Credit Transactions Flashcards
Essential Elements of Pledge / Mortgage
- To secure fulfillment of a Principal obligation
- Absolute Owner of collateral at time of perfection
- Free Disposal of property (or legal authority for that purpose)
Pledge / Mortage → only an accessory contract
Remember → it is at time of perfection
- different to Law on Sales (time of delivery)
Since it is an accessory contract, if the principal is void = accessory is void
Obligation is Due but Unpaid
- thing pledged may be alienated (public auction). True or False?
- creditor cannot appropriate the thing pledged, unless stipulated. True or False?
True, False
- even if stipulated (bawal talaga siya)
- this stipulation is called “pactum commissorium” or automatic appropriation → VOID
Exceptions where Appropriation is Valid
- subsequent voluntary act on part of debtor (e.g. dacion en pago)
- after 2 auctions → thing is still not sold (only for pledge)
- since si debtor naman na nag-initiate
- 2 (!!) → after non, pwede na iappropriate
Indivisibility of Pledge / Mortgage
- cannot be partially extinguished
- what if namatay yung debtor (debt of 300K), yung isang heir niya is nagbayad ng 100K, maeextinguish na ba yung pledge / mortgage?
- what if debtor has 2 debts of 50K each, pledged with ring and watch, nagbayad ng 50K, maeextinguish na ba yung pledge / mortgage?
NO (cannot be partially extinguished even if debt has been partially paid / partially received by debtor’s / creditor’s heir)
YES (eto yung XPN where several things given and each thing guarantees only a determinate portion of the credit → since nagbayad ng 50K, pwede makuha yung isa as ring or watch)
Other than the Essential Elements stated above, a pledge has additional essential element
- delivery of the thing
Kapag walang delivery, kahit complete yung ibang essential elements → VOID
Debtor is called Pledgor. A 3rd person may be a pledgor.
Creditor is called Pledgee. A 3rd person may be a pledgee.
No → pledgor = DR
Yes → pledgee = CR or 3P
Subject Matter of Pledge
- moveable property
- instrument evidencing incorporeal rights
Yes
Characteristics of Pledge (ARISU)
- Accessory
- Real
- Indivisible
- Subsidiary
- Unilateral
Form of Pledge
- to bind the parties, it must be written. True or False?
- to bind 3rd person, it must be in a public instrument. True or False?
- False → oral or written
- False → public instument + description + date
Obligation is Due but Unpaid
- same as above, with some additional details
- alienated (at public auction)
- must be with notary public (not court)
- notice to debtor stating the amount due
Yes
Rules as to Proceeds
- if there is an excess, debtor is not entitled unless agreed. True or False?
- if there is a deficiency, creditor is not entitled unless agreed. True or False?
Pledge
True
- Excess = if silent, kay creditor mapupunta
- XPN : if agreed, kay debtor mapupunta
False
- Deficiency = if silent, si creditor walang habol
- no XPN (absolute rule)
Basta nabenta, extinguished na yung obligation
(kahit more than or less than yung proceeds)
Debtor is called Mortgagor. A 3rd person may be a mortgagor.
Creditor is called Mortgagee. A 3rd person may be a mortgagee.
Real Estate Mortgage
Yes → mortgagor = DR or 3P
No → mortgagee = CR
different to Pledge
Subject Matter of Real Estate Mortgage
- immoveable property
- real rights over immoveable property
Yes
Characteristics of Real Estate Mortgage (ACISU)
- Accessory
- Consensual
- Indivisible
- Subsidiary
- Unilateral
Form of Real Estate Mortgage
- to bind the parties, it must be written. True or False?
- to bind 3rd person, it must be in a public instrument. True or False?
- False → oral or written
- False → must be registered in registry of deeds
Public Instrument → only for convenuence
If the debt is still not due and demandable, may the owner alienate (sell or donate) the thing mortgaged?
