| Front | Amador obtained a loan of P300,000 from Basilio payable on March 25, 2012. As security for the payment of his loan, Amador constituted a mortgage on his residential house and lot in Basilio's favor. Cacho, a good friend of Amador, guaranteed and obligated himself to pay Basilio, in case Amador fails to pay his loan at maturity. III.(2) If Amador sells his residential house and lot to Diego, can Basilio foreclose the real estate mortgage? (1%) (A) Yes, Basilio can foreclose the real estate mortgage because real estate mortgage creates a real right that attaches to the property. (B) Yes, Basilio can foreclose the real estate mortgage. It is binding upon Diego as the mortgage is embodied in a public instrument. (C) No, Basilio cannot foreclose the real estate mortgage. The sale confers ownership on the buyer, Diego, who must therefore consent. (D) No, Basilio cannot foreclose the real estate mortgage. To deprive the new owner of ownership and possession is unjust and inequitable. |
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| Back | SUGGESTED ANSWER: (B) Since the mortgage is in a public instrument, ther is constructive notice to Diego, who is the buyer of the mortgage property. ALTERNATIVE ANSWER: (C) The mortgage is not registered, thus, cannot be binding against third persons. (Art. 2125, Civil Code) |
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