Case 1

Ben pledged his watch to VY Domingo Agencia, a pawnshop, for P5,000. On due date,

Ben failed to redeem his watch. The pawnshop sold the watch at a public auction to the

highest bidder at P4,000. In this case, can the creditor recover the deficiency?

Case 2

D borrowed P30,000 from C. To secure the debt, D pledged his ring, wristwatch, and

necklace. Before the debt could be paid, C died leaving X, Y and Z as heirs. By agreement

among the heirs who inherited the credit, the ring would secure the share of X of the credit,

the wristwatch for the share of Y, and the necklace for the share of Z. Later, D pays X

P10,000. Can D demand the extinguishment of the pledge of the ring?

Case 3

D borrowed P100,000 from C. To secure the debt, D mortgaged his land and building in

favor of C. The mortgage is registered with the Register of Deeds. Sometime later, D sold

the land to X who was not aware of the mortgage of the land and building. Is the sale of the

land binding to X?

Case 4

Consider the following situations:

(1) D owes C P10,000. To secure the debt, D pledged his cell phone. D defaults. The cell

phone is sold for P9,000 at the public auction.

(2) D bought a car for P360,000 from C. The price, which is payable in 12 equal monthly

installments of P30,000, is secured by a chattel mortgage on the car. After paying 2

installments, D defaults in the payment of the 3rd installment and the subsequent

ones. C forecloses the chattel mortgage and the car is sold at the public auction for

P280,000.

Which of the situations above is deficiency recoverable?

Case 5

D pledged his 100 shares of stock of San Miguel Corporation to C to secure his debt of

P5,000. On due date, D was not able to pay the debt, so C caused the sale of the shares to

sell at auction. The shares of stock were sold at P4,500. Is the principal obligation

extinguished even if there is deficiency?