Yuliongsiu vs. PNB- Petitioner was the owner of 2 vessels and operated FS-203

(purchased from Philippine Shipping Commission by installment only the sum of P76,500 and the balance of the purchase price was payable at P50,000 a year, due on or before the end of the current year.)

- P obtained a loan of P50,000 from PNB. To guarantee its payment, plaintiff pledged its 2 vessels and its equity in the FS-203, as evidenced by the pledge contract

- P effected partial payment of the loan in the sum of P20,000

- The remaining balance was renewed by the execution of 2 promissory notes in the bank's favor. These two notes were never paid at all by P on their respective due dates.

- PNB filed criminal charges against P and two other accused for estafa thru falsification of commercial documents, and they were convicted by the trial court and sentenced to indemnify PNB in the sum of P184,000

- PNB took physical possession of three pledged vessels- The FS-203 was subsequently surrendered by PNB to the

Philippine Shipping which rescinded the sale to Yuliongsiu, for failure to pay the remaining installments on the purchase price. The other two boats were sold by PNB to third parties

- W/N the contract was a pledge- Yes- PNB as pledgee was therefore entitled to the actual

possession of the vessels. While it is true that Yuliongsiu continued operating the vessels after the pledge contract was entered into, his possession was expressly made "subject to the order of the pledgee.

- P urges to rule that constructive delivery is insufficient to make pledge effective. The type of delivery will depend upon the nature and the peculiar circumstances of each case. The parties here agreed that the vessels be delivered by the "pledgor to the pledgor who shall hold said property subject to the order of the pledgee." Considering the circumstances of this case and the nature of the objects pledged, i.e., vessels used in maritime business, such delivery is sufficient

- Since PNB was, pursuant to the terms of pledge contract, in full control of the vessels thru Yuliongsiu, the former could take actual possession at any time during the life of the pledge to make more effective its security

Paray vs. Rodriguez- Respondent Rodriguez were owners of shares of stock in a

corpoaration known as Quirino-Leonor-Rodriguez Realty Inc.

- Rodriguez secured by way of pledge some of their stock to the Parays for the payment of certain loan obligations

- Parays attempted to foreclose the pledge when Rodriguez failed to pay

- Rodriguez filed a complaint to the RTC which sought the nullity of the pledge agreements and cosigned payments to the RTC and invoked their right to redemption

- Despite consignation, the public auction took place as scheduled

- W/N the Parays may refuse consigned payment- Yes- Being an extrajudicial sale, all the creditor needs to do is to

proceed before a notary public to the sale of the thing pledged

- The things pledged are not subject to redemption- Thus, the things pledged may not be redeemed from the

persons who had bought the same through the public auction.

Manila Surety vs. Velayo - Velayo had a pending case against Granados- Velayo secured a bond worth 2800 to Manila Surety for

the dissolution of the writ of attachment obtained by Granados, with an annual premium of 112.00

- Velayo also delivered 4 pieces of jewelry to Manila Surety as added protection with power to sell the same

- Judgment having been rendered in favor of Granados, Manila surety was forced to pay 2800

- Manila Surety then sold the jewelry but was only able to obtain 235.00 from it

- Manila surety filed a case against Velayo for collection- W/N article 2115 applies?- Yes- Art. 2115 - the thing pledged shall extinguish the principal

obligation, whether or not the proceeds are equal or not to the principal obligation

- The principal obligation being the bond - The provision is clear and unmistakable, and its effect can

not be evaded. By electing to sell the articles pledged, instead of suing on the principal obligation, the creditor has waived any other remedy, and must abide by the results of the sale. No deficiency is recoverable.

Tambuting vs. Commissioner of Internal Revenue- Tambunting Pawnshop was found to have a deficiency of

Documentary Stamp Tax of 50,910- Tambunting filed its written protest to the assessment

notice alleging that it was not subject to documentary stamp tax under Section 1957 of the National Internal Revenue Code (NIRC) because documentary stamp taxes were applicable only to pledge contracts, and the pawnshop business did not involve contracts of pledge

- W/N DST is applicable to pawn tickets- Yes- True, the pawn ticket is neither a security nor a printed

evidence of indebtedness. But, precisely being a receipt for a pawn, it documents the pledge. Consequently, the issuance of the pawn ticket by the pawnshop means that the thing pledged has already been placed in its possession and that the pledge has been constituted.

- Good faith, thus charges deleted