Interpretation of Transitional Provisions.
SEC. 55. Interpretation of Transitional Provisions. - For this Chapter, unless the context otherwise requires:
(a) Existing secured creditor - means a secured creditor with a prior security interest;
(b) Prior law - means any law that existed or in force before the effectivity of this Act;
(c) Prior interest - means a security interest created or provided for by an agreement or other transaction that was made or entered into before the effectivity of this Act and that had not been terminated before the effectivity of this Act, but excludes a security interest that is renewed or extended by a security agreement or other transaction made or entered into on or after the effectivity of this Act; and
(d) Transitional period - means the period from the date of effectivity of this Act until the date when the Registry has been established and operational.
Creation of Prior Interest.
SEC. 56. Creation of Prior Interest. -
(a) Creation of prior interest shall be determined by prior law.
(b) A prior interest remains effective between the parties notwithstanding its creation did not comply with the creation of this Act.
Perfection of Prior Interest.
SEC. 57. Perfection of Prior Interest. —
(a) A prior interest that was perfected under prior law continues to be perfected under this Act until the earlier of:
(1) The time the prior interest would cease to be perfected under prior law; and
(2) The expiration of the transitional period.
(b) If the perfection requirements of this Act are satisfied before the perfection of a prior interest ceases in accordance with subsection (a) of this section., the prior interest continues to be perfected under this Act from the time when it was perfected under the prior law.
(c) If the perfection requirements of this Act are not satisfied before the perfection of a prior interest ceases in accordance with subsection (a) of this section, the prior interest, is perfected only from the time it is perfected under this Act.
(d) A written agreement between a grantor and a secured creditor creating a prior interest is sufficient to constitute authorization by the grantor of the registration of a notice covering assets described in that agreement under this Act.
(e) If a prior interest referred to in subsection (b) of this section was perfected by the registration of a notice under prior law, the time of registration under the prior law shall be the time to be used for purposes of applying the priority rules of this Act.
Priority of Prior Interest.
SEC. 58. Priority of Prior Interest. -
(a) The priority of a prior interest as against the rights of a competing claimant is determined by the prior law if:
(1) The security interest and the rights of all competing claimant arose before the effectivity of this Act; and
(2) The priority status of these rights has not changed since the effectivity of this Act.
(b) For purposes of subsection (a)(2) of this section, the priority status of a prior interest has changed only if:
(1) It was perfected when this Act took effect, but ceased to be perfected; or
(2) It was not perfected under prior law when this Act took effect, and was only perfected under this Act.
Enforcement of Prior Interest.
SEC. 59. Enforcement of Prior Interest. -
(a) If any step or action has been taken to enforce a prior interest before the effectivity of this Act. enforcement may continue under prior law or may proceed under this Act.
(b) Subject to subsection (a) of this section, prior law shall apply to a matter that is the subject of proceedings before a court before the effectivity of this Act.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
