Uribe Notes on Credit

8/12/2019 Uribe Notes on Credit

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CREDIT TRANSACTIONSAtty. Crisostomo Uribe

Defnitions:

• Article 1933

• Article 1962

• Article 2047

• Article 2132

• Article 2140

Important provisions:

• Article 1942

• Article 1979

• Article 1956 – interest in simple loan

• Article 2085

• Article 2088 - pactm commissorim

• Article 2089 - in!ivisi"ilit# principle $not #et as%e! in t&e "ar e'ams(

• Article 2115 - ri)&t to recover t&e !efcienc# or t&e ri)&t to recover t&e e'cess in

ple!)e an! mort)a)e $*avorite +estion in "ar e'ams(

,: Are cre!it transactions "ailments

A: .o/ ome o* t&em are "ailments "t not all o* t&em/

,: &# are t&e# not "ailmentsA: In a "ailment t&ere is a !eliver# o* a propert# "# one person to anot&er in trst *or aparticlar prpose it& an a)reement e'press or implie! t&at sc& t&in) ill &ave to "eretrne! or at least acconte! *or/ In *act t&e or! "ailment is sai! to come *rom t&erenc& or! "ailer &ic& means to !eliver/ In some cre!it transactions !eliver# is notre+ire! *or t&e per*ection o* t&e contract/ In *act t&at contract ma# "e e'tin)is&e! evenit&ot an#t&in) &avin) "een !elivere!/ pecifcall# re*errin) to:

1/ arant# - not&in) is !elivere! *or its per*ection an! ma# even "e e'tin)is&e!it&ot an#t&in) "ein) !elivere! "# t&e )arantor to t&e cre!itor/

2/ ret#s&ip3/ ort)a)e – not&in) is !elivere!/ &e mort)a)or remains in possession o* t&e t&in)

mort)a)e!/

&ese transactions are not "ailments "t are calle! cre!it transactions/

,: &# not cre!it contractsA: ;ecase not all cre!it transactions are contracts/ ome o* t&ese transactions ol! arise"# operation o* la an! no a)reement is re+ire!/ <'amples incl!e:

1/ =e)al ple!)e $ple!)e "# operation o* la(2/ >!icial !eposit – it is "# or!er o* t&e cort t&at a t&in) ol! "e !eposite! it& t&e

cort/

,: &# not secre! transactionsA: ;ecase not all cre!it transactions are secre! transactions/

,: &# cre!it transactionsA: ;ecase all t&ese transactions ol! involve cre!it/ ?re!it means t&e "elie* "# a personin t&e ot&er person@s capacit# to *lfll &is o"li)ations in t&e *tre/

,: a# a sale "e a cre!it transactionA: es/ &ere is a sale %non as sale on cre!it/ ;t e !on@t reall# !iscss sales or!inaril# asa cre!it transaction "ecase most sales are not sales on cre!it/ $e)/ Bapa) "mi"ili %anaman n) t"i) !i naman tan) #anC Bn) ala %an) pam"ili ma&a %a lan)//(

Transcribed by: Tere Carbero and Mafe Halili Page 1




.ormall# sales on cre!it ol! involve #n) millions o* pesos or &n!re!s o* t&osan!s an)price/

,: Distin)is& "rie# commo!atm $classic "ailment t&at@s &# t&e parties are calle! "ailor-"ailee( an! mtm $simple loan(/A:

?EEDAF FFF &e "ailee ac+ires t&e se o* t&e t&in) "tnot its *rits nless ot&erise stiplate!/ &et&in) is !elivere! *or t&e se o* t&e ot&erpart#/

&e "orroer ac+ires oners&ip over t&emone# or propert# "orroe!/ Goever &eill &ave an o"li)ation to pa# t&e len!er at&in) o* t&e same %in! an! +alit#/

,: Distin)is& s*rct an! commo!atm/ tate &et&er t&is ma# "e constitte! overconsma"le )oo!s/A:

FFHF? ?EEDAFertains to t&e ri)&t to enJo# t&e *rits He*ers to t&e ri)&t to se t&e t&in)

es t&is ma# "e constitte! overconsma"le )oo!s/ &ere can "e a s*rct

over mone#/ A vali! s*rct ma# "econstitte! as to t&e *rits o* t&e t&in)/

es t&is ma# "e constitte! overconsma"le )oo!s/ As lon) as t&e )oo!s are

not to "e consme! or t&e prpose o* t&etransaction is not *or consmption "tpro"a"l# onl# *or e'&i"ition/

,: Al"erto an! >anine mi)rate! to t&e F leavin) "e&in! t&eir *or c&il!ren one o* &om isann#/ &e# one! a !ple' apartment an! alloe! ann# to live in one o* t&e nits/ &ilein t&e F Al"erto !ie!/ Gis i!o an! &is c&il!ren e'ecte! an e'traJ!icial settlement o* Al"erto@s estate &erein t&e to-!oor apartment as assi)ne! "# all t&e c&il!ren to t&eirmot&er >anine/ "se+entl# s&e sol! t&e apartment to >or)e/ &e latter re+ire! ann# tosi)n a prepare! lease contract so t&at &e an! &is *amil# col! contine occp#in) t&e nit/ann# re*se! to si)n t&e contract alle)in) t&at &is parents alloe! &im an! &is *amil# tocontine occp#in) t&e premises/ I* #o ere >or)e@s consel &at le)al steps ol! #ota%e <'plain/

A: irst step is to )ive notice to >or)e to vacate t&e premises "ecase &e re*ses to si)n t&elease contract/ Fn!er t&e *acts &en ann# even in &is claim t&at &is parents alloe! &iman! &is *amil# to contine occp#in) t&e premises an! apparentl# t&ere as no pa#ment *ort&e se o* t&e premises commo!atm as constitte! over t&is apartment nit/ As provi!e!"# la commo!atm is a prel# personal contract an! it& t&e !eat& o* t&e "ailorcommo!atm as e'tin)is&e!/ In *act n!er t&e *acts all &is c&il!ren incl!in) ann#e'ecte! an e'traJ!icial settlement &erein t&e apartment nit as assi)ne! to t&e mot&eran! t&ere*ore i* at all &e ol! still "e alloe! to remain in t&e premises t&at ol! "e int&e concept o* commo!atm it&ot pa#in) rentals *or t&e se o* t&e nit/ &s &en itas sol! ann# ol! no lon)er &ave a ri)&t over t&e propert# as &is ri)&t ol! !epen!on t&e ri)&t )iven to &im "# &is mot&er/ I* &e ol! *ail to vacate t&e premises an action *oreJectment ol! "e t&e proper reme!#/

,: ?&oose t&e ri)&t anser: &e parties to a "ailment are

a( "ailor"( "aileec( commo!atario!( all o* t&e a"ovee( letter a an! "

A: =etter e $"ailor an! "ailee(/ ?ommo!atario re*ers onl# to a particlar %in! o* "ailment&ic& is commo!atm/ &e +estion pertains to a "ailment in )eneral/





=<?FH<:Deposit is a "ailment/ =oosel# spea%in) t&e !epositor is t&e "ailor an! t&e !epositar#

is t&e "ailee/ &e part# &o receives t&e propert# is t&e "ailee/ Ba#a lan) I &ave arne! #oalrea!# t&at i* t&e la calls t&em "# specifc names "# all means se t&e name )iven "#la/ o %n) alam ni#on) !eposit ito call t&em !epositor-!epositar# an! not "ailor-"ailee/

,: Go man# %in!s o* loan DepositA: In loans t&ere are to %in!s/ In !eposit t&ere are also to %in!s/ ;t as *ar ase'traJ!icial !eposit t&ere are to %in!s: volntar# an! necessar#/ It is onl# t&e volntar#!eposit &ic& is a contract/ >!icial !eposits an! necessar# !eposits are not contracts/.ecessar# !eposits are constitte! "# la &ereas J!icial are "# or!er o* t&e cort orse+estration/

,: &at is t&e prpose o* commo!atmA: &e prpose o* commo!atm is t&e se o* t&e t&in)/ &e "ailee ol! &ave no ri)&t tose t&e *rits nless ot&erise stiplate!/ In ot&er or!s i* &e "orroe! a cara"ao an!&ile in &is possession t&e cara"ao &a! an oKsprin) &e ill &ave no ri)&t to se t&eoKsprin) nless ot&erise stiplate! "# t&e parties/ Ba#a lan) "# e'press provision o* t&ela t&is is essentiall# )ratitos/ I* t&ere is a stiplation *or t&e se o* t&e t&in) t&at is notcommo!atm/

,: &at is t&e prpose o* !epositA: In !eposit a t&in) is !elivere! *or sa*e%eepin)/ &at is t&e prpose o* t&e !eliver# o* t&et&in)/ &e !epositar# is not sppose! to se t&e t&in)/

,: As to contracts n!er cre!it transactions &at are t&e onl# principal contractsA: &e onl# principal contracts are commo!atm simple loan an! !eposit/ All ot&ercontracts covere! "# cre!it transactions are accessor# contracts/ All o* t&em are secrit#arran)ements sc& as )arant# sret#s&ip ple!)e c&attel mort)a)e real estate mort)a)eantic&resis/

=<?FH<:In Art/ 1316 commo!atm an! !eposit are mentione! as real contracts/ &at is not

present in t&is matri' is ple!)e/

,: Is simple loan also a real contractA: es/ &ere*ore "e*ore t&e !eliver# o* t&e t&in) "orroe! t&e contract is not t&enper*ecte!/ ;t ta%e note t&at even "e*ore t&e !eliver# o* t&e t&in) &ic& is t&e s"Jectmatter o* t&e contract t&e a)reement "eteen t&e parties is alrea!# a vali! an! "in!in)a)reement/ In ot&er or!s t&ere ol! alrea!# "e ri)&ts arisin) *rom t&e a)reement even i* t&e contract itsel* &as not #et "een per*ecte!/

,: I* t&ere as an a)reement to constitte a commo!atm in an a)reement "eteen A an!; ; ill "orro t&e cara"ao o* A/ ;e*ore t&e !eliver# o* t&e cara"ao is t&e a)reementalrea!# vali! an! "in!in)A: es/ Goeveer t&e commo!atm itsel* ill not "e per*ecte! ntil t&e !eliver# o* t&e

cara"ao/ &is ol! !efnitel# "e relevant *or e'ample in ple!)e "ecase t&e ri)&ts o* t&eple!)ee ill onl# arise in relation to t&e t&in) ple!)e!/ or e'ample i* t&ere is *ailre to pa#&e can onl# sell t&e t&in) ple!)e! i* t&e ple!)e as per*ecte!/ o %n) ala pan) !eliver# o* t&e t&in) ple!)e! &e cannot avail o* t&e reme!ies provi!e! "# la "ecase t&e contract asnot per*ecte!/ ;t since t&e a)reement as alrea!# vali! an! "in!in) t&e ot&er part# &o isentitle! to !eliver# can alrea!# compel t&e ot&er part# to !eliver t&e t&in) in or!er *or t&econtract to "e per*ecte! or i* t&e ot&er part# can no lon)er !eliver it can "e t&e "asis o* lia"ilit# o* t&at person &o "on! &imsel* to !eliver in t&is contract &et&er it is a !eposit orple!)e &ic& are real contracts/





,: Is commo!atm essentiall# )ratitosA: es/ I* t&ere is compensation *or t&e se t&e ? rle! in t&e case o* Hep"lic v/ ;a)tast&at t&e contract as a lease contract "ecase t&ere as compensation *or t&e se o* t&e"lls/

,: Is simple loan or mtm essentiall# )ratitosA: .o/ imple loan or mtm is or!inaril# )ratitos sc& t&at &en #o "orro a sm o* mone# *rom a *rien! normall# alan) interest/ a) ma)-c&ar)e si#a n) interest &in!imas#a!on) *rien! /

,: In sc& case is t&e *rien! entitle! to interestA: es/ Ge ma# "e entitle! to interest i* t&ere is an e'press stiplation in ritin)/ I &avesome&o emp&asiLe! t&at Art/1956 in relation to interest pertains to compensator#interest/

,: Go is compensator# interest earne!A: I* t&e sm o* mone# as "orroe! a #ear a)o an! t&e parties a)ree! t&at it ol! "e!e to!a# t&e interest t&at ol! "e earne! *rom last #ear p to t&is !a# is compensator#interest/ or t&e cre!itor to "e entitle! to t&is interest it &as to "e e'pressl# stiplate! inritin)/

,: Go is interest "# a# o* !ama)es earne!A: I* to!a# cre!itor !eman!e! *or pa#ment an! t&e !e"tor *aile! to pa# startin) tomorro &eill "e lia"le alrea!# *or interest "# a# o* !ama)es/ &is time &in!i na %ailan)an nastiplate!/ o an) lia"ilit# ni#a *or interest is "ecase &e is lia"le *or !ama)es "ecase &eas alrea!# in !ela#/

