PLEDGE In pledge or mortgage, ownership of the
ARTICLE 2085
RULE: The essential requisites of pledge:
a. Constituted to secure fulfilment
of principal obligation
b. Pledgor or mortgagor be the
absolute owner of the thing
pledged or mortgaged
c. Persons constituting the pledge
or mortgage has the free
disposal of their property and in
the absence thereof, they be
legally authorized for that
purpose.
*Third persons not party to the principal
obligation may secure the latter by
pledging or mortgaging own property.
ARTICLE 2086
RULE: Article 2052 is applicable to pledge
or mortgage
ARTICLE 2087
RULE: when principal obligation is due the
things in which the pledge or mortgage
consists may be alienated for the payment
to the creditor.
WHAT IS PLEDGE?
It is a contract where the debtor delivers
to the creditor or to a third person a
movable or a document evidencing an
incorporeal right for the purpose of
securing the fulfilment of a principal
obligation with the understanding that
when payment is made, the thing
delivered shall be returned with all its
fruits and accessions to the debtor.
WHAT ARE THE KINDS OF PLEDGE?
Voluntary pledge- created by agreement
Legal pledge- created by operation of law
WHAT ARE THE CHARACTERISTICS OF PLEDGE
REAL- Perfected by delivery
ACCESSORY- Cannot stand on its own. Its
validity depends on the validity of
principal obligation.
UNILATERAL- Creates obligation solely on
the part of the creditor to return the thing
pledged subject to the fulfilment of the
principal obligation
SUBSIDIARY- the contract does not arise
until the fulfilment of the principal
obligation is secured.
o In case of doubt whether it is a
contract of pledge or dacion en
pago, the presumption is that it is
pledge since it transmits lesser
rights and interest.
WHAT IS THE CAUSE AND CONSIDERATION OF
PLEDGE
Pledgor=Principal obligation
Pledgee=Compensation stipulated
o Validity of pledge depends upon
the validity of principal obligation
(ACCESSORY CONTRACT)
WHAT ARE THE ESSENTIAL REQUIREMENTS OF
PLEDGE
Must secure performance of a principal
obligation
Comply with 2085 and 2087
Must be the absolute owner. Hence, a
mortgage executed before the mortgagor
became the owner of the property
mortgaged is void.
thing pledged is retained by the debtor
A mortgagor desiring to attack the validity
of a mortgage contract should act with
reasonable promptness; unreasonable
delay may result to ratification
Invalidity of pledge does not affect the
principal obligation
If it is deemed as void it can still be
considered as instrument evidencing a
debt.
Pledge must be delivered. Without
delivery there can be no pledge because it
is in the delivery lies the security of
pledge
As a general rule, mortgagor retains the
possession of the property mortgaged.
PLEDGE IS CONSTITUTED TO SECURE THE
FULFILLMENT OF PRINCIPAL OBLIGATION
Pledge and mortgage are accessory
contract; they cannot exist without a valid
obligation.
Pledge and mortgage may guarantee,
voidable, unenforceable, or natural
obligation.
PLEDGE OR MORTGAGE IS CONSTITUTED BY THE
ABSOLUTE OWNER
Pledge or mortgage is done by the
absolute owner of the property
If done by an agent, the agent must have
authority or consent of the owner of the
property
Pledge constituted by an impostor is void
being that the impostor is not the absolute
owner and the pledgee acquires no right
as to the property. Except in the doctrine
of mortgagee in good faith.
A foreclosure sale, thou essentially forced
sale is still a sale in accordance with the
NCC. The mortgagor in default, the forced
seller became obliged to transfer the
ownership of the price of the thing sold.
Being a sale, the seller in foreclosure sale
must be the owner of the thing sold
because on requirement of a contract of
pledge requires that the
pledgor/mortgagor is the absolute owner.
WHAT ARE THE PROPERTY PLEDGED OR
MORTGAGED?
Future property cannot be pledged or
mortgaged.
A subsequently acquired property pledged
or mortgaged is void and ineffectual since
the mortgagor became the owner of the
property after mortgage was executed.
In co-ownership, the co-owner has the full
ownership of his part and of the fruits and
pertaining thereto. He may alienate,
assign, mortgage it except when personal
rights are involved; He may however
alienate it as to the proportion of the
property allotted to him.
A mortgage of a conjugal property by one
of the spouses is valid only as to of the
entire property.
PLEDGOR OR MORTGAGOR MUST HAVE FREE
DISPOSAL OF PROPERTY OR HAVING LEGAL
AUTHORITY TO DO SO.
The act of pledging or mortgaging is an
act of strict ownership involving as it does
alienation or transmission of real rights in
the property.
 Pledgor or mortgagor must have the 1. The creditor cannot appropriate
capacity or authority to dispose the things given by way of pledge
property. or mortgage
Free disposal means property must not be 2. The creditor cannot dispose the
subject to any claim of a third person things given by way of pledge
Capacity to dispose property means the or mortgage
pledger or mortgagor has the capacity and
authority to make the disposition of the RIGHT OF THE CREDITOR WHERE DEBTOR FAILS
property. TO COMPLY WITH HIS OBLIGATION
The property given in pledge or mortgage
THE THING PLEDGED OR MORTGAGED MAY BE stands as security for the fulfilment of the
ALIENATED principal obligation.
The thing may be alienated because they If the debtor fails to comply with the
are constituted to secure the fulfilment of obligation at the time it falls due, the
principal obligation creditor is merely entitled to move for the
The right to alienate is implied and sale of the thing pledged or mortgaged
inherent in transaction of mortgage or with the formalities required by law in
pledge order to collect the amount of his claim
from the proceeds.
