Credit Trans.doc Cases - Suretyship

8/9/2019 Credit Trans.doc Cases - Suretyship

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Republic of the PhilippinesSUPREME COURTManila

EN BANC

G.R. No. L-16666 April 10, 1922

ROMULO MACHETTI,plaintiff-appelle,vs.HOSPICIO DE SAN JOSE,defendant-appellee, andIDELIT! " SURET! COMPAN! O THE PHILIPPINE ISLANDS, defendant-appellant

Ross and Laurence and Wolfson & Scwarzkopf for appellant.Gabriel La O for appellee Hospicio de San Jose.No appearance for the other appellee.

OSTRAND, J.:

It appears from the evidence that on ul! "#, "$"%, one Romulo Machetti, b! a &rittena'reement undertoo( to construct a buildin' on Calle Rosario in the cit! of Manila for the)ospicio de *an ose, the contract price bein' P%+,. ne of the conditions of the a'reement&as that the contractor should obtain the 'uarantee of the /idelit! and *uret! Compan! of thePhilippine Islands to the amount of P"01,1 and the follo&in' endorsement in the En'lishlan'ua'e appears upon the contract2

MANI3A, Jul !"# !$!%.

/or value received &e hereb! 'uarantee compliance &ith the terms and conditions as

outlined in the above contract.

/I4E3I56 AN4 *7RE56 CMPAN6 / 5)E P)I3IPPINE I*3AN4*.

8*'d9 55 :R*5ER,ice'(resident.

Machetti constructed the buildin' under the supervision of architects representin' the )ospiciode *an ose and, as the &or( pro'ressed, pa!ments &ere made to him from time to time uponthe recommendation of the architects, until the entire contract price, &ith the e;ception of thesum of the P+,$#1.1, &as paid. *ubse%.


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ACTS(

Petitioner sold to Wonderland Food Industries two parcels of land. They stipulated under

a Memorandum of Agreement that the terms of payment would be P1,000,000 in cash,

P2,000,000 in shares of stock, and the balance would be payable in monthly

installments. Thereafter, an

addendum was executed between them, qualifying the cash payment. Instead of cash

payment, the vendee authorized the vendor to obtain a loan from the financier on which the

vendee bound itself to pay for. This loan was to cover for the payment of P1,000,000. This

addendum was not notarized.

Petitioner Soriano signed as maker the promissory notes payable to the bank. However,

the petitioners failed to pay the obligations as they were due. During that time, the bankwas in financial distress and this prompted it to endorse the promissory notes for collection.

The bank gave ample time to petitioners then to satisfy their obligations.

The trial court held in favor of the bank. It didn't find merit to the contention that

Wonderland was the one to be held liable for the promissory notes.

HELD(

First, there was no contract of sale that materialized. The original agreement was that

Wonderland would pay cash and petitioner would deliver possession of the farmlands.

But this was changed through an addendum, that petitioner would instead secure a loan and

the settlement

of the same would be shouldered by Wonderland.

Petitioners became liable as accommodation parties. They have the right after paying the

instrument to seek reimbursement from the party accommodated, since the relation between

them has in effect became one of principal and surety.

Furthermore, as it turned out, the contract of surety between Woodland and petitioner wasextinguished by the rescission of the contract of sale of the farmland. With the rescission, there

was confusion in the persons of the principal debtor and surety. The addendum thereon

likewise lost its efficacy.


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SECURITY BANK AND TRUST COMPANY, Inc.vs

RODOLFO M. CUENCAPan'aniban, . ctober =, 0= E;tin'uishment of uarant!

I. FactsF Creditor2 *ccurit! Ban( and 5rust Co.4ebtor2 *ta. Ines Melale Corp.*uret!2 Rodolfo Cuenca

A.* ta . I n es i s a c or p or a ti o n e n' a' ed i n l o '' i n' o pe r at i on s. I n " $1 , i t&as'ranted b! *ecur it ! Ban( a c red it l ine in the amount of Php 1M. 5osecurepa!ment, i t e;ecuted a chattel mort'a'e over some of its machineriesande


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Re!#&$ic 's. Pa$(Fo) L#*&e Co., Inc., + SCRA -, No. L(/-+0, Fea1

/2, 320/

G.R. No. L-26473 February 29, 1972REPUBLIC OF TE PILIPPINE!, plaintif-appellee,vs.P"L-FO# LU$BER CO., INC. "N% F"R E"!TERN !URET& ' IN!UR"NCECO$P"N&, INC., (e)e*(a*+, F"R E"!TERN !URET& ' IN!UR"NCE CO., INC.,(e)e*(a*+-aea*+/ F"R E"!TERN !URET& ' IN!UR"NCE CO., INC., +0r(-ar+y a*+-aea*+, . G"!P"R P"L"NC" ' O!EP LEE, third-partydeendants.

