Quick answer: Yes. A court may order specific performance when a valid and enforceable obligation is due, the claimant has performed or is ready to perform, and the promised act remains legally and practically possible. As illustrated by Universal Food Corp. v. Court of Appeals, the remedy is not automatic, especially when performance has become…
Direct answer: Under the Personal Property Security Act (Republic Act No. 11057), a security interest over movable property is perfected once it has been created by a written security agreement and the secured creditor has registered a notice with the Personal Property Security Registry, taken possession of the collateral, or (for deposit accounts and investment…
Quick answer: Republic Act No. 11057 provides a modern system for using personal property—such as equipment, inventory, receivables, deposit accounts, and other movable assets—as collateral. A security agreement creates the interest between the parties; perfection makes the security interest effective against third parties, commonly through registration, possession, or control. What the PPSA changes Concept Practical…
Direct answer: Yes, in most cases. When a real estate mortgage is foreclosed and the sale price does not cover the debt, the lender may sue the borrower for the deficiency. The Supreme Court has explained that “the mortgage is but a security and not a satisfaction of indebtedness,” and that Act No. 3135, which…
Quick answer: A real estate mortgage secures a principal obligation with immovable property. The mortgagor must own the property and have capacity to dispose of it. The mortgage should be recorded in the Registry of Deeds to bind third persons, and the lender cannot simply appropriate the property after default. Core validity checks Question Why…
Quick answer: A guarantor who lawfully pays the creditor may generally recover from the debtor the amount paid, legal interest from the time the debtor is notified of the payment, qualifying expenses, and damages when proper. Under Civil Code Articles 2066–2067, payment also subrogates the guarantor to the creditor’s rights against the debtor, subject to…
Understand when an ordinary guarantor may require exhaustion of the debtor’s assets and when the creditor can proceed directly.
Learn why an ordinary guarantor is generally secondarily liable while a surety binds itself solidarily with the principal debtor.
Understand when a contractual penalty replaces damages and interest, when additional recovery is possible, and when courts may reduce it.
Understand why lifting statutory interest ceilings did not remove judicial review of unconscionable rates and oppressive loan charges.