RFBT - PLEDGE MORTGAGE AND ANTICHRESIS Flashcards
What are the common requisites of pledge and mortgage?
- ) That they be constituted for the fulfillment of a principal obligation.
- ) That the pledgor or mortgagor be the ABSOLUTE OWNER of the thing pledged or mortgaged.
- ) That the persons constituting the pledge or mortgage have the free disposal of the property, and in the absence thereof, that they be legally authorized for the purpose.
What is a conventional pledge?
Conventional pledge is that which is constituted by the mutual consent of the pledgor and the pledgee.
What is Legal pledge?
Legal pledge is that which is created by operation of law. It refers to the right to retain a thing until he receives payment of his claim.
What are the requisites of a conventional pledge?
- That it be constituted to SECURE THE FULFILLMENT of a principal obligation.
- That the PLEDGOR BE THE ABSOLUTE OWNER OF THE THING PLEDGED
- That the persons constituting the pledge or mortgage have the FREE DISPOSAL OF THE PROPERTY PLEDGED, and in the absence thereof, that they be legally authorized for the purpose.
- That the thing pledged be PLACED IN THE POSSESSION OF CREDITOR or of a 3rd person by common agreement.
What kind of delivery is necessary in a pledge?
A pledge, being a real contract requires for its perfection the DELIVERY OF THE THING to the creditor or a third person if by common agreement. WITHOUT ACTUAL DELIVERY, A PLEDGE IS VOID.
What could be the object of pledges?
- ) All movables within the commerce of men which are susceptible of possession.
- ) Incorporeal rights evidenced by instruments/documents.
What should be the form of pledges?
1.) IF BETWEEN PARTIES
Any form as long as there is ACTUAL DELIVERY of the object.
2.) AS REGARDS 3RD PERSONS
The pledge must be in A PUBLIC INSTRUMENT showing a DESCRIPTION OF THE THING PLEDGED and DATE OF PLEDGE to take effect against 3rd persons.
What is the extent of pledge?
- ) The thing pledged
- ) Fruits, income, dividends or interests earned by the thing pledged, UNLESS there is a stipulation excluding them. If there is an EXCESS, creditor may apply it to the principal.
- ) The offspring, of the thing pledged is an animal, unless there is a stipulation excluding them. The offspring however shall PERTAIN TO THE PLEDGOR.
What are the rights of the debtor/pledgor?
- ) To alienate, WITH THE CONSENT OF THE PLEDGEE, the thing pledged. The ownership of the thing pledged is transmitted to the vendee or transferee as soon as the pledgee consents to the alienation, but the pledgee shall continue in possession.
- ) To ask that the thing pledged be judicially or extra-judicially deposited if it is used without authority or for a purpose other than for its preservation.
3.) To continue to be the owner of the thing pledged unless it is expropriated.
Expropriation - the action by the state or an authority of taking property from its owner for public use or benefit.
- ) To ask for the return of the thing pledged after he has paid the debt and its interests/expenses.
- ) To require that the thing pledged be deposited with a third person if it is in danger of being lost or impaired through the negligence or acts of the pledgee.
- ) To demand the return of the thing pledged, upon offering another thing in pledge provided the latter is of the same kind and quality, if there are reasonable grounds to fear the destruction or impairment of the thing pledged without the fault of the pledgee.
What are the obligation of the debtor/pledgor?
- To pay the debt and its interests with expenses.
- To pay damages that the pledgee may suffer by reason of the flaws of the thing pledged, if he was aware of such flaws but did not advise the pledgee of the same.
What are the rights of the creditor/pledgee?
- ) To retain in his possession the thing pledged until the debt is paid.
- ) To demand reimbursement of the expenses made for the preservation of the thing pledged.
- ) To bring actions which pertain to the owner of the thing pledged in order to recover it from 3rd persons
- ) To use the thing pledged if he is authorized to do so, or when its use is necessary for its preservation.
- ) If he is deceived of the substance of the thing pledged, he may either:
a. ) claim that another thing be given to him in place of the thing pledged.
b. ) Demand immediate payment of the principal obligation,
6.) To cause the sale of the thing pledged at a public sale if there is a danger of destruction/impairment in value of the thing pledged without his fault. The proceeds of the auction shall be security for the principal obligation in the same manner as the thing originally pledged.
7.) To collect and receive the amount due if the thing pledged is a credit which becomes due before it is redeemed, and to apply the same to the payment of his claim, and deliver the surplus should there be any to the pledgor.
Example: D received a promissory note of 10,000 from M due on March 1. D pledged the note to secure a loan of 8,000 from C which is due on March 5. C can collect the 10,000 from M, apply the 8,000 to the debt, and return the 2,000 excess to D.
8.) To sell the thing pledged upon default of the debtor.
What are the obligations of the creditor/pledgee?
- ) To take care of the thing pledged with the diligence of a good father of a family.
- ) To be liable for the loss or deterioration of the thing pledged unless it is due to fortuitous event.
- ) Not to deposit the thing pledged with a 3rd person unless authorized( if so, it must be in a PUBLIC INSTRUMENT)
- ) To be responsible for the acts of his agents or employees with respect to the thing pledged.