,: &at is interest rate in case o* loanA: I* t&ere as stiplation in ritin) "t no specifc rate as a)ree! pon it ill "e t&e le)alrate &ic& is 12M/ ;t ta%e note t&at t&e sr# la &a! alrea!# "een sspen!e! %a#anormall# t&e# can stiplate as to an# interest rate e'cept t&at a)ain t&e ? *rom time totime ol! consi!er an interest rate as stiplate! "# t&e parties to "e contrar# to morals –to "e immoral "ecase it is e'cessive nreasona"le t&s it is !eclare! voi!/<)/ 3M per mont& interest pls 3M per mont& penalt# ere "ot& re!ce! to 1M per mont&/

n) 3M per mont& interest &ic& is 36M per annm as consi!ere! contrar# to morals –immoral e'cessive e'or"itant t&ere*ore voi!/

,: I* t&e interest stiplate! is voi! ol! t&e cre!itor still "e entitle! to interestA: es/ ero An) )ina)aa n) ? ol! re!ce t&e rate to t&e le)al rate/ As in t&e e'ampleprovi!e! #n) 3M na)in) 11M per mont& %a#a eKectivel# 12M pa!n per annm/

,: As to t&e penalt# na 3M na)in) 1M is t&ere "asis to t&e re!ctionA: es/ ;ecase in o"li)ations it& a penal clase #n) penalt# ma# "e re!ce! in toscenarios: 1("ecase t&e penalt# is e'cessive or e'or"itantN or 2( t&ere as partial*lfllment or even irre)lar *lfllment o* t&e o"li)ation/ In t&at case ma# partial pa#ments

naman %a#a t&at as se! as a )ron! to re!ce t&e penalt# *rom 3M per mont& to 1M permont&/

,: Is !eposit or!inaril# a )ratitos contractA: es/ Deposit or!inaril# is a )ratitos contract/ &en #o as% #or classmate to &ol! #or"oo% ma#"e *or over t&e ee%en! *or sa*e%eepin) &a"an) na)"a"a%as#on %a sa "oraca#t&at ol! "e a !eposit/ ;t normall# #o !on@t &ave to pa# *or t&e sa*e%eepin) o* #or"oo%/ Goever t&is is s"Ject to t&e e'ception t&at t&ere col! "e an a)reement *orpa#ment o* rentals or even it&ot sc& stiplation *or t&e pa#ment o* rentals i* t&e





!epositar# is in t&e "siness o* sa*e%eepin)/ o i* #o !eliver )oo!s or t&in)s *orsa*e%eepin) it is alrea!# n!erstoo! t&at #o &ave to pa# rentals "ecase t&e !epositar# isen)a)e! in sc& "siness/

,: &at is t&e eKect o* one o* t&e partiesA:

?EEDAF FFF &is contract is prel# personal in c&aracter/Gence !eat& o* one o* t&e partiese'tin)is&es t&e contract

&is is not a prel# personal contract/ &ere*ore i* t&e cre!itor !ies &is &eirs ill"e &app# to !eman! *or t&e per*ormance o* t&e !e"tor@s o"li)ation/ I* !e"tor !ieso"li)ation is not e'tin)is&e!/ Gis estate ill"e responsi"le *or t&e per*ormance o* &iso"li)ation/

,: Is !eposit a personal contractA: &e la ol! consi!er !eposit personal onl# i* it is )ratitos in c&aracter/

,: In relation to a contract o* loan &at is t&e s"Ject matter in commo!atm tm

A:?EEDAF FFF

mova"les an! immova"lese)/ 5 &ectares o* lan! &ose an! lot $#ocan se t&e &ose an! lot it&otcompensation(

onl# mova"lese)/ a sm o* mone# 1 %ilo o* s)ar

As to &et&er t&e s"Ject ma# "e consma"le or nonconsma"le :

?EEDAF FFF1/ .onconsma"les-t&e t&in) or!inaril# s&ol! "enonconsma"le "ecase t&ere is ano"li)ation to retrn t&e ver# same t&in)/

I* t&e )oo!s or t&e t&in) is a consma"let&in) an! it is se! in accor!ance to itsnatre it ill "e consme! at ala n)maisasali so !apat nonconsmma"le/

2/ ?onsma"les $Art/1936(- as lon) as t&e prpose is not *orconsmption/

1/ ?onsma"les- t&ere is no ot&er article &ic& ol!

allo a nonconsma"le t&in) to "et&e s"Ject matter o* mtm/

- e): ;orroin) one %ilo o* mascova!os)ar t&at is consma"le/ #o &ave

to pa# i* #o are t&e "orroer it&one %ilo o* mascova!o s)ar o* t&esame %in! an! +alit# "t o"viosl#not o* t&e same s)ar &ic& #o"orroe! $"a%et %a pa nan)&iram%n) &in!i mo )a)amitin(

2/ .onconsma"les $Accor!in) to ro*/ olentino an! Att#/ Fri"e(

;t accor!in) to Att#/ Fri"e t&ere can "e vali! mtm over a nonconsmma"le t&in)

"ase! on &is e'perience/

Att#/ Fri"e: I had an experience a few meters away San Sebastian. I went to CentralBookstore outlet in Ever Gotesco. When I asked for olume I of !rof. "olentino#s book$ thesalesperson asked me if I can wait for a few minutes as he will %ust &et a book from another bookstore$ I think to 'ex Bookstore. When he returned$ he sold the book which he &ot fromthe other bookstore but he told me that he will %ust have to deliver a kind of such book whentheir stocks arrive. In other words$ when I tried to buy the book$ wala pa silan& stocks pero

paparatin& na. So e(ectively$ walan& problema between me and Central Bookstore$ that#s asale and therefore I ac)uired ownership over the book. But what was the le&al relationship





between the Central Bookstore and the 'ex Bookstore in relation to the book which was soldto them* "he possible claims are that +,it is a barter- or ,it is a loan. "his can never bebarter because this involves the same kind of thin&. /apa& barter$ dapat kalabaw at kabayo.In fact the law expressly provides na kapa& barter$ nonfun&ible. !ero since this can bereplaced by a thin& of the same kind and )uality$ this is fun&ible. It cannot be barter rather it is really a loan.

Why*

It has to be a loan because ownership has to pass to the Central Bookstore so that ownership will pass to me by way of sale. 0owever$ they will have an obli&ation to pay theother bookstore with a thin& of the same kind and )uality. So I think "olentino is correct inconsiderin& nonconsummables to be a valid sub%ect matter of a contract of loan.

"he explanation here by some authors is that yun& de1nitions n& simple loan andcommodatum under 2rt.+344 is defective in the sense that if properly translated from theold Civil Code to the 5ew Civil Code$ the word that should have appeared instead of consumables for mutuum should have been fun&ible. Instead of nonconsummables incommodatum$ it should have been nonfun&ible. In other words$ in commodatum the thin&borrowed cannot be replaced by a thin& of the same kind and )uality. "he bailee or theborrower has to return the very same thin& kaya nonfun&ible. Whereas in simple loan$borrower can return a thin& of the same kind and )uality kaya fun&ible sya. "he word shouldnot have been really consumable but fun&ible.

,: In relation to !eposit &at is t&e s"Ject matter in J!icial !eposit <'traJ!icial !eposit

>FDI?IA= D<EI FFFenerall# immova"les$alt&o)& &in!i naman !a!al&in an)immova"le mismo sa %orte i* t&is is a parcelo* lan!/ ?ertifcates o* title ol! "e!elivere! to t&e cort(

onl# mova"les

As to &et&er t&e s"Ject ma# "e consma"le or nonconsma"le :in !eposit it ma# "e consma"le or nonconsmma"le/ It !oes not matter/ Alt&o)& I

ol! sa# t&at i* t&e )oo!s are peris&a"le na consma"les t&e perio! o* t&e !eposit ill Jst"e a ver# s&ort perio!/ ;a%a ilan) oras lan) or ilan) ara %ase consma"le na peris&a"le pa/&ereas pa) nonconsma"le mas%i 50 #rs/

,: In relation to e'penses incrre! "# t&e "ailee in relation to t&e t&in) "orroe! incommo!atm:;e*ore &e le*t *or Hi#a!& to or% as a mec&anic e!ro le*t &is A!ventre van it& ito it&an n!erstan!in) t&at t&e latter col! se it *or 1 #ear *or &is personal or *amil# se &ilee!ro or%s in Hi#a!&/ Ge !i! not tell ito t&at t&e "ra%es o* t&e van ere *alt#/ ito &a! t&evan tne! p an! t&e "ra%es repaire!/ Ge spent a total amont o* 15000/00 apparentl# *or"ot& t&e tne p an! t&e repair o* t&e "ra%es s#stem/ A*ter sin) t&e ve&icle *or to ee%s

ito !iscovere! t&at it consme! too mc& *el/ o ma%e p *or t&e e'penses &e lease! it toAna"elle/ o mont&s later e!ro retrne! to t&e &ilippines an! as%e! ito to retrn t&evan/ Fn*ortnatel# &ile "ein) !riven "# ito t&e van as acci!entall# !ama)e! "# a car)otrc% it&ot &is *alt/&o s&all "ear t&e 15000/00 spent *or t&e van&o s&all "ear t&e cost *or t&e van@s *el oil an! ot&er materials &ile it as it& ito

A: ito/ =i"re na n)a ni#a )inamit n) van pati "a naman *el ipapa-s&ol!er pa ni#a sama#-ari/ A"so na #an/ In commo!atm frst #o &ave to !etermine t&e natre o* t&ee'pense/ Is t&e e'pense necessar# *or t&e se or preservation I* it is not necessar# *or t&e





se or preservation $e)/ Ge replace! lan) #n) tires )inaa ni#an) m) tires or m)&eels( &e cannot !eman! *or reim"rsement *or sc& e'pense/ alan) reim"rsement/An) %otse nila)#an ni#a n) spoiler sa li%o! o"viosl# t&at is not necessar# *or t&e se an!preservation nless malina t&at &e "orroe! t&e car as a sports car $m%&an) an) spoilera# %ailan)an #ata sa m)a sports car(/ As *ar as t&e e'penses *or t&e se an! preservation!alaa ito: 1( in relation to t&is pro"lem tne pN 2( repair n) "ra%es/ o &ave to +ali*#

*rt&er &et&er it is an or!inar# e'pense or an e'traor!inar# e'pense/ or or!inar# e'penseli%e ito &a! t&e van tne! p n) tne-p &e cannot !eman! *or reim"rsement !itto %ase%ailan)an naman tala)a #n *or t&e se o* t&e car/ I* #o ol! "e sin) it #o &ave to &avet&e car tne! p ever# no an! t&en/ ero #n) repair o* t&e "ra%es t&is is an e'traor!inar#e'pense &ic& can "e t&e s"Ject o* reim"rsement/ Ba#a !oon sa 15000/00 a portion o* t&at can "e reim"rse! "ecase it pertains to an e'traor!inar# e'pense/ ero in relation toacci!ental !ama)e case! "# t&e car)o trc% #n) acci!ental !ama)e &appene! &ile t&etrc% as "ein) se!/ &e la provi!es t&at *or e'traor!inar# e'penses t&e "ailee can!eman! *or reim"rsement n) 100M i* t&e !ama)e as case! &ile not "ein) se!/Galim"aa nari#an lan) si#a sa par%in) area ni#a na)%aroon n) eart&+a%e &atevere'pense t&at ill &ave to "e spent *or t&e repair ill "e &oll# reim"rsa"le/ ;t i* t&e!ama)e as case! &ile t&e t&in) as "ein) se! li%e in t&is pro"lem t&e reim"rsementill onl# "e p to 50M/ A)ain t&is is an e'traor!inar# e'pense "t t&e !ama)e as case!&ile t&e t&in) as "ein) se!/

,: Into t&e ri)&ts an! o"li)ations o* t&e parties: &at ol! "e t&e eKect o* t&e loss o* t&et&in) "orroe! &ile t&e t&in) is in t&e possession o* t&e "ailee or t&e "orroerA: I* t&e loss as case! "# a *ortitos event or!inaril# t&e "ailor ill "ear t&e loss i* t&e"ailor as t&e oner/ a%e note in commo!atm t&e "ailor nee! not "e t&e oner o* t&et&in) loane! "ecase t&ere is no trans*er o* oners&ip/ ;t i* &e is t&e oner &e ill "e t&eone to "ear t&e loss "ecase a)ain t&ere "ein) no trans*er o* oners&ip &e remains to "et&e oner n!er t&e res perit domino rle t&e oner "ears t&e loss/.ote: n!er certain circmstances even i* t&e loss o* t&in) "orroe! as !e to a *ortitosevent it ill "e t&e "ailee or t&e "orroer &o ill "ear t&e loss even i* &e is not t&e oner/

