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Summary Chapter 18: Real Security: Pledge and Mortgage
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18 Real Security: Pledge andMortgage
A creditor who acquires a creditor’s right against a depbtor has a claim against the debtor in his personal
capacity only.
The basis of the creditors right may be a contract between the creditor and debtor, or a delict commited
against the creditor, or the unjustied enrichment of the debtor at the cost of the creditor.
The amount owing by the debtor to the creditor i.t.o the creditors right is called the principal debt.
To ensure that the debtor preforms i.t.o the creditors right 1, the creditor can require that the debtor
provide security i.r.o the performance due to the creditor.
SEE EXAMPLE ON PAGE 291
CATEGORIES OF SECURITY
SECURITY
PERSONAL security REAL security
Pledg
e
Suretyship Mortgage
Cession Security granted by
operaton of law.
Tacit hypothecs
Judicial pledge
Statutory security rights
n
Personal Security Liens
PERSONAL SECURITY implies that a creditor, on the basis of a performance due to him as a result of a
creditors right against a debtor (the principal debt), also acquires a creditors right against another
person as security for the payment of the principal debt.
Suretyships is a good example of personal security.
i.t.o a contract of surety between the creditor and a 3 rd party, the p3rd party undertakes to perform the
debtors obligaton i.t.o the principal debt to the creditor if the debt should fail to do so.
The creditor therefore acquires a creditors right against the 3 rd party2 as security for the principal debt.
Surety is a specialised part of the law of contract.
1
Pays the principal debt.
2
Personal security.
, A.Real Security
REAL SECURITY the creditor acquires a limited real right in the property of the debtor as security for the
payment of the principal debt by the debtor to the creditor, untl payment of the principal debt.
Categories of Real Security:
(i) Pledge – moveable property
(ii) Mortgage – immovables
(iii) Cession in securitatem debit
(iv) Security granted by operaton of law i.r.o property of the debtor to the creditor.
a. Tacit hypothecs of the landlord and credit grantor
b. Judicial pledge
c. Statutory security rights
d. Liens
General Principals apply i.r.o REAL security:
(a) Real security is enforceable only against the property of the debtor as long as the debtor owes the
creditor an amount i.t.o a valid principal debt.3
If the principal debt lapses or is paid in full, the real security is terminated automatcally.
The real security is therefore accessory to the principal debt – Thienhaus, NO v Metje & Ziegler
(b) the creditor obtains a limited real right to the property of the debtor which is enforceable against
the debtor personally and all third partes.
Therefore a double legal relatonship exists:
i. A creditors right of the creditor against the debtor as a result of the principal debt between
them;
ii. A limited real right of the creditor to the moveable or immovable property of the debtor as
security for the principal debt.
(c) If the debtor doesn’t setle the principal debt as agreed, the creditor has a preferental claim to the
proceeds if the property is sold in executon or insolvency.
(d) The real security exists i.r.o the principal debt and all interest, except if otherwise agreed upon by
the debtor and creditor.
(e) The creditor does not usually acquire any enttlements of use and enjoyment i.t.o the property, and
may hold it only for the purpose of the security.
(f) Movable property must be returned to the debtor if the principal debt is paid.
(g) Partes may agree by means of a pactum antchreseos that the creditor may enjoy the fruits of the
encumbered property in lieu of the interest on the principal debt.
(h) Property of the debtor is usually used as security for the principal debt, but it is also possible to use
the property of a surety as security i.t.o a contract or a mortgage of surety.
3
Creditors right.
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