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Credit Transactions Flashcards

1
Q

Credit Transactions
Similarities between Pledge, Real Estate Mortgage, and Chattel Morgage

  1. 3 Requisites of Contract of Pledge and Mortgage?
  2. On 9/30, D pledge cp of his father. On 10/31, father died and as a sole heir, he obtained ownership of the cp. What is the status of the contract pf pledge?
A

1:
1. To secure a FULFILLMENT OF PRINCIPAL OBLIGATION
2. Pledgor or mortgagor should be the ABSOLUTE OWNER
3. FREE DISPOSAL of their property, in the absence thereof, that they be legally authorized for the purpose

  1. Void. Since the requirement of the contract is “absolute ownership” must be complied with AT THE TIME THE COTRACT WAS ENTERED INTO
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2
Q

Credit Transactions
Similarities between Pledge, Real Estate Mortgage, and Chattel Morgage

Explain Accesory Contract

A

Cannot exist without a VALID obligation or a principal contract

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3
Q

Credit Transactions
Similarities between Pledge, Real Estate Mortgage, and Chattel Morgage

Provide Type of obligations that a Pledge/Mortgage may secure

A
  1. Pure Obligations
  2. Conditional Obligations (suspensive or resolutory)
  3. Obligations with a term (suspensive or resolutory)
  4. Natural Obligations
  5. Recissible Contracts
  6. Voidable Contracts
  7. Unenforceable Contracts
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4
Q

Credit Transactions
Similarities between Pledge, Real Estate Mortgage, and Chattel Morgage

Can secure void obligation/contracts?

A

NO

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5
Q

Credit Transactions
Similarities between Pledge, Real Estate Mortgage, and Chattel Morgage

Third Person (not parties to the principal obligation) may secure the latter by pledging or mortgaging their own property?

A

Yes. Just follow the requisites.

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6
Q

Credit Transactions
Similarities between Pledge, Real Estate Mortgage, and Chattel Morgage

Exlpain Pactum Commissorium

A

PC means Automatic Appropriation Prohibited. PC Void.

The creditor cannot appropriate the thing given by way of pledge pr mortgage, pr dispose of them.

Any stipulation to the contrary is void!

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7
Q

Credit Transactions
Similarities between Pledge, Real Estate Mortgage, and Chattel Morgage

Explain Indivisibility of Contract and its exception

A

A pledge or mortgage is indivisible even though the debt may be divided among successors in interest of the debtor of the creditor

Exception: if there being several things given in mortgage or pledge, each one of them guarantees only a determinate portion of the credit

D has 2 debts with C, 50k each. Pledge his diamond ring and gold watch. If D paid 50k, he can demand the release of the diamond or gold.

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8
Q

Credit Transactions
Pledge

2 Kinds of pledge?

A
  1. Voluntary or conventional - created by agreement of the parties
  2. Legal - created by operation of law
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9
Q

Credit Transactions
Pledge

Exlpain Delivery / real contract

A

The thing pedged must be placed in the possession on the creditor, or thrid person by common agreement

Delivery is necessary in order to constitute the contract of pledge

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10
Q

Credit Transactions
Pledge

Exlapin rules on fruits of pledged things

A

Fruits, income, dividends, or interest.

May apply to anu interest, if none, to principal obligation.

Also, like in Corporate Liquidation, the pledge shall extend to the interest and earnings of the right pledged

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11
Q

Credit Transactions
Pledge

Who is the owner of the thing pledged if not yet expropriated?

A

Debtor

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12
Q

Credit Transactions
Pledge

Other way of exthinguishment of a contract of pledge? Aside from payment of principal obligation.

A
  1. Thing pledged is returned. The pledge is Extinguished. Any stipulation to the contrary shall be void!
  2. Renunciation or Abandonment of pledge. Basta may statement in writing.
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13
Q

Credit Transactions
Pledge

  1. Explain creditors right of appropriation (auction).
  2. Does pledgor has the right to bid?
A

1:
1. If the FIRST auction id not sold, second one with same formalities shall be held

  1. If the Second auction still not sold, THE CREDITOR MAY APPROPRIATE THE THING PLEDGED!

2: Yes. But his offer shall not be valid if he is the only bidder.

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14
Q

Credit Transactions
Pledge

Explain Sale of the thing, proceeds thereof
1. Price is more than obligation including interest
2. Less than
3. Explain also if credit (pautang) is the object of pledge?

A
  1. The debtor shall not be entitled to the excess, unless it is otherwise agreed.
  2. Creditor shall not be entitled to recover the deficiency, any stipulation to the contrary shall be void.

Hence, the sale of the thing pledge shall extinguish the principal obligation, whether less or more than.

