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    Pledge

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    Kell
    1. Voluntary pledge is created by agreement of parties, while legal pledge arises by operation of law. Pledge is a subsidiary contract where the obligation only arises if the principal obligation is not fulfilled. 2. In a pledge, the creditor cannot use or appropriate the pledged item without the owner's consent. If the debtor pays part but not all of the debt, they can demand return of a pledged item equal in value to the amount paid. 3. A pledge involves movable assets as security for a debt, while a mortgage uses immovable property. A legal mortgage accurately documents the financial obligation, while an equitable mortgage arises if the legal requirements are not fully met such as for the asset being an equitable interest

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    Pledge

    Uploaded by

    Kell
    113 views2 pages
    1. Voluntary pledge is created by agreement of parties, while legal pledge arises by operation of law. Pledge is a subsidiary contract where the obligation only arises if the principal obligation is not fulfilled. 2. In a pledge, the creditor cannot use or appropriate the pledged item without the owner's consent. If the debtor pays part but not all of the debt, they can demand return of a pledged item equal in value to the amount paid. 3. A pledge involves movable assets as security for a debt, while a mortgage uses immovable property. A legal mortgage accurately documents the financial obligation, while an equitable mortgage arises if the legal requirements are not fully met such as for the asset being an equitable interest

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    1. Voluntary pledge is created by agreement of parties, while legal pledge arises by operation of law. Pledge is a subsidiary contract where the obligation only arises if the principal obligation is not fulfilled. 2. In a pledge, the creditor cannot use or appropriate the pledged item without the owner's consent. If the debtor pays part but not all of the debt, they can demand return of a pledged item equal in value to the amount paid. 3. A pledge involves movable assets as security for a debt, while a mortgage uses immovable property. A legal mortgage accurately documents the financial obligation, while an equitable mortgage arises if the legal requirements are not fully met such as for the asset being an equitable interest

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    113 views2 pages

    Pledge

    Uploaded by

    Kell
    1. Voluntary pledge is created by agreement of parties, while legal pledge arises by operation of law. Pledge is a subsidiary contract where the obligation only arises if the principal obligation is not fulfilled. 2. In a pledge, the creditor cannot use or appropriate the pledged item without the owner's consent. If the debtor pays part but not all of the debt, they can demand return of a pledged item equal in value to the amount paid. 3. A pledge involves movable assets as security for a debt, while a mortgage uses immovable property. A legal mortgage accurately documents the financial obligation, while an equitable mortgage arises if the legal requirements are not fully met such as for the asset being an equitable interest

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    © All Rights Reserved
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    Pledge and mortgage

    1. How does voluntary pledge differ from legal pledge?


    - Voluntary pledge is created by the will of the parties. Legal
    pledge on the other hand is pledge by operation of law; right
    of a person to retain a thing until he receives payment of his
    claim.
    2. Pledge is a subsidiary contract. Explain.
    - Pledge is subsidiary contract because the obligation incurred
    does not arise until the fulfillment of the principal obligation
    that is secured.
    3. In order to secure the payment of his debt, A gave his ring to B as
    security for a P10,000.00 loan.
    a. Can B use the ring?
    - No, B cannot use the ring. Unless, there is an authority of A.
    The law states that the creditor cannot use the thing pledged
    without the authority of the owner and if he should do so or
    should misuse the thing in any other way, the owner may ask
    that it be judicially or extrajudicially deposited.
    b. In case A cannot pay, can B automatically appropriate the ring to
    himself?
    - No, B cannot appropriate the ring to himself. The law says that
    the creditor cannot appropriate the things given by way of
    pledge or mortgage, or dispose of them. Any stipulation to the
    contrary is null and void.

    4. A borrowed P50,000 from B and deposited his ipad worth P20,000,


    his cellphone worth P15,000 and a laptop worth P15,000 to secure
    his obligation. Should A be able to pay B, P15,000, can A demand
    from B the return of the cellphone or the laptop? Explain.
    - Yes, A shall have the right to the extinguishment of the pledge
    or mortgage. A can demand B the return of either the
    cellphone or laptop because the payment is equal to 15,000
    which is the same value of the cellphone or laptop being
    deposited.
    5. Distinguish pledge from mortgage.
    - Pledge is typically utilized where the charge needs to be
    created over movable assets such as to avail the debt. On the
    other hand, Mortgage is used when the securities provided is
    an immovable asset/property by the borrowers to obtain the
    loans
    6. A used his ring worth P50,000 to secure a P20,000 debt he got from
    B. When A was not able to pay, B sold the thing pledge to C for
    P15,000. Considering that there is still an unpaid balance of P5,000,
    can B collect such amount from A?

    7. How does legal mortgage differ from equitable mortgage?

    - A legal mortgage is the document that accurately outlines your


    financial obligation to the mortgagee and legally complies with
    the requirements of the property's jurisdiction. If any part of a
    mortgage document is incorrect or missing, which renders it an
    invalid legal document, it becomes an equitable mortgage. An
    equitable mortgage arises where the formalities to create a
    legal mortgage have not been completed or where the asset
    being mortgaged is only an equitable interest.

    NEXT READING ASSIGNMENT: ARTICLES 2124-2140


    For those who wanted to study in advance, midterm exams will be on April
    24 covering credit transactions

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