1 Dankner v. Natkes (1955) 11 P.M. 137; Lantziano v. Rabel (1959) 39 P.E. 319; Custodian v. Ovid (1962) (IV) 16 P.D. 2649. Although the authorized translation from Hebrew for “Security Interests Law” is “Pledges Law”, the author does not use that term in the present article. Since the term “pledge” generally refers to one particular type of charge (the possessory charge) he considers its use here might be misleading. For a general review and the full text of the Law see Weisman, J., “Principles of the Pledges Law, 1967” (1969) 4 Is.L.R. 417Google Scholar; (1967) 21 L.S.I. 44.

2 Amsterdamer v. Moskoiwitz (1972) (I) 26 P.D. 793, 804 per H. Cohn J.

3 Rudden, and Mosely, , An Outline of the Law of Mortgages (London, 1967) 99Google Scholar.

4 Osborne, G. E., Handbook on the Law of Mortgages (2nd ed., 1970) 626.Google Scholar

5 Riesenfeld, , “Security Interests in Land in Modern Civil Law” included in: Yiannopoulos, (Ed.), Civil Law in the Modern World (Louisiana State University Press, 1965) 155.Google Scholar

6 Sec. 13(b) reads: “The debtor or any person whose right is likely to be affected by the giving or realization of the security may redeem it by fulfilling the obligation before the time set for its fulfilment; in the case of an interest-bearing monetary obligation, the debtor or such person shall also pay the creditor the interest which would have become due to him up to the time for the fulfilment of the obligation or up to six months after payment, whichever is the earlier date. This subsection shall not apply where the security agreement otherwise provides or where the security agreement otherwise provides or where the collateral is given as security for a series of bonds”.

7 The right of redemption after maturity is discussed below.

8 See sec. 13(b), supra n. 6.

9 See sec. 42, quoted above, and explanatory notes accompanying sec. 44 of the original draft (dated 1970).

10 See Security Interests Law, 1967, sec. 6; Land Law, 1969, sec. 85(a) (23 L.S.I. 575).

11 Craies on Statute Law (London, 6th ed., 1963) 376 et seq. See also: Security Interests Law, 1967, sec. 2(a); Contracts (General Part) Law, 1973, sec. 61(a).

12 Security Interests Law, 1967, sec. 13(a).

13 Land Law, 1969, sec. 88. For a critical analysis of the Land Law see Weisman, J. (1970) 5 Is.L.R. 379CrossRefGoogle Scholar and for the full text of the Law see ibid., at p. 292.

14 Land Law, 1969, sec. 85(a).

15 The market overt rule, in sec. 5 of the Security Interests Law, 1967, provides that: “Where movable property pledged while in the possession of the pledgor has been deposited as specified in sec. 4(2) or the pledge thereof has been registered as specified in sec. 4(3), the pledge shall be effective in all respects even if the pledgor was not the owner of the property or was not entitled to pledge it, provided that the creditor acted in good faith and the property came into the hands of the pledgor with the sanction of the owner thereof or with the sanction of a person entitled to have possession thereof”.

16 Security Interests Law, 1967, sec. 13(c).

17 Companies Ordinance, 1929, sec. 2. Geichman v. Bank Hapoalim (1960) 22 P.M. 382.

18 The limitation period does not bar realization of collateral. The Limitation Law, 1958, sec. 20. Quare whether a debtor can compel his creditor to realize his collateral and not cause undue delay relying on sec. 39 of the Contracts (General Part) Law, 1973, which provides that “an obligation or right arising out of a contract shall be fulfilled or exercised in customary manner and in good faith”. Cf. Restatement of the Law of Security (1941) 146.

19 The debtor may not be able to sell the collateral subject to the security interest, if prohibited to do so by the security agreement. Land Law, 1969, sec. 85(a); The Shipping (Vessels) Law, 1960, sec. 70 (14 L.S.L. 75).

20 Uniform Commercial Code, 1972, secs. 9–505; Restatement, supra n. 18 at § 52; Law of Property Act, 1925, sec. 91(1).

21 Security Interests Law, 1967, sec. 16(b).

22 Compare: Uniform Commercial Code, 1972, sec. 9–506; Restatement, supra n. 18, at pp. 152–53.

23 Realization is normally achieved by sale of the collateral. The purchaser acquires the collateral free of any charge (Sale Law, 1968, sec. 34A). Before the purchase money is paid over to the creditor the security interest shifts from the original collateral to the purchase money (Sale Law, 1968, sec. 34B). Secs. 34A, 34B, were added to the Sale Law, 1968 in 1971 (25 L.S.I. 178).

24 By a decree of the Minister of Finance the period for redemption can be further extended.

25 The hope that the statutory right of redemption will increase the price mortgaged property reaches upon realization was not always fulfilled. See Osborne, op. cit. supra n. 4 at pp. 17, 18.

26 In exceptional cases redemption would be allowed even after this stage. See supra text at n. 24.

27 It is in this context that the American experience is relevant. See supra n. 25.

28 Waring v. London and Manchester Assurance Co. [1935] 1 Ch. 310, 317–318; Uniform Commercial Code, 1972, sec. 9–506.

29 Amsterdamer v. Moskowitz (1972) (I) 26 P.D. 793; Suday v. Uda (1972) (II) 26 P.D. 282; Aspaka v. Lipman, F.H. (1973) (I) 27 P.D. 349. In the Suday case, the question arose indirectly, but on that, see in Lipman's case, at pp. 352–53.