The creditor does not automatically
become the owner at the time stipulated Upon failure of the mortgagor to pay his
the obligation is still unfulfilled obligation, the remedy of the mortgagee is
to foreclose the mortgage.
The remedy of mortgagee or pledgee is to
have the security sold in a public auction The mortgagors default does not operate
and the proceeds of the auction shall be to vest in the pledgee or mortgagee the
applied to the principal obligation ownership of the property for any such
effect is against public policy.
Pledgor remains the owner of the thing
pledged during the pendency of the
PROHIBITION AGAINST PACTUM COMMISSORIUM
contract and prior foreclosure and sale
Pactum commisorium- stipulation
THE CREDITOR IS NOT REQUIRED TO SUE TO whereby the thing pledged, mortgaged or
ENFORCE HIS CREDIT under antichresis shall automatically
become property of the creditor in the
The creditor/pledgee/mortgagee is not
event of non-payment of the debt within
obligated to file an independent action for
the fixed time.
the enforcement of credit. To do so would
nullify is lien and defeat the purpose of the IN SHORT, the security contract remains
contract which is to give him preference valid; only the stipulation is prohibited.For
over the property given as security for the there will be no need of public sale or
satisfaction of credit. foreclosure proceedings required by law.
o Requisites:
THE PLEGOR OR MORTGAGOR MAY BE THE THIRD a. There should be pledge,
PERSON mortgage or antichresis of
It is not necessary that the principal property by way of security
debtor should always be the pledger or b. There is stipulation for an
automatic appropriation by
mortgagor.
the creditor of the property
Accommodation pledge is not necessarily
in event of non-payment
void so long as a valid consent was given.
within the stipulated period.
It is the duty of the mortgagee to make
Note: There is no pactum commissorium if
proper inquiry on the debtor, he is
the alienation of the property was by way
deemed guilty of negligence if he relied
of security and not by way of satisfying or
solely on the representations made by the
extinguishing the debt of the debtor.
debtor, particularly where the creditor is
engaged in banking business which is a
PROHIBITION REFERS TO STIPULATION
business affected by public interest.
AUTHORIZING AUTOMATIC APPROPRIATION
The following are the instances of pactum
PLEDGE vs MORTGAGE
commissorium:
Pledge Mortgage
1. Stipulation providing that
Constituted on Constituted on the mortgaged property
movables immovable shall be considered in full
Property must Delivery is not payment without further
be delivered necessary action in court, in case of
Not valid Not valid non-payment
against 3rd against 3rd 2. Stipulation in a purport of
person unless person if not pacto de retro sale, wherein
the thing is registered the ownership over the
described and property sold would
the date of automatically pass to the
pledge appear vendee and no redemption.
in the public
instrument PERMISSIBLE STIPULATIONS
Pledger can sell Mortgagor can Subsequent modification of the original
the thing with sell the thing contract
consent of the without the o The prohibited stipulations are
pledgee consent of the those executed or made
mortgagee simultaneously with the original
contract.
ARTICLE 2088 o It does not prohibit modifications of
RULE: the original contact by subsequent
 agreement that the parties may
deem fit to adopt.
Subsequent voluntary cession of property
o This amounts to legal effect of
novation of the original contract
and to a voluntary sale of the
property for the amount of debt.
Promise to assign or sell
o This is merely a personal obligation
of the mortgagor and does not in
any way bind the property.
1. Mortgagor may validly sell
the property to 3rd person, if
there will be any action, it
should be an action for
damages against the
mortgagor (personal
obligation)
2. If the vendee contributed to
the breach of contract by
the mortgagor, he will also
be held liable for damages.
3. If the vendee is guilty of
fraud, it would be a ground
for rescission of the sale in
his favour
Authority t take possession of the property
upon foreclosure
o Mortgagee may take possession of
the mortgaged property, provided
that it is not contrary to provisions
of Art. 2088 and 2137.
RISK OF LOSS OF PROPERTY PLEDGED OR
MORTGAGED
Pledgee or mortgagee does not become
the owner of the property as ownership
still remains with the debtor. (res perit
domino suo)
ARTICLE 2089
RULE: Pledge or mortgage is indivisible.
1. Heirs who has paid a part of
the obligation cannot ask for
proportionate
extnguishment of the
obligation as long as the
whole debt is not satisfied
2. Neither the creditor who
received his share of the
debt return the pledge or
cancel the mortgage, to the
prejudice of other creditors.
3. If several things given in
mortgage or pledge, each
one only guarantees a
determinate portion of the
credit.
4. Debtor shall have the right
to extinguishment of the
pledge or mortgage as
portion of the debt fro which
each thing is especially
answerable is satisfied.
ARTICLE 2090
Indivisibility of pledge or mortgage is not
affected by the fact that debtors are not
solidarily liable.
PLEDGE OR MORTGAE INDIVISIBLE
As consequence of indivisibility:
o Single thing- every portion of the
property pledged or mortgaged is
answerable for the whole
obligation.
o Several things- all of them are
liable for the totality of the debt
and the creditor does not have to
divide his action by distributing the
debt, among the various things
pledged or mortgaged.
ALL THINGS ARE LIABLE FOR
SUCH BALANCE.
