Practice question
Mara mortgages her land solely to secure Nilo’s loan. She neither borrows nor assumes personal debt liability or a guaranty. After sale, the lender seeks a personal deficiency judgment against Mara solely because she gave the mortgage. Which is correct?
- Every third-party mortgagor is automatically a personal borrower.
- Granting real security alone does not establish Mara’s personal deficiency liability.
- Mara automatically guarantees double the loan.
- Her lack of personal undertaking makes Nilo’s loan nonexistent.
- The lender may ignore the foreclosure proceeds.
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.
Answer this question in flashcards to review your response and continue practicing.