III Notes On Law On Pledge Real Estate Mortgage Chattel Mortgage Antichresis Agency PDF
III Notes On Law On Pledge Real Estate Mortgage Chattel Mortgage Antichresis Agency PDF
III Notes On Law On Pledge Real Estate Mortgage Chattel Mortgage Antichresis Agency PDF
COVERAGE:
A. Contract of Pledge
B. Contract of Real Estate Mortgage
C. Contract of Chattel Mortgage
D. Contract of Antichresis
E. Contract of Agency
1. Essential requisites of the contracts of pledge, real estate mortgage and chattel mortgage
b. That the pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged.
i. Period the pledgor or mortgagor required to be the owner of the thing pledged or
mortgaged for the validity of contract of pledge or mortgage
1. At the time the pledge or mortgage is constituted
c. That the persons constituting the pledge or mortgage have the free disposal of their property, and
in the absence thereof, that they be legally authorized for the purpose.
d. That when the principal obligation becomes due, the things in which the pledge or mortgage
consists may be alienated for the payment of the creditor.
i. Pactum Commissorium is a stipulation whereby the thing pledged or mortgaged shall
automatically become the property of the creditor in the event of non-payment of the debt within
the term fixed. This stipulation is null and void for being contrary to law and public policy.
2. The following are the instances where the thing pledged or mortgaged may be sold or alienated in public
auction for the payment of the secured contract of loan or principal obligations
a. If the pledgor or mortgagor fails to fulfill certain conditions and such violation would make the debt due
and demandable.
b. If the debtor has lost the right to make use of the period or where there is an acceleration clause in the
payment of installment.
installment.
c. Upon default to pay the obligation at maturity.
4. Contract of pledge is a contract by virtue of which the debtor delivers to the creditor or to a third person a
movable, or instrument evidencing incorporeal rights for the purpose of securing the fulfillment of a principal
obligation with the understanding that when the obligation is fulfilled, the thing delivered shall be returned with
all its fruits and accessions.
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6. Essential requisites of conventional pledge or contract of pledge
a. That it be constituted to secure the fulfillment of a principal obligation.
b. That the pledgor be the absolute owner of the thing pledged.
c. That person constituting the pledge has the free disposal of his property, and in the absence thereof, that
he be legally authorized for the purpose.
d. That the thing pledged be placed in the possession of the creditor, or a third person by common
agreement.
8. Form of contract of pledge for validity or to bind contracting parties vs. form of contract of pledge to bind
third persons
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14. Instances when a third person who pledges his own movable property to secure the debt of another shall be
released from liability
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.
b. If an extension of time is granted to the debtor by the creditor without 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. If the thing pledged is deteriorated on the fault of the pledgee.
b. Direct Modes of Extinguishment of contract of pledge but do not extinguish the contract of loan
c. Direct Modes of Extinguishment of contract of pledge but also extinguish the contract of loan
i. Sale of the thing pledged regardless of the net proceeds of the sale.
ii. Appropriation of the thing pledged by the pledgee if the thing pledged is not sold in the first and
second auctions.
17. Legal Pledge is a type of pledge which refers to the right of a person to retain a thing until he receives payment of
his claim.
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21. Important characteristics of real estate mortgage
24. Formality of a contract of real estate mortgage for validity vs. Formality of a contract of real estate
mortgage to bind third persons
25. Foreclosure - refers to the remedy available to the mortgagee by which he subjects the property mortgaged to the
satisfaction of the obligation secured when the principal obligation is not paid when due or when there is any
violation of any condition, stipulation or warranty by the mortgagor.
a. Judicial Foreclosure is a type of foreclosure made through the filling of a petition in court under Rule
68 of Rules of Court and availed of when the deed of real estate mortgage does not provide for special
power of attorney (SPA) authorizing the mortgagee-creditor to foreclosure it extrajudicially.
i. Equity of Redemption – The judgment debtor/mortgagor has a period of not less than 90 days
nor more than 120 days from the entry of judgment to pay his liability to prevent the public sale
of his mortgaged property.
ii. Right of Redemption – The judgment debtor/mortgagor is not generally allowed to repurchase
the property sold in public auction in judicial foreclosure unless a special law allows.
b. Extrajudicial Foreclosure is a type of foreclosure made in compliance with Act No. 3135 and available
when there is a stipulation in the mortgage contract that the mortgage may be foreclosed extrajudicially or
when such foreclosure sale is made under a special power of attorney inserted in the contract of mortgage.
i. Equity of Redemption – The mortgagor may pay his obligation to prevent the public sale of his
property in the grace period given by the mortgagee.
ii. Right of Redemption – The mortgagor may repurchase the property sold in public auction within
a period of:
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28. Chattel mortgage is a conditional sale of personal property as security for the payment of a debt, or the
performance of some other obligation specified therein, the condition being that the sale shall be void upon the
seller paying to the purchaser a sum of money or doing some other act named. If the condition is performed
according to its terms the mortgage and sale immediately become void, and the mortgagee is thereby divested of
his title.
34. Antichresis is a contract whereby the debtor secures to the creditor the fulfillment of a principal obligation,
especially 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. In this contract, the creditor acquires the right to
receive the fruits of an immovable of his debtor, with the obligation to apply them to the payment of the interest,
if owing, and thereafter to the principal of his credit.