Debtor cannot ask for the
release of one or some of
the several properties
pledged or mortgaged or
proportionate
extinguishment of the
pledge or mortgage unless
and until the debt secured
has been paid fully.
o Debtors heir/ creditors heir-
debtors heir who has paid part of
the debt cannot ask for
proportionate extinguishment of
the pledge or mortgage
Creditors heirs who
received his share of the
debt, cannot return the
pledge or mortgage if the
debt is not completely
satisfied.
EXCEPTION TO RULE OF INDIVISIBILITY
Where each one of several things
guarantees determinate portion of
the credit- guarantees fix portion, there
would be as many as pledges or
mortgages
Where only portion of the loan was
released- it presupposes that there are
several heirs of the debtor or creditor.
Where there are failure of
consideration-
Where there is no debtor-creditor
relationship- the pledge or mortgage is
indivisible among parties but not to third
persons, either personally or through his
agent.
o The indivisibility arises only when
there is a debt, that is, there is a
debtor-creditor relationship.
o The indivisibility is not applicable to
the right of redemption of an
accommodation mortgagor and his
assignee with respect to whom this
relationship is not present.
FORECLOSURE OF MORTGAGE CONSTITUTED ON
SEVERAL PROPERTIES
The rule that the real property, consisting
of several lots, should be sold separately,
applies to sales in execution and not to
foreclosure of mortgages.
o A mortgage even if constituted on
two or more properties, is one and
indivisible, thus, it cannot be
divided among different properties,
the mortgagee has the right to
have the properties either or both,
or singly, sold to satisfy his claim.
o The sale of the mortgagors
properties cannot be set aside in
the absence of evidence to show
that a better price could have been
obtained if they were sold
separately, or the sale of one or
some alone would bring sufficient
proceeds to satisfy the mortgage
credit.
NOTE: The doctrine of indivisibility of
mortgage does not apply once the
mortgage is extinguished by a complete
foreclosure thereof.
WHERE REAL MORTGGAGE AND CHATTEL
MORTGAGE IN ONE INSTRUMENT
 The mere embodiment of the real estate
mortgage and a chattel mortgage on one
document does not have the effect of
fusing both securities into an indivisible
whole.
o Both remain distinct agreements.
The mortgage therefore, may
legally foreclose the real estate
mortgage extrajudicially and waive
the chattel mortgage foreclosure,
and maintain instead a personal
action for the recovery of the
unpaid balance of the credit.
ARTICLE 2091
Rule: a contract of pledge secure all kinds
of obligations (pure or subject to suspensive or
resolutory condition)
The pledge agreement may stipulate that
the pldge will also stand as security for
any future advancements or renewals
thereof that the pledger may procure from
the pledge.
ARTICLE 2092
Rule: promise to constitute pledge or
mortgage gives rise only to personal
action between the contracting parties,
w/o prejudice to criminal responsibility
incurred by him who defrauds another by:
- Offering in pledge or
mortgage an
unencumbered
things which he
knew were subject to
some burden, or
misrepresenting
himself to be the
owner of the same.
-
NOT A REAL RIGHT, what actually exist is
only right of action to compel fulfilment of
the promise but there is no pledge or
mortgage yet
The creditor can enforce an agreement to
constitute a mortgage together with the
right to recover the debt.
CRIMINAL RESPOSIBILITY OF THE PLEDGOR OR
MORTGAGOR
It is essential that fraud or deceit at the
time of sale shall not be practiced by the
mortgagor or pledger, otherwise it shall
constitute a crime of estafa.
PROVISIONS APPLICABLE TO PLEDGE ONLY
ARTICLE 2093
RULE: In addition to the requisites under
2085:
The essential requisites of pledge:
a. Constituted to secure fulfilment of
principal obligation
b. Pledgor or mortgagor be the absolute
owner of the thing pledged or
mortgaged
c. Persons constituting the pledge or
mortgage has the free disposal of their
property and in the absence thereof,
they be legally authorized for that
purpose.
It is necessary in order to have a valid
contract of pledge; the thing pledged must
be placed in the possession of the
creditor, or of a third person by common
agreement.
REQUISITE OF PLEDGE
It must secure obligation
The pledgor must be the absolute owner
The pledgor must have fee disposal of the
thing pledged
It must be delivered to the creditor
Must be made in a public instrument
It must be described therein and must
contain the date of the execution of the
contract of pledge. (in order to affect third
person)
TRANSFER OF POSSESSION IS ESSENTIAL IN
PLEDGE
Pledge is real contract which requires
delivery for its perfection
Without delivery there can be no pledge
An agreement to constitute pledge only
gives rise to a personal action between
contracting parties
Pledge is merely a lien, and possession is
indispensable to the right of a lien
To affect 3rd person a contract of pledge
must be in public instrument and the thing
pledged must be delivered to the pledgee.
TYPE OF DELIVERY DEPEDS UPON THE NATURE OF
THE THINGS
Things can be delivered by means of:
a. Actual delivery- there is an
actual possession of the
property pledged.
b. Constructive delivery- symbolic
transfer eg. By delivering the
key.
ARTICLE 2094
RULE: All movables which are within the
commerce may be pledged, provided
susceptible of possession.
ARTICLE 2095
RULE: Incorporeal right may be pledged
evidenced by documents. The instrument
proving the right to pledge shall be
delivered to the creditor. If negotiable it
must be indorsed.
SUBJECT MATTER OF PLEDGE
A pledge is confined and limited to
personal property and it cannot be
extended or made to apply to real
property.
The movable be within the commerce of
men and susceptible for possession.