HE;=<: A pon re+est loane! &is passen)er Jeepne# to ; to ena"le t&e latter to "rin)&is sic% i*e *rom ani+i arlac to t&e &ilippine eneral Gospital in anila *or treatment/En t&e a# "ac% to ani+i a*ter leavin) &is i*e at t&e &ospital people stoppe! t&epassen)er Jeepne#/ ; stoppe! *or t&em an! alloe! t&em to ri!e on "oar! acceptin)pa#ment *rom t&em Jst as in t&e case o* an or!inar# passen)er Jeepne#s pl#in) t&e rote/As ; as crossin) ;am"an t&ere as a t&rst o* la&ar *rom t/ inat"o/ &e Jeep t&at asloane! to &im as rec%e!/ $Er!inaril# t&ere ol! "e +estions t&at ol! "e as%e!"ecase a certain event &appene! Jst in t&e imme!iate past/ Ito 1993 "t #n) t/inat"o erpte! actall# in 1991/(

,: &at !o #o call t&e contract t&at as entere! into "# A an! ; it& respect to t&epassen)er Jeepne# t&at as loane! "# A to ; to transport t&e latter@s sic% i*e to anilaA: I* t&e anser )iven is contract o* loan &in!i mas#a!on) ma)an!a/ In *act t&e e'amineralrea!# sai! t&e Jeepne# t&at as loane! "# A to ;/ A "etter or more accrate anser ist&at t&is is a contract o* commo!atm/ It appears in t&e *acts t&at t&ere &as "een no

compensation *or t&e se o* t&e Jeepne#/ .ei)&"or lan) ni#a ito m%&an) *avor lan) ni#a ito*or t&e se o* t&e Jeepne# *or &im to "e a"le to "rin) &is i*e to G/

,: Is ; o"li)e! to pa# *or t&e se o* t&e passen)er Jeepne#A: .o/ In commo!atm t&ere is no o"li)ation to pa# an! in *act n!er t&e *acts t&ere as nostiplation t&at ; is re+ire! to pa# rental *or t&e se o* t&e Jeepne#/

,: Is ; lia"le to A *or t&e loss o* t&e Jeepne#/





A: &e loss o* t&e Jeepne# as !e to a *ortitos event la&ar/ Goever &e ol! "e lia"leas t&e la provi!es "ecase &e se! t&e t&in) *or a prpose !iKerent *rom t&at a)ree!pon "# t&e parties/ Ge as onl# alloe! to se t&e Jeepne# to "rin) &is i*e to t&e &ospital/Ge as not alloe! "# t&e oner to se it as a passen)er Jeepne#/ i)ro ma&i)pit an)pan)an)ailan)an %ase nasa ospital an) asaa/ ;t t&is ol! *all s+arel# n!er Art/ 1942&ere t&e "ailee ill "e t&e one to "ear t&e loss &e ill "e lia"le *or t&e loss even i* t&e loss

as !e to *ortitos event "ecase &e !evote! t&e t&in) to ot&er prpose notcontemplate! "# t&e parties/ &is is a )oo! la !efnitel# "ecase &a! &e not se! it as apassen)er Jeepene# "a%a &in!i ina"tan n) la&ar %a#a &e ol! "e lia"le *or t&e loss/

,: A "orroe! ;@s trc% !rin) a fre &ic& "ro%e ot in A@s )ara)e/ Ge &a! time to save onl#one ve&icle an! &e save! &is car instea! o* t&e trc%/ Is &e lia"le *or t&e loss o* ;@s trc%&#A: es "ecase t&ere &ere is a conict o* interest/ Instea! o* savin) t&e trc% &ic& &e"orroe! &e save! &is on car/ ;# e'press provision o* t&e la i* &e c&ooses to save &ist&in) instea! o* t&e t&in) &ic& &e "orroe! &en &e &a! t&e opportnit# to save one o* t&e to t&in)s &e can "e &el! lia"le *or t&e loss o* t&e t&in)/ ;t #o consi!er t&ep&raseolo)# o* t&e +estion &e &a! t&e time to save onl# one ve&icle/

Att# Fri"e: I had a student here in San Sebastian$ the only student in almost 6 years of teachin&$ who &ave us an answer to a similar )uestion 7she is now a lawyer,. Sir$ it dependson how the cars were parked if they were parked one after the other$ I#m sure she was

ima&inin& dun sa m&a parkin& area n& apartment units were vehicles are parked one after the other. So if you are in front$ before you could brin& your car out of the &ara&e all theother cars would have to be driven out of the &ara&e. E lalo na kun& ikaw yun& nasa dulo./araratin& mo pa lan& n& alas8sin&ko n& uma&a tapos may aalis na n& alas8sais &i&isin&in kana naman dahil somebody will be leavin& the &ara&e. So sabi niya if that is the case$ thenthe borrower cannot be held liable because if the car was in front then he will not have any opportunity to save the car in front because he would only have the time to save the car which was parked at the last row.I actually had to think really hard dun sa tanon& na yun because if you consider the

phraseolo&y$ he saved his car instead of the truck. "he premise of the problem which iscontemplated by the law is that he actually had the opportunity to save either. 0indi duonsa scenario niya where he never had the opportunity to save either because he could only save one. 0indi mo pweden& ma8save yun& isa because the other cars are still at the back.So what is meant by +39 is that the bailee actually had the opportunity to save either of the two: yun& sarili niya at yun& borrowed vehicle. 2nd if he saved his own he would beliable for the loss of the borrowed truck. 72t dahil na&8isip ako$ bini&yan ko sya n& 9pointsout of ; - nasa ar&uments lan& yan$ kun& &aano ka&anda un& ar&uments. <n& iba$ may

taman& sa&ot pero di ma&anda an& explanations. Sometimes I will not &ive full points,

,: ive ot&er scenarios &ere t&e "ailee ill "e t&e one to "ear t&e loss/A: I* t&e t&e "ailee %ept t&e t&in) lon)er t&an t&e perio! stiplate!/ &is is consistent it&Art/ 1165 t&at $to !eliver a !eterminate t&in) an! t&e t&in) as lost or !estro#e! !e to a*ortitos event( &e ma# still "e &el! lia"le *or t&e loss o* t&e t&in) i* &e as alrea!# in !ela#at t&e time o* t&e lost/ In t&e case o* Hep"lic v/ ;a)tas &ere t&e ? actall# state! t&att&e contract as a contract o* lease !espite t&e contention o* t&e estate o* ;a)tas t&at it iscommo!atm t&e ? &el! t&at even i* t&is contract is commo!atm still lia"le pa !in an)estate "ecase t&e estate %ept it lon)er t&an t&e perio! stiplate!/ Fn!er t&e *acts na)-e'pire na an) perio! na)-re+est n) e'tension *or one #ear pina)"i)#an *or t&e e'tension an) sccee!in) re+est *or t&e e'tensions &in!i na pina)"i)#an an! t&erea*ter t&e "ll !ie!/<ven i* t&e lost as !e to a *ortitos event "ecase t&e estate as alrea!# in !ela# in t&e!eliver# o* t&e "lls still n!er Art/ 1942 t&e estate as &el! lia"le/ &e ot&er reason &#t&e estate o* ;a)tas as &el! lia"le in t&at case as "ecase &en t&e "lls ere !elivere!to ;a)tas ma# appraise! vale an) "aat "ll #n) isa tipon) 1300/00 #n) isa





1200/00/ In ot&er or!s i* t&ere is an appraise! vale o* t&e t&in) "orroe! &en it as!elivere! to t&e "orroer even i* t&e t&in) ill "e lost or !estro#e! !e to a *ortitosevent &e ol! "e lia"le *or t&e loss o* t&e t&in)/ In ot&er or!s ma# appraise! vale e/Bapa) naala #an sa#o a& #an an) "a"a#aran mo// t&e appraise! vale o* t&e t&in)/

,: st t&e "ailor "e t&e oner

A: .o/ &e "ailor nee! not "e t&e oner/ Goever in mtm oners&ip passes to t&e"orroer or t&e !e"tor it& t&e !eliver# o* t&e t&in) "orroe!/ Ba#a res perit domino rlean) ma)-aapl# !ito/

,: e actall# &a! a case sa la oOce &ere t&is person "orroe! mone# *rom a "an%/Instea! o* !epositin) t&e amont "orroe! to an accont it& t&e "an% or Jst as%in) *or ac&ec% &e actall# as%e! t&e cas& to "e !elivere! to &im/ A*ter 15mins/ *rom t&e time &e le*tt&e "an% na-&ol!p/ ?an &e still "e compelle! to pa# in t&at contract o* loanA: es/ Eners&ip alrea!# passe! to &im an! t&ere*ore even i* t&e loss as !e to a*ortitos event &e ill still &ave to "ear t&e loss an! can "e compelle! to pa# t&e amont/

&at is a *acltative compensationA: In o"li)ations i* one o* t&e !e"ts pertains to t&e o"li)ation o* t&e "ailee in commo!atmt&e "ailee cannot invo%e compensation "t t&e "ailor can/ &e la actall# sa#scompensation s&all not "e proper "t &at is meant "# la is t&ere can "e no le)alcompensation "t t&ere can "e *acltative compensation i* t&e one invo%in) compensationis t&e "ailor/ olic# &ere o* t&e la is &en t&e "ailor or t&e !epositor !eman!s *or t&e retrno* t&e t&in) t&e# &ave ever# ri)&t to e'pect t&at t&e t&in) ill &ave to "e !elivere! to t&em/

&ere*ore t&e "ailee cannot invo%e compensation

,: &at is a precarimA: It is a special %in! o* commo!atm &ere t&e "ailor can !eman! *or t&e retrn o* t&et&in) "orroe! at ill or at an#time/ ;t t&is can &appen onl# i* t&ere as no stiplation asto !ration nor t&e se o* t&e t&in) or t&e se o* t&e t&in) is merel# tolerate! "# t&e oner/I* t&ere as a perio! a)ree! pon $e)/ 3mos/ it&in &ic& t&e "ailee col! se t&e t&in)(t&e "ailor as a rle cannot vali!l# !eman! *or t&e retrn o* t&e t&in) "e*ore t&e e'pirationo* t&e perio!/ as%i )ratitos an) contract na ito t&e "ailor &as to respect t&e ri)&t o* t&e"ailee to se t&e t&in) ntil t&e e'piration o* t&e perio!/

,: &at is t&e e'ception to t&e )eneral rle t&at "ailor cannot vali!l# !eman! *or t&e retrno* t&e t&in) "e*ore t&e e'piration o* t&e perio!A: &e frst scenario is &en t&ere is an r)ent nee! on t&e part o* t&e "ailor $si#a namanan) ma# %ailan)an n)a#on/ I* #o are t&e "ailee isaoli mo an) &iniram mo/ I* t&is is a car#o ere alloe! "# t&e "ailor to se *or one mont& "t on t&e 6t& !a# &e &a! to "rin) &isi*e to t&e &ospital o* corse #o &ave to retrn t&e car(/ ol! t&at reslt to t&ee'tin)is&ment or termination o* t&e contract .o/ t&at ill merel# sspen! t&e contractntil t&e r)ent nee! o* t&e "ailor is over/ Bapa) tapos na an) r)ent nee! ni#a t&e "ailor isre+ire! to retrn t&e t&in) "orroe! to t&e "ailee *or t&e "ailee to contine it& t&e se o* t&in) ntil t&e e'piration o* t&e perio!/

&e secon! scenario is &en "ailee committe! an act o* in)ratit!e/ I* &e "orroe! acar o* t&e "ailor an! t&erea*ter "e*ore t&e e'piration o* t&e perio! t&e "orroer rape! t&e!a)&ter o* t&e "ailor t&at ol! "e an act o* in)ratit!e &erein t&e "ailor ol! &ave t&eri)&t to !eman! *or t&e retrn o* t&e car especiall# i* t&e inci!ent &appene! insi!e t&e car/

a%e note i* #o ill rea! t&e provision n!er !onations *or t&at act to "e an act o* in)ratit!e t&e la re+ires t&at t&e person rape! t&e !a)&ter mst no lon)er "e n!ert&e parental at&orit# o* t&e "ailor $%a#a %n) 45#rs/ol! na an) !a)&ter m%&an) &in!i nasi#a act o* in)ratit!e/(





.E<: I* t&ere is a provision citin) anot&er provision "# all means please rea! t&eprovisions cite! %ase ma%%mpleto lan) an) n!erstan!in) ni#o !oon sa provision i* #oill rea! also t&e ver# provision cite! in t&at article/

,: As *ar as mtm is concerne! ma# t&e "orroer "e compelle! to pa# in a crrenc#&ic& is not in &ilippine crrenc#

A: es i* it as so stiplate! "# t&e parties/ HA 8183 ol! no allo parties to stiplate asto &ic& crrenc# !e"ts in mone# are to "e pai! nli%e t&e la "e*ore t&is &ic& is HA 529&ic& ol! onl# allo pa#ment o* !e"ts in mone# in &ilippine crrenc#/ i)ro alam ni#o#n) reason %n) "a%et !ati ma# HA 529// %ase e reall# &a! a pro"lem it& !ollars/ Drin)t&at time napa%aprecios n) m)a F !ollars so"ra-so"ra an) re+irement !ito pero %ontilan) an) pmapaso% !rin) t&at time %a#a tala)an) re)late! an) !ollars/ In *act n!er t&atla an#one &o receives F !ollars is re+ire! to srren!er t&e !ollars to t&e ?entral ;an%it&in 24&rs/ *rom t&e receipt o* t&e F !ollars/ Gin!i naman ppnta %a tala)a sa a"ini/

o Jst &ave to srren!er it to a "an%/ ;t o"viosl# it& t&e repeal o* t&is la in 1996m%&an) &in!i na nten %ailan)an tala)a an) F !ollars or at least &in!i na naten pro"lemao"viosl# !a&il sa Es/ ila an) tna# na "a#ani n) "ansan) ito/ An) pro"lem !itoalle)e!l# is smoso"ra #n) !ollars/ An) eKect is na)sstren)t&en #n) peso pero an)na)ssKer a# #n) m)a Es parin/

