Tocao v CA y Belo is not a guarantor. If he was it should have been set forth in writing.

Art 2055 provides that a guaranty may be express. However, the statute of frauds provide that if a person would answer for a debt it must be in writing.

Astro Electronics y y Subrogation is the transfer of all the rights of the creditor to a third person, who substitutes him in all his rights The guarantor is subrogated to the rights of the creditor when he assumes the principal obligation

Severino v Severino y It is not necessary that the guarantor receives any benefit. Since it is usually gratuitous. Nevertheless, the guarantor is bound by the same consideration as the principal

Willex vca y y Atok y In guaranty agreements, i.e. in the case a continuing guaranty, the fact that there was no valid obligation at the time of the consummation of the contract does not invalidate the contract on the basis of Art 2052. Since the same provision provides that the guaranty may secure unenforceable or voidable obligations or I 205, it may secure future debts as in the case ay hand There can be retrospective application of the continuing guaranty if the intention of the parties as shown by stipulation provides for it. Excussion will not apply if the guarantor expressly renounced ait as in the case

Tanedo y Waiver of extension is a valid stipulation

Southern Motors v Barbosa y y Excussion does not apply when the security given is not in the nature of a security in a guarantee. As in this case, it was actually a mortgage contract. Thus if purely a mortgage contract, governed by Art 2087

Poblacion v baylon y In a suit against the principal, the defense of excussion is not yet available, since it is first necessary to determine what the liability of the principal is since the liability of the guarantor is only SUBSIDIARY. One of the prerequisites of Excussion is that a judgment first be obtained against the principal.

Wise and Co v Tanglao y y y SPA to mortgage and enter suretyship He only mortgaged. Thus no liabiloity Assuming he entered suretyship, actions first against principal before the surety

Syquia v Jacinto & Palma y Same doctrine as above. Until the properties of the principal debto can be executed, excussion does not yet apply.

Arroyo v Jungsay y y Another requirement for the principle of excussion to apply is that the guarantor must point to properties of the principal debtor which may be levied and is located in the Philippines Why the requirement of being located in the Philippines o The purpose of a guaranty(in this case, a bond) is to ensure a creditor that he may collect the payment without any hindrance or delay.

Luzon v Sia y y y Compromise agreement between defendant and petitioner, w/o informing surety Excussion ot available since Art 2056 provides it is not available if (2) surety bound themselves solidary Even if excussion available, Times surety should still point to leviable property of principal debtor.

Cochingyan v R&B y y y Cochingyan and Villanueva are guarantors of R&B who guaranteed Cochingayan s debt to PNB PNB held in abeyance the payments Art 2079 does not apply since C&V are bound to R&B thus the extension granted to PNB does not apply to the guarantors of the guarantor

Morever, there was no extension in this case considering that the debt had already matured. 2nd par of Art 2079 that mere failure to demand payment does not release the guarantor

Mercantile Insurance v ysmael (Art 2071 par 4, when debt becomes demandable) y y Guarantor wishes to enforce IA agreement even prior to its payment It is a valid stipulation to demand the debtor to pay the guarantor even before it pays the creditor.

PNB v CA y y A material alteration (extensions, in this case the loan amount), without the guarantor s consent shall release the guarantor from its liability. The rationale behind this is that it increases the risk borne by the guarantor since a larger debt entails a larger possibility of the debtor failing to pay.

People s bank and Trust co v Tambunting y The right in Art 2071 can be waived. In case of absolute guarantys the guarantor allows the credito unilateral extensions of the period.

PNB v manila Surety (Art 2061 may apply in analogy: in re pointing out leviable properties but creditor fails to levy on them.) y y PNB made atty in fact by debtor to collect. PNB allowed other creditors to collect The Surety is release from liability due to the negligence of PNB to collect

PLEDGES

Manila Banking v Teodoro y y In doubt between pledge and dation it is pledge The terms and stipulations and intent determine nature of the contract. If the debt still continues despite the conveyance, it must be a pledge

Arenas v Raymundo y y y Jewelry to be sold on commission from a commission agent, pledged in a pawnshop. The general rule is 3rd party who acquired in good faith must first be reimbursed. BUT One of the requisites of a pledge is that the pledgor must be the owner of the item pledged. In this the agent was not the owner, thus does not bind the principal and she can demand the jewelry back from the pawnshop.

Rural Bank v CA y A pampango illiterate defrauded to secure by mortgage another person s loan.

If there is fraud or vitiation of consent, the pledgor or mortgagor is not liable for the extent which was defrauded her.