$"5"LINT"L, J.:pClaiming that the Pal-Fox Lumber Co., Inc. as indebted to the !ureau o Internal"evenue or orest charges and surcharges amounting to P##,$%#.%&, and that theFar 'astern (urety ) Insurance Co., Inc. as *ointly and severally liable ith thelumber company or the payment o said orest charges up to P%,+++.++ on accounto a orestry bond hich the surety company executed in avor o the plaintif onovember , #/0&, guaranteeing aithul compliance by the principal ith all theprovisions o the Forest La and ational Internal "evenue Code, as ell as the1prompt and complete payment o all charges laully accruing on the orestproducts cut or gathered by 2Pal-Fox Lumber Co., Inc.3, and o all 4nes and penaltiesimposed in accordance ith the provisions o la,1 the plaintif commenced suitbeore the Court o First Instance o 5anila 2Civil Case o. 66$&3 see7ing torecover, *ointly and severally, rom Pal-Fox Lumber Co., Inc. and the Far 'astern(urety ) Insurance Co., Inc. the sum o P%,+++.++ plus interest rom the 4ling o thecomplaint, and rom the Pal-Fox Lumber Co., Inc. alone the balance o P&,$0#.%&plus legal interest.

8he Far 'astern (urety ) Insurance Co., Inc. 4led its anser ith a cross-claimagainst its co-deendant Pal-Fox Lumber Co., Inc. hich, due to the latter9s ailure to4le an anser despite valid service o summons, as subse:uently declared indeault. ;ith leave o court, the surety company later 4led a third-party complaintagainst certain persons based on a separate indemnity agreement herein saidthird-party deendants appear to have bound themselves to indemniy the suretycompany or all damages it may sufer by reason o the execution o the orestrybond. In time, these third-party deendants ere similarly declared in deault.'"'F?"', *udgment is hereby rendered ordering deendants to pay to plaintif,

*ointly and severally, the sum o P%,+++.++, ith legal interest thereon rom the4ling o the complaint until ully paid, and deendant Pal-Fox Lumber Co., Inc. to pay

to plaintif the urther sum o P&,$0#.%&, ith legal interest thereon rom the 4ling othe complaint until ully paid, plus costs@ and li7eise ordering cross-deendant Pal-Fox Lumber Co., Inc. and third-party deendants Aaspar A. Palanca and Boseph Leeto pay to deendant Far 'astern (urety ) Insurance Co., Inc., *ointly and severally,any amount hich the latter may pay to plaintif under his *udgment, plus premiumin the amount o P6,%+.++ and stipulated attorney9s ees and interest at the rate o#% and # per annum, respectively, on the total amount due, the said interest tobe compounded :uarterly rom ovember , #/0&, until ully paid.


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Dnable to secure, in a motion or reconsideration, a *udgment absolving it rom anyand all liability under Forestry !ond o. ++0, the surety company appealed to theCourt o


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Budgment must go to the plaintif. In the case o National Marketing Corporation vs.Marquez, et al., L-%%%6, Banuary 6#, #/&/, 2& (C"< , &3, this Court resolveda similar :uestion as ollos= .?n the third and last issue 2on hether the surety9s liability can exceed the amounto its bond3, it is enough to remar7 that hile the guarantee as or the originalamount o the debt o Aabino 5ar:ueJ, the amount o the *udgment by the trial

court in no ay violates the rights o the surety. 8he *udgment on the principal asonly or P#+,+++.++, hile the remaining P/,//+./# represent themoratoryinterestdue on account o the ailure to pay the principal obligation rom and ater the samehad allen due, and deault had ta7en place. '"'F?"', the decision appealed rom is aKrmed, ith the modi4cation that theappellant should pay the interest ad*udged in said decision up to the date opayment o the principal sum o P%,+++.++. o pronouncement as to costs.Concepcion, C.J., Reyes, J.B.L., Zalivar, Castro, !ernano, "ee#ankee, Barreo,$illamor an Makasiar, JJ., concur.

CONCEPCION 4. 5IUDA DE SY6UIA, in he ca!acit1 as a"*inistati) of the

estate of the "ecease" 7e%oio S18#ia, Plaintiff-Appellee, '. PERFECTO

4ACINTO, ET AL., Defendants. RAFAEL PALMA, Appellant.

Fancisco Do*in%#e9 fo Appellant.