I &a! a *rien! in >apan/ ;e*ore t&e peso stren)t&ene! an) %ini%ita n#a sa >apan ol!"e e+ivalent to 100000/00 per mont&/ ;t "ecase o* stren)t&enin) o* t&e peso latel#paran) 80000/00 per mont& na lan) an) vale n) %an#an) income $pero minsan masmala%i pa #an sa %ini%ita n) isan) a"o)a!o (/

,: A !eposit ma!e in compliance it& a le)al o"li)ation is:a( an e'traJ!icial !eposit"( a volntar# !epositc( necessar# !eposit!( a !eposit it& a are&osemane( letters a an! "/

A: En its *ace paran) an) sa)ot A a)a! "ecase a !eposit ma!e in compliance it& a le)alo"li)ation is an e'traJ!icial !eposit/ &ere are to %in!s o* e'traJ!icial: necessar# an!volntar#/ &is actall# ma!e in compliance is more o* a necessar# !eposit "ecase t&ereare to %in!s o* e'traJ!icial: #n) isa is volntar# &ic& is not ma!e in compliance it& ale)al o"li)ation/ Ba#a pa) meron %a#on) na"asa &a) a)a! a)a! sma)ot/ in)nan ni#on) i"a "a%a mas tama si#a at mas accrate/ &e "est anser is necessar# !eposit/

,: Ana rente! a sa*et# !eposit "o' at t&e Alto ;an% pai! t&e rental *ee an! as )iven t&e%e#/ Ana pt &er Jeelr# an! &er )ol! coins in t&e "o'/ Da#s a*ter t&ree arme! men )aine!entr# into t&e Alto ;an% openin) its valt an! several sa*et# !eposit "o'es incl!in) Ana@san! emptie! t&em o* t&eir contents/ ?ol! Ana &ol! Alto ;an% lia"le *or t&e loss o* t&econtents o* &er sa*et# !eposit "o'A: Er!inaril# i* t&e loss o* t&e t&in) !eposite! is !e to a *ortitos event it ill "e t&e!epositor $i* &e is t&e oner( &o ill "ear t&e loss/ &e reason *or t&is is t&at in !eposit t&eoners&ip !oes not pass to t&e !epositar# "ecase t&e t&in) ill "e !elivere! onl# *or

sa*e%eepin)/ Goever t&ere are instances &en t&e !epositar# cannot vali!l# invo%e*ortitos event "ecase pro"a"l# t&ere as concrrin) ne)li)ence on &is part/

es s&e can &ol! Alto ;an% lia"le i* s&e can prove t&at t&ere as concrrin)ne)li)ence on t&e part o* t&e Alto ;an%/ A )oo! e'ample is a case !eci!e! "# t&e ? inrelation to pans&ops/ &e *act t&at t&ere appears to "e no secrit# )ar! or at least t&esecrit# )ar! as not even re+ire! to testi*# more o*ten t&an not !a&il ala tala)an)secrit# )ar! - t&en t&at is ne)li)ence &ic& can "e t&e "asis o* lia"ilit# "# one invo%in)





t&e *ortitos event/ Gere n!er t&is circmstances a)ain it ill "e t&e !epositar# &o ill"ear t&e loss even i* t&e loss as !e to a *ortitos event/

,: Is savin)s !eposit a !eposit A: .o/ In relation to a "an% loan an! savin)s !eposit a savin)s !eposit is not a !eposit "t asimple loan/ avin)s !eposits crrent !eposits an! time !eposits are not !eposits nor are

t&e# irre)lar !eposits/ ? ol! sa# t&ese transactions are in t&e natre o* irre)lar!eposits/ Gin!i sila irre)lar !eposits rat&er t&e# are in t&e natre o* irre)lar !eposits$&ic& means ma# pa)%a-!eposit(/ &# in t&e natre o* ;ecase %apa) !epositsppose!l# t&e !epositar# cannot se/ ;t i* it is an irre)lar !eposit t&e !epositar# ol!&ave t&e ri)&t to se/ In &ere t&e "an% can se t&e amont !eposite!/ Alt&o)& &in!i s#a!eposit at least it is in t&e natre o* an irre)lar !eposit/ An) "an% )ina)amit naman tala)an#a n) pera at !oon s#a %mi%ita "ecase t&e "an% ill len! t&e mone#/ As !epositor in asavin)s accont an) interest rate na i"i"i)a# sa#o a# /04M annall#/ ann %ataas pero%apa) i%a an) mtan) sa %anila m)a 12M or 14M per annm %apa) m)a &osin) loan/o )ann %ala#o an) !iKerence "eteen t&e interest t&at t&e# ill pa# #o as to t&e interestt&at #o ill &ave to pa# t&em %a#a %mi%ita tala)a an) m)a "an%s/

,: &en ol! a !eposit "e consi!ere! as an irre)lar !epositA: In )eneral i* t&e !epositar# &as t&e ri)&t to se t&e t&in)/ ;t i* &e &as t&e ri)&t to sepe!en) !eposit pa!n si#a as lon) as t&e principal prpose ol! still "e sa*e%eepin)/ ;t&e ma# &ave t&e ri)&t to se ma#"e *or onl# *or a !a#/ <'ample is &en a car is !elivere! toanot&er person/ Goever t&at person can se t&e car ever#!a# to "rin) &is c&il!ren to t&esc&ool an! "rin) "ac% t&e c&il!ren &ome/ Apparentl# &in!i na s#a !eposit/ %&an) pe!ena si#an) commo!atm $%n) )ratitos an) se( or pe!e n) lease $%n) na)"a"a#a! nasi#a(/ I* t&is same car is !elivere! to t&e ot&er *or sa*e%eepin) ma#"e t&e !epositar# ol!"e alloe! to se t&e car mas%i once lan) e'ample e& in one car s&o/ In sc& case t&eprincipal prpose ol! still "e sa*e%eepin) %a#a it ol! not c&an)e t&e natre o* t&econtract/

&e ot&er scenario &ere t&e !eposit ol! "e an irre)lar !eposit is &en t&e se o* t&e t&in) even i* not e'pressl# )rante! or permitte! "# t&e !epositor is necessar# *or t&epreservation o* t&e t&in)/ A )oo! e'ample ol! pertain to a !eposit o* a car/ &ose na ma#alam sa %otse ol! %no t&at i* #o !on@t trn on t&e en)ine o* t&e car *or at least 10 !a#s99M possi"ilit# t&at t&e "atter# ill "e !isc&ar)e!/ as%i )ann %a-"ran! ne #n) "atter#mo i-tr# mo lan) 10 !a#s mon) a) )amitin an) en)ine at a) mon) itrn onma!i!isc&ar)e #an ore t&an t&at i* #o !on@t !rive t&e car *or a perio! o* 2 mont&s #oill notice #n) tires n) sasa%#an a# at na/ I !on@t %no t&e scientifc e'planation to t&at"ecase i* #o ol! se t&e car ever#!a# &in!i naman n*a-at an) tire nless merontala)an) pro"lema/ In ot&er or!s i* #o are t&e !epositar# #o ma# &ave to se t&e car topreserve t&e car so #o s&ol! !rive t&e car ever# no an! t&en ma#"e *rom anila to;oraca# an! t&en to ;a)io *or t&e preservation o* t&e species/

,: In t&e province *armer cople "orroe! mone# *rom t&e local merc&ant/ o )arant#pa#ment t&e# le*t t&e orrens title o* t&eir lan! it& t&e merc&ant *or &im to &ol! ntil t&e#pa# t&e loan/ Is t&ere a contract o* ple!)e contract o* mort)a)e contract o* antic&resis or

none o* t&e a"oveA: .one o* t&e a"ove t&e transaction is neit&er a ple!)e a mort)a)e nor antic&resisIt is not a contract o* antic&resis is "ecase t&ere is not&in) in t&e *acts &ic& ol! tell #ot&at t&e cre!itor as )iven t&e ri)&t to t&e *rits/ Goever &e ol! &ave t&e o"li)ation toappl# t&e *rits to t&e interest i* oin)/ I* t&ere is an e'cess t&e e'cess s&ol! "e applie! tot&e principal/

,: a# t&is "e a ple!)e





A: Apparentl# t&e s"Ject matter o* t&e contract is a parcel o* lan!/ ince t&e contract o* ple!)e pertains to mova"les t&en it appears t&at t&is cannot "e a contract o* ple!)e/ ;t itma# "e ar)e! t&at t&is is a contract o* ple!)e "t &at as ple!)e! as not t&e lan! "tt&e certifcate o* title/ Alt&o)& t&e e'aminer sai! le*t t&e orrens title &at is reall#meant &ere is t&e certifcate/ a#"e it as t&e certifcate &ic& as ple!)e! "# t&e !e"tor/

&e pro"lem it& t&at ar)ment is &at i* t&e principal !e"tor !e*alts t&en t&e cre!itor

ol! sell t&e certifcate I"e"enta n#a an) papel me!#o ala #atan) "i"ili Jan sa papel na#an/

,: Is t&is a contract o* mort)a)eA: ince t&is is a parcel o* lan! it appears t&at t&is ol! "e a real estate mort)a)e/

,: Fn!er t&e *acts ma# t&is "e a real estate mort)a)eA: It is claime! t&at it cannot "e "ecase t&e a)reement is not in ritin) or it is not in *act ina p"lic instrment nor as it re)istere!/ I cannot a)ree reall# it& t&is position/ I t&in% t&e"est anser to t&is +estion is t&is is a contract o* real estate mort)a)e "ecase t&e laactall# !oes not re+ire a particlar *orm as *ar as t&e real estate mort)a)e is concerne!/;# e'press provision o* t&e la even i* t&is contract is not re)istere! it ma# still "e a vali!an! "in!in) contract "eteen t&e parties/ &e limitation onl# provi!e! "# la as *ar as realestate mort)a)e is concerne! as interprete! "# t&e preme ?ort is t&at t&e mort)a)eecre!itor cannot *oreclose t&e mort)a)e i* it is not in a p"lic instrment/ He)istration is noteven re+ire! in or!er *or t&e cre!itor to "e a"le to *oreclose/ ;t it ill not or!inaril# "in!t&ir! persons i* not re)istere!/ ;t even i* t&e mort)a)e is not in a p"lic instrment *ore'ample it is in a private instrment &ile t&ere can "e no vali! *oreclosre "ecase t&einstrment is still in a private instrment at least t&e cre!itor &ere ol! &ave a ri)&t n!erArticle 1357 &ic& is to !eman! *or t&is contract to "e in t&e *orm prescri"e! "# la"ecase t&e contract &a! alrea!# "een per*ecte!/ ?onsi!erin) t&at t&ere as alrea!#!eliver# o* t&e orrens title t&is ol! no lon)er "e covere! "# tatte o* ra!s/ a) ver"alln) an) real estate mort)a)e &is reme!# &ere is 1357 *or &im to "e a"le to *oreclose t&emort)a)e/ o t&e "est anser &ere is t&is is a contract o* a real estate mort)a)e/

;t t&en a)ain man# +estions ol! re+ire #o to !istin)is& one transaction *romanot&er/ o into t&e natre o* eac& transaction frst t&en #o can )o into t&e c&aracteristicss"Ject matter/

,: Distin)is& a contract o* c&attel mort)a)e *rom a contract o* ple!)e/A: In a a# t&ere@s a nee! to !istin)is& t&ese to "ecase "ot& involve mova"les/E"viosl# c&attel mort)a)e is not a real contract ple!)e is a real contract/

,: Distin)is& "eteen a contract o* real estate mort)a)e an! a contract o* sale it& ri)&to* reprc&ase/ &# is t&ere a nee! to !istin)is& t&ese toA: A contract o* real estate mort)a)e is an accessor# contract/ A contract o* sale it& ri)&to* reprc&ase is a principal contract/ In *act in a contract o* real estate mort)a)e ponper*ection t&ere ol! "e no trans*er o* oners&ip/ In contract o* sale it& ri)&t toreprc&ase once t&ere is !eliver# t&ere is trans*er o* oners&ip alt&o)& t&e oners&ipol! still "e a con!itional oners&ip/

,: &e relevance in t&is +estionA: Fn!er t&e la on sales a contract o* sale it& ri)&t o* reprc&ase ma# "e treate!actall# merel# as an e+ita"le mort)a)e/ An! t&en e+ita"le mort)a)e is actall# amort)a)e/ It &as all t&e elements o* a mort)a)e "t it is not in t&e *orm o* a mort)a)e/ ormlan) an) na)%a%ai"a "t all t&e re+isites ol! actall# pertain to a mort)a)e/

