OUTLINE – PERSONAL ROPERTY SECURITY ACT (RA 11057)

1. Objective / Purpose --- Sec.2

2. Laws repealed/ amended/ modified – Sec. 6

- Most sweeping effect is repeal of laws on conventional pledges and
chattel mortgages

3. Scope – Sec. 4

4. Definitions: Security interest (SI) - Sec. 3(j)

Grantor – Sec. 3(c)
Secured creditor - Sec. 3(i)

5. Continuity and Extent of SI – Sec. 9, 8, 3(f)

6. Creation of SI – Sec. 5

7. Nature of a Security Agreement (SA):

- consensual contract
- accessory obligation
- Real security

8. Object of SI
- Personal property / movables – Sec. 4
- Art. 416, 417 of NCC
 - movables under the PPSA
Mla Bank v. Teodoro (GR 53955; 1/13/1989)
Yau Chua v. CA (GR L-78519; 9/26/1989)
- Future property – Sec. 5(b)

9. Form – Sec. 6; Sec. 3(k); Sec.7

10. Perfection of SI – Sec. 11(a)

11. Effect of Perfection – Sec. 11(b)

12. Means of Perfection – Sec. 12

a) By Registration – Sec. 12
b) By Possession – Sec. 12
c) By Control – Sec. 12; 13; Sec. 3(b)

13. Disposition of Perfected SI

Effects: a) Continuity of SI – Sec. 9
Except if parties agree otherwise;
or transferee in GF – Sec. 21
b) Perfection in proceeds – Sec. 14; Sec. 3(f)

14. Assignment of SI – Sec. 16

15. Priority of SI – a) Sec. 17 (perfection of SI vs creation of SI)

 b) priority w/in each means of perfection

16. Enforcement of SI After Default

a) Expedited repossession – prelim process
a.1) No judicial process - Sec. 47 (a), (b)
a.2) With jud’l process - Sec. 47 (c); Sec. 63
b) Enforcement Proper
b.1) Higher-ranking secured CR – Sec. 46
b.2) Methods of enforcement:
1. Recovery of Collateral – Sec. 48
- no judicial process
Citibank v. Sabeniano (GR 156132; 10/12/2006)
2. Disposition of collateral – Sec. 49; 50
- publicly or privately
- requirement of comm’l reasonableness
- right of redemption – Sec. 45
Note: Typo error Sec. 45(b)(1) – remove “not”
3. Retention of Collateral – Sec. 54

17. Extinguishment of SI – a) When ALL secured obligs have been

Discharged AND (b) there is NO outstanding commitments to extend credit
secured by the SI.