mortgagor

Mortgagee Mortgagor

Surety/princ ipal

Debtor Creditor

Exception: third persons who are not parties to the principal obligation, may serve the latter by pledging or mortgaging their own property

and creditor. Exception: third person (Art. 1257) whoever pays in behalf of the debtor without knowledge or against the will of the latter, cannot compel the creditor or subrogate him in his rights such as those arising from a mortgage, guaranty or penalty (Art. 1236) whoever pays for another may demand from the debtor what he has paid, except that if he paid without knowledge or against the will of the debtor he can recover only in so far as the

Creditor

payment has been beneficial to the debtor. Subject Matter 1. All movables which are within the commerce of man. Provided they are susceptible of possession (art.2094) Fruits: the creditor shall compensate what she receives with those who owe him, or in so far as the amount may exceed that which is due, he shall apply it to the principal. Unless, there is an stipulation to the contrary, the pledge shall extend to the interest and earnings of the right pledge (art. 2102). 2. Incorporeal rights (Art 2095). of Does not require any form of contract, except in case to affect third persons, it Movables (Art 2124), Shares of stock, interest in business, machinery treated by the parties as personal property subsequentl y installed on a leased land, vessels, motor vehicles, house of mixed materials, house intended to be demolished, house built on rented land, house of strong materials Immovables , alienable rights in accordance with the laws, imposed upon immovables (Art 2124), fruits, natural accessions, improvemen ts, growing fruits, and the rents or income not yet received when the oblidation becomes due, amount of indemnity granted or owing to the proprietor (Art 2127). Immovable (Art 2132), fruits creditor acquires the right to receive the fruits

Form contract

The law does not specify any form of contract

Must be registered to the Chattel mortgage registry (Art 2140)

Must be No specified recorded in form of the registry contract of property, provided if the instrument

Must be in writng, otherwise the contract is void.

must be public instrument (2096)

in

Transfer of Ownership is ownership retained by the pledgor Transfer of The thing possession pledged is placed in the possession of creditor, or of third person by common agreement (Art. 2093) Preservation The creditor and shall take care expenses of the thing pledged with the diligence of a good father of a family; he has the right to the reimbursement of the expenses made for its preservation, and is liable for its loss or deterioration (Art 2099) Appropriation The creditor cannot appropriate the things given, any stipulation to the contrary is

Ownership is retained by the mortgagor Remains in the possession of the mortgagor

is not recorded, the mortgage was nevertheles s binding between the parties (Art2125). Ownership is retained by the mortgagor Remains in Transferred the to creditor possession of the mortgagor

Retained by the debtor

The creditor cannot appropriate the things given, any stipulation to the

The creditor cannot appropriate the things given, any stipulation to the

Creditor cannot appropriate the thing pledged but only its fruits for

void (Art 2087) Effects of the obligation when it becomes due The thing in which the pledge or mortgage consist maybe alienated for the payment of the creditor (Art 2087) Guarantor is secondarily or subsidiarily liable, he contracts to pay if by the use of due dliligence the debt cannot be paid by the principal after the creditor has exhausted all the properties of the principal debtor and after resorting to all legal remedies

contrary is void (Art 2087) The creditor may cause the mortgaged property to be foreclosed and apply the proceeds thereof to his credit

contrary is void (Art 2087) The creditor may cause the mortgaged property to be foreclosed and apply the proceeds thereof to his credit

Surety is directly, primarily and equally bound with the principal as original promisor although he possesses no direct or personal interest over the latters obligation nor does he receive any benefit there from

the payment of his credit. Does not acquire the ownership of the real estate for none payment of the debt within the period agreed upon. Creditor may petition with the court for the payment of the debt or the sale of the real property.