Security interests that do not amount to mortgages and transfers of unsecured monetary claims are governed by specific statutory mechanisms.
1. Charges (Section 100)
Where immovable property of one person is, by act of parties or operation of law, made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a Charge on the property.
| Mortgage | Charge |
|---|---|
| Involves the transfer of an interest in specific immovable property. | Does not transfer any interest; merely creates a right of payment out of the property. |
| Can only be created by the voluntary act of the parties (contract). | Can be created either by act of parties or by operation of law (e.g., statutory charge for unpaid taxes). |
| Right to foreclosure is available in specific kinds of mortgages. | Foreclosure is never available; remedy is strictly a sale through court. |
2. Actionable Claims (Section 130)
An actionable claim is a claim to any unsecured debt, or to any beneficial interest in movable property not in the possession of the claimant, which the Civil Courts recognize as affording grounds for relief.
- Examples: Arrears of rent, claim for unpaid purchase money, book debts, or claim under an insurance policy. (Does not include secured debts like mortgages or pledges).
- Transfer Procedure: Must be effected only by an instrument in writing signed by the transferor. Upon execution, all rights and remedies vest in the transferee immediately, regardless of notice to the debtor.