ARTICLE 2096
RULE: In order to affect third persons the
thing in a contract of pledge:
a. The thing must be described
b. The date of pledge must be
stated
c. Must be in a public
instrument
ARTICLE 2097
RULE:
1. In order for the pledgor to
alienate the thing pledged, the
pledgee must consent.
2. If it is sold, the ownership of the
thing pledged is transmitted to
the vendee or transferee as
soon as the pledgee consents
to the alienation, but the latter
shall continue in possession.
ARTICLE 2098
 RULE: The contract of pledge gives the
creditor the right to retain the thing in his
possession or in that 3rd person to whom it
was delivered, until the debt is paid.
RIGHT OF PLEDGEE TO RETAIN THE THING
PLEDGED
The possession of the pledgee constitutes
his security.
The debtor cannot demand for its return
until the debt secured by it is paid.
The right of retention is limited only to the
fulfilment of the principal obligation
ARTICLE 2099
RULE:
1. The creditor shall take care of
the thing pledged with the
diligence of a good father of a
family, because he still has the
duty to return the thing pledged
and he is not the owner to such.
2. The creditor has the right to be
reimbursed of the expenses in
order to preserve the thing.
3. The creditor shall be liable for
the loss or deterioration of the
thing in confirmation to the
NCC.
Unless stipulated, the interest and earning
of pledge and in case of animals, their
offspring are included in pledge.
ARTICLE 2103
RULE:
1. Unless the thing pledged is
expropriated, the debtor
continues to be the owner.
2. The creditor may bring the
actions which pertain to the
owner of the thing pledged in
order to recover if from, or
against the 3rd person.
RIGHT OF PLEDGEE AGAINST THE 3rd PERSON
The pledgor remains the owner of the
property pledged.
Creditor is obligated to take care of the
thing with the DOGF
Creditor may bring action pertaining to the
owner in order to recover it.
The right of the pledgee is a real right
enforceable against 3rd person but it is
necessary that the contract of pledge is in
the form of a public instrument to be
enforceable.

ARTICLE 2100
RULE:
1. The creditor-pledgee cannot
deposit the thing pledged with
a third person, unless it is
stipulated.
2. The pledgee is responsible for
the acts of his agents or
employee with respect to the
thing pledge.

ARTICLE 2101
RULE:
1. The pledgor has the same
responsibility as a bailor in
commodatum
2.
ARTICLE 2102
RULE:
1. If the thing pledge earns or
produces fruits, income,
dividends or interest; the
pledgee shall compensate what
he receives with those which
are owing him; but if none are
owing him, or insofar as the
amount may exceed that which
is due, he shall apply it to the
principal
2. Unless there is a stipulation to
the contrary, the pledge shall
extend to the interest and
earnings of the thing pledged.
3. In case of pledge of animals,
their offsprings shall pertain to
the pledgor or owner of the
animals pledged, but shall be
subject to the pledge, if there is
no stipulation to contrary.

RIGHT OF PLEDGEE TO COMPENSATE EARTNING

OF PLEDGE WITH DEBT
Pledgee has no right to use the thing
pledged or to appropriate the fruits
without authority of the pledgor
Pledgee can apply the F, I, D, or I earned
or produced by the thing pledge to the
payment of interest, if owing, and then to
the principal of his credit.
 REAL MORTGAGE

ART. 2124
RULE: only the following property may be
object of real mortgage:

a. Immovables
b. Alienable rights
Note: movables may be object of chattel
mortgage

WHAT IS MORTGAGE?
It is a contract whereby the debtor
secures to the creditor the
fulfilment of a principal obligation,
specially subjecting to such
security immovable property or
real rights over immovable
property which obligation shall be
satisfied with the proceeds of the
sale of said property or rights in
case said obligation is not complied
with at the time stipulated.

WHAT ARE THE CHARACTERISTICS OF

MORTGAGE?
Real- creates real rights as to the
property mortgaged.
Accessory-it cannot stand on its
own
Subsidiary-arises if there is a
failure to fulfil the principal
obligation
Unilateral-creates only obligation
on the part of the creditor to free
the property from the
encumbrance once the principal
obligation is fulfilled.

POSSESSION OF PROPERTY MORTGAGED

Mortgagor is entitled to possession since
as a general rule, mortgagor retains
possession of the property mortgaged
because debtor merely subjects the
property as lien but ownership is not
parted with.
Mortgagee cannot appropriate the thing
given by way of pledge or mortgage since
he is not the owner thereof. Any
stipulation to the contrary is null and void.
It is not essential that the property
mortgage remains in the hands of the
mortgagor. The mortgagor may deliver
said property to the mortgagee without
altering the contract.

PAYMENT OF INTEREST ON MORTGAGE CREDIT

It is not essential requisite of the contract
of mortgage that:
a. Principal of the mortgage credit
bears interest
b. The interest as compensation
for the use of the principal and
enjoyment of its fruits be in
form of a certain percent
thereof.
The interest may be in the form of fruits of
the mortgaged property, without losing
thereby its character of a mortgage
contract.
If it is agreed that the creditor shall apply
the fruits of the property to the payment
of interest and of the principal of his credit
 the contract shall be deemed as anti-
chresis.
CAUSE AND CONSIDERATION OF MORTGAGE
A mortgage is an accessory contract it
cannot stand on its own.
It will be valid if the principal contract is
valid and cannot be avoided for lack of
consideration.
Its validity would depend on the validity of
the debt secured by it.
