- Statute
- Philippine Civil Code
- Article
- Art. 2115
- Topic
- Pledge
- Status
- In force
- Book
- BOOK IV Obligations and Contracts
- Title
- TITLE XVI PLEDGE, MORTGAGE AND ANTICHRESIS
- Chapter
- CHAPTER 2 Pledge
- Year
- 1949
- Cited by
- Multiple Supreme Court decisions
The provision
The sale of the thing pledged shall extinguish the principal obligation, whether or not the proceeds of the sale are equal to the amount of the principal obligation, interest and expenses in a proper case. If the price of the sale is more than said amount, the debtor shall not be entitled to the excess, unless it is otherwise agreed. If the price of the sale is less, neither shall the creditor be entitled to recover the deficiency, notwithstanding any stipulation to the contrary. (n)
Intellegal Wiki · In plain terms
Once a pledged item is sold, the principal debt is fully extinguished no matter what the sale brings in. If the price exceeds the debt, the debtor gets no surplus unless otherwise agreed; if it falls short, the creditor cannot recover the shortfall even if the contract says he can.
An editorially maintained plain-language explanation of this provision — not legal advice.
Cases applying this article
- Pameca Wood Treatment Plant v. Teves
- Paray v. Rodriguez G.R. No. 132287