Required ban a absolute owner ng property si Pledger at mortgagor?

 Pledger or mortgagor is the absolute owner. The person constituting the pledge must
be the absolute owner of the thing pledged or mortgaged, otherwise it is void. Be
it noted that the principal debtor may not be the pledger of the thing pledged.
What if walang pambayad si pledger anong gagawin ni pledgee?
 The thing pledge will be automatically will be sold to the pledge if allowed of supreme
court.
Yung mortgage ba pwedeng pangsecure sa future?
 real estate mortgages to permit optional' future advances which enables the mortgagee to
make funds available to the mortgagor for later repairs, replacements or improvements.
 Mortgages for future advances generally make available opportunities for long term repayments
and will frequently make additional funds available for the purchasing of chattels or fixtures at
the same low interest rate rather than force the borrower to finance household goods by
purchasing on an installment plan with a high "finance charge" or by small loans, secured or
unsecured, which also typically provide high interest rates.'
 At the same time the mortgagor is encouraged to reduce the mortgage debt because he can
more readily obtain the money necessary to make repairs to the property as they are required.
Furthermore, the mortgagor finds a distinct advantage in eliminating the expenses attendant
upon the execution of subsequent mortgages as each later advancement is made,'
 However, the use of the optional type is not limited to homes which are newly purchased. For a
discussion of the varied applications of this mortgage, see Architectural Forum, "The Open End
Mortgage", June, 1949, p. 102; Fortune, Sept., 1949, p. 18. 6. This is accomplished by the
combined use of a mortgage for future advances and the "package mortgage". By the use of the
package mortgage, newly constructed homes can be sold equipped with such essentials as
refrigerators, stoves, washing machines, or other appliances, with the entire "package"
constituting the security. It will generally provide for a composite rate of interest at about four
or five per cent which covers the loan on the real property, fixtures, and chattels. At the same
time it provides for an extended payment term.

Pactum comissorium
 It is a stipulation authorizing the creditor to appropriate the things given by way of pledge
and mortgage or to dispose of them. It is declared null and void by law. (Art 2088).
Reason : The amount of the loan is ordinarily much less than the value of the security.
Note: The appropriation must be automatic without need of further act on the part of the
debtor. Hence, the prohibition does not apply to:
a. Subsequent voluntary act of the debtor of making cession of the property or;
b. A promise to assign or sell said property in payment of the debt.
Pwede bang ilagay yung pangalan ni pledgee sa ownership ni pledger incase na di makabayad si
pledger?
 The pledgee has the right of selling the pledge if the pledgor fails to make payment at the
stipulated time.
 No title to a third party purchaser is guaranteed following a wrongful sale except in the case
of property passing by delivery, such as money or negotiable securities.
 In all other cases, persons must show that they are a bona fide purchaser, for (good) value,
without notice (BFP). In the case of some types of property as defined on the detailed laws of
the jurisdiction, such a new possessor (BFP) must have first consulted (before purchase)
revealing no other ownership and then made a public notice or registered their title in a
court-recognised register before the pledgor. After a wrongful sale by a pledgee (such as if
the pledgor has been keeping to his payment schedule and will have the right to redeem the
goods if continuing to do so), the pledgor cannot recover the pledge/the value of the pledge
without a tender of (full payment of) the amount due (secured under the pledge). [3] Thar
contrasts with the general law of mortgages, which allows most mortgagors to sustain a
cause of action (sue) on a wrongful sale to restore the property into their qualified ownership
if they bring any payment arrears up to date.
 Article 571. Prohibition on collateral’s transferThe pledge contract shall not
provide that the pledgee acquires theownership of the pledged asset when
the pledgor does not pay off hisdebt by the time when the duration to fulfill
the debt expires.

Pwede ba magkaroon ng double pledge?

 The double-pledge situation is possible when the value of the collateral is great enough to
cover two separate payment obligations.

Rights of the Pledgee

 a. To retain the thing in his possession or in that of a third person to whom it has
delivered, until the debt is paid (Art 2099).
 b. To be reimbursed for the expenses incurred in its preservation (Art 2099).
 c. To compensate (set – off) the fruits, income, dividends or interests earned or produced
by the thing pledged and received with those which are due to him (Art 2102).
 d. To bring the actins which pertain to the owner of the thing pledged in order to recover
if from or defend it against a third person (Art 2103).
 e. To sell the thing pledged at the public auction, if without his fault, there is danger of
destruction, impairment or diminution in the value of the thing (Art 2108).
 f. To claim a substitute or demand immediate payment, if he is deceived on the substance
or quality of the thing pledged (Art 2109)
 g. To sell the thing pledged at public auction if the obligation secured is not paid (Art
2112). h. To bid at the public sale (Art 2114). i. To collect the amount that become due
 on a credit pledged before such credit is redeemed. j. To choose which one of the several
thing pledged shall be sold (Art 2119) .
Obligations of pledge
 a. To take care of the thing pledge with the diligence of a good father of the family (Art
2099).
 b. To answer for its loss or deterioration in the proper case; c. Not to deposit the thing
pledge with a third person unless authorized (Art )
 d. To be responsible for the acts of his agents or employees with respect to the thing
pledged (Art 2100);
 e. Not to use the thing pledged unless authorized or its preservation so requires (Art
2104);
 f. To advise the pledgor, without delay, of any danger to the thing pledged (Art 2107).
 g. To promptly advise the pledgor or owner in case of sale at public auction of the result
thereof (Art 2116); and
 h. To return the thing pledged when the principal obligation is paid.