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Comparison of Pledge, Real Mortgage, Chattel Mortgage and Antichresis
Basis of Conventional Pledge Real Estate Mortgage Chattel Mortgage Antichresis
Difference
Type of Real – By delivery of Consensual – By mere Formal – By Formal – By execution
Contract as to object consent registration of the of written agreement of
perfection contract of chattel antichresis with
mortgage in the Chattel statement of the amount
Mortgage Registry of principal and interest
of the contract of loan.
To bind third Must be in a public Must be registered in Must be accompanied Must be registered in the
persons instrument showing a the Registry of Property by affidavit of good Registry of Property
description of the faith
thing pledged and the
date of the pledge
Object of Movable or personal Immovable or real Movable or personal Immovable or real
contract property property property property
Prohibition Applicable Applicable Applicable Applicable
against pactum
commissorium
Indivisibility of Indivisible Indivisible Indivisible Indivisible
the contract
Remedy of Foreclose security and Foreclose security and Foreclose security and Gather the fruits of the
Creditor in case sell the collateral in sell the collateral in sell the collateral in land and apply the fair
of Debtor’s public action with the public action with the public action with the market value of the fruits
default proceeds to be applied proceeds to be applied proceeds to be applied at the time of application
to the unpaid to the unpaid obligation to the unpaid obligation first to the interest of the
obligation loan and the remainder
to the principal of the
loan.
As to Deficiency can never Deficiency can be Deficiency can be Deficiency can be
deficiency be recovered even if recovered unless there recovered unless there recovered through
there is a stipulation. is stipulation to the is stipulation to the continuous gathering of
Any stipulation for contrary. contrary. (Except in fruits.
recovery of deficiency case of personal
is null and void. property sold in
(Exception – Legal installment under
Pledge) Recto Law)
As to excess of Excess belongs to the Excess belongs to the Excess belongs to the Excess fruits belongs to
proceeds pledgee-creditor mortgagor unless there mortgagor unless there the owner of the land or
unless there is is stipulation to the is stipulation to the antichretic debtor.
stipulation to the contrary. contrary.
contrary. (Exception –
Legal Pledge)
As to The pledgee may The mortgagee cannot The mortgagee cannot The antichretic creditor
appropriation appropriate the thing appropriate the thing appropriate the thing cannot appropriate the
of property pledged if the same is mortgaged. mortgaged. land used as collateral
not sold in two public but may sell the fruits to
auctions. be applied to interest and
principal of loan.
As to selling of The pledgor may only The mortgagor can sell The mortgagor can sell The antichretic debtor
property after sell the property with the property. Any the property. Any can sell the land.
the pledge or the consent of the stipulation prohibiting stipulation prohibiting
mortgage by pledgee. the mortgagor to sell the mortgagor to sell
the owner. the property is void. the property is void.
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36. Agency is a contract, whereby a person binds himself to render some service or to do something in representation
or in behalf of another, with the consent and authority of the latter.
39. Status of contract of entered into by the agent in behalf of the principal
42. Effects if the agent acts within the scope of his authority but in his (agent’s) behalf or without disclosing the
principal
a. The principal has no right of action against the person with whom the agent has contracted.
b. The person with whom the agent has contracted has no right of action against the principal.
c. The agent is directly bound in favor of the one with whom he has contracted.
d. The contract binds the third person and the principal even if the contract involves thing belonging to the
principal.
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45. Rules that shall be observed as regards to the liability of agent when he appoints a substitute
a. If the agent is not prohibited to appoint a substitute, the agent may appoint a substitute but he shall be
responsible for the acts of the substitute.
b. If the agent is authorized to appoint a substitute and the principal designated the person to be appointed as
substitute, the agent is not responsible for the acts of the substitute.
c. If the agent is authorized to appoint a substitute and the principal does not designate the person to be
appointed as a substitute, the agent shall be liable if the person appointed as substitute is notoriously
incompetent or insolvent man.
d. If the agent is prohibited to appoint a substitute, the agent cannot appoint a substitute. If he appoints one,
all the acts of the substitute shall be void.
46. Degree of liability of two or more agents vs. Degree of liability of two or more principals
48. Instances wherein the principal shall not be liable for the expenses incurred by the agent
a. When the agent acted in contravention of the principal’s instructions and the principal avails himself of
the benefits derived from the contract.
b. When the expenses were not due to the fault of the agent.
c. When the agent incurred them with knowledge that an unfavorable result would ensue if the principal was
not aware thereof.
d. When it was stipulated that the expenses would be borne by the agent, or that the latter would be allowed
only a certain amount.
51. Instances when agency may not be revoked at will by the principal
a. If a bilateral contract depends upon an agency.
b. If the agency is a means of fulfilling an obligation already contracted.
c. If a partner appointed a manager of a partnership in the contract of partnership and his removal from the
management is unjustifiable.
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53. Principles concerning withdrawal by the agent
a. The agent must give notice to the principal of the withdrawal.
b. The agent must indemnify the principal for any damage suffered by reason of the withdrawal.
c. The agent shall not be liable for withdrawal if it is based upon the impossibility of continuing the
performance of the agency without grave detriment to himself.
d. The agent who withdraws should take care of the object of the agency if his reason is valid.
54. Instances when the agency is not extinguished by the death of the principal.
a. If the agency has been constituted in the common interest of the principal and the agent.
b. If the agency has been constituted in the interest of a third person who has accepted the stipulation in his
favor.
c. In so far as to finish the business already begun on the death of the principal, should delay entail any
danger.
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