11.     Hypothecation of moveable assets

            (1) Where an agreement provides that this section shall apply thereto, the movable assets of a farmer, or any stipulated item or class of such assets shall, on the signature of the certificate of indebtedness, and subject to the provisions of section 5(2), be hypothecated to the bank as fully and effectively as if they had been hypothecated in terms of a notarial bond and, on insolvency, the claim of the bank in respect of the proceeds of such movable property shall be a preferent claim which shall be preferent to the claim of the holder of any notarial bond, general or special, executed at any time subsequent to the signature of the certificate of indebtedness.

            (2)        Where any movable assets hypothecated to the bank in accordance with the provisions of subsection (1) are attached and sold in execution of the order of any court in respect both of a debt for which the property is a security under this Act and of any other debt the bank shall be entitled to be paid in full out of the proceeds of the property before any unsecured creditor of the farmer receives payment.

12.     Special provision where livestock hypothecated

            (1)        Where any flock or herd of any livestock forms part of the movable assets of a farmer which are hypothecated to the bank in accordance with the provisions of section 11 the farmer shall not slaughter, sell, donate, loan, hypothecate, encumber, or alienate such flock or herd or any portion thereof in such a manner as to effect materially the security of the bank without the prior permission of the bank.

            (2)        Nothing in this section shall prevent the sale of livestock to a buyer or under an authority given under section 7(5).

            (3)        A farmer who contravenes the provisions of this section shall be guilty of an offence and liable to a fine not exceeding P200.

13.     Marking of hypothecated property

            (1) An agreement may provide that any movable assets which are hypothecated in accordance with the provisions of section 11 be marked by the farmer, if called upon to do so by the bank, in a manner prescribed in the agreement and that, where livestock are required to be so marked, their progeny shall be similarly marked.

            (2)        Any farmer who fails to mark his assets when called upon to do so in accordance with the provisions of subsection (1) and any person who tampers with or defaces a mark made in terms of this section shall be guilty of an offence and shall be liable to a fine not exceeding P200.

14.     Sale of hypothecated property without an order of court

            (1) An agreement may provide that the bank shall have the following rights-

     (a)     a right upon the happening of an event stipulated in the agreement as being an event authorizing the seizure of the movable assets of the farmer or of any item or class thereof, to take possession of such assets;

     (b)     where possession of any assets has been so taken a right, after an interval of five clear days, to sell the assets either by auction or, if the agreement so provides, by private treaty, and either for a lump sum payment or payment by instalments;

     (c)     an obligation, in the event of such power of sale being exercised, to apply the proceeds of sale in and towards the discharge of the debts owed to the bank by the farmer, and the costs of seizure and sale, and pay the surplus, if any, of the proceeds to the farmer.

            (2)        The bank shall endeavour to exercise its powers under this section as read with the agreement, in a manner least onerous to the farmer and, in particular, shall not seize any assets which the farmer requests the bank or its servant or agent not to seize if there are other and adequate movable assets belonging to the farmer which may be seized under the agreement in satisfaction of the debt owing to the bank.

            (3) The existence of a provision in an agreement of the nature described in subsection (1) shall be noted on the certificate of indebtedness.

            (4) Where movable assets liable to seizure under subsection (1) include crops or horticultural produce, the power to take possession of such crops or produce under that subsection shall include power to reap or gather the crops or produce.

            (5)        Any person who-

     (a)     obstructs or hinders any servant or agent of the bank seeking to enforce the rights of the bank in terms of this section;

     (b)     conceals from such servant or agent property liable to seizure in terms of this section;

     (c)     seeks to mislead such servant or agent by giving false information in connection with such property,