Note: mortgage must describe the debt sought to
be secured. An obligation not secured by a
mortgage unless it comes fairly within its terms
KINDS OF MORTGAGE
Voluntary- agreed between parties
Legal- required by law
Equitable- lacks proper formalities or other
requisites of a mortgage required by law,
nevertheless reveals the intention of the
parties to burden real property as a
security for debt.
OBJECT MATTER OF MORTGAGE
Object of a contract of mortgage are:
A. Immovable; and
B. Alienable rights imposed upon
an immovable.
A real right over real property is a real
property.
A mortgage on real property is in itself a
real property
Objects of Pledge and Chattel Mortgage
are movables.
FUTURE PROPERTY CANNOT BE OBJECT OF
MORTGAGE
Future property cannot be object of
mortgage because the mortgagor cannot
legally mortgage any property he did not
own yet. What the law requires is the
mortgagor must be the absolute owner
which in such case of a future property
mortgaged, the mortgagor is not the
owner yet of the thing.
A stipulation subjecting to the mortgage
lien, property (improvements) which the
mortgagor may subsequently acquire,
install or use in connection with real
property already mortgage belong to the
mortgagor is valid.
ART. 2125
RULE:
A. In addition to the requisites under
ART2085, in order for a contract of
mortgage to be validly constituted it must
be:
1. Comply with the essential requisites
under 2085
2. Recorded in the Registry of Property.
B. If the mortgage is not recorded:
1. it is still binding between parties
C. The mortgagee has the right to demand
the execution and the recording of the
document in which the mortgage is
formalized.
ESSENTIAL REQUISITES OF MORTGAGE
In addition to the essential requisites of
mortgage under 2085 and 2087, it must
appear in a public instrument duly
recorded in the Registry of Property.
NOTE:
A duly executed mortgage is deemed valid
until the contrary is proven.
The burden of proof rest upon the party
attacking its validity.
No valid mortgage is constituted where the
alleged deed of mortgage is a mere private
document.
The creditor has the right to compel the debtor
to execute a contract of mortgage in a public
instrument
It the mortgage is not registered it is still
deemed valid and binding between parties.
Registration only operates as notice of the
mortgage to others bit neither adds to its
validity nor converts an invalid mortgage into a
valid one.
Foreclosure cannot be refused on the ground
that the mortgage is not registered, provided
no innocent parties are involved.
The registration of a mortgage over real
property is without prejudice to the better right
of third parties.
DOCTRINE OF MORTGAGE IN GOOD FAITH
The mortgagee has the right to rely in
good faith on the certificate of title of the
mortgagor and has no obligation to
undertake further investigation in case
there is absence of any sight that might
arouse suspicion.
This doctrine presupposes that the
mortgagor who is not the rightful owner of
the property has already succeeded in
obtaining a torrents title over the property
and that after obtaining the said title, he
succeeds in mortgaging the property to
another.
As a general rule where there is nothing in
the certificate of title indicating any cloud
or vice in the ownership of the property,
the purchaser is not required to explore
further on the Torrens Title. Except, when
the mortgagee has knowledge of the
defect and does not directly deal with the
registered owner of the property.
A mortgagee who deliberately ignores
significant facts that would create
suspicion cannot be considered as
mortgagee in good faith.
Greater care and diligence is required of a
mortgagee-bank.
RIGHT IN CASE OF LEGAL MORTGAGES
Gives the contracting parties the right
to compel each other to observe the
form required by law.
REGISTRATION OF MORTGAGE
Registration is a ministerial act by
which a deed, contract, or instrument
is inscribed in the records of the Office
of the Register of Deeds and annotated
on the back of the TCT covering the
land subject of the deed, contract, or
instrument.
The act of registration creates a
constructive notice to the whole world
and binds third persons.
Once the mortgage has been signed in
due form the mortgagee is entitled to
its registration as a matter of right.
By the execution of mortgage, the
mortgagor is presumed to have given
its consent to its registration and
cannot revoke it unilaterally.
Mortgage is voluntary transaction; the
register of deeds has no authority to
register it without the consent of both
parties.
Registration is a mere ministerial act.
 Registration is merely a declaration
that the record of the title appears to
be burdened with the mortgage
described.
A registered mortgage right over
property previously sold is inferior to
the buyers unregistered right.
A registered mortgage is superior to a
contract to sell.
EFFECT OF THE INVALIDITY OF MORTGAGE ON
PRINCIPAL OBLIGATION
The principal obligation is still valid since a
mortgage is an accessory contract.
A mortgage deed remains as evidence of a
personal obligation even if deemed
invalid. Hence, debtor-mortgagor is still
obligated to fulfil his obligation.
Mortgage derives its validity from the
principal obligation.
ARTICLE 2126
RULE: Mortgage directly and indirectly
subjects the property upon which it is
imposed, whoever the possessor may be,
to the fulfilment for the obligation for
whose security it was constituted.
EFFECT OF MORTGAGE
Creates real right
Creates a right in rem, a real right, a lien
inseparable to the property mortgage,
which is enforceable against the whole
world.
The real right on the mortgaged property
follows where the property goes, until
discharge of payment of the obligation is
satisfied.
A mortgagor is allowed to make a second
or subsequent mortgage on a property
already mortgaged subject to the rights of
the previous mortgagee.
Mortgage creates merely an encumbrance
and does not extinguish the right of the
debtor who does not lose his principal
attribute as owner, which is the right to
dispose.
Any stipulations that forbid the owner
from alienating the principal the
immovable is void.
