Pledge and Mortgage PDF
Pledge and Mortgage PDF
PLEDGE AND
AND
MORTGAGE
MORTGAGE
CHAPTER 1
SIMILARITIES BETWEEN
PLEDGE AND MORTGAGE
RIGHT OF CREDITOR WHEN OBLIGATION IS
DUE
PLEDGE
Chattel
Covers only the property described therein and not like substituted property
acquired by the mortgagor
A stipulation extending its scope and effect to after-acquired property is VALID
where the after-acquired property is in renewal of, or in substitution for, goods
on hand when mortgage was executed, or is purchased with the proceeds of
sale
Refers to "rolling stocks"
EXTENT OF SECURITY
MORTGAGE
Real Estate
Not limited to the immovable mortgaged
Extends to the following
the natural accessions, the improvements, growing fruits, and rents or
income not yet received when obligation becomes due
to the amount of indemnity granted or owing to the proprietor from the
insurers of the property mortgaged
All objects permanently attached to the mortgaged land or building
Even if placed after execution it is included
EXTENT OF SECURITY
MORTGAGE
Real Estate
Fruits gathered of the land should not be applied to the payment of the principal
obligationUnless stipulated
Unless stipulated
Cretes a real right which attaches to the property and not to the mortgagee
Any person who comes into the possession of the property mortgaged is bound
and subject to the provisions of the Land Registration Laws
RIGHT OF CREDITOR WHEN OBLIGATION IS
DUE
PLEDGE
The creditor to whomthe credit has not been satisfied in due time, may proceed
before a Notary Public for the sale of the thing
Sale must be made at a public auction
Notice must be given to the pledgor and owner of the amount which the
public sale was held
What happens in a public sale?
Both the pledgor and the pledgee may bid
Pledgor's bid shall be perferred if he offers the same terms as the highest
bidder
Pledgee's bid shall NOT be valid, if he is the only bidder
RIGHT OF CREDITOR WHEN OBLIGATION IS
DUE
MORTGAGE
Chattel
Upon default of the mortgagor, the right of the mortgagee is to
foreclose it
A public auction sale by a public officer at a public place in the
municipality, after notice to the mortgagor of the time, place and
purpose of sale
Municipality is where the mortgagor resides or where the
property is situated
Creditor-mortgage may bid as well
RIGHT OF CREDITOR WHEN OBLIGATION IS
DUE
MORTGAGE
Real Estate
The right of the mortgagee is also to foreclose the mortgage
Foreclosure may either be made judicially or extrajudicially
Extrajudicially happens only where there is a stipulation
upon the default of the debtor
Judicially happens by bring an action for that purpose in
the Regional Trial Court
In the absence of stipulation this is the default
APPLICATION OF THE PROCEEDS
PLEDGE
Any person who has any right in or to the thing may satisfy the
principal obligation as soon as the latter becomes DUE and
DEMANDABLE
Third Person who pledges his personal properties to secure an
obligation, may redeem the thing by paying off the creditor of
the debtor's indebtedness
Only if the debtor fails to do so
To prevent the public sale
REDEMPTION
MORTGAGE
Chattel
When the condition of a mortgage is broken, the following may redeem
i. the mortgagor
ii. a person holding a subsequent mortgage
iii. subsequent attaching creditor
An attaching creditor who so redeems shall be subrogated to the rights of the
mortgagee and entitled to foreclosure the mortgage
The redemption is made by paying or delivering to the mortgagee the amount
due
Known as the CHATTEL MORTGAGE LAW
REDEMPTION
MORTGAGE
Real Estate
2 Kinds of Redemption
Equity of Redemption
right of the mortgagor to redeem the mortgaged property after his
default in the performance of the condition but before the sale of the
property
Mortgagor can at any time AFTER the debt has become due, but
BEFORE the extrajudicial foreclosure of the mortgage, pay the
creditor of the amount indebtedness, interest and other expenses
incurred
Judicial foreclosure
mortgagor may exercise his equity of redemption before
confirmation of the sale by the court
REDEMPTION
MORTGAGE
Real Estate
2 Kinds of Redemption
Right of Redemption
right of the mortgagor to redeem the property within a certain period
after it was sold for the satisfaction of the mortgaged debt
Extrajudicial Foreclosure
mortgagor may redeem the property at any time within the term of
one year from and after the date of the registration of the sale
Judicial Foreclosure
mortgagor can no longer exercise his right of redemption after the
judicial confirmation of the sale
LAWS APPLICABLE
PLEDGE
Governed by Articles 2085 to 2123 of the New Civil Code
MORTGAGE
Governed by
the Chattel Mortgage Law Act No. 1508
the Civil Code provisions as long as they don't conflict
with the Chattel Mortgage Law
Revised Administratice Code
Article 319 of the Revised Penal Code
RIGHTS OF PLEDGEE
PLEDGEE
5. The pledgee may bring the actions which pertain to the owner of
the thing in order to recover it from, or defend it against third
person
a. Unless stipulated
b. He may demand the sale of only as many of the things as are necessary for
the payment of the debt
PLEDGEE
a. He shall apply the same to the payment of his claim and deliver the surplus
to the pledgor if theres any
PLEDGEE
3. The debtor can't ask for the return of the thing pledged against
the will of the creditor
a. Unless he has paid the debt and its interest, with expenses
PLEDGEE
4. The pledgor may require that the thing be deposited with a third
person
a. If through the negligence or willful act of the pledgee, the thing pledged is in
danger of being lost or impaired
5. The pledgee has prior right to cause the thing to be sold at
public sale
a. If there are reasonable grounds to fear the destruction or impairment or
dimunutionin value of the thing, WITHOUT the fault of pledgee
b. Proceeds of auction shall be applied to the principal obligation
c. If pledgee didn't exercise this right, pledgor may ask for the return of the
thing
d. Pledgee may offer another thing as long as its the same kind and its quality
is not inferior
EXTINGUISHMENT OF
PLEDGE
WAYS TO EXTINGUISH
PLEDGE