Yes
- Pactum de Non-Aliendo → forbidding the owner from alienating = VOID
Foreclosure is the remedy available to mortgagee (iba lang ng term, pero same rin sa pledge na sell at public auction)
Kinds of Foreclosure
1. Judicial (need to file a petition in court)
2. Extrajudicial (need to have stipulation or SPA)
Sa extrajudicial, pag walang stipulation or SPA → Judicial Foreclosure lang pwede
Judicial Foreclosure
- equity of redemption
Explain, Timing, and What is the Period
Equity of Redemption
- mortgagor may pay the liability para ma-redeem niya yung property
- timing → before confirmation of sale
- period → between 90 days to 120 days from judgement of court (since judicial foreclosure)
in a way, para siyang grace period
Judicial Foreclosure
- right of redemption
Explain, Timing
Right of Redemption
- mortgagor may pay the purchase price para ma-redeem niya yung property
- timing → after sale
THIS IS NOT APPLICABLE TO JUDICIAL FORECLOSURE
- XPN : Mortgagee is a bank
in other terms “kukunin ko ang akin”
Extrajudicial Foreclosure
- right of redemption
What is the Period
APPLICABLE NA SINCE EXTRAJUDICIAL FORECLOSURE
Period
- mortgagor → natural person = within 1 year from registration of sale
- mortgagor → juridical person = earlier (registration of sale or 3 months from sale)
Rules as to Proceeds
- if there is an excess, debtor is not entitled unless agreed. True or False?
- if there is a deficiency, creditor is not entitled unless agreed. True or False?
Real Estate Mortgage
False
- Excess = if silent, kay debtor mapupunta
- XPN : if agreed, kay creditor mapupunta
False
- Deficiency = if silent, kay creditor mapupunta
- XPN : if agreed, kay debtor mapupunta
different to Pledge
Subject Matter of Chattel Mortgage
- personal property (recorded in CM register)
- term is personal (not movable)
- What if not recorded and instead delivered? Regarded as PLEDGE
Characteristics of Chattel Mortgage (AFI)
- Accessory
- Formal
- Indivisible
Form of Chattel Mortgage
- to bind the parties, it must be written. True or False?
- to bind 3rd person, it must be in a public instrument. True or False?
- False → oral or written
- False → must be registered in CM register + affidavit of good fatih
Rules as to Proceeds
- if there is an excess, debtor is not entitled unless agreed. True or False?
- if there is a deficiency, creditor is not entitled unless agreed. True or False?
Chattel Mortgage
First, remember that in chattel mortgage, it must be extrajudicial foreclosure
False
- Excess = if silent, kay debtor mapupunta
- XPN : if agreed, kay creditor mapupunta
False
- Deficiency = if silent, kay creditor mapupunta
- XPN : if agreed, kay debtor mapupunta
- XPN : if recto law, si creditor walang habol
different to Pledge, almost same to Real Estate Mortgage
Pledge vs Real Estate Mortgage vs Chattel Mortgage
Parties
Pledge
- pledgor = DR
- pledgee = CR or 3P
Real Estate Mortgage
- mortgagor = DR or 3P
- mortgagee = CR
Chattel Mortgage
- mortgagor = DR
- mortgagee = CR
Pledge vs Real Estate Mortgage vs Chattel Mortgage
Object
Pledge
- movable property
- incorporeal rights
Real Estate Mortgage
- immovable property
- real rights over immovable property
Chattel Mortgage
- personal property registered (term is “personal”, must be registered)
Pledge vs Real Estate Mortgage vs Chattel Mortgage
Characteristics
Pledge
- ARISU (Real → needs delivery)
Real Estate Mortgage
- ACISU (Consensual)
Chattel Mortgage
- AFI (Formal)
Pledge vs Real Estate Mortgage vs Chattel Mortgage
Possession and Sale During Pendency
Pledge
- transferred to creditor, valid with consent of creditor (since nasa kanya possession)
Real Estate Mortgage
- retained by debtor, valid and pactum de non aliendo is void
Chattel Mortgage
- retained by debtor, valid
Pledge vs Real Estate Mortgage vs Chattel Mortgage
Form to Bind Parties
Form to Bind 3rd Person
Pledge
- oral or written
- public instrument + description + date
Real Estate Mortgage
- oral or written
- registered in registry of deeds
Public Instrument → only for convenuence
Chattel Mortgage
- oral or written
- registered in CM registry + affidavit of good faith
Pledge vs Real Estate Mortgage vs Chattel Mortgage
Obligation is Due and Unpaid. What to do?
Pledge
- public auction (notary public + notice of amount due)
Real Estate Mortgage
- judicial foreclosure
- extrajudicial foreclosure
Chattel Mortgage
- extrajudicial foreclosure
Pledge vs Real Estate Mortgage vs Chattel Mortgage
Rules in Case of Excess
Pledge
- creditor, unless agreed
Real Estate Mortgage
- debtor, unless agreed
Chattel Mortgage
- debtor, unless agreed
Pledge vs Real Estate Mortgage vs Chattel Mortgage
Rules in Case of Deficiency
Pledge
- creditor cannot recover, even if stipulated (absolute rule)
Real Estate Mortgage
- creditor, unless agreed
Chattel Mortgage
- creditor, unless agreed
- creditor cannot recover → if recto law