Ca"enas : Casa$ fo Appellee.

SYLLABUS

1. EXECUTION OF JUDGMENT; REVIVAL OF JUDGMENT; SHERIFFS SALE;EQUITABLE PRINCIPLE NOT APPLICABLE. The ae!!a"# $"%&'e( #he e)*$#a+!e,$"-$!e #ha# "& e,(&" (h&*! e",$-h h$/(e!0 *"*(#!2 a# #he e3e"(e &0 a"he,.Th$( e)*$#a+!e ,$"-$!e ha( "& a!$-a#$&" #& a !e4a!!2 -&"*-#e (he,$00( (a!e. The

ae!!a"# &e( " )*e(#$&" #he ,e4*!a,$#2 &0 #he (a!e.

5. ID.; ID.; ID.; RIGHT OF REDEMPTION. I" #he $"(#a"# -a(e6 a!#h&*4h $# 7a(a!!e4e #he ,&e,#2 7a( (&! 0&, 4,ea#!2 +e!&7 $#( %a!*e6 #he e0e"a"#( $ "

e3e,-$(e a"2 ,$4h# &0 ,ee/#$&". The *4/e"# e+# $" $#( e"#$,e#2 7a( "$(-ha,4e +e0&,e #he a-#$&" 0&, #he ,e%$%a! &0 #he *4/e"# 7a( +,&*4h#.

8. ID.; ID.; ID.; DEFENSES AVAILABLE TO A GUARANTOR; BENEFIT OFEXHAUSTION. 9$#h ,e0e,e"-e #& a!! #he e0e"(e( a%a$!a+!e #& a 4*a,a"#&, P a(

4*a,a"#&, $( (#$!! e"#$#!e #& #he +e"e0$#( &0 a,#$-!e( 1:86 1:85 a" 1:


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S#,ee#6J.6 -&"-*,(.

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demand a securit! that shall protect him from an! proceedin'sb! the creditor and from the dan'er of theinsolvenc! of the debtor.

7.R. No. L(/-33< Dece*&e 3, 32/-

P=ILIPPINE NATIONAL BANK,Plaintiff-Appellant6 %(. MARIANO ESCUETA,CIRILO B. SANTOS an" TEOFILO 5ILLON7CO,Defendants-Appellants.

Dionisio de Leon and Carlos B. Hilado for plaintiff-appellant.Eusebio Orense and Victorino Yamson for defendants-appellants.

OSTRAND, J.;

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15/24

#he ,&/# a2/e"# a# /a#*,$#2 &0 a!! #he "e(6 ,a0#(6 +$!! &0 e3-ha"4e6 &%e,,a0#(a" he, &+!$4a#$&"( &0 e%e,2 '$"6 &" 7h$-h #he P,$"-$a! /a2 "&7 +e $"e+#e6 &,/a2 he,ea0#e, +e-&/e $"e+#e #& #he C,e$#&,6 !*( #he $"#e,e(# #he,e&" a# #he ,a#e&0 ($3 a" &"e>ha!0 @ e, -e"# e, a""*/6 a" #he -&(#( a" e3e"(e( &0 #heC,e$#&, $"-*,,e $" -&""e-#$&" #he,e7$#h.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e(%$,#*a! !a7 !$+,a,2

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The G*a,a"#&,( e3,e((!2 7a$%e a!! ,$4h#( #& e/a" &0 a2/e"# a" "$-e &0"&"a2/e"# a" ,e(#6 a" a4,ee #ha# #he (e-*,$#$e( &0 e%e,2 '$"6 #ha# a,e "&7a" /a2 he,ea0#e, +e !e0# 7$#h C,e$#&,6 $#( (*--e((&,(6 e"&,(ee( &, a(($4"(6 a(-&!!a#e,a! #& a"2 e%$e"-e( &0 e+# &, &+!$4a#$&" &, *&" 7h$-h a !$e" /a2 e3$(##he,e0&,6 /a2 +e 7$#h,a7" &, (*,,e"e,e a# a"2 #$/e6 a" #he #$/e &0 a2/e"##he,e&0 e3#e"e6 7$#h&*# "$-e #&6 &, -&"(e"# +2 #he 4*a,a"#&,(6 a" #ha# #he!$a+$!$#2 &" #h$( 4*a,a"#2 (ha!! +e $,e-# a" $//e$a#e a" " -&"#$"4e"# *&" #he*,(*$# +2 #he C,e$#&,6 $#( (*--e((&,(6 e"&,(ee( &, a(($4"(6 &0 7ha#e%e, ,e/e$e($# &, #he2 ha%e a4a$"(# #he P,$"-$a! &, #he (e-*,$#$e( &, !$e" $# &, #he2 /a2 &((e((6a" #he 4*a,a"#&,( 7$!! a# a"2 #$/e &" e/a"6 7he#he, *e &, " *e6 a2 #& #heC,e$#&, a"2 &%e,,a0# &0 #he P,$"-$a!.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a!

