Short answer. Yes. Article 2114 requires that all bids at the public auction of a pledged thing offer to pay the purchase price at once — in cash, immediately. If the pledgee accepts any other kind of bid, the law treats him, as far as the pledgor is concerned, as having already received the purchase price.
What the law says
All bids at the public auction shall offer to pay the purchase price at once.
Civil Code, Article 2114 — Cash Bids. Read the full provision →
What the law says
If any other bid is accepted, the pledgee is deemed to have been received the purchase price, as far as the pledgor or owner is concerned.
Civil Code, Article 2114 — Cash Bids. Read the full provision →
The cash-at-once rule
The article sets a firm condition on how a pledge auction is conducted. All bids at the public auction shall offer to pay the purchase price at once. A bid, to count, must be an offer of immediate payment — cash on the spot, not payment on terms, on credit, or by later instalments. The auction of a pledged thing is a device to convert the security into money that satisfies the debt, and the rule keeps that process clean and immediate. A prospective buyer who cannot pay there and then is not making a qualifying bid, whatever figure he names. Immediacy is part of what makes the bid acceptable at all.
Why immediate cash is required
The insistence on immediate cash protects the pledgor, whose property is being sold. If bids on credit were allowed, the pledgee could accept a promise to pay rather than actual money, and the pledgor's item would be gone while the proceeds that are supposed to pay down his debt remained merely owed by the buyer. That would expose the pledgor to the buyer's solvency and to delay in a sale conducted for the pledgor's account. Requiring payment at once ensures that when the thing is sold, real money is produced against which the debt is measured, and the pledgor is not left chasing a paper price he can neither see nor use.
The consequence of accepting any other bid
The article backs the rule with a sharp consequence for the pledgee who ignores it. If any other bid is accepted, the pledgee is deemed to have been received the purchase price, as far as the pledgor or owner is concerned. In other words, if the pledgee accepts a bid that is not an offer of immediate payment, he is treated — as against the pledgor — as though he had actually collected the full price in cash. The debt is credited with that amount regardless of whether the pledgee ever really gets paid. The risk of a non-cash bid falls entirely on the pledgee who chose to accept it, not on the owner of the thing.
What this means for the pledgor
For a pledgor, this is a real safeguard against a mishandled sale. If your pledged item was auctioned and the pledgee accepted a bid on terms rather than cash, you are entitled to have your debt credited with that purchase price as if it had been paid in full, whatever the pledgee actually recovered from the buyer. So it is worth knowing how the sale was conducted and on what terms the winning bid was accepted. Where the accepted bid was not a cash-at-once bid, the accepted price is treated as received against your obligation, which may reduce or even extinguish what you still owe.