PLEDGETWO KINDS:





a/ le!)e "# operation o* la or le)al ple!)e"/ Polntar# le!)e $"# contract or "# a)reement o* t&e parties(

,: &en ol! t&ere "e a le)al ple!)e Fn!er &at circmstancesA: &ere ol! "e a le)al ple!)e i* a cre!itor is in t&e possession o* a mova"le propert#one! "# principal !e"tor an! &e ol! &ave t&e ri)&t to retain sc& mova"le propert# to

secre *lfllment o* t&e o"li)ation o* t&is !e"tor an! i* t&e !e"tor ol!n@t pa# t&e cre!itorol! &ave t&e ri)&t to sell t&at t&in) to satis*# &is claim/;asicall# Article 2121 enmerates 3 scenarios &ere t&ere ol! "e le)al

)arantees "t t&e enmeration is not e'clsive "ecase even n!er1914 in a)enc# i* t&ea)ent *or e'ample incrre! e'penses *or accomplis&ment o* t&e prpose o* a)enc# an! apropert# to "e !elivere! to t&e principal as receive! "# t&is a)ent &e ol! &ave t&e ri)&tto retain t&is propert# in ple!)e to secre t&e *lfllment o* t&e o"li)ation o* t&e principal to&im as *ar as reim"rsement o* t&e e'penses is concerne!/ ;t t&e ot&er scenariosmentione! in 2121 ol! "e *on! in Articles 546 1731 1994/

Article 1731 pertains to a contract *or a piece o* or% &ere *or e'ample a car as!elivere! to a car repair s&op *or repair/ A*ter t&e repair or%s ere ma!e an! t&e "ill aspresente! to t&e oner o* t&e car t&e oner *aile! to pa# t&en t&e car repair s&op ol!&ave t&e ri)&t to retain t&e car in ple!)e/ &erea*ter i* t&is oner *ails to pa# a*ter a certainperio! normall# &e ol! "e )iven 30 !a#s it&in &ic& to pa# t&en t&e car repair s&opol! &ave t&e ri)&t to sell t&e car to satis*# &is claim/

Article 1994 pertains to t&e ri)&t o* !epositar# to retain t&e t&in)s !eposite! "#!epositor/ =i%e in a &otel pa) an) cstomer sa &otel ol! !eposit certain items $li%e

Jeelries( an! t&e rentals &ave not "een pai! or t&e "ill *or &is sta# in t&e &otel &ave not"een pai! t&e &otel ol! &ave t&e ri)&t to retain t&e t&in)s in ple!)e/ &erea*ter t&e &otelma# sell t&e t&in)s to satis*# its claim/

In c&attel mort)a)e a personal propert# is recor!e! as a secrit# *or t&e per*ormance o* ano"li)ation/ &is is t&e reason &# it is claime! t&at t&is is a *ormal contract/ In a real estatemort)a)e a real propert# or an immova"le propert# is s"Jecte! to t&e claim o* t&e cre!itor/In antic&resis i* t&ere is one ni+e secrit# arran)ement it is antic&resis "ecase it is notan or!inar# secrit# arran)ement/ .a) ii"a i"a ito n) natre/ ;e*ore ?ivil ?o!e it is treate!as a con!itional sale/ ;t n!er t&e ?ivil ?o!e it is a secrit# arran)ement "ecase t&et&in) ma# even "e sol! "# t&e antic&retic cre!itor in case t&e principal !e"tor !e*alts "t itis not an or!inar# secrit# arran)ement "ecase it& t&is arran)ement t&e principalo"li)ation ma# even "e e'tin)is&e! "# mere antic&resis/,: &#A: ;ecase in t&is arran)ement t&e cre!itor ol! &ave a ri)&t to t&e *rits o* t&eimmova"les &oever &e ol! &ave t&e o"li)ation to appl# t&e *rits to t&e interest i* oin) an! t&en to t&e principal/ &is one some&o ol! &ave t&e aspect o* pa#ment/

PURPOSE: All t&ese are entere! into to secre *lfllment o* t&e o"li)ation

AS TO CAUSE: I* t&e person &o entere! into t&is contract is t&e principal !e"tor &imsel*meanin) i* t&e ple!)or or t&e mort)a)or is t&e principal !e"tor &imsel* t&en t&e case in

t&e ple!)e or mort)a)e ill "e t&e same case in t&e principal contract/ &e essentialreason &ic& impelle! &im to ple!)e or to mort)a)e &is propert# ill "e t&e reason &# &eentere! in t&e contract o* loan or t&e ot&er principal contract &ic& is to "e secre! "# t&isaccessor# contract/ Goever i* t&e ple!)or or t&e mort)a)or is a t&ir! person t&e casecol! "e li"eralit# pa) alan) consi!eration or it ma# "e *or compensation/ Ge ma# receivea sm o* mone# or an# ot&er consi!eration *or t&e e'ection o* t&ese contracts/

In )arant# or sret#s&ip t&e )arantor or sret# is A=A a t&ir! person/ ;t inple!)e or mort)a)e or!inaril# t&e ple!)or or mort)a)or is t&e principal !e"tor &imsel*/ erope!e rin t&ir! person/ In *act sa "an)%o i* "orro mone# *rom t&e "an% an! #o can@t





provi!e *or a secrit# li%eparcel o* lan! c actall# on &in!i %a papatan)in/ ;t pa)pre*erre! client n) "an% #o ma# "e alloe! to "orro even i* t&e secrit# ma# "e provi!e!"# a t&ir! person/

SUBJECT MATTEROBJECT:a/ le!)e an! c&attel mort)a)e: mova"les

"/ Heal estate an! antic&resis: immova"les

PLEDGE: ,: A co as ple!)e!/ ;ecase ple!)e is a real contract t&e co mst "e !elivere! inor!er *or t&e contract to "e per*ecte!/ &ile in t&e possession o* t&e ple!)e $ple!)ee is t&eperson to &om t&e propert# as !elivere! as a secrit# in a contract o* ple!)e(/ &ile t&eco as in t&e possession o* t&e ple!)ee I &a! an oKsprin)/

$a( &o ons t&e oKsprin) &e ple!)or or i* &e is also t&e principal !e"tor call &im ple!)or-!e"tor/ &e

la re+ires t&e ple!)or to "e t&e a"solte oner o* t&e t&in)/ &e accessoriesQ*ritsol! )o to t&e oner o* t&e t&in)/

$"( Goever "ecase &e is t&e oner o* t&e t&in) ol! t&e ple!)or &ave t&e ri)&tto !eman! *or !eliver# o* t&e oKsprin) to &im *rom t&e ple!)ee

&e anser or!inaril# is no "ecase !espite t&e *act t&at t&e oKsprin) ol!"e one! still "# t&e ple!)or !rin) t&e e'istence o* t&e ple!)e t&e ple!)ee &as t&eri)&t to t&e t&in)/ &e oKsprin) ol! "e covere! "# t&e ple!)e/ All t&ese ol! "ecovere! "# t&e ple!)e – t&e t&in) ple!)e! t&e *rits t&e oKsprin)/ Ge ol! &avet&e ri)&t to retain t&e t&in) as a secrit# *or t&e *lfllment o* t&e o"li)ation an! i* t&eprincipal !e"tor !e*alts &e ol! &ave t&e ri)&t to sell not onl# t&e mot&er co "talso t&e oKsprin) to satis*# &is claim/

C!ATTEL MORTGAGE:,: ?&attel mort)a)e over a &ose ma# it "e a vali! an! "in!in) c&attel mort)a)eA: It ma# "e a vali! c&attel mort)a)e i* t&e &ose is ma!e o* li)&t materials li%e nipa &t/

&ese &oses can "e move! *rom one "aran)a# to anot&er/ &e# are practicall# mova"les/;t t&e pro"lem &ere is a c&attel mort)a)e over a concrete &ose/ <'ceptionall# it

ma# still "e a vali! mort)a)e over a &ose i* t&e &ose as reall# inten!e! *or !emolition/ Inot&er or!s &at ere reall# mort)a)e ere t&e materials o* t&e &ose/ eron pa "an)sil"i an) m)a materials n) isan) "a&a# es/ &ere are people &o ol! actall# live "#t&is "siness o* "#in) oo!s an! materials *rom t&e !emolis&e! &ose/ &e ? rle! t&att&e c&attel mort)a)e as a vali! c&attel mort)a)e/ &e pro"lem reall# is a c&attel mort)a)eover a concrete &ose &ic& is not *or !emolition/

R constrcte! a &ose in a lot &ic& &e as leasin) *rom / =ater R e'ecte! a c&attelmort)a)e over sai! &ose in *avor o* S as secrit# *or a loan o"taine! *rom t&e latter/ tilllater R ac+ire! oners&ip over t&e lan! &ere &is &ose as constrcte!/ A*ter &ic& &emort)a)e! "ot& &ose an! lan! in *avor o* t&e "an% &ic& mort)a)e is annotate! on t&e

orrens certifcate o* title/ &en t&e "i!!er at t&e *oreclosre sale *oreclose! t&e mort)a)eit as t&e "an%$cre!itor( &ic& ac+ire! R@s &ose an! lot/ =earnin) o* t&e procee!in)s

con!cte! "# t&e "an% S is no !eman!in) t&at t&e "an% reconve# to &im R@s &ose or pa#R@s loan to &im pls interest/,: Is S@s !eman! a)ainst t&e "an% vali! an! sstaina"le &#A: S@s !eman! t&at t&e "an% reconve# to &im R@s &ose ol! onl# "e a vali! !eman! i* t&ec&attel mort)a)e over t&e &ose is a vali! an! "in!in) c&attel mort)a)e as a)ainst t&e"an%/ ;t o"viosl# t&e anser to t&is is no/ A c&attel mort)a)e over an immova"lepropert# &ile "in!in) "eteen t&e parties n!er t&e principle o* estoppel t&e ? ol!sa# t&at t&e mort)a)or ill not "e alloe! to +estion t&e vali!it# o* mort)a)e "ecase &esi)ne! t&e c&attel mort)a)e even i* it involves immova"le propert#/ ;t t&e c&attel





mort)a)e is ala#s voi! as a)ainst t&ir! persons/ In relation t&e c&attel mort)a)e over t&e&ose t&e "an% is a t&ir! person/ An! t&ere*ore as to t&e "an% t&e c&attel mort)a)e as tot&e &ose is a voi! c&attel mort)a)e/ In relation to t&e claim t&at t&e "an% s&ol! pa# R@sloan to &im t&ere is no "asis to t&at claim "ecase t&e "an% &as not&in) to !o it& t&e loan/

&ere is no privit# o* contract "eteen t&e "an% an! S or even R/ &e loan contract as"eteen R an! S/ &e "an% &as not&in) to !o it& t&at loan/

Pinn# constrcte! a "il!in) on a parcel o* lan! &e lease! *rom An!rea/ Ge c&attelmort)a)e! t&e lan! to elicia/ &en &e col!n@t pa# elicia elicia initiate! *oreclosreprocee!in)/ Pinn# claime! t&at t&e "il!in) &e &a! constrcte! on t&e lease! lan! cannot"e vali!l# *oreclose! "ecase t&e "il!in) as "# la an immova"le/,: Is Pinn# correctA: $GarmoniLe t&e *acts !aC ( Fn!er t&e *acts t&e c&attel mort)a)e! t&e lan! tapos t&e

"il!in) cannot "e *orclose!/ o &at as reall# mort)a)e! t&e lan! or t&e "il!in) $"i nisir &e consi!ers t&is a t#po error lan) !a( An) c&inattel mort)a)e! as t&e "il!in)"ecase Pinn# as claimin) t&at t&e "il!in) cannot "e vali!l# *oreclose! "ecase it is animmova"le/ o Pinn# apparentl# c&attel mort)a)e! t&e "il!in) not t&e lan!/ ;t !o notstate sc& it is not t&e "il!in) &ic& is *oreclose it is t&e mort)a)e over t&e "il!in) &ic&is *oreclose!/ $Do not s&ortct !a paran) JeJemon an) !atin) !aC ( o "e ver# accrate

*oreclose t&e mort)a)e over t&e propert#/o is Pinn# correct &e anser is !efnitel# no/ Ge cannot oppose t&e *oreclosreover t&e mort)a)e not "ecase t&e mort)a)e reall# is a vali! mort)a)e "t "ecase &e isestoppe! *rom !oin) so/ Fn!er t&e principle o* estoppel t&e mort)a)or &imsel* cannot+estion t&e vali!it# o* t&e mort)a)e/ In t&e pro"lem no t&ir! person is involve!/

o secre t&e pa#ment to ; o* a loan A t&e oner o* t&e lot e'ecte! a c&attel mort)a)eon t&e "il!in) &e erecte! t&ereon as ell as on some nel# "o)&t mac&iner# store!t&erein/ &erea*ter a J!)ment as ren!ere! a)ainst A in *avor o* ? &o &a! t&e "il!in)an! t&e mac&iner# levie! pon to satis*# t&e J!)ment/,: Is t&e c&attel mort)a)e "in!in) on ?A: &e anser is #es as *ar as t&e mac&iner# is concerne! "ecase n!er t&e *acts t&emac&ineries are nel# "o)&t mac&ineries store! t&erein/ It !oes not appear to "e animmova"le propert#/ It as not "ro)&t to a "il!in) *or a certain in!str# or a certain or%/An! t&ere*ore it ill still "e consi!ere! as a mova"le propert#/ ;t as *ar as t&e "il!in) isconcerne! t&e c&attel mort)a)e over t&e "il!in) cannot "in! a t&ir! person/ &e mort)a)eis voi! as *ar as t&ir! persons are concerne!/ o it cannot "in! ? a t&ir! person/