!a7 !$+,a,2

Th$( $"(#,*/e"# $( $"#e"e #& +e a -&/!e#e a" e,0e-# $"e/"$#2 #& #he C,e$#&,0&, a"2 $"e+#e"e(( &, !$a+$!$#2 &0 a"2 '$" &7"$"4 #he P,$"-$a! #& #he C,e$#&,0,&/ #$/e #& #$/e6 a" #& +e %a!$ a" -$"*&*( 7$#h&*# 0*,#he, "$-e #& #heG*a,a"#&,(6 a" /a2 +e ,e%&'e +2 #he G*a,a"#&,( a# a"2 #$/e6 +*# &"!2 a0#e,0&,#2>e$4h# h&*,( "$-e $" 7,$#$"4 #& #he C,e$#&,6 a" (*-h ,e%&-a#$&" (ha!! "&e,a#e #& ,e!$e%e #he G*a,a"#&,( 0,&/ #he ,e(&"($+$!$#2 0&, &+!$4a#$&"( $"-*,,e +2#he P,$"-$a! ,$&, #& #he #e,/$"a#$&" &0 (*-h e,$&.

@S4. MARIANO ESCUETA -ha",&+!e( %$,#*a! !a7 !$+,a,2

RAFAEL VILLANUEVA -ha",&+!e( %$,#*a! !a7 !$+,a,2

CIRILO B. SANTOS -ha",&+!e( %$,#*a! !a7 !$+,a,2

9M. ENNED -ha",&+!e( %$,#*a! !a7 !$+,a,2

TEOFILO VILLONGCO -ha",&+!e( %$,#*a! !a7 !$+,a,2


16/24

uarantor!

I" #he$, a"(7e,6 #he e0e"a"#( /a'e a 4e"e,a! e"$a! &0 #he a!!e4a#$&"( &0 #he-&/!a$"# a"6 $" (*+(#a"-e6 (e# * a( (e-$a! e0e"(e( #ha# #he a0&,e(a$ (*,e#2a4,ee/e"# 7a( "e%e, a--e#e +2 #he !a$"#$00; #ha# #he !a$"#$00 ha *"*!2 a"

7$#h&*# #he -&"(e"# &0 #he e0e"a"#(6 e3#e"e #he #$/e 0&, #he a2/e"# &0 #hee+# +2 #he ,$"-$a!6 #he I(!a" T,a$"4 C&.6 I"-. a" #he,e+2 ,e!$e%e #hee0e"a"#( 0,&/ #he$, !$a+$!$#$e( a( (*,e#$e(; #ha# #he !a$"#$00 7$#h&*# #he '"&7!e4ea" -&"(e"# &0 #he e0e"a"#( ,e!ea(e #he (*,e#26 Ra0ae! V$!!a"*e%a 0,&/ h$(&+!$4a#$&"( *"e, #he a4,ee/e"#6 a" #ha# #he !a$"#$00 (h&*! ha%e ,e(e"#e $#(-!a$/ a4a$"(# #he e(#a#e &0 #he (*,e#26 9/. e""e26 e-ea(e6 +*# ha%e 0a$!e #&& (& a" #ha#6 -&"(e)*e"#!26 #he e0e"a"#( -a"" +e he! !$a+!e 0&, #he (ha,e( &0#he(e #7& (*,e#$e(.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a! !a7 !$+,a,2

U&" #,$a!6 #he -&*,# +e!&7 0&*" #ha# #he e0e"a"#( 7e,e !$a+!e 0&, #he (*/ &0P568.16 !e(( &"e>0$0#h (a$ &"e>0$0#h ,e,e(e"#$"4 #he !$a+$!$#2 &0 #he e-ea(e(*,e#26 9/. e""e26 +*# (h&*! +e -,e$#e 7$#h #he (*/ &0 P16.:6 #he %a!*e

&0 -e,#a$" /e,-ha"$(e (e"# +2 #he I(!a" T,a$"4 C&.6 I"-.6 #h,&*4h #he !a$"#$00 #&Sha"4ha$6 Ch$"a6 #& +e #he,e $(&(e &0 +2 #he Sha"4ha$ +,a"-h &0 #he !a$"#$00-&,&,a#$&" a" &0 7h$-h #,a"(a-#$&" "& a--&*"# ha +ee" ,e"e,e +2 #he !a$"#$00.J*4/e"# 7a( #he,e0&,e ,e"e,e $" 0a%&, &0 #he !a$"#$00 a" a4a$"(# #hee0e"a"#( 0&, #he (*/ &0 P65.


