CC 3158 - Formalities and contents of pledge; requirements for pledge of promissory notes and other written obligations - Louisiana Statutes

Art. 3158. Formalities and contents of pledge; requirements for pledge of promissory notes and other written obligations

A. But this privilege shall take place against third persons only in case the pledge is proved by some written instrument, in which shall be stated the amount of the debt intended to be secured thereby, and the species and nature of the thing given in pledge; or the description of the thing pledged may be contained in a list or statement annexed to the instrument of pledge and giving its number, weight, or descriptive marks.

B.(1) When a debtor wishes to pledge promissory notes, bills of exchange, bills of lading, stocks, bonds, policies of life insurance, or written obligations of any kind, he shall deliver to the creditor the notes, bills of exchange, bills of lading, stocks, bonds, policies of life insurance, or other written obligations, so pledged, and such pledge so made, except as hereinafter provided with regard to life insurance policies, shall without further formalities be valid as well against third persons as against the pledgor thereof, if made in good faith.

(2)(a) All pledges may be made by private writing of any kind if only the intention to pledge be shown in writing, but all pledges, except of a life insurance policy in favor of the insurer, must be accompanied by actual delivery.

(b) The pledge of a life insurance policy must also be evidenced by a written assignment thereof as security to the pledgee and by delivery of the pledge or assignment to the insurer and, unless the beneficiary thereof may be changed upon the sole request of the insured, or unless pledge or assignment without the consent of the beneficiary be specifically provided for in the policy, must be accompanied by the consent of any named beneficiary who is not the insured or his estate.

C.(1) Whenever a pledge of any instrument or item of the kind listed in this Article is made or has been made to secure a particular loan or debt, or to secure advances to be made up to a certain amount, and, if so desired or provided, to secure any other obligations or liabilities of the pledgor or any other person, to the pledgee, or its successor, then existing or thereafter arising, up to the limit of the pledge, such as may be included in a cross-collateralization clause, and the pledged instrument or item remains and has remained in the hands of the pledgee or its successor, the instrument or item may remain in pledge to the pledgee or its successor, or without withdrawal from the hands of the pledgee or its successor, be repledged to the pledgee or its successor to secure at any time any renewal or renewals of the original loan or any part thereof or any new or additional loans, even though the original loan has been reduced or paid, up to the total limit which it was agreed should be secured by the pledge, and, if so desired or provided, to secure any other obligations or liabilities of the pledgor or any other person to the pledgee or its successor, then existing or thereafter arising, up to the limit of the pledge, without any added notification or other formality, and the pledge shall be valid as well against third persons as against the pledgor thereof, if made in good faith; and such renewals, additional loans and advances or other obligations or liabilities shall be secured by the collateral to the same extent as if they came into existence when the instrument or item was originally pledged and the pledge was made to secure them.

(2) Such cross-collateralization clauses include but are not limited to pledges securing obligations of more than one person; pledges securing more than one obligation or future obligations; or any combination of these, whether such obligations are direct or indirect, absolute or contingent, liquidated or unliquidated, or otherwise. Such clauses are not and never have been against the public policy of Louisiana.

D.(1) The assignment or transfer of the principal obligation does not: extinguish the pledge; constitute a new pledge or issuance; or affect the retroactive effect given by this Article for obligations to the original pledgee or its successor. In all cases, if the pledge at the time of its delivery, issuance, or reissuance was intended to secure obligations that may arise in the future, the pledge relates back to the time of delivery, issuance, or reissuance if and when such future obligations are incurred, as long as the pledgee, the pledgee's agents, or the pledgee's successors have maintained possession of the pledged item.

(2) Such future obligations include but are not limited to:

(a) Lines of credit;

(b) Situations where monies have been advanced, paid in whole or in part, one or more times, and readvanced pursuant to one or more obligations that the pledge was given to secure; or

(c) Situations in which the pledgor or any other persons could not have required the pledgee or its successors to advance funds under one or more obligations that the pledge was given to secure.

E. The delivery of property on deposit in a warehouse, cotton press, or on storage with a third person, or represented by a bill of lading, shall pass to the pledgee by the mere delivery of the warehouse receipt, cotton press receipt, bill of lading, or storage receipt, showing the number, quantity or weight of the thing pledged; and such pledge so made, without further formalities, shall be valid as well against third persons as against the pledger thereof, if made in good faith. Such receipts shall be valid and binding in the order of time in which they are issued for the number, quantity, or weight of the things pledged, if there should not be enough to meet all receipts so issued.

F. Nothing herein contained shall be construed to repeal any part of Title 9, Sections 4301 to 4382, both inclusive of the Louisiana Revised Statutes of 1950.

Amended by Acts 1900, No. 157, §1; Acts 1952, No. 290, §1; Acts 1989, No. 137, §17, eff. June 22, 1989.