- ) Not to use the thing pledged unless he is authorized by owner and the usage is necessary for its preservation.
- ) To deliver to the debtor the surplus after paying his claim from what he has collected on a credit that was pledged and which has become due before it is redeemed.
What are the rights of a third person who pledges his own movable property to secure the debt of another?
- ) To be indemnified by the debtor if he pays the creditor, and the indemnification shall consist of:
a. total amount of debt
b. Legal interests
c. expenses incurred by pledgor notifying debtor
d. Damages if due
2.) To be subrogated to all the rights of the creditor if he pays the creditor.
- ) To be released from liability in the following cases:
a. ) If the creditor voluntarily accepts immovable or other property in payment of the debt even if the creditor thereafter loses the same by eviction.
D borrowed 50,000 from C secured by T’s ring. If C accepts a parcel of land from D in payment of debt,(dation in payment), T can demand to be released from pledge, even if C loses the property paid by D by eviction
b. ) If an extension of time is granted to the debtor by the creditor without the pledgor’s consent.
c. ) If through some act of the creditor the pledgor cannot be subrogated to the rights, mortgages and preferences of the creditor.
D owes C, and the debt is secured by T’s ring(pledge) and G as guarantor. If C cancels G’s guarantee, T is released from liability since he can no longer go after G if D defaults.
How are pledges extinguished?
1.) Indirect Causes - When the debtor pays the creditor
- ) Direct Causes
a. ) Return by the pledgee of the thing pledged to pledgor/owner
b. ) Renunciation or abandonment IN WRITING by the pledgee. Acceptance by pledgor not necessary, and in the meantime the pledgee becomes a depositary upon the renunciation.
c. ) Sale of the thing pledged - sale must be by PUBLIC AUCTION, through a NOTARY PUBLIC, with NOTICE TO DEBTOR AND OWNER OF THING
d. ) Appropriation of the thing pledged, in case thing is not sold in 1st and 2nd auction. In this case, creditor must give an acquittance for his entire claim.
Any stipulation that the pledge is not extinguished by the return of the thing pledged is:
VOID
The pledgee shall be disqualified from bidding at the public auction of the thing if?
He is the only bidder.
What are examples of Legal Pledge?
- ) Possessory lien by a possessor in good faith. - retain the thing which he has incurred and necessary/useful expenses until he has been reimbursed. (B bought from S a bike. He spent 1000 on accessories and repair. Later it turns out that O was the real owner and was able to prove such. B is entitled to retain the thing until O has reimbursed him for the expenses he incurred.)
- ) Possessory lien of worker - He who has executed work upon a movable has a right to retain it by way of pledge until he is paid. (Mechanic may retain the car he repaired until the car’s owner has paid him for his service.)
- ) Depositary’s right of retention - depositary may retain the thing deposited until the full payment of what may have been due him by reason of the deposit. (Warehouse owner has the right to retain the goods stored until whoever stored them has fully paid the storage costs due him.)
Differentiate conventional and legal pledge.
1.) If PROCEEDS OF SALE EXCEED AMOUNT OF DEBT
Conventional - Excess belongs to the creditor, unless there is a stipulation that it shall belong to debtor.
Legal - Excess belongs to debtor.
2.) If AMOUNT OF DEBT EXCEEDS PROCEEDS OF
SALE
Conventional - Creditor cannot recover deficiency
Legal - Creditor can recover deficiency.
What is a real estate mortgage?
Real estate mortgage is a contract whereby the debtor secures to the creditor the fulfillment of a principal obligation, specially subjecting to such security immovable property or real rights over immovable property in case the principal obligation is not complied with at the time stipulated.
What are the requisites of a real mortgage?
- ) That it be constituted to secure the fulfillment of a principal obligation.
- ) That the mortgagor be the absolute owner of the thing mortgaged.
- ) That the person constituting the mortgage must have the free disposal of his property, and in the absence thereof, that he be legally authorized for the purpose.
- ) That the document in which the mortgage appears be recorded in the Registry of Property.
What are the kinds of real mortgage?
- ) Conventional - created by agreement of the parties
- ) Legal - One executed pursuant to an express requirement of a provision of law.
- ) Equitable - one which although lacking certain formality, shows the intention of the parties to charge a real property as a security for a debt and contains nothing contrary to law.
What form is needed for a real mortgage?
AS TO PARTIES - The real mortgage may be in any form since it is a consensual contract. It is binding between the parties even if NOT REGISTERED W/ REGISTRY OF PROPERTY. However it must be in a public instrument for the CONVENIENCE OF THE PARTIES.
AS TO 3RD PERSONS - To be binding against 3rd persons, it must be recorded in the Registry of Property.
May the owner of the property alienate/sell the property even if it is mortgaged?
Yes. Any stipulation prohibiting this is VOID.
May the owner of the thing execute a second mortgage on it?
Yes, even without the consent of the 1st mortgagee, unless there is a stipulation that consent of the 1st mortgagee is required.
What is foreclosure?
Foreclosure is the remedy available to mortgagee by which he subjects the property mortgaged to the satisfaction of the obligation secured when it is not paid when due or when there is any violation of any condition/stipulation/warranty by the mortgagor.