17/24

@9$#"e(( -&"#$"*$"4. 9he" #he(e 4&&( 7e,e a!,ea2 a-'e * -a/e M,. 9$!(&"6(&"6 7h& 7a( a!(& 7&,'$"4 $" #he Na#$&"a! Ba"'. A( $# 7a( -*(#&/ #& 4& &0#e" #& &*,&00$-e #& #,a"(a-# +*($"e(( 7$#h #he /a"a4e,6 7he" he (a7 #he +&3 -&"#a$"$"4 #he(a$ 4&&(6 0*,$&*( he (a$ #& #he /a"a4e, 9h2 & 2&* (e" #h&(e 4&&( #&Sha"4ha$ 7$#h&*# #he -&"(e"# &0 #he +a"' The" G&!e"+e,46 $" /2 ,e(e"-e6 (a$I ha 2&*, e,/$(($&". > A!,$4h#6 +*# 2&* /*(# (e" #h&(e 4&&( #& Sha"4ha$ #h,*#he +a"' a" #ha# #he 0$,/ P&"4ee K P,&*-e C&. -a"" (e!! (a$ 4&&( 7$#h&*# #hea*#h&,$#2 &0 #he Ma"a4e, &0 #he Ba"'( +,a"-h $" Sha"4ha$.

Q. 9e,e #h&(e (e"# #& Sha"4ha$ #h,* #he +a"' > A. e(($,.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a! !a7 !$+,a,2

Q. A" a0#e, (a$ 4&&( 7e,e (e"# #& Sha"4ha$6 & 2&* '"&7 $0 #he2 7e,e (&! #he,ea" 7h& (&! #he/ > A. U #& #he 2ea, 1586 (a$ 4&&( 7e,e " (&! a"a0#e,7a,( *!#$/a#e!2 #he +a"' ha( $4"&,e $# -&/!e#e!2 a" 7e & " '"&7 7ha#ha( +ee" &"e +2 #he Ba"' 7$#h #h&(e 4&&(.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e(%$,#*a! !a7 !$+,a,2

Q. 9ha# 7a( #he %a!*e &0 #h&(e 4&&( a# #he #$/e #he2 7e,e (e"# #& Sha"4ha$ #h,*#he +a"' > A. I# aea,( $" #h$( $"%&$-e6P16.:.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a! !a7 !$+,a,2

Q. Tha# a/&*"# &, #he ,&-ee( &0 #h$( 4&&( $0 #he2 7e,e (&! $" Sha"4ha$ +2 #he+,a"-h &0 #he +a"'6 & 2&* '"&7 $0 #he2 7e,e -,e$#e #& #he a--&*"# &0 #he I(!a"T,a$"4 C&.6 I"-.6 7$#h #he Ph$!$$"e Na#$&"a! Ba"' > A. I #h$"'6 " +e-a*(e $#(ee/( " #ha# "&+&2 $" #he +a"' '"&7( a+&*# #he(e 4&&( 7h$-h 7e,e (e"# #&Sha"4ha$.

