Ruminations on the Louisiana Law of Pledge

• Author: Michael H. Rubin
• Position: Mr. Rubin is a member of the multi-state firm of McGlinchey Stafford. He has served as an Adjunct Professor at the Paul M. Hebert Law Center for more than three decades and is a past president of the American College of Real Estate Lawyers, the Bar Association of the United States Fifth Circuit Court of Appeals, and the Louisiana Bar ...
• Pages: 697-739

Ruminations on the Louisiana Law of Pledge

Michael H. Rubin*

On January 1, 2015, Act 281 of the 2014 Louisiana legislative

session took effect.1 Drafted by the Louisiana State Law Institute,2

the Act amends, revises, and reworks not only the Civil Code

articles concerning the rules on pledge as a form of real security, but

also the articles setting forth the basic principles of personal liability

and security for loans. It also deals, in part, with judicial mortgages.

Practitioners will find that, although many basic pledge concepts

remain the same, there are a number of new rules, new procedures,

and, in some cases, new prohibitions.

Copyright 2015, by MICHAEL H. RUB IN.

* Mr. Rubin is a member of the multi-state firm of McGlinchey Sta fford.

He has served as an Adjunct Professor at the Paul M. Hebert Law Center for

more than three decades and is a past president of the American College of Real

Estate Lawyers, the Bar Association of the United States Fifth Circuit Court of

Appeals, and the Louisiana Bar Association. He is a Life Member of the

American Law Institute, a Commissioner on the Uniform Law Commission, and

was a member of the Louisiana State Law Institute Committee that proposed the

2014 revision to the pledge articles. His latest legal book is LOUISIANA

SECURITY DEVICES: A PRÉCIS (LexisNexis). His debut novel, published in the

Fall of 2014, is the legal thriller, THE COTTONCREST CURSE, published by the

LSU Press.

The author extends his thanks to L. David Cromwell, Christopher Odinet,

Dian Tooley-Knoblett, and Gabriel A. Cro wson for their many helpful

comments and suggestions about this Article and the examp les contained in it.

Their advice is sincerely appreciated, and any errors that remain are purely those

of the author.

1. Act No. 281, 2014 La. Acts. The Louisiana Law Review deviates from

The Bluebook for Louisiana source material when citing to session laws in the

Acts of the Louisiana Legislature. In addition to providing the year and page

number for the particular session law, the Louisiana Law Review also provides

the Act number. The Acts of the Louisiana Legislature can be found on

HeinOnline (under “Session Laws Library”) or in the Paul M. Hebert Law

Center Library.

2. The Louisiana State Law Institute was created by the Legislature in

1938 and serves as “an official advisory law revision commission, law reform

agency and legal research agency.” LA. REV. STAT. ANN. § 24:201 (2007). Note,

references to Louisiana Revised Statutes contained within are to the West

Louisiana Revised Statutes Annotated. The date appended to each statutory

reference is the publication date of each section. See also Act No. 166, 1938 La.

Acts 430. The Law Institute works not only on the “continuous revision,

clarification and co-ordination of the Louisiana Revised Statutes,” but also on

revisions to the Louisiana Civil Code. See LA. REV. STAT. ANN. § 24:251

(2007).

698 LOUISIANA LAW REVIEW [Vol. 75

I. THE BACKGROUND OF THE LOUISIANA LAW OF PLEDGE

There are numerous historical antecedents for the Louisiana

law of pledge, including an Egyptian tradition of pledging a

mummy to secure a loan,3 Greek4 and Roman5 law, and the Bible.6

Although there is an ongoing scholarly debate about whether

Louisiana owes more of its civilian tradition7 to France or Spain,8

there is no dispute that, at the time the entire Civil Code was

revised in 1870 following the Civil War,9 only 19 of its more than

3. See Valerie Seals Meiners, Comment, Formal Requirements Of Pledge

Under Louisiana Civil Code Article 3158 and Related Articles, 48 LA. L. REV.

129, 129 (1987).

4. See John H. Wigmore, The Pledge-Idea: A Study in Comparative Legal

Ideas, 10 HARV. L. REV. 321, 322–23 (1897). This article notes that

[I]n at least four important bodies of law and language the primitive

word for the ideas of “pledge,” “bet” (or “forfeit”), and “promise,” was

substantially the same. In the Scandi navian we have vaed, ved. In the

Germanic we have wetti, wette, wedde, vadi-um, guadi-um, and (by

sliding the di into ji) wage, guage, gage. In the Latin we have pignus in

the first two meanings, and from the same root () pango, pag,

pactum, in the third meaning. I n the Greek, the verb-stem ø (put) has

all three meanings.

Id. (citations omitted). See also John H. Wigmore, The Pledge-Idea: A Study in

Comparative Legal Ideas. III, 11 HARV. L. REV. 18 (1897).

5. See Donald E. Phillipson, Development of the Roman Law of Debt

Security, 20 STAN. L. REV. 1230, 1237 (1968) (“Although pignus had apparently

arisen before the fifth century B.C., it was not included in the Twelve Tables.

Pignus was a form of security far less formal and restrictive than fiducia cum

creditore, because it did not involve a transfer of civil ownership.”); Cf. Shael

Herman, The Contribution of Roman Law to the Jurisprudence of Antebellum

Louisiana, 56 LA. L. REV. 257 (1995).