ARTICLE 2127
RULE: Mortgage extends to the natural
accessions, to the improvements, growing
fruits, and rents or income yet not
received, when the obligation becomes
due, and to the amount of the indemnity
granted or owing to the proprietor form
the insurers of the property mortgaged, or
in virtue of expropriation for public use,
with the declarations, amplifications and
limitations established by law, whether the
estate remains in the possession of the
mortgagor, or it passes in the hands of the
third person.
EXTENT OF MORTGAGE
Not limited to the property mortgaged
Extends to all its:
a. Accessions
b. Improvements
c. Growing fruits
d. Rents
e. Income
f. Proceeds of insurance
g. Expropriation value
STIPULATION IN MORTGAGE CONTRACT
INCLUDING AFTER ACQUIRED PROPERTY
A stipulation that an after acquired
property is valid when its purpose is for
exchange or replacement of the thing
mortgaged because it is to maintain the
original value of the property given as
security.
MORTGAGE WITH DRAGNET CLAUSES TO
SECURE FUTURE ADVANCEMENT
Future advancement is necessary to be
stipulated
As a general rule, an action to foreclose a
mortgage must be limited to the amount
mentioned in the mortgage
Amount named as consideration in a
contract of mortgage do not limit the
amount for which the mortgaged may
stand as security, if from the instrument,
the intent to secure future loans or
advancement can be gathered.
Dragnet clause operates as convenience
and accommodation to the borrowers as it
makes available addition funds without
having to execute additional security
documents, thereby saving time, travel,
loan closing cost, cost of extra legal
services, recording fees, etc.
Dragnet clause shall be strictly construed.
A mortgage given to secure future
advancement is a continuing security and
is not discharged by the repayment of the
amount named in the mortgage, until the
full amount of all the loans or
advancement obtained are paid.
ARTICLE 2128
RULE:
1. Mortgage credits may be
alienated or assigned to a third
person
2. Alienation of mortgage credit
may bay in whole or in part,
with the formalities required by
law.
ALIENATION OR ASSIGNMENT OF MORTGAGE
CREDIT
Mortgage credit is a real right and
immediately subjects the property to the
fulfilment of the principal obligation.
The real right may be alienated or
assigned by the mortgagee-creditor to a
third person, in whole or in part.
The assignee or the buyer may foreclose
the mortgage in case of non-payment of
debt.
Alienation is valid even if not registered.
ARTICLE 2129
RULE: The creditor may claim from a third
person in possession of the mortgaged
property, the payment of the part of the
credit secured by the property which said
third person possesses, in terms and with
the formalities which the law establishes.
RIGHT OF CREDITOR AGAINST TRASFEREE OF
MORTGAGED PROPERTY
The mortgagor is not relieved of his
obligation even if the property is
transferred to another person in the
absence of novation. Hence the mortgage
may still be foreclosed.
Recorded Real Mortgage is an accessory
contract. It is inseparable from the
property subjected to mortgage,
regardless of who is the owner.
 Creditor may demand from any possessor
the payment only of the part of the credit
secured by the property.
It is necessary that prior demand must be
made to the debtor and the debtor failed
to pay such debt.
Possessor/Transferrees remedy is to
proceed against the mortgagor.
ARTICLE 2130
RULE: A stipulation forbidding the owner
from alienating the immovable shall be
void.
STIPULATION FORBIDING ALIENATION OF
MORTGAGED PROPERTY
A stipulation forbidding the owner from
alienating the property shall be void.
When the mortgagor alienates the
property, the transferee is bound to
respect the encumbrance because being a
real right, the property remains subject to
the fulfilment of the obligation for whose
guaranty it was constituted.
STIPULATION REQUIRING MORTGAGEES
CONSENT BEFORE ALIENATION OF PROPETY
A stipulation requiring the mortgagees
consent before alienation shall be valid
and binding but only in the sense that the
mortgagee cannot be compelled to
recognize the sale with the loan s unpaid.
STIPULATION GRANTING THE RIGHT OF FIRST
REFUSAL
A stipulation granting the right of first
refusal to the mortgagee is valid.
SUBSEQUENT MORTGAGE ON PROPERTY ALREADY
MORTGAGED
A second mortgage on a property already
mortgaged is valid.
ARTICLE 2131
RULE: The form, extent and consequences
of mortgage, both as to its constitution,
modification and extinguishment, and as
to the other matters not included in this
chapter, shall be governed by the
provisions of Mortgage law and Land
Registration law.
LAWS GOVERNING MORTGAGE
Land Registration Law
Revised Administrative Code
MEANING OF FORECLOSIRE OF MORTGAGE
Foreclosure is the remedy available to the
mortgagee-creditor by which he subjects
the mortgaged property to the satisfaction
of the obligation to secure which the
mortgage was given where the mortgagor
is in default of payment in the obligation.
VALIDITY AND EFFECT OF FORECLOSURE
It is a necessary consequence of non-
payment of a mortgage debt.
As a rule, the mortgage can be foreclosed
only when the debt remains unpaid at the
time it is due
It is deemed valid only when the debtor is
in default in the payment of his obligation
The right to foreclose cannot be exercised
by any person other than the creditor-
mortgagee or his assigns.
In REAL ESTATE MORTGAGE when the
obligation is not paid when due, the
mortgagee has the right to foreclose the
mortgage property.
Proceeds gathered in foreclosure shall be
applied to the payment of the principal
obligation
Foreclosure is limited to the amount
mentioned in the mortgage document.
Mortgagee has no right to include in the
foreclosure of real estate mortgage any
unpaid loan separately secured by chattel
mortgage.