,: &ile t&e la re+ires t&at t&e t&in) to "e mort)a)e! "e a mova"le propert# ma# ac&attel mort)a)e over a propert# or!inaril# consi!ere! as an immova"le propert# "e a vali!an! "in!in) c&attel mort)a)eA: &e anser is #es i* t&ere is a la &ic& treats sc& immova"le propert# merel# aspersonalt# *or prposes o* c&attel mort)a)e/

,: An! is t&ere sc& a laA: &e anser is #es t&e c&attel mort)a)e la &ic& is ol!er t&an #or )ran!parents ol!treat certain immova"les merel# as personalt#/ &ese ol! incl!e lar)e cattles an!)roin) crops/ =ar)e cattles an! )roin) crops or!inaril# ol! "e consi!ere! asimmova"les "t t&e c&attel mort)a)e la merel# consi!ere! t&em as personalt# *orprposes o* t&e c&attel mort)a)e/ &s it ol! "e a vali! an! "in!in) c&attel mort)a)e i* t&e t&in)s mort)a)e! are lar)e cattle or )roin) crops/

REAL ESTATE MORTGAGEANTIC!RESIS: IEPA;=<A "i) !iKerence "eteen a contract o* sale an! a contract o* ple!)e or a mort)a)e ol!pertain to t&e oners&ip over t&e t&in)/ In sale a contract o* sale ol! "e vali! even i* t&eseller is not t&e oner o* t&e t&in) sol!/ Eners&ip over t&e t&in) sol! is not one o* t&e





essential elements/ ;t t&at is not so in ple!)e an! mort)a)e/ ;# e'press provision o* t&ela Article 2085 t&e mort)a)orQple!)or mst "e t&e a"solte oner/ &e +estion &ereol! pertain to t&is pro"lem/

M!C"# $% &'T(#TA "orroe! mone# *rom ;/ o secre t&e *lfllment o* &er o"li)ation to ; A mort)a)e! a

parcel o* lan!/ ;t at t&e time t&e mort)a)e is constitte! A as not #et t&e oner o* t&elan! "ecase t&at as still t&e s"Ject o* a pen!in) application n!er t&e &omestea! la/;t "e*ore t&e o"li)ation o* A to ; "ecame !e an! !eman!a"le t&at lan! as aar!e! to&er/ o A as alrea!# t&e oner at t&e time &en t&e o"li)ation "ecame !e/ An! !efnitel#&en s&e *aile! to pa# an! ; fle! an action *or t&e *oreclosre o* t&e mort)a)e A asalrea!# t&e oner/ .onet&eless A +estione! t&e vali!it# o* t&e *oreclosre/,: as t&e *oreclosre vali!A: &e ? rle! t&at t&e *oreclosre as not vali! "ecase t&e mort)a)or as not #et t&eoner at t&e time o* t&e constittion o* t&e mort)a)e/ &e ple!)or or mort)a)or mst "et&e oner not onl# at t&e time &en t&e o"li)ation "ecame !e not onl# at t&e time o* *oreclosre or t&e sale o* t&e t&in) "t also at t&e time o* t&e constittion o* t&e mort)a)or/Et&erise t&e ple!)e or mort)a)e ol! "e voi!/

In relation to t&e s"Ject matter one ot&er re+irement an! essential re+isite *or a ple!)eor mort)a)e to "e vali! is t&at t&e ple!)or or mort)a)or mst &ave *ree !isposal o* t&e t&in)ple!)e! or mort)a)e!/

A person ma# "e t&e a"solte oner "t &e ma# not &ave *ree !isposal *or onereason or anot&er/ &e "est reason &# &e ill not &ave *ree !isposal is "ecase t&ere isor!er o* t&e cort *or &im to retain t&e t&in) "# a# o* attac&ment or "# a# o* )arnis&ment/ I* t&ere is a mort)a)e over t&e t&in) t&at is a voi! ple!)e or mort)a)e/ &eot&er reason col! "e t&at t&e ple!)or or mort)a)or is sKerin) civil inter!iction/ As sc&&e is pro&i"ite! *rom !isposin) t&e propert# &ic& ol! "e eKective inter vivos/ In t&esame manner i* a person or entit# li%e a corporation is n!er receivers&ip it ill not &ave*ree !isposal/ &e ;oar! o* Directors cannot "in! t&e corporation in a ple!)e over t&eproperties o* t&e corporation "ecase t&en it ill "e t&e receiver &o ol! actall# &avecontrol over t&e properties o* t&e corporation/ &e la re+ires t&e ple!)or or mort)a)or to&ave *ree !isposal o* t&e t&in) *or t&e ple!)e or mort)a)e to "e vali!/

IN RELATION TO T!IS ESSENTIAL RE"UISITE:A ; an! ? are co-oners in e+al s&ares o* a resi!ential &ose an! lot/ Drin) t&eir co-oners&ip t&e *olloin) ere respective !one "# t&e co-oners: ; an! ? mort)a)e! t&e&ose to secre a loan/,: &at is t&e le)al eKect o* t&e mort)a)e contract e'ecte! "# ; an! ?A: &at mort)a)e ill onl# "in! t&e interest o* ; an! ? over t&e mort)a)e! &ose an! lot/ I* t&eir interest are e+al t&en t&e mort)a)e over t&e &ose an! lot ill onl# pertain to 2Q3 o* t&e propert#/ It ill not "in! A/ ;ecase in mort)a)e t&e mort)a)or mst "e t&e a"solteoner o* t&e t&in) mort)a)e/

C!ARACTERISTICS: All t&ese contracts are accessor# contracts/ ;t &o are t&e#

per*ecte! An) ma# isse lan) &ere is ple!)e &ic& is a real contract/ &e pro"lem &erepertains to t&e %in! o* !eliver# *or t&e per*ection o* t&e ple!)e/ In ot&er or!s ol!constrctive !eliver# sOce Jst li%e in sale Er is it re+ire! t&at t&ere "e p&#sical !eliver#or actal !eliver# o* t&e t&in) in or!er *or t&e ple!)e to "e per*ecte! &e ? ol! tell sor!inaril# it s&ol! "e p&#sical !eliver#/ &ere s&ol! "e actal material !eliver# o* t&et&in) *or t&e ple!)e to "e per*ecte!/ Goever in e'ceptional circmstances &en it ol!"e an nreasona"le re+irement *or t&e t&in) or t&e )oo!s to "e p&#sicall# !elivere! to t&eple!)ee t&en constrctive !eliver# ma# sOce/





&)*+" ,(-(P()" .#P)"- /% P.T.!#") &e )oo!s ple!)e! ere volminos )oo!s *on! in a are&ose/ &at t&e ple!)or !i! asto !eliver t&e %e#s to t&e are&ose to t&e ple!)ee/,: Fpon t&e !eliver# o* t&e %e#s to t&e ple!)ee as t&ere alrea!# a per*ecte! ple!)eA: &e ? sai! #es/ De =eon an! ot&ers ol! call t&is s#m"olic !eliver# "ecase it ol!&ave "een an nreasona"le re+irement *or t&e t&in) to "e p&#sicall# !elivere! to t&e

ple!)ee/ o t&e !eliver# o* t&e %e#s to t&e place &ere t&e )oo!s are locate! ol! resltalrea!# in a per*ecte! ple!)e/

'-(")*#(' $% P)& &ree s&ips ere ple!)e!/ &e parties e'ecte! a p"lic instrment &erein it as state!t&at&ile t&e s&ip ere still manne! "# t&e cre o* lion)si t&e "orroer-ple!)or t&e#ill "e n!er t&e control an! spervision o* .;/ as t&ere a per*ecte! ple!)e &# is t&erean isse o* &et&er t&e ple!)e a)ain &a! alrea!# "een per*ecte! ;ecase i* t&e principal!e"tor !e*alte! an! t&e ple!)e &a! not #et "een per*ecte! t&e ple!)ee cannot invo%e t&ereme!ies n!er t&e la on ple!)e/ Ge cannot invo%e an# ri)&t n!er t&e contract/,: o as t&ere a per*ecte! ple!)eA: &e ? sai! #es/ ?itin) t&e rlin) in ;A.BE I=II.E <A.E= v/ <<HE. it ol! "ean nreasona"le re+irement *or lion)si to "e re+ire! to p&#sicall# !eliver t&e s&ips to.;/ &s s#m"olic !eliver# sOces *or t&e per*ection o* t&e ple!)e/

a%e .ote: Er!inaril# ver"al ple!)e a# it "e per*ecte! es as lon) as t&ere as!eliver#/ ;t *or a ple!)e to "in! t&ir! persons t&e la re+ires t&at sc& ple!)e mst "e ina p"lic instrment an! it mst "e !ate! an! t&e propert# ple!)e! mst "e !escri"e! int&at instrment/

As to c&attel mort)a)e an! real estate mort)a)e t&is is &ere t&e !e"ate ol! lie/Heal estate or c&attel mort)a)e are t&e# reall# solemn contract or *ormal contracts/<speciall# in real estate mort)a)e >stice Pit) ol! onl# "e t&e onl# at&or &o ol!claim na solemn or *ormal contract an) real estate mort)a)e/ I am also not one o* t&ose noteven De =eon ol! consi!er t&is a solemn contract "ecase &ile t&e la sa#s t&e realestate mort)a)e mst "e recor!e! in t&e He)istr# o* ropert# &oever t&e la sa#s i* not itol! still "e "in!in) pon t&e parties/ ;# e'press provision a mere promise to constitte amort)a)e alrea!# )ives rise to a personal action "eteen t&e contractin) parties/ As lon) ast&e contract &a! alrea!# "een per*ecte! an action to compel t&e ot&er part# to &ave t&atcontract in t&e *orm re+ire! "# la ma# alrea!# prosper n!er Article 1357/ I alrea!#mentione! i* it is not #et in a p"lic instrment t&e mort)a)ee cannot *oreclose t&emort)a)e/ Heme!#: Invo%e Article 1357/

Antic&resis is no !o"t a solemn contract/ &e la is ver# clear/ An a)reement as tot&e principal an! interest mst "e in ritin) ot&erise t&e antic&resis is voi!/

&ese contracts !efnitel# are nilateral contract "ecase at least as to mort)a)epon per*ection o* t&e mort)a)e onl# one ol! &ave an o"li)ation n!er t&e contract/ Inple!)e t&e ple!)ee is t&e one &o ol! &ave an o"li)ation/ Fpon per*ection t&e ple!)or!oes not &ave an# o"li)ation an#more $papo-po na ln) pro ta%ot na ta%ot "ecase i* t&e

principal !e"tor !e*alts &is propert# ol! "e sol! in an action saleC (/

Into t&e ri)&ts an! o"li)ations o* t&e parties: isa sa pina%ama!amin) tanon) ol! *alln!er pactm commisorim/

As to t#e ri$#t to %se:,: Does t&e ple!)ee &ave t&e ri)&t to se "ecase t&e t&in) as !elivere! to &im &e is inpossession can t&e ple!)ee se t&e t&in)





A: &e anser is no "ecase t&e t&in) as !elivere! to &im as secrit# not *or &im to se/;t t&en a)ain t&ere are e'ceptions/ I* &e as at&oriLe! to se "# t&e ple!)or or it isnecessar# *or t&e preservation o* t&e t&in)/ &is is e'actl# t&e same rle as in t&e la on!eposit/

,: ;t in ?&attel mort)a)e or t&e real estate mort)a)e !oes t&e mort)a)ee &ave t&e ri)&t

to se t&e t&in)A: Er!inaril# in a stan!ar! arran)ement as *ar as t&ese contracts are concerne! t&emort)a)ee ill &ave no ri)&t to se "ecase in t&e frst place !eliver# is not re+ire!/Er!inaril# t&e mort)a)or ol! still "e in possession o* t&e t&in) mort)a)e!/

,: Goever in one case !eci!e! "# t&e ? &at i* t&ere as a stiplation t&at t&e t&in)mort)a)e! ol! "e !elivere! to t&e mort)a)ee in or!er *or t&e cre!itor to !eliver t&eamont "orroe! to t&e "orroer ol! t&at c&an)e t&e natre o* t&e contract as acontract o* mort)a)e &et&er c&attel or real estateA: &e ? sai! no/ It ill remain to "e a mort)a)e/ Alt&o)& it means si)rista an)mort)a)ee/