6. See, e.g., Genesis 38:18 (The Soncino Chumash) (“And he said, ‘What

pledge shall I give thee?’ And she said, ‘Thy signet, and thy bracelets, and thy

staff that is in thy hand.’”); Deuteronomy 24:6 (The Soncino Chumash) (“No

man shall take the mill or the upper millstone to pledge, for he taketh a man’s

life to pledge.”).

7. For a discussion of Louisiana’s civilian tradition, see Alvin B. Rubin,

Hazards of a Civilian Venturer in a Federal Court: Travel and Travail on the

Erie Railroad, 48 LA. L. REV. 1369 (1988).

8. See Vernon V. P almer, The French Connection and the Spanish

Perception: Historical Debates and Contemporary Evaluation of French

Influence on Louisiana Civil Law, 63 LA. L. REV. 1067 (2003); see also Alain

Levasseur & Vicenç Feliú, The English Fox in the Louisiana Civil Law

Chausse-Trappe: Civil Law Concepts in the English Language; Comparativists

Beware!, 69 LA. L. REV. 715 (2009).

9. For an overview of the r evisions to the Civil Code, see A.N.

Yiannopoulos, The Civil Codes of Louisiana, in LA. CIVIL CODE, at XLI (Vol. 1

2014). For a more detailed discussion of this issue, see A.N. Yiannopoulos, Two

Critical Years in the Life of the Louisiana Civil Code: 1870 and 1913, 53 LA. L.

REV. 5 (1992) [Yiannopoulos, Two Critical Years].

2015] RUMINATIONS ON PLEDGE 699

40 articles on pledge were either direct translations of provisions of

the Code Napoléon or dealt with the same subject matter.10

Nonetheless, because the previous Louisiana Civil Code of 1825

was written in both French and English (with French being the

original language and English being the translation),11 and because

French law at the time influenced the redactors of the 1825 Civil

Code,12 many Louisiana courts have looked to the works of French

commentators to aid in understanding the pledge provisions.13

Once the 1870 Civil Code articles on pledge were enacted, they

remained almost completely unchanged until the 2014 legislative

session.14

10. See LA. STATE LAW INST., 3 LOU ISIANA LEGAL ARCHIVES: COMPILED

EDITIONS OF THE CIV IL CODES OF LOUISIAN A, pt. 2 (1942) (containing a word-

for-word comparison of the 1804 Code Napoleon, and the Louisiana Civil Codes

of 1808, 1825, and 1870). The following 1870 Civil Code articles are the subject

of Act 281 and are traceable directly back to the Code Napoleon: 3133–3135,

3141, 3157, 3160, 3162, 3164–3167, 3169, 3171, and 3176–3181.

11. Id.

12. See Yiannopoulos, The Civil Codes of Louisiana, supra note 9, at

XLVII, XLIX (“The redactors of the 1825 Code followed the French Civil Code

closely and relied heavily on French doctrine and jurisprudence. . . . The 1808

and 1825 Louisiana Civil Codes were drawn up in French and translated into

English. . . . [C]ourts taking cogniza nce of the fact that the French text was the

original version, and being aware of the poor quality of the [English] translation,

developed the view that the French text was controlling.”); see also

Yiannopoulos, Two Critical Years, supra note 9, at 22.

13. See, e.g., Scott v. Corkern, 91 So. 2d 569, 573 n.4 (La. 1956) (“The

reason for this rule is founded on the writings of the French commentators,

particularly Marcade, Troplong and Duranton who voice the opinion that it is

not the contract of pledge that interrupts prescription but the continuous

possession of the thing pledged with the debtor’s consent to such possession that

serves as a constant acknowledgment of the debt.” (citation omitted)); see also

Casey v. Cavaroc, 96 U.S. 467, 484 (1877); Citizens’ Bank v. Janin, 15 So. 471,

473 (La. 1894) (citing Troplong and Dalloz).

14. Of the 48 articles on pledge contained in the 1870 Civil Code (articles

3133–3181), 42 remained unchanged until the 2014 legislation. Two of the 1870

articles were repealed (articles 3160 and 3161). Four other articles were

amended between 1870 and 2014. The first is article 3133.1, amended by Act

No. 137, § 16, 1989 La. Acts 527, effective September 1, 1989, and Act No.

1079, §7, 1990 La. Acts 2735, effective September 1, 1990, to deal with

Louisiana’s adoption of Louisiana Revised Statutes section 10:9-101,

Louisiana’s version of UCC article 9. The second is article 3158, amended by

Act No. 157, § 1, 1900 La. Acts 239, Act No. 290, § 1, 1952 La. Acts 489, and

Act No. 137, § 17, 1989 La. Acts 527, which had the effect of reworking the

statute concerning the requirements of the pledge of movables and the effects of

pledge on third parties. Third, article 3159, amended by Act No. 157, §2, 1900

La. Acts 239 dealt with pledges in favor of banks and last, article 3165,

amended by Act No. 9, 1872 La. Acts 36, concerning the rights of a pledgee

upon the debtor’s default. See Ralph Slovenko, Of Pledge, 33 TUL. L. REV. 59