Demand before foreclosure is essential.
A mortgage contract that contains
acceleration clause is valid. Failure of the
mortgagor to pay any instalment will
trigger the activation of the acceleration
clause.
The essence of a contract of mortgage
indebtedness is that a property has been
identified or set apart from the mass of
the property of the debtor-mortgagor as
security for the payment of debt
The power to foreclose a mortgage or not
resides on the mortgage
Once proceeds have been applied for the
payment of obligation, the debtor cannot
be required to pay unless there is
deficiency between the amount of the loan
and the foreclosure sale price, because
the obligation has already extinguished
Public notice of foreclosure sales must be
complied with, non-compliance to such will
render the sale voidable.
The rights that which mortgagor can
legally transfer, cede or convey after
foreclosure is the right to redeem, posses,
use and enjoy of the property during the
period of redemption.
KINDS OF FORECLOSURE
Judicial
Extrajudicial
JUDICIAL FORECLOSURE
Governed by Rule 68 of the ROC
A mortgage may be foreclosed judicially
by bringing action to the court.
The action shall be filed to the proper
court which has jurisdiction over the area
wherein the real property is situated.
If the court finds out that the complaint is
well-founded, it shall order the mortgagor
to pay the amount due within the period
not less than 90days but not more than
120 days upon the entry of judgement.
If the mortgagor fails to pay, it shall be
sold to a public auction in which to the
highest bidder shall the property be sold.
The sale shall be confirmed thereafter by
an order of the court.
Before confirmation of Judicial Foreclosure
sale, the court retains control of the
proceedings.
The proceeds of the foreclosure sale shall
be applied to the payment of the:
a. Cost of the sale
b. The amount due the mortgagee
c. Claims of junior encumbrances
or persons holding subsequent
mortgages in the order of
priority
d. The balance if any shall be paid
to the mortgagor or his duly
authorized agent, or persons
entitled to it.
Foreclosure is not complete until the
sheriffs certificate is executed. Absence of
 the certificate of sale, no title passes by
the foreclosure proceedings to the vendee.
EXTRAJUDICIAL FORECLOSURE UNDER ACT 3135
The law covers only real estate
mortgages. In EJF there must be an
express authority given to the mortgagee
in order to sell the property. It is intended
to regulate EJSale of the property
mortgaged and when the mortgage is
given a SPA or express authority to do so
in the deed itself or annexed thereto.
The authority to sell is not extinguished by
the death of the mortgagor or mortgagee
as it is an essential and inseparable part of
the bilateral agreement.
PUBLICATION is REQUIRED to give the
foreclosure sale a reasonably wide
publicity such that those interested might
attend the public sale.
A. Publication is mandatory-
failure to comply constitutes a
jurisdictional defect which
invalidates the sale. They must
strictly be complied with. Slight
deviation therefrom is not
allowed. A sale held after the
scheduled date indicated in the
notice of sale is void or
voidable.
B. Contents of notice:
1. Correct number of the
COT
2. Correct technical
description of the real
property to be sold
C. Object of notice- to achieve a
reasonably wide publicity of the
auction sale. Notice is given for
the purpose of securing bidders
and prevents sacrifice of the
property.
D. As long as the object of the
notice is obtained, immaterial
errors and simple mistakes on
the notice of sale, the notice
shall still be deemed valid and
sufficient.
E. Personal notice to the
mortgagor not generally
required, unless it is required in
the mortgage contract
F. Notice given to the mortgagee-
creditor is not required.
G. Posting of notice on mortgage
property not required. It merely
requires that the notice of sale
be posted in at least 3 public
places in the place where the
property is situated.
H. Certificate of posting not
required. What the law requires
is the posting of the notice of
sale and not the execution of
certificate of posting
I. Foreclosure proceedings have
the presumption of regularity. In
the absence of contrary
evidence, the presumption
prevails.
J. Posting and publication
requirements are imbued with
public policy.
K. Publication of notice of sale in
newspaper of general
circulation is sufficient
compliance. Failure to post
notice is not per se a ground for
invalidating foreclosure sale
provided that the notice is
published in the newspaper of
general circulation. A
foreclosure sale cannot be
annulled for alleged failure to
comply with the notice
requirement where what is
lacking is only the posting of
the notice in 3 public places,
and not the publication thereof
in a newspaper of general
circulation.
L. A newspaper is deemed as
newspaper of general
circulation when:
a. It is published for
dissemination of local
news and general
information
b. Has a bona fide
subscription list of
paying subscribers
c. It is published at regular
intervals.
M. Formalities of levy are not
required before an extrajudicial
foreclosed property can be sold
at public auction
N. Notice to bidder of all bids
offered at auction sale not
required.
The sale which cannot be made legally
outside of the province in which the
property is situated shall be made at
public auction after the giving of proper
notice and publication.
Public sale at different places on different
dates is valid. Indivisibility of Real estate
mortgage is not violated by conducting
two separate proceedings as long as each
parcel of land is answerable for the entire
debt.
Number of bidders does not necessarily
have to be more than one.
As a general rule the highest bidder must
pay in cash. Where the highest bidder is
the mortgagee and the amount of his bid
represented the total amount of the
mortgaged debt, it is not necessary for
him to pay in cash.
In case of a surplus in the purchase price,
the mortgagee must account for the
proceeds as If the price were paid in cash,
and in an action against the mortgagee to
recover the surplus, the latter cannot raise
the defence that no actual cash was
received.