,: Is t&is a reasona"le stiplationA: &is is a ver# mc& reasona"le stiplation especiall# in c&attel mort)a)e/

,: &# ?an a mort)a)ee *oreclose t&e mort)a)e i* t&e )oo!s or t&e t&in) is not in &ispossessionA: &e anser is no/ An! i* t&e t&in) in t&e possession o* t&e mort)a)or "# t&e time t&eprincipal !e"tor !e*alts tinata)o na an) t&in) mort)a)e!/ .a)!i!isappear na/ $&e carmort)a)e! ol! normall# "e it& t&e mort)a)or &o is t&e "orroer/ a) na)!e*alt naan) "orroer na# an #o ol! not see t&e car an#more pa) i%a an) "an%/ o ma# still&ave to fle an action *or replevin in or!er to recover t&e car in or!er *or #o to *oreclose t&emort)a)e/ Ba#a an) )sto n) i"an) cre!itorQmort)a)ee in possession na sila n) t&in)mort)a)e! so t&at i* t&e principal !e"tor !e*alts t&e# can imme!iatel# *oreclose t&emort)a)e/ ;t o"viosl# some !e"tors ol! not a)ree to t&is "ecase t&e# ol! se t&emac&ineries/(

,: In antic&resis !oes t&e antic&retic cre!itor &ave t&e ri)&t to se t&e t&in)A: .o/ An) ri)&t n#a is to t&e *rits – to receive t&e *rits not t&e ri)&t to se/

,: In *act in a stan!ar! arran)ement &o is in possession o* t&e t&in) &ic& is t&e s"Jectmatter o* antic&resisA: &e cre!itorQantic&retic cre!itor/ &e t&in) ol! "e !elivere! to &im alt&o)& t&is is nota real contract "t it ol! or!inaril# "e !elivere! to &im "ecase &e ol! &ave t&e ri)&t tot&e *rits/

,: Ba#a ln) i* t&e cre!itor retrns t&e t&in) to t&e !e"tor ol! t&at e'tin)is&e!antic&resisA: .o/ ;t t&ere ill "e c&an)es in t&e ri)&ts an! o"li)ations/ or e'ample or!inaril# it&t&e t&in) "ein) it& t&e cre!itor it is t&e cre!itor &o is o"li)e! n!er t&e la to pa# t&e

real propert# ta'/ ro i* &e retrns t&e t&in) to t&e !e"tor alt&o)& &e ol! still &ave t&eri)&t to receive t&e *rits &e ol! no lon)er &ave t&e o"li)ation to pa# t&e ta'es/ oo"viosl# &e !oesn@t &ave t&e ri)&t to se t&e t&in)/

INDI&ISIBILIT': &e la provi!es t&at a contract o* ple!)e or a contract o* mort)a)e is an in!ivisi"lecontract/ &at is in!ivisi"le is t&e contract not t&e t&in)s ple!)e! or mort)a)e! not t&eo"li)ations/,: e!e "an) t&e t&in)s ple!)e! !ivisi"le li%e 3 atc&es





A: e!e/

,: ;t ol! t&e ple!)e "e !ivisi"leA: .o in!ivisi"le pa rin/

,: Er t&e o"li)ation to pa# ma# "e !ivisi"le/ <'ample E"li)ation to pa# 300000 pa#a"le

in 3 mont&s $100000 per mont&(/ &e o"li)ation is !ivisi"le/ Is t&e contract o* ple!)e!ivisi"leA: .o in!ivisi"le pa rin/ eanin) ntil t&e entire o"li)ation is *ll# pai! or *ll# complie!it& t&e ple!)e or mort)a)e ill contine to &ave *ll *orce an! eKect/

,: <'ample t&e o"li)ation is an o"li)ation to pa# 100000 an! &e !elivere! a atc& tosecre t&e *lfllment o* &is o"li)ation/ &erea*ter &e as a"le to pa# 95000/ ?an &e no!eman! *or t&e retrn o* t&e atc&A: .o/ Fn!er t&e principle o* in!ivisi"ilit#/ Fntil t&e entire o"li)ation is *ll# pai! t&e ple!)eor mort)a)e ill contine to &ave *ll *orce an! eKect/ ;t consi!er t&is scenario &e!elivere! 3 atc&es to secre an o"li)ation &ic& is in t&e amont o* 300000/ A*ter pa#in)100000 &e !eman!e! *rom t&e cre!itor *or t&e retrn o* 1 o* t&e atc&es/ &at@s not a vali!!eman! n!er t&e in!ivisi"ilit# principle/

a%e note t&at t&is principle is not applica"le i* it as clear in t&eir a)reement t&at eac&atc& ill secre a specifc amont/

,: ol! t&is principle "e aKecte! i* t&e !e"tor !ies Bn) an) o"li)ation is an o"li)ation to!eliver 300000 tapos an) i!ineliver as a secrit# 3 atc&es/ &en t&e !e"tor !ie! &e assrvive! "# 3 c&il!ren/ Er!inaril# &o ol! on t&e 3 atc&esA: &e 3 c&il!ren/ Bn) alan) i"an) &eirs %n) alan) ill eac& one o* t&em ol! "eentitle! to 1 atc&/ o i* one o* t&e c&il!ren tol! t&e cre!itor &ere is m# 100000 retrn tome t&e atc& o* &ic& I am t&e &eir/

,: ?an t&e cre!itor "e compelle! to !eliver t&e atc& to t&at &eirA: .o/ &e in!ivisi"ilit# principle ol! not "e aKecte! "# t&e !eat& o* t&e !e"tor nor ol!it "e aKecte! "# t&e !eat& o* t&e cre!itor/

,: Does it matter i* t&e o"li)ation involve! i* t&ere are 2 or more !e"tor !oes it matter i* t&e o"li)ation is onl# a Joint o"li)ation i* t&e# are not soli!aril# lia"leA: .o/ &e in!ivisi"ilit# principle ill not "e aKecte! "# t&e *act t&at t&e o"li)ation is not asoli!ar# o"li)ation/

&is as t&e rlin) o* t&e ? in !(T /% C &ere 4 persons o"taine! certain)oo!s *rom t&e cre!itor/ o secre *lfllment o* t&e o"li)ation onl# one o* t&em $si Da#ritln)( an) na) e'ecte n) real estate mort)a)e over &is parcels o* lan!/ &en t&e o"li)ationo* t&ese 4 "ecame !e t&ecre!itor !eman!e! pa#ment "t no one as a"le to pa# ntilDa#rit oKere! to pa# onl# &is s&are claimin) t&at t&e o"li)ation is a Joint o"li)ation/ ;t a*terpa#in) &is s&are &e !eman!e! t&at t&e mort)a)e over &is parcels o* lan! "e cancelle!/ &e

? rle! t&at t&e o"li)ation as a Joint o"li)ation "ecase t&e o"li)ation !oes not *all n!eran# o* t&e 3 circmstances n!er Article 1207 &ere t&e o"li)ation ol! "e consi!ere!soli!ar#/

;t "ein) a Joint o"li)ation !oes it )ive Da#rit t&e ri)&t to &ave t&e mort)a)e cancela*ter pa#in) &is s&are &e ? rle! no "ecase o* t&e in!ivisi"ilit# principle/ ;e*ore t&e realestate mort)a)e can "e cancelle! t&e entire in!e"te!ness mst "e *ll# pai!/

PACTUM COMMISORIUM:





A;? loane! to .E 50000 *or &ic& t&e latter ple!)e! 400 s&ares o* stoc% in RS Inc/ It asa)ree! t&at i* t&e ple!)or *aile! to pa# t&e loan it& 10M #earl# interest it&in 4 #ears t&eple!)ee is at&oriLe! to *oreclose t&e s&ares o* stoc%/ As re+ire! .E !elivere!possession o* t&e s&ares to A;? it& t&e n!erstan!in) t&at t&e s&ares ol! "e retrne! to.E pon pa#ment o* t&e loan/ Goever t&e loan as not pai! on time/,: A mont& a*ter 4 #ears ma# t&e s&ares o* stoc% ple!)e! "e !eeme! one! "# A;?

A: E* corse not/ <ven n!er t&e *acts it as clear t&at &e is onl# at&oriLe! to *orecloset&e s&ares i* t&ere as no pa#ment it&in 4 #ears/ An! even i* t&ere as a stiplation to t&eeKect t&at &e ill alrea!# "e t&e oner a*ter t&e lapse o* 4 #ears t&at stiplation ol!even "e voi!/

o secre a loan o"taine! *rom a rral "an% rita assi)ne! &er lease&ol! ri)&t over a stallin a p"lic mar%et in *avor o* t&e "an%/ &e !ee! o* assi)nment provi!es t&at in case o* !e*alt in t&e pa#ment o* t&e loan t&e "an% s&all &ave t&e ri)&t to sell t&e lease&ol! ri)&tover t&e stall as &er attorne#-in-*act an! to appl# t&e procee!s to t&e pa#ment o* t&e loan/,: Assmin) t&e assi)nment to "e a mort)a)e !oes t&e provision )ivin) t&e "an% t&epoer to sell rita@s ri)&t constitte pactm commisorim or not &#A: &e provision !oes not constitte pactm commisorim "ecase *or a stiplation to "econsi!ere! as actm commisorim it s&ol! provi!e *or t&e atomatic trans*er o* oners&ip over t&e propert# ple!)e! or mort)a)e! o* t&e principal !e"tor/ ;# mere !e*altoner ill no "elon) to t&e ple!)ee or mort)a)ee/ &at ol! "e pactm commisoriman! t&at is voi! n!er t&e la/ &at is not t&e reme!# o* t&e ple!)ee or mort)a)ee/ Gisreme!# n!er t&e la is to &ave t&in) sol! in ple!)e t&r a p"lic action or t&r a notar#p"lic or in a mort)a)e t&r a *oreclosre sale/

,: In relation to ple!)e i* t&e ple!)ee appropriates t&e t&in) *or &imsel* ma# t&at "e avali! appropriation o* t&e t&in)A: &at ma# "e vali! in a scenario &ere t&e appropriation &appene! a*ter a 2n! action/Bn) sa 1st action alan) "i!!ers or t&e onl# "i!!er is t&e ple!)ee t&e la re+iresanot&er action/ In t&e 2n! action at ala pa rin) "i!!er or t&e onl# "i!!er is t&e ple!)eet&e la allos &im no to appropriate t&e t&in) ple!)e! *or &imsel*/ Goever t&at ol!e'tin)is& not onl# t&e principal o"li)ation "t also t&e ple!)e/

R "orroe! mone# *rom an! )ave a piece o* lan! as secrit# "# a# o* mort)a)e/ It ase'pressl# a)ree! "eteen t&e parties in t&e mort)a)e contract t&at pon non-pa#ment o* t&e !e"t on time t&e mort)a)e! lan! ol! alrea!# "elon) to /,: I* R !e*alte! in pa#in) ol! no "ecome t&e oner o* t&e lan!A: Defnitel# no "ecase t&at stiplation constittes pactm commisorim &ic& is voi!/

,: ppose in t&e prece!in) +estion t&e a)reement "eteen R an! as t&at i* R *aile!to pa# t&e mort)a)e !e"t on time t&e !e"ts s&all "e pai! "# t&e lan! mort)a)e! "# R to ol! #or anser "e t&e same as in t&e prece!in) +estionA: .o/ &at stiplation no !oes not constitte ? "ecase pon !e*alt t&e mort)a)ee!oes not atomaticall# a+ire oners&ip &ere/ As state! t&e !e"ts s&all "e pai! it& t&elan!/ Eners&ip !oes not atomaticall# pass pon !e*alt rat&er t&e mort)a)ee pon!e*alt ill onl# &ave t&e ri)&t to !eman! t&at t&e lan! "e !elivere! to &im as pa#ment/

&is ol! "e a vali! !ation in pa#ment in case t&e principal !e"tor !e*alts/ ol! t&ere "etrans*er o* oners&ip "e*ore !eliver# in !ation in pa#ment .o/ &ere can never "e !ation inpa#ment it&ot !eliver#/ ;t it& !eliver# "# a# o* !acion oners&ip t&en ol! pass/

,: Hosario o"taine! a loan o* 100000 *rom >enni*er an! ple!)e! &er !iamon! rin)/ &econtract si)ne! "# t&e parties stiplate! t&at i* Hosario is na"le to re!eem t&e rin) on !e!ate s&e ol! e'ecte a !ocment in *avor o* >enni*er provi!in) t&at t&e rin) s&allatomaticall# "e consi!ere! *ll pa#ment o* t&e loan/





$a( Is t&e contract vali! &ere are 2 contracts &ere/ irst t&ere@s a loan/ An! secon!t&ere@s a ple!)e/ ;t apparentl# t&e 2 contracts ma# "e in one !ocment lan)/ &ic&contract is re*erre! to in t&e +estion In *act is t&e contract vali!