Alcantara v Alinea y y y Loan contract with stipulation that failure to pay automatically makes the house and lot security sold to them. No mortgage-not registered; no pledge-it is real property; no antichresis THUS no PACTUm since for pactum to arise, there must be either be pledge, mortgage or antichresis

Francisco v CA y y Loan contract secured by REM and undated deed of sale. Stipulation that failure to pay automatically transfers the property to bank and the sale is executed The auto-conversion clause need not be in the mortgage deed itself. The fact that the mortgaged property is automatically transferred to the mortgagee shows that there is pactum commissorium Elements of PC (1) that there should be a pledge or mortgage wherein a property is pledged or mortgaged by way of security for the payment of the principal obligation; and (2) that there should be a stipulation for an automatic appropriation by the creditor of the thing pledged or mortgaged in the event of non-payment of the principal obligation within the stipulated period

Reyes v Sierra y y It is a mortgage contract as evidence by the words used in the contract. Thus the mere failure to redeem the property does not automatically convey the land to mortgagee. Otherwise it would amount to pc

Uy tong v ca y y Bought motor vehicles in installments. Stipulation that failure to pay automatically vest ownership of apartment to them PC cannot be applied. The contract is a sale not a mortgage. Moreover, there was no automatic conveyance of the apartment The land was executed after the action for specific performance was ruled in favor of the creditor.

Central Bank v CA y y Loan release 17 k only. SC ruled 21.85 hectares of the 100 hectares should be EJF since it is proportionate to 17 K release

The rule on indivisibility in Art 2089 does not apply considering that the situation referred to said article is in relation to heirs.

Belo v PNB y y y y Eslabon spouses mortgaged lands plus Belo s land EJF. Belo assigned rights of redemption to younger Belo. PNB demanded the whole mortgage debt for redemption instead of the amount for the Belo land What Art 2089 envisions is a mortgagor, not an accommodation mortgagor. What it refers to is a debtor mortgagor , not an a. mort. Moreover, it was discussed in class that the mortgagor can only be held liable as to the amount of the face value of the property mortgaged, thus an a.mort must only be held liable as to the extent of his property. Making the a.mort to pay for the whole amount of the debt would punish her for generosity.Moreover, in the case at hand, their was no debtor crreditor relationship, but an assignee of the right of redemption thus 2089 does not apply

Ajax v CA y Stipulation that mortgaged property will also answer for future loans is valid

PLEDGES Yuliongsui v PNB y This is an old case, 1947, thus Art 2110 as to prima facie evidence of extnguishment due to possession of pledgor of pledged item is inapplicable. In this case, the pledgor is constituted as a trustee of the pledge Moreover, the delivery required of pledged depends on the nature of the thing pledged. If susceptible of manual, then manual, if not, symbolic delivery suffices.

Insolvency of Gulf y The pledge is limited to personal properties. Actual delivery is required to constitute a pledge

PNB v Atendido y y The cavanes of palay pledged disappeared from the warehouse Art 2088 provides that the creditor cannot appropriate the pledged item. The pledge contract does not divest the pledgor from ownership. He remains to be the owner of the thing pledged. Thus he shall bear the loss of the property.

Caltex v CA

For negotiable instruments, Art 2095 provides that they must be delivered and must also be indorsed. Thus for failure to comply with this requirement, there is no pledge contract. Plus art 2096 also provides that it must state the description of thing pledged and date of constitution in a public instrument

Sarmiento v Javellana y y Jewelry pledged, extended till amount of loan can be offset by price of jewelry. If the principal ibligation is fulfilled, the creditor is obliged to return the thing pledged

Manila Surety v Velayo y y Sale of the pledged properties extinguishes the obligation. Art 2115 provides for this

Isaguirre v De Lara y y a mortgage merely creates a lien over the property. It does not divest the owner from his ownership, possession and enjoyment of the property. It may be stipulated that the property mortgaged be used by the mortgagee, but such stipulation is lacking in the case at hand

Osmundo v Canlas y y impostor canlas REM must be entered bgy the owners of the properties. Maosca instead of representing the Canlas as an agent, made impostors to act as owners

Samanilla v Cajucom y y Mortgagor who refused to return title to have it be annotated The argument of ortgagor would fail. There is no need to prove the existence of the mortgage, since an unregistered mortgage is nevertheless binding between the parties. It is only the binding effect to 3rd parties that a mortgage need be registered

Mobil oil v Diocares y Failure to register did not render the mortgage null. It is still binding between the parties

Cruz v Bancom y y y Brothers-Fathers Cruz Registration is indispensable to affect 3rd parties like the brothers. Moreover, the bank is not mortgagee in good faith. It provided that inoocent purchasers applies to mortgagees. However, the mortgagee in the case is a bank which requires a higher degree if diligence.

Medida v CA y A mortgage only limits the right of disposal of the mortgagor. Nevertheless, he is still entitled to possession and enjoyment of the property. He may also be allowed to create another mortgage over the same property in favor of others since it is only the absolute disposal or selling which is prohibited.

