Pledge, Mortgage & Antichresis 4/28/2018 3:23:00 AM

Common requisites of pledge & mortgage

 They are constituted to secure the fulfillment of a principal
obligation. May secure:
o All kinds of obligations, whether pure or subject to
suspensive or resolutory condition or even
o Voidable, unenforceable, or natural obligations
 That the pledgor or mortgagor is the absolute owner of the
thing pledged or mortgaged
o Ownership @ the time pledge or mortgage is constituted
 Must own the thing pledged or mortgaged at the time it
is constituted
o Third persons may mortgaged their property
 Can only be liable to the extent of the value of their
property
o The persons constituting the pledge or mortgage have free
disposal of the property, that they be legally authorized for
the purpose.
 Property being pledge or mortgage is free from claims
or encumbrances
When is the thing pledged or mortgaged may be sold or alienated to
pay debt?
 Before maturity
o Gen rule: cannot be sold or alienated since payment of debt
cannot yet be compelled
o Exception: pledgor or mortgager fails to fulfill certain
conditions (defaulted)
 At maturity
o Upon default of the debtor to pay the obligation at maturity
Appropriation of the thing pledged or mortgaged
 Pactum commissorium
o Automatic forfeiture- the ownership of the thing pledged or
mortgaged shall pass to the creditor by the mere default of
the debtor
o Requisites
 There should be a property mortgaged or pledged
  There should be stipulation for automatic appropriation
by the creditor of the thing mortgaged or pledge in case
of default of the debtor
 Appropriation of property
o Pledge
 Allowed only if pledged is not sold in two public auctions
o Mortgage
 Not allowed
Indivisibility of pledge & mortgage
 Gen. rule: indivisible, even though the debt may be divided among
the successors in interest of the debtor or of the creditor. *applies
even the debtors are jointly liable
 Indivisibility among heirs of debtor
o Debtor’s heir who has paid a part of the debt cannot ask for
proportionate extinguishment of the pledge or mortgage as
long as the debt is not completely satisfied
 Indivisibility among heirs of creditor
o Creditor’s heir who received his share of the debt cannot
return the pledge or cancel the mortgage, to the prejudice of
the other heirs who have not been paid.
 Exception: divisible if several things are given in pledge or
mortgage as the portion of the debt for which each thing is
answerable is satisfied. ( specifically segregated )
Promise to constitute pledge or mortgage
 Gives rise only to a personal action between the contracting parties
PLEDGE 4/28/2018 3:23:00 AM

Kinds
 Conventional or voluntary- constituted by the mutual consent of
the pledgor & the pledgee
o Requisites
 Constituted to secure the fulfillment of a principal
obligation
 Pledgor be the absoulute owner of the thing pledged
 Person constituting the pledge has the free disposal of
his property, and the absence thereof, that he be legally
authorized for the purpose
 The thing pledged be placed in the possession of the
creditor, or of a third person by common agreement
 Perfected upon the delivery of the thing
 Must be actual delivery
 No delivery, pledge is void
o Object of the pledge
 all movables w/in the commerce of men
 incorporeal rights evidenced by nego instruments, bill of
lading, shares of stocks etc.
o Form of pledge
 Between parties
 any form
 As regards to third persons
 must be in public instrument
o Extent of pledge(shall cover the ff:)
 The thing pledged
 Fruits, income, dividends or interests earned or
produced by the thing pledged, unless there is a
stipulation excluding them
 Offspring, if the thing pledged is an animal, unless there
is a stipulation excluding them
o Rights of the debtor/ pledgor
 To alinate, w/ the consent of the pledgee, the thing
pledged
  To ask that the thing pledged be judicially or extra
judicially deposited if it is used w/o authority for a
purpose other than its preservation
 To continue to be the owner of the thing pledged unless
it is expropriated
 To ask for the return of the thing pledged after he settle
his obligation
 To require that the thing pledged be deposited w/ a
third person if it is in danger of being lost or impaired
through the negligence or willful act of the pledgee
 To demand the return the thing pledge upon offering
another thing in pledge, if there are reasonable grounds
to fear the destruction or impairment of the thing
pledged w/o the fault of the pledgee
o Obligations of the debtor/pledgor
 To pay the debt @ its interests, with expenses in a
proper case, when they are due
 To pay damages that the pledgee may suffer by reason
of the flaws of the thing pledged, if he was aware of the
flaws but did not advise the pledgee of the same
o Rights of the creditor/pledgee
 to retain the possession of the thing pledged until the
debt is paid
 to demand reimbursement of the expenses made for
the preservation of the thing pledged
 to bring actions w/c pertain to the owner of the thing
pledged in order to recover it from, or defend it against
third persons
 to use the thing pledged if he is authorized to do so, or
when its use is necessary for the preservation of the
thing
 if he is deceived of the substance of the thing pledged,
he may either
 claim that another thing may be given to him
 demand immediate payment
 to cause the thing pledged at a public sale
  to collect & receive the amount due if the thing pledged
is a credit w/c becomes due before it is redeemed, & to
apply the same to the payment of his claim (exact
amount of debt only)
 to sell the thing pledged upon default of the
debtor/pledgor
o Obligations of the creditor/pledgee
 To take care of the thing pledged w/ a diligence of a
good father of a family
 To be liable for the loss or deterioration of the thing
pledged unless it is due to fortuitous event
 Not to deposit the thing pledge w/ a third person,
unless authorized
 To be responsible for the acts of his agents or
employees w/ respect to the thing pledge
 Not to use the thing pledge, except when:
 He is authorized by the owner
 The use of the thing is necessary for its
preservation
 To deliver the surplus after paying his claim from what
he has collected on a credit that was pledged & w/c has
become due before it is redeemed
o Rights of a third person who pledges his own movable
property to secure the debt of another
 To be indemnified by the debtor if he pays the creditor
 To be subrogated to all the rights of the creditor against
the debtor if he pays the creditor
 To be released from liability in the ff. cases
o Extinguishment of pledge
 Indirect Cause
 When the principal obligation is extinguished, the
pledge, as an accessory to the contract is also
extinguished
 Direct Cause
 Return by the pledgee of the thing pledged to the
pledgor or owner
  Renunciation or abandonment in writing by the
pledgee of the pledge
 Sale of the thing pledge
 Appropriation of the thing pledge
 Legal- constituted to secure the fulfillment of a principal obligation
–right of person to retain a thing until he receives payment of
his claim
o Examples
 Possessory lien by a possessor in good faith
 Possessory lien of worker
 Depositary’s right of retention
o Excess or deficiency of proceeds of sale
 Excess
 Conventional pledge- excess belongs to creditor
 Legal pledge- excess shall be delivered to debtor
 Deficiency
 Conventional- creditor is not entitled to recover
the deficiency
 Legal- creditor is entitled to recover the
deficiency
MORTGAGE 4/28/2018 3:23:00 AM

