FACC 220 Lecture Notes - Lecture 1: Hypothecation, Natural Person, Public Auction
4 Feb 2018
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If the creditors rank equals, the price is distributed proportionally to their claims, unless some of them have a legal cause of preference: prior claims and hypothecs are the only legal causes of preference. Prior claims: a claim to which the law attaches the right of the creditor to be preferred over the other creditors, even the hypothecary creditors, is a prior claim. The main specificity of a prior claim vs hypothec: 2654. 1 prior claims of municipalities and school boards for property taxes constitute a real right. Prior claims rank, according to their order among themselves, and without regard to their date, before movable or immovable hypothecs. Prior claims of the same rank come in proportion to the amount of each claim. The priority granted by law to certain claims ceases by operation of law when the obligation which is its cause is extinguished.