Anong right ni pledgee pag di nabayaran ni pledger?

 REMEDIES IN CASE OF AN EVENT OF DEFAULT. Upon the occurrence and during the continuance
of an Event of Default, the Pledgee shall be entitled to exercise all of the rights, powers and remedies (whether
vested in it by this Agreement, the Loan Agreement, any other Financing Agreements, and/or in equity or by law,
and including, without limitation, all rights and remedies of a secured paity of a debtor in default under the Uniform
Commercial Code as in effect in the State of Illinois or equivalent provisions of any other applicable jurisdiction
(the “UCC”)) for the protection and enforcement of its rights in respect of the Collateral, and to the fullest extent
permitted by applicable law, the Pledgee shall be entitled, without limitation, to exercise the following rights, which
the Pledgor hereby agrees to be commercially reasonable:
 
(a)           to receive all amounts payable in respect of the Collateral otherwise payable
under Section 5 hereof to the Pledgor;
 
(b)           to transfer all or any part of the Collateral into the Pledgee’s name or the name of its nominee or
nominees;
 
(c)           to vote all or any part of the Collateral and otherwise act with respect thereto as though it were the
outright owner thereof;
 
(d)           at any time or from time to time to sell, assign and deliver, or grant options to purchase, all or any
part of the Collateral in one or more parcels, or any interest therein, at any public or private sale at any exchange,
broker’s board or at any of the Pledgee’s offices or elsewhere, without demand of performance, advertisement or
notice of intention to sell or of time or place of sale or adjournment thereof or to redeem (all of which, except as
may be required by mandatory provisions of applicable law, are hereby expressly and irrevocably waived by the
Pledgor) for cash, on credit or for other property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its absolute discretion may determine. Pledgor
agrees that to the extent that notice of sale shall be required by law that at least ten (10) calendar days’ notice to the
Pledgor of the time (which shall be during normal business hours) and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification. The Pledgee shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. The Pledgee may adjourn any public or
private sale from time to time by announcement at the time and place fixed therefor, and any such sale may, without
further notice, be made at the time and place to which it
 
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was so adjourned. Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of
redemption with respect to the collateral, whether before or after sale hereunder, and all rights, if any of marshalling
the Collateral and any other security for the Secured Obligations or otherwise. At any such sale, unless prohibited by
applicable law, the Pledgee may bid for and purchase all or any part of the Collateral so sold free from any such
right or equity of redemption. The Pledgee shall not be liable for failure to collect or realize upon any or all of the
Collateral or for any delay in so doing nor shall the Pledgee be under any obligation to take any action whatsoever
with regard thereto;
 
(e)           to settle, adjust, compromise and arrange all accounts, controversies, questions, claims and
demands whatsoever in relation to all or any part of the Collateral;
 
(f)            in respect of the Collateral, to execute all such contracts, agreements, deeds, documents and
instruments, to bring, defend and abandon all such actions, suits and proceedings, and to take all actions in relation
to all or any part of the Collateral as the Pledgee in its absolute discretion may determine;
 
(g)           to appoint managers, sub-agents, officers and servants for any of the purposes mentioned in the
foregoing provisions of this Section and to dismiss the same, all of the Pledgee in its absolute discretion may
determine; and
 
(h)           generally, to take all such other action as the Pledgee in its absolute discretion may determine as
incidental or conducive to any of the matters or powers mentioned in the foregoing provisions of this Section and
which the Pledgee may or can do lawfully and to use the name of the Pledgor for the purposes aforesaid and in any
proceedings arising therefrom.
 