I" #he &$"$&" #he 7,$#e,6 #he #e(#$/&"2 )*e $( ha,!2 (*00$-$e"# #& -ha,4e #he!a$"#$00 7$#h #he ,e(&"($+$!$#2 0&, #he $(&(a! &0 #he /e,-ha"$(e a!!e4e #& ha%e+ee" (h$e #& Sha"4ha$. The I(!a" T,a$"4 C&.6 7a( a -&//e,-$a! &,4a"$a#$&"a" ,e(*/a+!2 'e# ,e-&,( &0 $#( #,a"(a-#$&"(6 +*# #he,e (ee/( #& +e "&&-*/e"# &, +&&' e"#,2 (h&7$"4 #ha# #he 4&& 7e,e (h$e #& Sha"4ha$ #h,&*4h#he !a$"#$00 +a"' &, a"2 &0 $#( +,a"-he(. I0 #he (h$$"4 &-*/e"#( 7e,e#,a"(/$##e &, e!$%e,e #& #he +a"'6 #he,e (h&*! ha%e +ee" a !e##e, &0 #,a"(/$##a!6&0 7h$-h #he I(!a" T,a$"4 C&.6 /*(# ha%e ,e#a$"e a -&2; +*# "& (*-h !e##e, &,-&2 ha( +ee" &00e,e $" e%$e"-e; #he $"%&$-e ,e0e,,e #& $" #he #e(#$/&"2 $(6 $0a"2#h$"46 $" 0a%&, &0 #he !a$"#$00 $"a(/*-h a( $# /a2 +e -&"(#,*e #& $"$-a#e #ha##he $"%&$-e 4&&( 7e,e (h$e #& #he P&"4ee K P,&*-e C&.6 Sha"4ha$. The/a&,$#2 &0 #he /e/+e,( &0 #he -&*,# a,e6 h&7e%e,6 &0 #he &$"$&" #ha# #he*"-&"#,a$-#e #e(#$/&"2 &0 M,. E(-*e#a /*(# +e a--e#e a( #,*e a" #ha# $# (h&7((*00$-$e"#!2 #ha# #he +a"' a((*/e -&"#,&! &%e, #he /e,-ha"$(e #ha# $# 7a( $#( *#2#& a--&*"# #he,e0&,6 a" #ha# ha%$"4 0a$!e #& & (&6 $# /*(# +e -ha,4e 7$#h #he%a!*e &0 #he 4&&(.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a! !a7 !$+,a,2

The !a$"#$00>ae!!a"#( (e-&" a(($4"/e"#( &0 e,,&, $( #& #he e00e-# #ha# #he -&*,#+e!&7 e,,e $" 0$"$"4 #ha# #he (*,e#26 Ra0ae! V$!!a"*e%a6 ha +ee" ,e!ea(e 0,&/,e(&"($+$!$#2 +2 #he !a$"#$00>ae!!a"# a" $" e*-#$"46 0&, #ha# ,ea(&"6 &"e>0$0#h


18/24

0,&/ #he a/&*"# *e #he !a$"#$00.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a! !a7!$+,a,2

Th$( a(($4"/e"#6 $(6 7e #h$"'6 7e!! #a'e". The,e $( a+(&!*#e!2 "& e%$e"-e $" #he,e-&, (h&7$"4 #ha# #he !a$"#$00 4a%e $#( -&"(e"# #& V$!!a"*e%a( 7$#h,a7a! 0,&/

#he (*,e#2 a4,ee/e"#6 &, #ha# $# ,e!ea(e h$/ 0,&/ ,e(&"($+$!$#2. The 0a-# #ha# he7a( " /ae a e0e"a"# $" #h$( a-#$&" $( " (*00$-$e"# #& (h&7 (*-h -&"(e"# &,,e!ea(e; #he (*,e#$e( 7e,e &$"#!2 a" (e%e,a!!2 +&*" a" #he a-#$&" /$4h# +e+,&*4h# a4a$"(# e$#he, &0 #he/ 7$#h&*# &$"$"4 #he -&(*,e#$e(. I# $( 0*,#he, #& +e"e #ha# #he e0e"a"#( /ae "& /$&" $" #he -&*,# +e!&7 #& ha%e V$!!a"*e%a$"-!*e a( a a,#2 e0e"a"#.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a! !a7!$+,a,2

The e0e"a"#(>ae!!a"#( ,e(e"# (e%e" a(($4"/e"#( &0 e,,&,6 "&"e &0 7h$-h -a"+e (*(#a$"e. U"e, #he 0$,(# #h,ee a" #he 0$0#h6 $# $( a,4*e #ha# $# ha( " +ee"(h&7" #ha# #he !a$"#$00 a--e#e #he (*,e#2 a4,ee/e"#. Th$( $( a )*e(#$&" &0 0a-#67h$-h $" &*, &$"$&" 7a( -&,,e-#!2 e#e,/$"e +2 #he #,$a! -&*,#. The &-*/e"#

e%$e"-$"4 #he a4,ee/e"# 7a( e!$%e,e #& #he !a$"#$00 +a"' a" ,e#a$"e +2 $#7$#h&*# &+e-#$&". I# a!(& aea,( #ha# #he +a"'6 &" #he (#,e"4#h &0 #he a4,ee/e"#6e3#e"e -,e$# #& #he I(!a" T,a$"4 C&. The(e 0a-#( (*00$-$e"#!2 $"$-a#e #hea--e#a"-e(. S*-h a--e#a"-e( "ee " "e-e((a,$!2 +e e3,e(( &, $"7,$#$"4.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a! !a7 !$+,a,2

The 0&*,#h a(($4"/e"# &0 e,,&, ha( ,e0e,e"-e #& #he 0a-# #ha# #he !a$"#$006 $" $#(#,a"(a-#$&" 7$#h #he I(!a" T,a$"4 C&.6 -ha,4e a h$4he, ,a#e &0 $"#e,e(# #ha# 0$3e$" #he (*,e#2 a4,ee/e"# a" #he e0e"a"#( a,4*e #ha# &"e &0 #he ,$"-$a!-&"$#$&"( &0 #he a4,ee/e"# #he,e+2 %$&!a#e a" a!#e,e +2 #he !a$"#$00 a"(*,e#$e( -&"(e)*e"#!2 ,e!ea(e. Th$( -&"#e"#$&" -a"" (*--e((0*!!2 +e /a$"#a$"e.