DBP CA y The right granted to DBP as atty in fact is to sell the properties, but this could not be done by DBP without EJF because it would amount to a violation of art 2089.Thus EJF is a requirement. So he exceeded his rights in selling it to himself w/o EJF.

People s Bank and Trust v Dahican y y After acquired properties may be stipulated to be included in the real estate mortgage even without registering it again. The machineries in the case is governed by the OCC, thus the machineries were immobilized and thus are real, and not requiring registration in chatterl mortgage register

Mojica v CA y Contract is the law between the parties. A stipulation that a mortgage covers future loans is valid

Santiago v Pioneer y y The power to mortgage was one of the powers granted to the atty in fact. Mortgage credit may be alienated to a 3rd person upon compliance with requirement of notice and publication

Prudential v Alviar y y y A blanket mortgage clause or dragnet clause subsumes all debt of past or future origins. The blanket mortgage clause or dragnet clause does not apply in the case at hand. The reliance on the security test provides that in blanket mortgage clauses, when subsequent loans are secured by other mortgages, then itmust be shown that the loan relies on the original mortgage and not on the subsequent securities.

Caltex v manzana y In mortgages, the mortgagee has two options o EJF  He has priority in the lien o Collection suit for execution  No prior lien but may proceed to execute against other properties They are mutually exclusive. Choosing one, bars recovery from the other

Gonzales v CA y y It is written extrajudicial demand which interrupts the prescriptive period. The right to recover from a deficiency judgment after and EJF is 10 years

CHATTEL MORTGAGE Makati Leasing v Wearever y Real properties may be treated as personal properties by stipulation. In such cases, the parties are estopped from asserting the contrary.

Torres v Limjap y y Stipulation as to make chattel mortgage include after acquired properties is valid, provided it was expressly provided for. Purpose of cm law is promote business. Thus the act that it cannot include after acquired properties for substitution does not apply to drugstores, because, such would be tantamount to impeding business since the mortgage can only be effected if the drugstore closes

ACME v CA y CM can only secure that which exists during the time of its constitution. If there are future loans to be secure by same mortgage, the old chattel mortgaged must be amended or a new one entered One of the requirements of a chattel mortgage is an affidavit of good faith. o It provides that the purpose of the mortgage is secure a valid obligation and not for fraud o Failure to comply does not bind 3rd parties to the contract.

Servicewide specialists v CA y y Only notice to the debtor and not consent is required as to assignment of credit by creditor But CONSENt of the debtor is required for the sale by the debtor mortgagor of the parties to a 3rd person.

Dy v CA y Sec 78 of the General Banking Act partakes as an amendment of Act 3135. Banking Institutions covered by said act also includes credit institutions like SIHI in the case at hand. In which case, for a valid redemption, the redemption price must be the mortgage debt, not merely the purchase value of the property mortgaged.

Selegna

The right to redeem in re banking institutions is one year paying what is the outsanding obligation in the mortgage deed with interests and the damages. But now cites Sec 47 of general banking ct. which is which

Pameca y y y Law on pledge apply to chattel mortgage so far as not inconsistent with CML Art 2115 is inconsistent since it does not entitle the creditor or debtor for the deficiency or excess respectively. The CML provides for the application of the proceeds. o Costs of sale o Mortgage debt o Junior emcumbrancers o Balance to the debtor

Superline v ICC y y y Ateneo Law graduate lavides It is an amortized commercial loan covered by the chattel mortgage law since the relationship between them is a mortgagor-creditor/mortgagee. Thus action tor ecover deficiency would prosper

ANTICHRESIS Pando v Gimenez y The nature of the contract shows that it was an antichresis. Thus failure of the creditor to pay taxes and comply with his obligation makes him liable for damages

PREFERRENCE/CONCURRENCE OF CREDITS DBP v NLRC y Art 110 does not create a lien of credit for laborers upon all properties or a specific property owned by the employer. Preference of credit also applies to the preferred credits of laborers provided in Art 2241 (goods manufactured) and 2242(3) (construction or repair of canals, building or such works) RA 6715 has expanded the preference of credit over workers for unpaid wages in case of insolvency of employer. Nevertheless, a lien over the property is special preferred credit even prior to the preferred credit of laborers for unpaid wages. For the latter to apply, insolvency proceeding must first be made and whatever remains of the properties of the employer after encumbrance by the preferred mortgagees, shall be distributed to the laborers first.

y y

Atlantic Erectors v herbal Cove

Notice of lis pendens may be made only in the ff cases o Action for partition o Action to recover possession o Other action affecting title  This also applies to suits seeking to establish a right, an equitable estate or interest in a specific real property or a lien. o In the case at hand, it is a contractor s lien, but it has never been alleged that it was, thus case would not prosper o Assuming in arguendo, contractor s lien applies only when there is concurre3nce of credits. That is, in an insolvency proceeding.