A: &e anser is #es "ecase even i* t&e stiplation ol! "e consi!ere! aspactm commisorim it ill not aKect t&e vali!it# o* t&e loan it ill not aKect t&evali!it# o* t&e mort)a)e/ It is onl# t&e stiplation &ic& is voi! not t&e contract/ ;t

even t&e stiplation I ol! a!mit t&ereis a !e"ate on t&is/ it& t&e stiplation t&ati* Hosario is na"le to re!eem t&e rin) on !e !ate s&e ol! e'ecte a !ocment in*avor o* >enni*er provi!in) t&at t&e rin) s&all atomaticall# "e consi!ere! *llpa#ment o* t&e loan !oes t&at constitte pactm commisorim &e anser is no/Fpon !e*alt o* t&e principal !e"tor t&e cre!itor !oes not ac+ire oners&ipatomaticall#/ &e cre!itor n!er t&e *acts ol! onl# &ave t&e ri)&t to compel t&eot&er part# to e'ecte a !ocment in *avor o* >enni*er t&at t&e rin) s&allatomaticall# "e consi!ere! *ll pa#ment/ Fntil t&e e'ection o* t&e !ocment t&ecre!itor ill not ac+ire oners&ip/ &ere*ore it is not pactm commisorim/

$"( ill #or anser to A "e t&e same i* t&e contract stiplates t&at pon *ailre o* Hosario to re!eem t&e rin) on !e !ate >enni*er ma# imme!iatel# sell t&e rin) an!appropriate t&e entire procee!s t&ereo* *or &ersel* as *ll pa#ment o* t&e loan Heason/

A: &e anser ol! "e t&e same/ &e vali!it# o* t&e contract ol! not "eaKecte!/ &at stiplation cannot constitte ?/ In *act t&e cre!itor &ere is onl# )ivent&e ri)&t to sell &ic& normall# ol! "e )iven to cre!itor pon !e*alt o* t&e !e"tor"# stiplation o* t&e !e"tor/ it&ot stiplation t&e cre!itor ma# as% t&e notar#p"lic to sell t&e t&in) in or!er *or t&e procee!s to "e applie! to t&e in!e"te!ness/

REMEDIES:,: I* a t&in) as ple!)e! or mort)a)e! an! instea! o* &avin) t&e t&in) ple!)e! sol! in anaction sale or instea! o* *oreclosin) t&e mort)a)e t&e cre!itor instea! fle! an action *orspecifc per*ormance to !eman! *or t&e pa#ment o* t&e !e"t/ a# t&e action prosperA: &e ? ol! sa# #es/ &at is one o* t&e reme!ies o* a cre!itor/ Goever i* &e fles anaction *or recover# o* t&e sm o* mone# instea! o* a *oreclosre &e is !eeme! to &avea"an!one! &is ri)&ts n!er t&e mort)a)e or &e ol! "e !eeme! to &ave a"an!one! &isri)&ts n!er ple!)e/ In ot&er or!s manalo man s#a sa %aso na #n &e ol! not &avepre*erence over t&e propert# ple!)e! or mort)a)e!/ Ge ill merel# "e consi!ere! as annsecre! cre!itor Jst li%e t&e ot&er nsecre! cre!itors/

As to t#e ri$#t to re(o)er *e+(ie,(y:,: I* t&e t&in) ple!)e! as sol! $p"lic action or *oreclosre sale( net procee!s 80000pero an) npai! amont 100000/ o ma# !efcienc# t&e 20000/ ?an t&e cre!itor $ple!)ee ormort)a)ee( recover sc& !efcienc# *rom &om in t&e frst placeA: rincipal !e"tor is !iKerent *rom t&e ple!)orQmort)a)or/ I* t&ere is a ri)&t to recover t&e!efcienc# *rom &om rom t&e principal !e"tor or mort)a)or It ill "e *rom t&e principal!e"tor/ An) lia"ilit# n) mort)a)or e'ten!s onl# to t&e propert# itsel*/ ;t &e cannot "e &el!lia"le *or an# ot&er amont "ecase &e "on! &imsel* onl# as *ar as t&e propert# isconcerne! it&ot preJ!ice to an e'press stiplation/ ;t is t&ere sc& a ri)&t to recover

!efcienc# es/

,: &at i* t&e t&in) as sol! *or 130000 an! t&e total in!e"te!ness as onl# 100000 ma#e'cess na 30000 &o is entitle! to t&e e'cessA: &e e'cess s&ol! )o to t&e oner o* t&e propert# %c maaalan na s#a n) propert#mappnta sa &i)&est "i!!er/ At least man lan) n) e'cess mapnta sa %an#a %onselo !e"o"o/





,: ero ito "a an) rles pa)!atin) sa ple!)e real estate mort)a)e c&attel mort)a)eantic&resisA: &e anser is #es e'cept sa ple!)e/ a c&attel mort)a)e real estate antic&resis i* t&ereis !efcienc# t&ere@s a ri)&t to recover t&e !efcienc# i* t&ere is an e'cess it )oes to t&emort)a)or ta%e note &o is not necessaril# t&e principal !e"tor/

,: ero sa ple!)e "ali)ta!/ In case t&ere is a !efcienc# can t&e ple!)ee recover t&e!efcienc# *rom t&e principal !e"torA: &e anser is no/ I* t&ere is a stiplation in t&e contract o* ple!)e &ere it is provi!e!t&at in case o* !efcienc# t&e ple!)ee can recover !efcienc# *rom t&e principal !e"tor t&atstiplation is voi!/ &ere*ore t&e ple!)ee cannot recover an# !efcienc#/

,: Goever i* t&ere is an e'cess &o ol! "e entitle! to t&e e'cessA: &e anser is t&e ple!)ee not t&e ple!)or/ &e onl# plasi"le e'planation is "ecaset&is is a *orm o* "alancin)/ ala s#an) ri)&t to recover !efcienc#/ I* onl# *or t&at I t&in% t&erle is reasona"le/

,: ;t is it possi"le t&at t&e ple!)or ma# "e entitle! to t&e e'cess instea! o* t&e ple!)eeA: es i* t&ere is a stiplation to t&at eKect/ it&ot a stiplation t&e ple!)ee ol! "eentitle! to t&e e'cess/ a !efcienc# voi! an) stiplation/ a e'cess t&at@s a vali! an!"in!in) stiplation/

Asi!e *rom ple!)e t&ere is onl# one ot&er e'ception to t&e rles mentione!/ &is ol! "ein c&attel mort)a)e/ I* t&ere is a !efcienc# t&ere ol! "e no ri)&t to recover !efcienc#/Er!inaril# n!er t&e c&attel mort)a)e la pa) ma# !efcienc# t&ere ol! "e a ri)&t torecover !efcienc#/ ;t n!er a specifc scenario t&e mort)a)ee$cre!itor( ma# &ave no ri)&tto recover !efcienc#/ aan man)#a#ari ito &en t&e Hecto la ol! "e applica"le/ I* t&emort)a)e is covere! "# Hecto la i* t&er is !efcienc# t&ere ol! "e no ri)&t to recover!efcienc#/

,: r/ atno! lent r/ a)ana%a 100000/ as secrit# o* t&e pa#ment o* sai! amonta)ana%a !elivere! to atno! 2 rin)s in ple!)e/ &en a)ana%a *aile! to pa# matno!*oreclose! an! &a! t&e rin) sol! at t&e action/ &e procee!s o* t&e sale a*ter !e!ctin)e'penses amonte! to onl# 70000/

$a( a# atno! !eman! t&e !efcienc# *rom a)ana%aA: E* corse &e can ala#s !eman!/ ;t is t&e !eman! a vali! !eman! or

can &e recovert&e !efcienc# &at ill not "e a vali! !eman!/ Ge cannot recover t&e!efcienc# "ecase n!er t&e la in ple!)e in case t&ere is !efcienc# t&e ple!)eecannot recover/

$"( Assme t&at t&e procee!s a*ter !e!ctin) e'penses amonte! to 150000/ ol!atno! &ave "een entitle! to t&e e'cess

A: .o t&ere "ein) no stiplation t&at t&e e'cess s&all pertain to t&e ple!)or/Fn!er t&e la on ple!)e t&e e'cess )oes to t&e ple!)ee/

A !iamon! rin) an! *emale co ere ple!)e! to secre a loan amontin) to 100000/ &eple!)e appeare! in a p"lic instrment/ A mont& later t&e co )ave "irt&/ &en t&eamont o* t&e loan as not pai! pon its matrit# !ate t&e ple!)ee case to "e sol! at t&ep"lic action t&e rin) t&e co an! t&e co@s oKsprin)/ An! t&e amont o* 150000 asrealiLe!/ &e ple!)or pon learnin) o* t&e sale !eman!e! *rom t&e ple!)ee t&e e'cess int&e price over an! a"ove t&e amont o* t&e principal o"li)ation claimin) t&at &e is entitle!to t&e e'cess an! claimin) t&at t&e oKsprin) as not incl!e! in t&e ple!)e/ &e ple!)eere*se! to compl# it& t&e !eman!/,: Go ol! #o resolve t&is conict ive #or reasons/





A: I ol! !eci!e t&is conict in *avor o* t&e ple!)ee/ irst as to t&e claim o* t&e ple!)ort&at t&e oKsprin) as not incl!e! in t&e ple!)e n!ert&e la oKsprin)s are covere! "# t&eple!)e nless ot&erise stiplate! "# t&e parties/ &ere appears to "e no stiplation &ic&ol! e'cl!e t&e oKsprin) *rom t&e ple!)e t&s n!er t&e la it is covere! "# t&eple!)e/ econ! as to t&e e'cess t&e claim o* t&e ple!)or t&at &e is entitle! to t&e e'cess isnot tena"le "ecase n!er t&e la on ple!)e it is t&e ple!)ee &o is entitle! to t&e e'cess

nless ot&erise stiplate! "# t&e parties/ &ere "ein) no stiplation to t&at eKect n!ert&e *acts t&e ple!)ee is t&e one entitle! to t&e e'cess/

,: imilar *acts !n sa atno! an! a)ana%a/ ;t t&e +estion no sppose t&e rin)instea! o* "ein) ple!)e! &as "een mort)a)e! to atno! ol! atno! &ave "eenentitle! to t&e !efcienc# i* t&e sales procee!s ere less t&an t&e in!e"te!ness or to t&ee'cess i* t&e procee!s ere moreA: As to t&e !efcienc# n!er t&e c&attel mort)a)e la t&e mort)a)ee can recover t&e!efcienc#/ ;t ol! t&is "e covere! "# t&e Hecto la .o "ecase t&is is not a sale oninstallment/ o t&e c&attel mort)a)e la ill appl# t&at t&e ple!)ee can recover t&e!efcienc#/

,: &o ol! "e entitle! to t&e e'cess ol! t&e ple!)ee "e entitle!A: .o/ &e e'cess ol! )o to t&e mort)a)or &ic& is t&e reasona"le rle/

RIG!T O- REDEMPTIONE"UIT' O- REDEMPTION TO A MORTGAGOR,: Are t&e ri)&t o* re!emption an! e+it# o* re!emption t&e sameA: .o/ &e ri)&t o* re!emption is t&e ri)&t a*ter t&e sale/ <+it# o* re!emption is t&e ri)&t tore!eem "e*ore t&e sale is con!cte!/

,: Is t&ere an e+it# o* re!emption in ple!)eA: &ere is none/ alan) e+it# or ri)&t %c normall# an) pineple!)e m)a sin)sin) lan) relo/o me!#o !i mas#a!on) e'pensive/

,: a J!icial *oreclosreA: t&ere ol! "e e+it# o* re!emption/ ;e*ore t&e cort ol! or!er t&e sale o* t&e t&in) ina *oreclosre sale t&e re!emptionerQprincipal !e"tor ol! &ave t&e opportnit# to pa# t&e!e"t ol! "e )iven a perio! normall# 90 !a#s/ a) J!icial *oreclosre ala n) ri)&t o* re!emption %c n)a meron n) e+it# o* re!emption/

<'cept: i* t&e mort)a)ee is a fnancial instittion/ a) m)a "an%s an) mort)a)eeeven in J!icial *oreclosre meron) ri)&t o* re!emption/ In e'traJ!icial *oreclosre is t&erea ri)&t o* re!emption es &ic& is 1 #ear/ a J!icial *oreclosre &at is t&e perio! o* re!emption 12 mnt&s or 1 #ear Is t&ere a !iKerence "eteen t&e 2 &ere is a "i)!iKerence 5 !a#s/ El! rle 12 mont&s $means 3012(/ .o t&e ? !eeme! it ise toc&an)e t&e la into 1 #ear/

,: 1 #ear *rom &enA: 1 #ear *rom t&e re)istration o* t&e sale/ Fntil t&e !ee! o* sale is re)istere! t&e 1 #earperio! ill not even start to rn/

&e mort)a)e as not re)istere! an! t&e oKer to re!eem as fle! t&erea*ter more t&an 1#ear *rom t&e sale/ &e 1 #ear perio! never even starte! to rn "ecase o* t&e *ailre tore)ister/ till t&e oKer to re!eem as fle! it&in 1 #ear *rom re)istration o* t&e sale/ It asa proper re!emption/

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