9ha#e%e, $"#e,e(# #he !a$"#$00 /a2 ha%e -ha,4e #he I(!a" T,a$"4 C&.6 $" $#(a--&*"#( #he 0a-# ,e/a$"( #ha# a( a4a$"(# #he (*,e#$e(6 $# $( e/a"$"4 &"!2 #he ,a#e&0 $"#e,e(# (e-$0$e $" #he a4,ee/e"#6 7h$-h (#$!! ,e/a$"( *"-ha"4e a" $"0&,-e.-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a! !a7 !$+,a,2

The e0e"a"#(>ae!!a"#( he, a(($4"/e"#( &0 e,,&, a,e (& -!ea,!2 *"#e"a+!e a( #&,e)*$,e "& $(-*(($&".-ha",&+!e(%$,#*a!a7!$+,a,2-ha",&+!e( %$,#*a! !a7 !$+,a,2

F&, #he ,ea(&"( (#a#e6 #he aea!e *4/e"# $( he,e+2 /&$0$e +2 $"-,ea($"4 #he!a$"#$00( ,e-&%e,2 #& #he 0*!! (*/ &0 P6


19/24

a. 6 &ould become the o&ner because it &as a'reed upon b! them based on the principle of

autonom! of contracts.

b. 6 &ould not become the o&ner because the a'reement that he &ould become the o&ner

upon default of J is a'ainst the la&.

c. 6 &ould no& become the o&ner but &ith ri'ht of redemption b! J.

d. 6 &ould not become the o&ner if J annuls the voidable a'reement.

ANS)ER( *

. !ot an essential re"uisite of real estate mortgage:

a. Mort'a'ee should have free disposal of the propert! mort'a'ed, and in the absence thereof,

he should be le'all! authoriGed for the purpose.b. *ub?ect matter of a contract must be immovable propert! or alienable real ri'hts upon

immovables.

c. Mort'a'or is the absolute o&ner of the propert! mort'a'ed.

d. Constituted to secure the performance of the principal obli'ation.

ANS)ER( A

#. $ contract by virtue of which personal property is recorded in the

%hattel &ortgage 'egister as a security for the performance of an obligation.

a. Pled'e

b. Real Mort'a'e

c. Antichresis

d. Chattel Mort'a'e

ANS)ER( D

(. %hattel is distinguished from pledge.

a. 5he e;cess over the amount due after foreclosure 'oes to the debtor.

b. 5he sale of the ob?ect in an auction distin'uishes the obli'ation.

c. 5he deliver! of the personal propert! is necessit!.

d. 5he re'istration of the propert! in the Re'istr! of Propert! is necessar!.


20/24

ANS)ER( A

). *hich of the following is not correct?

a. If the thin' pled'ed &ill be returned b! the pled'ee, the contract of pled'e is e;tin'uished.

b. An! stipulation allo&in' the pled'ee or mort'a'ee to appropriate the thin' pled'ed or

mort'a'ed is void.

c. In case the creditor foreclosed the chattel mort'a'e, he cannot recover an! deficienc! in case

the proceeds of the foreclosure sale are less than the unpaid obli'ation.

d. A public document containin' a clear and complete description of the propert! mort'a'ed

must be re'istered in the Chattel Mort'a'eRe'ister, other&ise, the mort'a'e is not void.

ANS)ER( C

+. $ stipulation whereby the pledgee or mortgagee automatically becomes the owner of

the thing pledged or mortgaged.

a. Pactum commissorium

b. Consolidation of o&nership

c. Conventional redemption

d. Consi'nation

ANS)ER( A

. *hich of the following statements is true and correct?

a. Pled'e and mort'a'e are accessor! contracts because the! cannot e;ist b! themselves.

b. In both pled'e and mort'a'e, the creditor is entitled to deficienc!?ud'ment.

c. here an obli'ation is secured b! a pled'e or mort'a'e and it is not paid &hen due, the

pled'ee or mort'a'ee ma! dispose of the thin' pled'ed or mort'a'ed if there is an a'reement

to that effect bet&een the parties.

d. 7nless other&ise a'reed upon b! the parties, the sale of the mort'a'ed propert!e;tin'uishes in full the obli'ation of the mort'a'or to the mort'a'ee.