  1. If more or less yung collection, ibigay dapat ni creditor yung sobra sa debtor or still bayaran ni debtor yung kulang. Remember, wala pang foreclosure dito.
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15
Q

Credit Transactions
Pledge

Provide 3 VOID stipulations

A
  1. Pledge is not extingished by the return of the thing pledged
  2. Automatic Appropriation (pactum comissorium)
  3. Recovery of dificiency in case proceeds from the sale is less than the amount of the obligation
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16
Q

Credit Transactions
Pledge

Pahapyaw. Legal Pledge?

A

A type of of a pledge which refers to the right of a person to retain thing until he reveives payment of his claim

17
Q

Credit Transactions
Real Estate Mortgage

Object?

A
  1. Immovables
  2. Alienable rights in accordance with the laws, imposed upon immovables
18
Q

Credit Transactions
Real Estate Mortgage

3 Types?

A
  1. Conventional - created by the agreement of the parties
  2. Legal - provision of law
  3. Equitable - lacks certain formality, but the facts show the intention of the parties to charge Real Property as security for a debt is not contrary to the law
19
Q

Credit Transactions
Real Estate Mortgage

Form?

A

No form is required tp contitute a contract of real state mortgage

20
Q

Credit Transactions
Real Estate Mortgage

Explain Pactum De Non-alienado

A

The owner is allowed to alienate (sell to other party) the immovable propery mortgaged.

Stipulation prohibiting such right is called pactum de non-alienado and is considered VOID.

21
Q

Credit Transactions
Real Estate Mortgage

Exlpain the proceeds of the forclose sale:

  1. More than
  2. Less than
A
  1. If more than Unpaid amount, mortgagor shall be entitled to the excess
  2. Less than, the mortgagee shall be entitled to recover deficiency

The rationale is that the mprtgage is still a separate contract and merely stands as means to recover unpaid amount.

22
Q

Credit Transactions
Real Estate Mortgage

In case of non payment of the principal obligation, the creditor mortgagee may foreclose the mortgage 1. Either? 2. Notice of foreclosure required?

A
  1. Extrajudicial - non required, unless stipulated
  2. Judicial - posting in 3 public places atleast 20 days prior to sale and publication of tge notice of sale in a newspaper of generic circulation
23
Q

Credit Transactions
Real Estate Mortgage

  1. Explain Redemption
  2. Period to redeem
A
  1. It only exists i REM foreclosures.
  2. a. Extrajudicial
    General Rule - 1 year
    Exception if the creditor is bank, 3 months from the sale or registration
    b. Judicial - though 90-120days, bit still exists as long as there is no confirmation of sale by court
24
Q

Credit Transactions
Chattel Mortgage

Define

A

Personal property is recorded in the Chattel Mortgage Register as a security for the performance of an obligation

25
Q

Credit Transactions
Chattel Mortgage

If the movable property is not recorded in Chattel Mortgage, bu delivered to the creditor or third person, this contract is?

A

Pledge

26
Q

Credit Transactions
Chattel Mortgage

Is this a formal contract?

A

Yes. It is perfected by the registration to chattel mortgage register

27
Q

Credit Transactions
Chattel Mortgage

  1. What is Affidavit of good faith? Its effect on validity?
  2. And its effect on Third Persons
A
  1. Sworn statement. Does not affect the validity of the contract (still valid since both parties may be considered in pari delicto), but it only makes the contract non binding to third persons who acted in goodfaith.
  2. To affect 3rd persons, there must be an Affidavit ot Goodfaith and the same must be registred with Chattel Mortgage Registry, MARINA (vessels), LTO (vehicles)
28
Q

Credit Transactions
Chattel Mortgage

Exlpain forclosure

A

Shall be done in extra judicial only.
Notice: 10 days prior to sale; posting two or more public places 10 days before auction

29
Q

Credit Transactions
Chattel Mortgage

Explain proceeds of Forclosure of Sale:
1. More than
2. Less than

A
  1. If more than unpaid amount, the excess shall belong to mortgagor
  2. If less than:
    General Rule - creditor is entiled for deficiency (Note: including interest and cost of forclosure sale!)
    Except: if the object is sale in installment and covered by Recto Law
30
Q

Credit Transactions
Chattel Mortgage

Is there a right of redemption like in Real State Mortgage?

A

No

31
Q

Credit Transactions
Real Estate Mortgage

Notes:
*Covered by statute of frauds
*Public instrument that is registered in the Registry of deeds is required to bind third parties

A
32
Q

Credit Transactions
Pledge

A pledge shall take effect agaisnt 3rd person if there is public instrument which includes:

A

Description of the thing pledge and date of the pledge

33
Q

Credit Transactions
Chattel Mortgage

In order for a contract of chattel mortgage to be valid, it:

A

Must be in writing subcribed by botg parties in the presence of two witnesses

RFBT (37 decks)

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