Declaration of Dec 13, 2005 as Non-Working Day in Gen. Trias

Section 1 amends Section 182 of Act No. 1459, as last amended by Act No. 2092.
Section 1 replaces Section 182 with a revised rule on how corporate loans must be evidenced and secured.
Act No. 3392 focuses on loan security requirements and modifies only the amended text of Section 182.

Section 182 requires that every loan made by the corporation must be properly evidenced by a note or other instrument in writing.
Section 182 requires every loan to be secured by a first mortgage or deed of trust on unencumbered real estate.
Section 182 further requires every loan to be secured by the pledge to the corporation of shares of stock of the corporation whose matured value at least equals the amount loaned.
The secured shares requirement ensures that the pledged shares have a matured value sufficient to cover the loan principal amount.

Section 182 allows loans to be made on the security of free shares pledged to the corporation for repayment.
Under the exception, the loan is allowed only if, at the time the loan is made, the withdrawal value of the free shares under the by-laws exceeds the amount borrowed and interest thereon for six months.
This exception applies to the portion of the security consisting of shares pledged as free shares, rather than relying on the real estate-first mortgage/deed of trust requirement.

Section 182 prohibits making a loan on the security of real estate unless the title to the real estate has been first registered.
Registration must be done in accordance with the Land Registration Act, or under the Public Act in cases where the applicable act authorizes encumbrance or conveyance.
Registration may also be done under the system of registration established by the laws in force on the date of the approval of the two Acts referenced in the provision.
Section 182 declares that the legal encumbrance or conveyance created with such title is valid against the whole world and has priority over any other claims against the real estate.