ANS)ER( A


21/24

-. he price stipulated by the parties to a mortgage contract below which the property

shall not be sold at public auction.

a. Mar(et price

b. Current price

c. 5ipo or 7pset price

d. *ellin' price

ANS)ER( C

/. he written abandonment of the pledge produces which the of the following effects?

a. 5he principal obli'ation is e;tin'uished.

b. 5he pled'e remains unless the thin' pled'ed is returned.c. 5he pled'e remains unless the debtorKpled'or has accepted abandonment in &ritin'.

d. 5he pled'ee becomes a depositar! until he 'ives bac( the possession of the thin' pled'ed to

the debtorKpled'or.

ANS)ER( D

10. $ sworn statement attesting to the fact that the chattelmortgage is made for the

purpose of securing the obligation specified in the conditions thereof, and for no other

purpose, and that the obligation is ust and valid, and one not entered into for thepurpose of fraud.

a. Affidavit of 'ood moral character

b. Affidavit of merit

c. Affidavit of 'ood faith

d. Affidavit of trust

ANS)ER( C

a. Real contract

b. Pled'or or mort'a'or

c. 5hin' pled'ed ma! be appropriated if debtor cannot pa!

d. Pled'or or mort'a'or must have a free disposal of the thin' pled'ed


22/24

ANS)ER( C

12. he rule on pactum commissorium does not apply to

a. Antichresis

b. Pled'e

c. Real mort'a'e

d. Commodatum

ANS)ER( D

1$. It is also the essence of the contracts of pledge andmortgage that when the

principal obligation becomes due, the things in which the pledge or mortgage consistsmay be

a. Appropriated b! the creditor

b. 4isposed of b! the creditor

c. Alienated b! the creditor

d. 4eposited &ith the third person prior to foreclosure

ANS)ER( C

1%. 'eal estate mortgage

a. )as for its ob?ect movables as &ell as immovables

b. Is perfected the moment the contract is re'istered &ith theRe'istr! of Propert!

c. Is inseparable because the mort'a'e directl! and immediatel! sub?ects the propert! upon

&hich it is imposed, &hoever the possessor ma! be, to the fulfillment of the obli'ation for &hose

securit! it &as constituted

d. Entitles the mort'a'ee to the fruits of the thin' mort'a'ed

ANS)ER( C

1'. 2ffect of sale on the thing pledged if it is less than the principal obligation

a. Creditor cannot recover the deficienc! unless there is a stipulation

b. Creditor cannot recover the deficienc!


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c. Creditor cannot recover the deficienc! even if there is a stipulation

d. Creditor can recover the deficienc! even if there is no stipulation

ANS)ER( C

16. If the proceeds of the sale is more than the obligation, the creditor is entitled to the

e3cess unless otherwise stipulated, while if it is less, the creditor cannot recover the

deficiency even if there is no stipulation. his is applicable to

a. Pled'e

b. Chattel mort'a'e

c. Real estate mort'a'e

d. Mutuum

ANS)ER( A

1+. *hich of the following is not a re"uired formality in an auction sale?

a. 5he pled'or or the o&ner and the pled'ee must bid

b. It must be made &ith the help of a notar! public

c. 5he debt &as alread! due but &as not paid on time

d. Notice to the debtor and the o&ner of the thin' pled'ed before and after the public auction

ANS)ER( A

1&. *hich of the following is not an obligation of the pledgor?

a. 5o participate in the public auction of the thin' pled'ed

b. 5o inform the pled'ee of the fla&s, of the thin' if (no&n to him

c. 5o pa! the principal obli'ation includin' the interest, and e;penses in a proper case

d. 5o reimburse the pled'ee for the e;penses incurred for the preservation of the thin' pled'ed

ANS)ER( A

19. 4ne of the following is a right of the pledgor

a. Reimbursement for the preservation of the thin' pled'ed


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b. 4emand return of the thin' pled'ed upon pa!ment of the principalobli'ation

c. Recover or defend the thin' pled'ed a'ainst a third person

d. Continue to have a lien on the thin' pled'ed even if it is alienated

ANS)ER( *

20. !ot a valid obect of pledge

a. Certificate of stoc(

b. *toc( dividends

c. arehouse receipts

d. 5imberland

ANS)ER( D

Date post:	01-Jun-2018
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