UPDATES IN REGULATORY FRAMEWORKS
LAW ON CREDIT TRANSACTIONS should the property not be
sufficient to cover the debt
REQUISITES OF CONTRACT OF The accommodation
PLEDGE AND MORTGAGE pledgor or mortgagor is not
solidarily bound with the
Essential Requisites (SOD) (Art principal obligor but his
2085) liability extents only to the
1. Secures the fulfillment of a property pledged or
principal obligation; mortgaged. Should there be
2. Pledgor, mortgagor, antichretic any deficiency, the creditor
debtor must be the absolute has recourse on the
owner of the thing pledged or principal debtor who
mortgaged; and remains to be primarily
The reason being that in bound. The law grants to
anticipation of a possible the accommodation pledgor
foreclosure sale in case of or mortgagor the same
default which is still a sale, rights as a guarantor and
the rule is that the seller he cannot be prejudiced by
must be the owner of the any waiver of defense by
thing sold the principal debtor.
3. Pledgor, mortgagor, antichretic
debtor must have free disposal of ACCESSORY CONTRACT: a pledge or
their property, or be legally mortgage cannot exist without a valid
authorized for such purpose. obligation or a principal contract
NOTES: PLEDGE
Is a contract by virtue of which the
Third persons can pledge or debtor delivers to the creditor or to
mortgage their own a third person a movable or
property to secure the document evidencing incorporeal
principal obligation. rights for the purpose of securing
It is not necessarily void the fulfillment of a principal
simply because the obligation
accommodation pledgor or If not fulfilled: mattransfer sa
mortgagor did not benefit creditor yung plinedge
from the same. So long as If fulfilled: the thing delivered
valid consent was given, shall be returned.
the fact that the loan was
given solely for the benefit CAUSE OR CONSIDERATION
of the principal debtor Pledge is an accessory contract (its
would not invalidate the validity would depend on the
mortgage (GSIS vs CA, 170 validity of principal obligation)
SCRA 533) Its cause insofar as the pledgor is
The accommodation concerned is the principal
pledgor or mortgagor, obligation
without expressly assuming Third persons who are not parties
personal liability for such of the principal obligation (not the
debt, is not liable for the debtor) can pledge their own
payment of any deficiency, property to help the original debtor
UPDATES IN REGULATORY FRAMEWORKS
KINDS OF PLEDGE
1. VOLUNTARY or conventional or
one which is created by
agreement of parties
2. LEGAL or one which is created by
operation of law
