17 Questions
A third person may pledge his property to secure another person’s debt.
True
The debtor or pledgor may alienate the thing pledged without the consent of the pledgee.
False
The pledgee may use the thing pledged even without the consent of the pledger if the use of the thing is necessary for its preservation.
True
A real mortgage is not binding between the parties if the same was entered into orally.
True
Immovables may be the object of a deposit.
True
What can C do if D cannot pay the loan at maturity?
C can no longer recover the deficiency.
What happens to the P20,000 debt and the pledge when D defaults on the loan and the ring is sold for P18,000 at auction?
Neither the debt of P20,000 nor the pledge is extinguished.
If John pays P150,000 towards the P450,000 loan from Andrew, will the mortgage on John's share of the land be extinguished?
No, because the obligation is solidary, and payment in part shall not extinguish the obligation secured by the mortgage.
What is the minimum amount that C can recover from D if D cannot pay the P100,000 loan at maturity?
C can recover the P90,000 from the sale of the lot.
What is the maximum amount that C can recover from D if D cannot pay the P20,000 loan and the ring is sold for P18,000 at auction?
C can recover the P2,000 deficiency from D.
If John, James, and Peter borrowed P450,000 from Andrew and mortgaged their undivided agricultural land, and John later pays P150,000, will the mortgage on John's share of the land be extinguished?
No, because the obligation is solidary, and payment in part shall not extinguish the obligation secured by the mortgage.
If D pays X the entire $10,000 share, what is true regarding the pledge?
The pledges of the wristwatch and necklace remain until Y and Z are paid.
What is the purpose of D endorsing the $12,000 promissory note to C?
To serve as security for D's $10,000 loan from C.
On April 25, when M's promissory note is due, what can C do?
Foreclose on the pledged promissory note if D defaults on the loan.
If D repays the entire $10,000 loan before May 1, what happens to the pledged promissory note?
The pledge is extinguished and C must return the note to D.
What rights does C have over the pledged promissory note before its maturity date?
C cannot do anything with the note except hold it as security.
If D defaults on the $10,000 loan, what must C do before foreclosing on the pledged note?
Provide reasonable notice and opportunity for D to pay the debt.
Study Notes
Pledges and Mortgages
- A third person can pledge their property to secure another person's debt.
- The pledgor (person who owns the pledged property) may not alienate the pledged thing without the consent of the pledgee (creditor).
- The pledgee may use the pledged thing if necessary for its preservation, but must do so with care and return it in its original state.
Pledge of Multiple Items
- If multiple items are pledged to secure a debt, and one of the items is used to settle part of the debt, the pledge of that item is extinguished.
- The pledgee cannot demand the return of all pledged items if only part of the debt has been paid.
Mortgages
- A real mortgage is binding between parties even if it was entered into orally.
- Immovables can be the object of a deposit.
Foreclosure of Mortgage
- If a mortgage is foreclosed and the property is sold for less than the debt, the creditor can recover the deficiency from the debtor.
- The creditor cannot recover the deficiency from a third party who owned the property.
Partial Payment and Mortgage
- If there are multiple debtors and one of them pays their share of the debt, the mortgage on their share of the property is not extinguished until the entire debt is paid.
- Payment by one debtor does not extinguish the mortgage on the property, as the obligation is solidary.
Test your knowledge of Property Law with this True or False quiz. Determine whether each statement is correct or not based on your understanding of legal concepts related to pledges, debts, and mortgages.
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