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COMMON BETWEEN PLEDGE AND REAL ESTATE MORTGAGE

PLEDGE
What is a pledge
What is the object of a contract of pledge
Example of a contract of pledge
Characteristics of a contract of pledge
Requisites of a contract of pledge
Must all contracts of pledge be in a public instrument?
What is the rationale of the requirement?
To avoid fraud
What is a public instrument?

Bruno mars owes you P1,000,000. As security, he pledged his 24k bracelet. He kept it in a vault
which can only be opened with a key. Vault is located in his house and delivered to you the key
to the vault. Is there a contract of pledge?
Classmate answer: yes. Because there is constructive delivery.

So you’re saying actual physical delivery is not required? Such that symbolic or constructive
delivery is allowed?

When Mr. Sabado receives the key, does he have control over the thing pledged?
CA: yes, the creditor has control of the thing.

Mr. Malingin: there is no contract of pledge. W/ symbolic delivery, it only refers to negotiable
instruments. With movable things, there is a need to physically deliver

What are corporeal rights?

If the instrument is a bill of exchange, what is to be done to put it in control of the pledgee?
CA: indorse it.

In the same example, what if the vault is located in the house of another person?

In the example in the book, the goods are placed in a warehouse. In this example, the vault is
located in the pledgor’s house. In Banco Español, the warehouse was already controlled by the
pledgee. In this case, there is no contract of pledge. First, actual physical possession is still w
Bruno Mars. Although the key is with the pledgee, there is no assurance that the vault was
locked. The symbolic possession is not enough to constitute control over the thing. If you
distinguish that with El Banco, pledgee already has control of the warehouse apart from the
symbolic delivery of the key.

What are the kinds of pledge?


What happens if Bruno Mars sells the necklace without your consent? What happens to the
pledge?

Is it not that Bruno mars has the right as the owner to dispose the property?

The buyer of the necklace that the necklace is previously pledged to you. Later on, since he
already paid for the necklace, he sued for the recovery of the necklace. Is it you, the pledgee or
the buyer who has already paid for it who has the right to the necklace?

CA: sale was valid. Pledge was not extinguished because buyer was in good faith. But pledgee
has the right of rescission of the sale

CA: the ownership of the thing will be transferred to the buyer

Since the original pledgor is not now the owner, what happens to the contract of pledge

Supposing the buyer sues for recovery, who is entitled to possession, the pledgee or buyer?

CA: it will still be the pledgee who is entitled to the possession because the purpose of the
pledge is to secure the obligation. What was actually pledged is used as a security. The ting
pledged is sold, the pledgee is still entitled to the possession. This is the case when with or
without consent of the pledgee

You mentioned about the right. Who has the right of rescission in that example.
It was valid but it is a rescissible contract.

If there is no consent of the pledgee, the contract is stil valid but rescissible if the thing pledged
will not be delivered to the buyer

Can the thing pledged be subsequitently pledged?


No.

What is the rationale of the law?

While the law allows the delivery to a third person. Here comes another provision that the
thing pledged is not allowed to a third person.

REM
VALID/VOID?
Stipulation that the mortgagor cant sell
That he can sell w consent of mee
That he shall first offer it to the mee

Remedies of mee in case of nonpayment


Collection case then later foreclose
Collecfion case, wdraw, then foreclose. Valid? What if vice versa

What is foreclosure
What is the purpose
Loan payable after 1 yr. immediately after 1 yr, it was foreclosed. Valid?
It was stipulated that no demand necessary. Valid?

Kinds or foreclosure?
Judicial rule 68
Extra jud what law governs

What if parties agree that the fc shall fc with the intervention of the court. J or ej fc?
What if the parties did not expressly agree. What can be availed of?
When is ej/ j fc applicable?

Is SPA by mee needed to foreclose?


What is the purpose of a judicial foreclosure

In a judicial fc is registration of the cert of sale necessary?


How will the proceeds be allocated

*mee = mortgagee
*mor= mortgagor

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