Real Mortgage
 Requisites
o Constituted to secure the fulfillment of a principal obligation
o Mortgagor be the absolute owner of the thing mortgaged
o Person constituting the mortgage must have the free disposal
of his property/ legally authorized for that purpose
o Must be recorded in the Registry of Property
 Characteristics
o Accessory
o Indivisible
o Inseparable
o Real right
o Real property
 Kinds of real mortgage
o Conventional or voluntary
o Legal
o Equitable mortgage
 Objects of real mortgage
o Immovable
o Alienable rights in accordance w/ the laws
 Form of real mortgage
o Between the parties
 Any form
o As regards to third persons
 Must be recorded in registry of propery
 Extent
o Property mortgaged
o Natural accessions
o Improvements
o Growing fruits
o Rents & income not yet received when the obligation becomes
due
o Indemnity granted
 Stipulation prohibiting alienation & second mortgage
o Alienation- void
o Second mortgage- valid if registered in Torrens system
  Mortgagor may execute a second mortgage w/o the
consent of the mortgagee
 Foreclosure
o Remedy available to the mortgagee by which he subjects the
property mortgaged to the satisfaction of the obligation
secured
o Grounds
 When principal obligation is not paid when due
 When there is any violation of any condition, stipulation
or warranty by the mortgagor
o Kinds
 Judicial foreclosure
 Extra-judicial foreclosure
o Senior mortgages & junior mortgages
o Redemption
o Kids of redemption
 Equity redemption- not less than 90 days
 Right of redemption
CHATTEL MORTGAGE 4/28/2018 3:23:00 AM

Requisites
 Constituted to secure the fulfillment of a principal obligation
 Mortgagor is the absolute owner of the thin mortgaged
 Person constituting the mortgage must have the free disposal of his
property, & is legally authorized for that purpose
 Must be recorder in chatter mortgage register
Object
 Only personal property
Form
 Between the parties- must be recorded in the Chattel mortgage
register of the province where the mortgagor resides & the province
where the property is located, if different form the residence of
mortgagor
o Motor vehicles- chattel mortgage register & LTO
o Shares of stock-chattel mortgage register in the province of
the corporation & the domicile of mortgagor
o Vessel- office of the collector of customs at port of entry
 As regards to third persons
o Affidavit of good faith must be attached to the Deed of
Chattel mortgage & must be recorded in chatter mortgage
register
Foreclosure
 Grounds
o When principal obligation is not paid when due
o When there is any violation of any condition, stipulation or
warranty by the mortgagor
 Kinds
o Judicial
o Extra-judicial
 Distribution of proceeds
o Cost of sale
o Claim of the person foreclosing the mortgage
o Claims of the persons holding subsequent mortgages in their
order
o Balance, if any, shall be paid to the mortgagor
 Two or more mortgages
 o Senior mortgagees
o Junior mortgagees
 deficiency