Practice question
A lender holds a valid lien on a constituent corporation's warehouse. After an effective merger, the survivor receives the warehouse and claims the lien is eliminated because title vested in it by operation of the merger rather than by an ordinary deed. No release or other ground for extinction exists. Which is correct?
- The lien remains unimpaired by the merger
- Automatic vesting necessarily destroys every lien
- Only unsecured creditors survive
- The survivor may erase liens by changing its letterhead
- The lender must buy shares to retain the lien
Legal references
- RA11232, Section79: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/86463
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