Practice question
A creditor forecloses one real estate mortgage securing a single loan and, while that foreclosure is pending, brings a simultaneous action to collect the same secured debt as if foreclosure proceeds were irrelevant. It calls the second case a deficiency action before the foreclosure result is known. Which statement is best?
- The label deficiency always permits simultaneous full collection.
- No accounting is ever required if the creditor filed first.
- A true deficiency follows the completed foreclosure’s established shortfall; simultaneous pursuit on the stated facts risks prohibited splitting of the same cause of action.
- The creditor automatically owns every debtor asset once both cases are filed.
- Foreclosure necessarily converts the debt into a donation.
Legal references
- https://www.lawphil.net/courts/rules/rc_1-71_civil.html — Rules of Court, Rule 68 section 6: deficiency and personal liability.
- https://lawphil.net/judjuris/juri2023/aug2023/gr_259282_2023.html — Spouses Prieto v BPI, GR 259282, August 30 2023, main opinion: proof of obligation and foreclosure proceeds.
- https://www.lawphil.net/judjuris/juri2021/apr2021/gr_203194_2021.html — Asset Pool A v Spouses Berris, GR 203194, April 26 2021, main opinion: deficiency after termination of foreclosure; no splitting of cause of action.
- https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html — Civil Code, article2085: third-party real security.
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