Civil Law, 2018 Bar — Question XIII-B

ESSAY

Sonny, Inc. (SI) purchased several heavy machineries from Single Equipment Philippines, Inc. (SEP) for PhP10 million, payable in 36 monthly installments. A chattel mortgage was constituted on the same machineries as security for the amount. As additional security, the President of SI, Stan Smith, mortgaged his house and lot. SI failed to pay the 16th and succeeding monthly installments. SEP then commenced a collection suit against SI, and in the course of the proceedings, a writ of attachment was issued against SI's properties, including the mortgaged machineries. The attached properties were subsequently sold at public auction, but the proceeds thereof were insufficient to satisfy the judgment credit. (b) Instead of collecting the deficiency, can SEP commence extrajudicial proceedings to foreclose the mortgage on Stan's house and lot in order to recover the deficiency? (2.5%)

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