Comment to article 323. Preservation of the pledge in case of transfer of the right to the pledged property to another person by way of succession The Civil Code of the Republic of Kazakhstan  

The first part of paragraph 1 of the commented article applies when the right of ownership (economic management) of the pledged property passes from the pledgor to another person, that is, when there is a universal succession (for example, during inheritance, during the reorganization of a legal entity) or a singular one (for example, when donating the pledged object or selling it). If such a right to the pledged property arose from another person regardless of the rights of the pledgor (for example, as a result of the forced sale of the pledged object - see comment to art. 322 of the Civil Code), the rule established by part 1 of paragraph 1 of the commented article, cannot be applied and the right of pledge is terminated.

The retention of the right of pledge in respect of the new owner of the pledged property or the organization to which the right of economic management of this property has been transferred does not depend on whether the person who received this property knew about its encumbrance by pledge. If he did not know about it, such a circumstance may be relevant only for the relationship of this person with the mortgagor-alienator, but does not affect the right of pledge.

In case of legal succession (singular or universal), the new owner (or the person who acquired the right of economic management) automatically becomes a party to the pledge agreement, the pledgor, with all the rights and obligations arising from this. Otherwise may be stipulated by the agreement with the pledgee upon assuming the rights of the legal successor. For example, by agreement of the parties to the pledge agreement, the pledgor may pledge other property in return for the alienated one.

If the property that is the subject of the pledge has passed by way of succession (universal succession or paid or gratuitous alienation) to several persons, the pledge agreement in which the two parties participated is reformed into a pledge agreement with a plurality of pledgors. At the same time, when the pledged object is divided between several persons, a shared obligation arises (see Article 286 of the Civil Code and the commentary to it) with the responsibility of each shared legal successor of the pledgor (the pledged debtor) in proportion to the part of the pledged property transferred to him. A similar rule applies in the case of common shared ownership of the mortgaged property by legal successors.

The liability of each legal successor of the pledgor is limited by the value of the property transferred to him or part of the property belonging to him in common equity ownership, since the essence of the pledge is to ensure the fulfillment of the obligation by the value specified in the pledge agreement (see commentary to art. 299 of the Civil Code). The exception is universal succession in the case of reorganization of the pledgor, who is the debtor of the main obligation, while the liability of each legal successor of such a pledgor is determined, in addition to the value of the pledged property transferred to him, also in accordance with art. 46 of the Civil Code (see art. 46 of the Civil Code and the commentary to it).

If the pledged property, which has passed by way of succession (universal or paid or gratuitous alienation) to several persons, is indivisible, common joint ownership of the legal successors arises in respect of this property (see Articles 209, 219 of the Civil Code and the commentary thereto). In this case, a joint pledge obligation arises and each of the mortgagor's legal successors becomes a joint pledgor, which means that each of the legal successors fulfills the pledge obligation (see art. 287 of the Civil Code and the commentary thereto).

The liability of joint pledgors is limited to the value of the pledged property, which is in common joint ownership. The exception is universal succession as a result of the reorganization of the pledgor, who is the debtor of the secured principal obligation, in which, as in the case of a shared pledge obligation (see previous paragraph of the commentary), the liability of the legal successors of such a pledgor is determined, in addition to joint liability in the amount of the value of the indivisible pledged property transferred to them, also in accordance with art. 46 of the Civil Code (see art. 46 of the Civil Code and the commentary to it).  

The rules similar to the rules for the succession of indivisible pledged property also apply in the case of common joint ownership of the pledged property on grounds other than the indivisibility of the pledged object.

 Constitution Law Code Standard Decree Order Decision Resolution Lawyer Almaty Lawyer Legal service Legal advice Civil Criminal Administrative cases Disputes Defense Arbitration Law Company Kazakhstan Law Firm Court Cases 

The commentary was prepared within the framework of the scientific and practical research program of the Scientific Research Center of Private Law of the Kazakh State Law University.  

Head of the working group on the preparation of the draft Civil Code of the Republic of Kazakhstan, Corresponding Member of the Academy of Sciences of the Republic of Kazakhstan, Professor Suleimenov M.K.

Deputy head Professor Basin Yu.G.