1. A commercial mortgage shall be effective against a debtor or third parties only where the possession of the mortgaged item passes from the mortgagor to the mortgagee or to a third party appointed by both contracting parties and remains in the possession of either such party receiving it until the lapse of the mortgage; or unless it is placed under joint possession in such manner as to prevent the mortgagor to dispose thereof without the knowledge of the creditor. 2. The mortgagee or the third party shall be deemed as having possession of the mortgaged property if it is placed at his disposal in such a manner as will lead others to believe that the mortgaged property has come into his custody; or if he receives a deed representing the mortgaged property vesting unto its holder the sole right to take delivery of the same. 3. The transfer of possession of rights shall be effected by the delivery of the instruments establishing them; and where the instrument is lodged with a third party, the delivery of the deposit receipt shall be deemed as the delivery of the instrument itself; provided that the instrument is described in the receipt accurately and in detail and provided that the depositary accepts possession thereof for the account of the mortgagee. In such case, the depositary shall be considered as having waived every right he had to retain the instrument for his own account for a reason existing prior to the mortgage, unless he had reserved such right when he accepted to hold possession of the instrument for the account of the mortgagee.
Interpretation and application must be checked against the official text and current version.