30 Per Kahan, J. in Amsterdamer, op. cit. supra n. 29 at p. 800.

31 Id. at p. 799.

32 Execution Rules, 1968, r. 42(d).

33 R. 43(b), 46.

34 Security Interests Law, 1967, sec. 17(3).

35 We shall discuss below the question who, apart from the debtor, has a right to redeem.

36 Aspaka v. Lipman, supra n. 29 at p. 350.

37 Amsterdamer, supra n. 29 at p. 800.

38 Amsterdamer, supra n. 29 at p. 798, and compare with the minority opinion on p. 802. See also Gilmore, G., Security Interests in Personal Property (1965) vol. 2, p. 1256.Google Scholar

39 The authorized translation of this law from the Hebrew is entitled “Prescription Law” (12 L.S.I. 129).

40 See sec. 13(a) of the Security Interests Law, 1967, quoted above.

41 Ibid.

42 Limitation of Actions Law, 1958, sec. 6.

43 Security Interests Law, 1967, sec. 13.

44 Ibid.

45 Contracts (General Part) Law, 1973, sec. 40. For English translation of Law see (1974) 9 Is.L.R. 282.

46 Compare sec. 13(a) with sec. 13(b) and see supra, text at n. 12.

47 Sec. 14.

48 Casner, A. J. (ed.), American Law of Property, (1952) vol. 4, p. 347Google Scholaret seq.; Osborne, supra n. 4 at p. 565 et seq.; and compare with French Civil Code, art. 1251; German Civil Code art. 1249; Italian Civil Code, art. 1203. Examples in Israel Law of subrogation for the benefit of people who had a duty to fufil an obligation can be found in Contracts (General Part) Law, 1973, sec. 58 and in the Guarantee Law (1967) sec. 12 (21 L.S.I. 41).

49 Security Interests Law, sec. 1.

50 Contracts (General Part) Law, 1973, sec. 40.

51 Sec. 13.

52 Cf. Gilmore, supra n. 38, vol. 2, p. 1220.

53 Sec. 13.

54 Sec. 24.

55 Such a security could be valid under sec. 5 of the Security Interests Law.

56 One can think of cases in which the creation of a security interest by itself is sufficient to affect third parties. Such is, for example the case of a security created by a co-owner over his share. The mere creation of the security affects the other co-owners with regard to their right to claim partition of the co-ownership (Security Interests Law, 1967, sec. 11). However, a case like this would have also been covered by the provision that those who might be affected by the realization of the security have a right to redeem (See Security Interests Law, 1967, sec. 11 (a)(2). The version which appeared in the Bill would therefore have been sufficient for such a case.

57 Sec. 14 provides: “Where a security has been redeemed under sec. 13 by a person other than the debtor, the person redeeming is entitled to resort to and be recouped by the debtor in like manner as a guarantor who has fulfilled his guarantee, and if the person redeeming is not the owner of the property, the securityshall be available to him for securing that right”.

58 Contracts (General Part) Law, 1973, sec. 40, which was discussed above, supra text at n. 45.

59 Transfer of Obligation Law, 1969, sec. 1 (23 L.S.I. 277).

60 Security Interests Law, 1967, sec. 13(a). With regard to mortgages in land, the situation is the same also during the period prior to maturity (Land Law, 1969, sec. 88).

61 Cf. American Law of Property, supra n. 48 at p. 348; Osborne, supra n. 4 at p. 568; Mazeaud, , Leçons de Droit Civil (Paris, 2nd ed., 1962), vol. 2, p. 766.Google Scholar

62 See above the discussion as to when redemption is possible in such cases.

63 E.g., Uniform Commercial Code, 1972, sec. 9–506; Osborne, supra n. 4. at p. 602; American Law of Property, supra n. 48 at p. 381 et seq.

64 Land Regulations (Administration and Registration), 1969, rr. 63, 64, refer to redemption by deposit also in such cases. It is arguable that this part of the regulation is ultra vires.

65 Compare Credit Banks Ordinance, 1922, sec. 5(2).

66 This conclusion finds support in the fact that the Security Interests Law was enacted approximately six years before the Contracts (General Part) Law, which provided for prior notice in case of early fulfilment of a contract.

67 In view of the present situation of the money lending market, in which there is a great shortage of money available for loans and little difficulty in finding new borrowers, the Controller of Banks issued a recommendation to the banks to limit their claims for interest to the maximum period of six weeks.

68 Compare a solution along this line in the Credit Banks Ordinance, 1922, sec. 5(2).

69 Cf. Rudden and Mosely, supra n. 3, at p. 100; Osborne, supra n. 4 at p. 626. In certain circumstances it would be possible to utilize the provision in the Contracts (Remedies for Breach of Contract) Law, 1970, sec. 11(a) (25 L.S.I. 13) which authorizes the courts to grant compensation beyond the payment of interest, in case of a breach of contract to pay a sum of money.

70 Secs. 17(3), 19. Such cases are limited to a collateral which was deposited with a bank.

71 When realization is carried out by the Execution Office (which is not obligatory, see secs. 16(b), 17(4)), it is subject to the procedure laid down by the Execution Rules, 1968. These regulations require “publication” of the execution (rr. 41, 53), but such publication cannot, practically, take the place of individual notices, such as are required when realization is effected by a bank, under Security Interests Law, sec. 19(b).

72 Compare the recent development in the United States where the tendency was to curb the requirements for notices. Uniform Commercial Code, 1972, Official Text with Comments, sec. 9–505(2), p. 808–10; Levenberg, C. U., “Comments on Certain Proposed Amendments to Article 9 of the Uniform Commercial Code” (1971) 56 Minn.L.R. 117, 130–33Google Scholar; Homer Kripke, “Mr. Levenberg's Criticism of the Final Report of the Article 9 and Review Committee: A Reply”, id., 805, at pp. 813–14.