Digests Set 2 Pledge

Estate of Litton vs Mendoza
Guarantor: C. Mendoza
Debtor of Tan and Mendoza: Bernals
Assignee of Tan: G. Litton
Creditor: Tan
Facts:
Bernal spouses are engaged in the manufacturing of embroidery,
garments, and cotton materials. Bernals purchased from Tan cotton
materials guaranteed by Mendoza. Bernals issued post dated checks to
Mendoza. The check matured without being enchashed and Mendoza
asked that another one be issued in the same amount.
Mendoza issued two checks in favor of Tan. Tan had the two checks
issued by Mendoza discounted in a bank. However, the said checks were
later returned to Tan with the words stamped "stop payment" which appears
to have been ordered by Mendoza for failure of the Bernals to deposit
sufficient funds for the check that the Bernals issued in favor of Mendoza.
Tan instituted an action acgainst Mendoza. While the case was
pending Mendoza entered into a compromise agreement with Tan, wherein
Tan acknowledged that all his claims against Mendoza had been settled
and that both parties waive, release and quit whatever claims they may
have against each other. Tan died and the action was continued by the
administrators of Litton estate.
Petitioner:
Due to the compromise agreement, he is released from
liability.
Respondent: Compromise agreement is null and void because he was not
duly represented by his counsel and that he had no right to alienate said
credit.
HELD: The deed of assignment fulfills the requisites of a valid pledge or
mortgage. Although it is true that Tan may validly alienate the litigatious
credit as ruled by the appellate court, citing Article 1634 of the Civil Code,
said provision should not be taken to mean as a grant of an absolute right
on the part of the assignor Tan to indiscriminately dispose of the thing or
the right given as security. The provision should be read in consonance
with Article 2097 of the same code. Although the pledgee or the assignee,
Litton, Sr. did not ipso facto become the creditor of private respondent
Mendoza, the pledge being valid, the incorporeal right assigned by Tan in
favor of the former can only be alienated by the latter with due notice to and
consent of Litton, Sr. or his duly authorized representative. To allow the
assignor to dispose of or alienate the security without notice and consent of
the assignee will render nugatory the very purpose of a pledge or an
assignment of credit.
Yuliongsui vs PNB
Debtor-Pledgor: D. Yuliongsiu
Creditor-Pledgee: PNB
Facts:
The plaintiff owned 2 vessels and one which was subject to an
installment payment. He obtained a loan of 50,000 from PNB and pledged
2 of his vessels as well as his equity in one of the vessels to guarantee it.
He paid the partial payment and executed two promissory notes as to
renew the balance. The two notes were never paid at all by plaintiff on their
respective due dates. The plaintiff was convicted by the court of estaffa.
He was also declared insolvent by the court. The bank took possession of
the pledged vessels and sold to third parties without the knowledge of the
plaintiff while the other one which the sale was rescinded for failure to pay
the remaining installments. The plaintiff filed an action to recover the three
vessels.
RTC: the action of the banks were justified.
Yoliongsui: The contract is a chattel mortgage, and the bank cannot take
possession of the chattels until after there has been default.
Ruling:
The contract is a contract of pledge. PNB therefore is entitled to actual
possession of the vessels as pledgee. While it is true that the plaintiff
continued operating the vessels after the pledge contract was entered into,
his possession was expressly made subject to the order of the pledgee.
The pledgor is regarded as trustee of the thing pledged.
CORNELIO CRUZ and CIRIACA SERRANO v. CHUA LEE
Parties:
Pawner/ Debtor-Pledgor: C. Cruz
Pawnee/ Creditor: Monte de Piedad and I. Tambunting
Creditor-Pledgee: Chua Lee
Facts:
Cornelio Cruz pledged valuable jewelry to two different pawnshops,
Monte de Piedad and Ildefonso Tambunting receiving therefore twelve
pawn tickets showing that these tickets were renewable, according to the
custom of pawnbrokers, upon payment from time to time of the sum of
money representing the intent accruing upon the debts.
Cruz presented himself to Chua and pledged to him six pawn tickets
of Monte de Piedad and a week after obtained another loan from Chua.
Chua renewed the tickets issued by Monte de Piedad by paying the interest
necessary to effect renewal, but these tickets expired and they were not
renewed. The jewelries were sold at a public auction and were not
redeemed.
Contention of the Respondent:
Chua alleged that the tickets had been drawn in the form of sale with
stipulation for repurchase, but it was understood between the parties that
the transaction was a loan and that the jewelry and tickets held by him
constituted a mere security for the money advanced by him to Cruz.
Ruling:
Chua is liable for the loss of the value of the pawn tickets.
The ordinary pawn ticket is a document by virtue of which the
property in the thing pledged passes from hand to hand by mere delivery of
the ticket, and the contract of pledge is, therefore, absolvable to bearer. It
results that one who takes a pawn ticket in pledge acquires domination
over the pledge, as it is the holder who must renew the pledge to keep it
alive. The law contemplates that the pledgee may have to undergo
expenses in order to prevent the pledge from being lost; and is entitled to
reimbursement from the pledgor.

Digests Set 2 Pledge

Uploaded by

Copyright:

Available Formats

Digests Set 2 Pledge

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Digests Set 2 Pledge

Uploaded by

Copyright:

Available Formats

Estate of Litton vs Mendoza

You might also like