Beruflich Dokumente
Kultur Dokumente
CA
G.R. No. 103576, Aug. 22, 1996
FACTS:
Chua Pac, president and general manager of Acme Shoe, Rubber and Plastic Corporation,
executed a chattel mortgage in favor of Producers Bank of the Philippines, as a security for a
corporate loan in the amount of P3M. The chattel mortgagecontained a clause that provided for
the mortgage to stand as security for all other obligations contracted before, during and after the
constitution of the mortgage.
The P3M was paid. Subsequently, the corporation obtained additional
financial accommodations totalling P2.7M. This was also paid on the due date. Again, the bank
extended another loan to the corporation in the amount of P1M, covered by four promissory
notes. However, the corporation was unable to pay this at maturity. Thereupon, the bank applied
for an extra-judicial foreclosure of mortgage.
For its part, the corporation filed an action for injunction with prayer for damages. The lower
court ultimately dismissed the case and ordered the extra-judicial foreclosure of mortgage.
Hence, this appeal.
ISSUEs:
If not proper, W/N the corporation is entitled to damages as a result of the extrajudicial foreclosure
HELD:
Contracts of Security
Contracts of security are either personal or real. In contracts of personal security, such as a
guaranty or suretyship, the faithful performance of the obligation by the principal debtor is
secured by the personal commitment of another (the guarantor or surety). In contracts of real
"Although Chua Pac was included in the case, he was only so named as a party in representation
of the corporation."