2013 (Civil Law) Bar Exam Questions: Multiple Choice Question 3

[Discuss/answer the question below. Or see Civil Law Instructions; Civil Law Instructions; Civil Law Essay Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10; Civil Law Multiple Choice Questions: 1, 24, 5, 6, 7, 8, 9 and 10; See also 2013 Bar Exam: Information, Discussions, Tips, Questions and Results]

III.

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.(1) If Amador fails to pay Basilio his loan on March 25, 2012, can Basilio compel Cacho to pay? (1%)

(A) No, Basilio cannot compel Cacho to pay because as guarantor, Cacho can invoke the principle of excussion, i.e., all the assets of Basilio must first be exhausted.

(B) No, Basilio cannot compel Cacho to pay because Basilio has not exhausted the available remedies against Amador.

(C) Yes, Basilio can compel Cacho to pay because the nature of Cacho’s undertaking indicates that he has bound himself solidarily with Amador.

(D) Yes, Basilio can compel Cacho who bound himself to unconditionally pay in case Amador fails to pay; thus the benefit of excussion will not apply.

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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