Art 2126 McCullough v Veloso 1 Mccullough sold Veloso a building called

Art 2126 mccullough v veloso 1 mccullough sold veloso

This preview shows page 9 - 11 out of 37 pages.

[Art. 2126] McCullough v Veloso 1. Mccullough sold Veloso a building called “Mccullough Building” with the land and building in it for P700k. a. Veloso already paid 50k at the execution of the contract. The remaining balance of 650k will be paid on installments, at 7% per annum. b. There is also a 10% interest on the amount of debt for attorney’s fees. 2. To secure this, Veloso mortgaged the property (Mccullough building) to him. Failure of payment of ANY of the installements will make the whole obligation due and demandable including the interest. 3. Veloso sold the mortgaged property to Sena for 100k. Serna acknowledged the mortgage on the property and assumed the obligation of Veloso to pay the remaining installments. 4. However, Serna was not able to pay it. Both Serna and Veloso were only abale to pay 250k/700k. 5. Mccullough thus brings this action to recover the liquidated amount of P510k plus 10% attonrey’s fees 6. The lower court ordered Veloso and Serna to pay the sum of the balance + 7% interest plus 2k attorney’s fees. 7. Both parties appealed: a. Mccullough – attorney’s fees shouldn’t have been reduced 9
Image of page 9

Subscribe to view the full document.

b. Veloso – he sold the property to Serna who assumed the obligation to pay, thus he should be relieved from the obligation to pay. ISSUE: WON Veloso is relieved from the obligation to pay. NO 1. Contrary to Veloso’s claim that there was novation, which extinguished his obligation, SC held that there was no novation since this requires the express consent of the creditor (Mccullough). a. The fact that Mccullough didn’t refuse as to the subsequent sale made by Veloso to Serna doesn’t amount to the consent contemplated by the law. b. The mortgage is merely an encumbrance on the property and doesn’t extinguish the title of the debtor. This is because the debtor doesn’t lose the principal attribute as an owner, who has the right to dispose. c. Thus, Veloso has every right to alienate (sell) the mortgaged property, which means that Mccullough doesn’t have the right to oppose this (which he didn’t, anyway) 2. The effect of transferring a mortgaged property to a 3 rd person are: a. Creditor may demand the 3 rd person in possession of the property for the mortgage payment. b. The debtor shouldn’t pay the debt upon its maturity without any demand by the creditor. Moreover, the 3 rd party may even abandon the property, in which case, it will be back in the possession of the debtor. 3. The intention of the Civil Code then is to let the debtor’s obligation stand despite the property being mortgaged to a 3 rd person. 4. The fact that Mccullough received payments is immaterial; it can be considered a valid payment made by a 3 rd person. Santiago v Dionisio 1. A land in Bulacan was bought by Santiago from former owner San Diego. The sale was recorded in the register of deeds.
Image of page 10
Image of page 11
  • Spring '16

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes