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RA 11057 vs. Repealed Laws

R.A. No. 11057 harmonized the rules on pledges and mortgages of movable collateral. It simplified the formalities for creation, perfection/registration, and enforcement of security interests. Now, a signed written contract is enough to create a security interest, and perfection can be done through registration, possession, or control of the collateral. Priority rules determine priority of interests in the same collateral. Importantly, the law removed the distinction between a pledgee and mortgagee's right to recover deficiency, covering all secured transactions of movable collateral except interests in aircraft and ships.

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Sage Rainelle Lingatong
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316 views2 pages

RA 11057 vs. Repealed Laws

R.A. No. 11057 harmonized the rules on pledges and mortgages of movable collateral. It simplified the formalities for creation, perfection/registration, and enforcement of security interests. Now, a signed written contract is enough to create a security interest, and perfection can be done through registration, possession, or control of the collateral. Priority rules determine priority of interests in the same collateral. Importantly, the law removed the distinction between a pledgee and mortgagee's right to recover deficiency, covering all secured transactions of movable collateral except interests in aircraft and ships.

Uploaded by

Sage Rainelle Lingatong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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R.A. No.

11057 REPEALED LAWS PLEDGE MORTGAGE


Movable collaterals, now Prior to RA No. 11057, pledge or In pledge, in mortgage,
include among others: mortgage of a movable delivery of the registration
deposit accounts, collateral would differ in thing pledged is where the
accounts receivable, formalities as to creation, necessary for its property is
negotiable instruments, perfection/registration, and validity while in situated is
security certificate or enforcement. Under the new mortgage, necessary to bind
electronic securities, law, the secured creditor, delivery is not third persons.
inventory, equipment, whether a mortgagee or necessary.
consumer goods, pledgee, shall account to the
livestock, and other grantor for any surplus, and, In pledge, the
agricultural products, unless otherwise agreed, the agreement must
vehicles, and even debtor is liable for any be in a public
intellectual property deficiency. instrument
rights. containing the
description of the
thing pledged
and the date
thereof to bind
third persons;
Now, rules on formalities Submitted the foreclosure of the mortgagor is
as to creation, the pledge liable to the
perfection/registration, completely mortgagee if the
and enforcement have extinguishes the proceeds of the
been simplified and loan obligation foreclosure sale
harmonized. A signed and any are not enough
written contract is stipulation to satisfy the
enough to create a allowing the loan.
security interest. pledgee to
Perfection of such recover any
security interest may be deficiency is null
by registration of a notice and void.
with the registry,
possession of the
collateral by the secured
creditor, or control of
investment property and
deposit account. Also, a
set of priority rules had
been provided for to
determine the priority of
interests and liens in the
same collateral. More
importantly, the long-
standing distinction
between a pledge and
chattel mortgage on the
right of the lender to
recover deficiency has
been removed.
covers all transactions of
any form that secure an
obligation with movable
collateral, except
interests in aircrafts
which will be subject to
Republic Act No. 9497, or
the “Civil Aviation
Authority Act of 2008”,
and interests in ships
subject to Presidential
Decree No. 1521, or the
“Ship Mortgage Decree of
1978”.

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