[Discuss/answer the question below. Or see Civil Law Instructions; Civil Law Instructions; Civil Law Essay Questions: 1, 2, 3, 4, 5, 7, 8, 9 and 10; Civil Law Multiple Choice Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10; See also 2013 Bar Exam: Information, Discussions, Tips, Questions and Results]
Lito obtained a loan of P1,000,000 from Ferdie, payable within one year. To secure payment, Lito executed a chattel mortgage on a Toyota Avanza and a real estate mortgage on a 200-square meter piece of property.
(A) Would it be legally significant — from the point of view of validity and enforceability — if the loan and the mortgages were in public or private instruments? (6%)
(B) Lito’s failure to pay led to the extra-judicial foreclosure of the mortgaged real property. Within a year from foreclosure, Lito tendered amanager’s check to Ferdie to redeem the property. Ferdie refused to accept payment on the ground that he wanted payment
in cash: the check does not qualify as legal tender and does not include the interest payment. Is Ferdie’s refusal justified? (4%)