Personal Property Security Act

Case Overview and Summary

Summary of Republic Act No. 11057 (Personal Property Security Act)

Definitions and Scope (Sections 3-4)
- Defines key terms like security interest, collateral, control agreement, grantor, secured creditor, etc.
- Applies to transactions securing obligations with movable collateral, except aircraft and ships.

Creation of Security Interest (Sections 5-10)
- Security interest created by security agreement in writing (Section 6).
- Describes requirements for sufficient description of collateral (Section 7).
- Extends security interest to identifiable/traceable proceeds and commingled funds (Section 8).
- Continuity of security interest despite disposition of collateral (Section 9).
- Grantor's right to create security interest in accounts receivable cannot be limited (Section 10).

Perfection of Security Interest (Sections 11-16)
- Perfection by registration of notice, possession, or control (Sections 11-12).
- Perfection by control for deposit accounts and investment property (Section 13).
- Continuous perfection in proceeds (Section 14).
- Perfection maintained despite change in means (Section 15).
- Assignment of perfected security interest (Section 16).

Priority of Security Interest (Sections 17-25)
- Priority based on time of registration or perfection (Section 17).
- Priority rules for perfection by control (Section 18).
- Priority for instruments and negotiable documents perfected by possession (Section 19).
- Priority and right of retention by operation of law (Section 20).
- Transferee exceptions for buyers in ordinary course (Section 21).
- Effect of grantor's insolvency on priority (Section 22).
- Priority rules for purchase money security interests (Section 23).
- Priority for livestock securing food/medicine obligations (Section 24).
- Continuity of security interest in fixtures, accessions, and commingled goods (Section 25).

Registration - Registry (Sections 26-44)
- Establishment of electronic Registry by LRA (Section 26).
- Public record and searchability of notices (Section 27).
- Requirements for sufficient notice (Section 28).
- One notice for multiple security agreements (Section 29).
- Effectiveness, amendment, continuation, and termination of notices (Sections 30-34).
- Registry duties and search capabilities (Sections 35-36).
- Disclosure of information by secured creditor (Section 37).
- Fees set by regulation (Section 38).
- Grantor's right to demand amendment/termination of notice (Sections 39-43).
- Privacy interference by registration/search (Section 44).

Enforcement of Security Interest (Sections 45-54)
- Right of redemption by paying secured obligation (Section 45).
- Higher-ranking secured creditor's right to take over enforcement (Section 46).
- Expedited repossession of collateral (Section 47).
- Recovery in special cases like accounts receivable and deposit accounts (Section 48).
- Right to dispose of collateral after default (Section 49).
- Commercial reasonableness required for disposition (Section 50).
- Notification of disposition (Section 51).
- Application of disposition proceeds (Section 52).
- Rights of buyers and third parties (Section 53).
- Retention of collateral by secured creditor (Section 54).

Transitional Provisions (Sections 55-59)
- Interpretation of transitional provisions (Section 55).
- Creation of prior interests under prior law (Section 56).
- Perfection of prior interests during transitional period (Section 57).
- Priority of prior interests (Section 58).
- Enforcement of prior interests (Section 59).

Congressional Oversight and Miscellaneous Provisions (Sections 60-68)
- Congressional oversight and periodic review (Section 60).
- Interpretation in case of conflict with other laws (Section 61).
- Implementing rules and regulations within 6 months (Section 62).
- Rules on enforcement procedure (Section 63).
- Sourcing of funds from LRA revenues (Section 64).
- Separability clause (Section 65).
- Repealing inconsistent laws like Chattel Mortgage Law (Section 66).
- Effectivity 15 days after publication (Section 67).
- Implementation conditioned on Registry being operational (Section 68).