The Pledgor recognizes that the Pledgee may be unable to effect a public sale of any or all the Collateral,
by reason of certain prohibitions contained in the Securities Act of 1933, as amended (the “Securities Act”), and
applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a
restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their
own account for investment and not with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made
in a commercially reasonable manner. The Pledgee shall be under no obligation to delay a sale of any of the
Collateral for the period of time necessary to permit the issuer thereof to register such securities or other interests for
public sale under the Securities Act, or under applicable state securities laws, even if such issuer would agree to do
so. The Pledgor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may
be necessary to make such sale or sales of all or any portion of the Collateral pursuant to this Section valid and
binding and in compliance with applicable law. The Pledgor further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the Pledgee, that the Pledgee has no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be
specifically enforceable against the Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a defense that no Event of Default has
occurred under the Loan Agreement.
 RIGHT OF CREDITOR WHERE DEBTOR FAILS TO COMPLY WITH HIS
OBLIGATION IN PLEDGE

1. If the debtor fails to comply with the obligation at the time it falls due, the creditor is
merely entitled to move for the sale of thing pledged

2. The creditor cannot appropriate himself without foreclosure the thing pledged as
pledge or under mortgage nor can he dispose of the same as owner

May the pledger participate in public auction?

Art. 2113. At the public auction, the pledgor or owner may bid.  He  shall,  moreover,  have  a 
better  right  if  he  should offer the same terms as the highest bidder.
 
The pledgee may also bid, but his offer shall not be valid if he is the only bidder. (n)

RIGHT OF PLEDGOR AND PLEDGEE TO BID AT PUBLIC SALE

- To  avoid  fraud,  the  pledgee  is  not  allowed  to  acquire  the thing pledged if he is
the only bidder 

RIGHT OF PLEDGEE TO CAUSE SALE OF THE

THING PLEDGED
Art.  2112.  The  creditor  to  whom  the  credit  has  not  been satisfied in due
time, may proceed before a Notary Public to the sale of the thing pledged. This
sale shall be made at a public  auction,  and  with  notification  to  the  debtor 
and  the owner  of  the  thing  pledged  in  a  proper  case,  stating  the amount for
which the public sale is to be held. If at the first auction  the  thing  is  not  sold, 
a  second  one  with  the  same formalities shall be held; and if at the second
auction there is  no  sale  either,  the  creditor  may  appropriate  the  thing
pledged.  In  this  case  he  shall  be  obliged  to  give  an acquittance for his
entire claim. (1872a)

> The thing pledged may be alienated for the payment to the creditor when the principal
obligation becomes due
 
THE FORMALITIES REQUIRED FOR SUCH SALE
1.   The debt is due and unpaid
2.   The sale must be at a public auction
3.   There must be notice to the pledgor and owner, stating the amount due
4.   The  sale  must  be  made  with  the  intervention  of  a  notary public
 

RIGHT OF PLEDGEE TO APPROPRIATE THING PLEDGED

What If yung bid ni pledgee ay same sa highest bidder?

Effects of pledged on the things sold?

Art. 2115. The sale of the thing pledged shall extinguish the principal obligation, whether
or not the proceeds of the sale are equal to the amount of the principal obligation, interest
and  expenses  in  a  proper  case.  If  the  price  of  the  sale  is more than said amount, the
debtor shall not be entitled to the excess, unless it is otherwise agreed. If the price of the
sale is less, neither shall the creditor be entitled to recover the   deficiency,  
notwithstanding   any   stipulation   to   the contrary. (n)

1.   If  the  price  of  the  sale  is  more  than  the  amount  due  the creditor, the debtor is not
entitled to the excess unless the contrary is provided
2.   If the price of sale is less, neither is the creditor entitled to recover the deficiency
a.    The  reason  is  to  compel  the  creditor  to  hold  an honest public sale
b.   Creditor  should  realize  the  loans  only  as  much  as he is likely to realize at a public sale

Definition of Real Estate Mortgage

 Mortgage otherwise known as Real Estate mortgage or Real Mortgage is a contract

whereby the debtor secures to the creditor the fulfillment of the principal obligation,
especially subjecting to such security immovable property or real rights over immovable
property in case the principal obligation is not complied with at the time stipulated:

Define Chattel Mortgage

Chattel Mortgage is a contract by virtue of which personal property is recorded in the Chattel
Mortgage Register as a security for the performance of an obligation (Art 2140).
Definition of foreclosure

 Foreclosure is a legal process that allows lenders to recover the amount owed on a
defaulted loan by taking ownership of and selling the mortgaged property. The
foreclosure process varies by state, but in general, lenders try to work with borrowers to
get them caught up on payments and avoid foreclosure.

Two types of foreclosure

a. Judicial Foreclosure – the mortgagee institutes an action in court;

b. Extra-judicial Foreclosure – The sale is made by the mortgagee himself when authorized by
the Chattel mortgage contract or by special law.

What is redemption?

Redemption may be defined as a transaction by which the mortgagor reacquires or buys back the
property, which may have been passed under the mortgage or divests the property of the lien,
which the mortgage may have created.

The pawner who fails to pay his obligation on the date it falls due may, within ninety days from
the date of maturity of the obligation, redeem the pawn by payment of the principal of the debt
with interest: Provided, however, That for the purpose of computing interest due after maturity of
the obligation, the basis shall be the sum of the principal obligation and interest earned at the
time the obligation matured.