ACCOUNTANCY INTEGRATION 4

ACTIVITY ACTG-INT4-BUSINESS LAW AND TAXATION

CHAPTER 9 LAW ON CREDIT TRANSACTIONS PART 2

APPLICATION OF LAW

Directions: Read and answer each question carefully.

Note: Copying answers directly from your classmates or from any book and sites from
the internet will automatically get 0 points.

Case 1
Pedro pledge grapes with Juan. Because the grapes were in danger of being spoiled,
Juan sold them for 1,000. Who owns the 1,000.00?

Pedro owns the 1,000 but juan shall keep it as security in the same manner as
the grapes originally pledged. The sale, however, must be a public safe.

Case 2
Leopoldo pledged with Virginia a car to secure a loan of P10,000. It was agreed that after
a month Virginia would return the car although the debt would be paid in six months. It
was also agreed that although Leopoldo would once more be in possession of the car,
the pledge would continue.

After a month as stipulated, Virginia returned the car .Has the pledge been extinguished?

Yes but not the principal obligation to pay 10,000 to Virginia in 6 months.

Case 3
Angela pledged with Betty a diamond ring. A week later, the diamond ring was found in
the possession of Angela. There is a presumption here that Betty has returned the
diamond ring to Angela that therefore the pledge has been extinguished. May this
presumption be opposed?

Yes since the presumption is merely prime facie. It could be that betty retuned
the ring and asked that it be substituted or a stranger may have stolen it and gave
it to Angela.

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Case 4
Annie pledge her diamond ring with Betty the debt was not paid on time, and a public
auction took place. Can Annie bid? Can Betty bid?

Yes, Annie can bid, in fact, she shall have a better right if she is the
highest bidder because the diamond ring Belong to her. Betty may
also bid but her offer is not valid if she is the only bidder.

Case 5
Anselmo borrowed from Benjamin 1,000. This was secured by a negotiable promissory
note made by Carlos in Favor of Anselmo to the amount of P1,900. The negotiable
promissory note was endorsed by Anselmo in Benjamin’s favor. If the note becomes due
before it is redeemed, can Benjamin collect and received the 1,900?

Benjamin can collect and receive the 1,900 from Carlos. He should
get 1,900 and delivered the 900 to Anselmo

Case 6
Anita pledged pieces of jewelry to the Barabara on a loan of P10,000. Unable to pay.
Barabara sold the jewelry at a public auction but realized only P6,000. May she recover
the deficiency from Anita?

No, the sale of the jewelry had extinguished the principal obligation,
interest and expenses.

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Case 7
Alexander pledged with Bernardo his diamond ring. Benardo took possession of the ring.
Later, although the principal obligation had not been paid, Bernardo wrote on a private
document that he was renouncing the pledge. Alexander did not accept the renunciation
and the ring retained in Bernardo’s possession.
1. Has the pledge beer extinguished?
YES, Bernardo is not Longer a pledge but a depositary. The non-
acceptance of the renunciation is immaterial.
2. Suppose instead of writing a letter, Bernardo returned the ring to Alexander. What
is the status of the pledge?
The pledge is extinguished upon the delivery of the thing
pledged. Any stipulation to the contrary is void.

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ACTIVITY ACTG-INT4-BUSINESS LAW AND TAXATION

CHAPTER 10 LAW ON CREDIT TRANSACTIONS PART 3

APPLICATION OF LAW

Directions: Read and answer each question carefully.

Note: Copying answers directly from your classmates or from any book and sites from
the internet will automatically get 0 points.

Case 1
Amoroso ,Balicotsa and Colido borrowed from Desidido P450,000. And as a security,
they mortgaged their co-owned agricultural land to Desidido.
Subsequently, Amoroso paid Desidido P150,000. Is the mortgage on Amoroso’s share
of the land extinguished.

No, because mortgage is considered invisible and payment in part shall not extinguish
the mortgage.

Case 2
Alkhobar borrowed P20, 000 from Bubonica by a mortgage on Alkhobar’s land. Bobonica
died leaving two children, Coyocote and Daldalera. Alkhobar paid Coyocote P10, 000. Is
Coyocote allowed to cancel the mortgaged?

No, because Daldera is a constant but the debt is only have

balance of P10,000.

Case 3
Ali mortgaged her land to Baba with an old building thereon. Later the building was
replaced by a new and more expensive one. Is the new building covered by the mortgage?
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Yes, in the absence of a contrary stipulation. Moreover, rent or income not yet received when the
obligation become due are also included except those already harvested before the obligation will
due.

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Case 4
Alindada mortgaged a car to Baliktad. The chattel mortgage is not registered in the Chattel
Mortgage Registry and at the Land Transportation Office. Is the contact nevertheless
valid?
Yes, a mortgage that is not recorded is valid between the parties but void as innocent as to innocent
third
person. The only purpose of registration is to give constructive notice to third person and did not give a
validity to a contract.

Case 5
Alipusta mortgaged a movable to Balicoco. Instead of recording a contract, the property
was delivered to creditor. Is the contract of chattel mortgage valid between the parties?
No, if they are movable, instead of being recorded is delivered to the creditor or a third person, the
contraa pledge and not a mortgage.

Case 6
Apuya executed a chattel mortgage on a house built on a rented land owned by Biribid.
Is the contract valid? How about if the object is machinery placed by a tenant in a plant
belonging to another?
Yes, a mortgage of a house built on one’s house own land or an rented land is valid between the parties,
and void as a third person. This is true event a mortgage is a registered in the mortgage register.

A machinery placed by a tenant shall be treated as personally subject to a mortgage.

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Case 7
Malikot delivers a promissory note to Plakak, and authorizes the latter to put in the blank
P2, 000. Plakak wrote 20,000. Then indorsed the instrument to Aurelio, Aurelio to
Babayote to Cioke. To whom can Cioke enforce the note if he is not a holder in due
course? How about if he is a holder in due course?
If Cioke is not a holder in due course, he cannot enforce the instrument against Malikot a party prior to
the completion of the instrument because it was not filled up in accordance with the authority given by
Malikot

If Cioke is a holder in due course, the instrument is "valid and effective for all purposes in his hands and
he may enforce it as if it had been filled up strictly in accordance with the authority given and within a
reasonable time. “Therefore, Cioke can enforce it to all parties in the instrument.

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