The debtor has the right to redeem the
property sold within 1 year from the date
of sale. The reckoning date is from the
registration of the certificate of sale.
Judicial persons have their right to redeem
the property until but not after the
registration of the certificate of foreclosure
sale which in no case shall be more than 3
months after foreclosure, whichever is
earlier.
The party aggrieved by foreclosure may
ask for the annulment of the foreclosure
sale on the ground that:
a. There was fraud, collusion,
accident, mutual mistake,
breach of trust or misconduct
by the purchaser;
b. The sale had not been fairly
and regularly conducted;
c. The price was inadequate and
the inadequacy was so great as
 to shock the conscience of the
court
Republication is necessary for the validity
of a postponed extrajudicial foreclosure
sale. Another publication is required in
case the auction sale is rescheduled, and
the absence of such republication
invalidates sale. Parties have no right to
waive the publication requirement.
RIGHT OF MORTGAGEE TO RECOVER DEFICIENCY
The mortgagee is entitled to recover
deficiency
ROC specially gives the mortgagee the
right to claim for deficiency in case
deficiency exists. However, act 3135
governing EJF does not give a mortgagee
the right to recover deficiency after the
public auction sale, neither dies it
expressly or impliedly prohibit recovery.
To recover deficiency the EJF must be
valid.
In EJD and JF, the mortgage is bit a
security and not a satisfaction of
indebtedness.
Where third person is the mortgagor, he
is not liable for any deficiency in the
absence of a contrary stipulation. The
action for recovery of such deficiency
must be directed against the debtor.
It is settled rule that a mortgagee may
recover any deficiency in the mortgage
account which is not realized in a
foreclosure sale and that an independent
civil action for the recovery of deficiency
may be filed even during the period of
redemption.
Prescriptive period to recover a deficiency
after foreclosure prescribes after 10 years
from the time the right of action accrues.
NATURE OF JUDICIAL FORECLOSURE PROCEEDING
A proceeding for JF is an action in rem.
Based on a personal claim against a
specific property of a defendant. Its
purpose is to seize the property and sold
by court order in which proceeds shall be
applied to the payment of plaintiffs claim.
An action for JF seeks to reach the
property and subject it to the payment of
a principal obligation. The subjection of
the property is only resorted to upon
failure to pay the debt.
If the property mortgaged is destroyed is
not a ground to reduce the indebtedness
secured.
An action for the foreclosure of mortgage
is an action which survives the death of
the mortgagor because the claim against
him is not a pure money claim but an
action to enforce a mortgage lien.
NATURE OF POWER OF FORECLOSURE BY
EXTRAJUDICIAL SALE
The power to foreclose is not an ordinary
agency but is primarily an authority
conferred upon the mortgagee for the
latters own protection.
An EJF of real estate mortgage is initiated
by filing a petition not with any court of
justice but with the office of the sheriff of
the province where the sale is to be made.
EJF are not judicial proceedings, actions or
suit.
An ancillary stipulation supported by the
same cause or consideration for the
mortgage and forms an essential and
inseparable part of a bilateral agreement.
Foreclosure is not a necessary
consequence of non-payment of mortgage
indebtedness. The creditor-mortgagee has
the right to foreclose the mortgage, sell
the property mortgaged, and apply the
proceeds of the sale to the satisfaction of
the unpaid indebtedness.
Power to decide to foreclose or not is the
prerogative of the mortgagee. The act of
the auctioning sheriff is governed by law
and not by the instruction of the
mortgagee.
A STIPULATION OF UPSET PRICE IN MORTGAGE
CONTRACT IS VOID
Upset price or tipo clause is deemed null
and void. For the property must be sold to
the highest bidder.
Parties cannot, by agreement, contravene
the law and interfere with the lawful
procedure of the courts.
EFFECT OF INADEQUACY OF PRICE IN
FORECLOSURE SALE
As a general rule, where there is a right to
redeem, inadequacy of price is not
material because the debtor may
reacquire the property at a low price or
else sells his right to redeem.
Mere inadequacy of the price obtained at
a sheriff sale will not be sufficient to annul
or set aside the foreclosure sale unless,
the price is so inadequate as to shock the
conscience of the court.
The property may be sold for less than its
fair market value upon the theory that the
lesser the price the easier for the owner to
effect the redemption so that the low price
even works to his advantage.
The mortgagor owner may sell his right to
redeem.
The value of the mortgaged property has
no bearing on the bid price at the public
auction, provided the public auction was
done regularly and honestly.
Mortgage is simply a surety and not a
satisfaction of indebtedness.
WAIVER OF SECURITY OF MORTGAGE
The mortgagee may institute either a
personal action for debt or a real action to
foreclose mortgage.
Mortgagee may waive the right to
foreclose his mortgage and maintain a
personal action for recovery of debt.
The remedy of personal action and
foreclosure are alternative and not
cumulative or successive. The mortgagee
cannot have both remedy.
In case of death of the debtor the creditor
has 3 options that can alternatively
pursued:
a. To waive the mortgage and
claim the entire debt from the
estate of the mortgagor as an
ordinary claim
b. To foreclose the mortgage
judicially and prove any
deficiency as an ordinary claim
c. To rely on the mortgage
exclusively, foreclosing the
same at any time before it is
barred by prescription without
right to file a claim for any
deficiency.
MEANING OF REDEMPTION
 A transaction by which the mortgagor
reacquires or buys back the property
which may have passed under the
mortgage or divests the property of the
lien which the mortgage may have
created.
The concept of redemption is to allow the
owner to repurchase the property.
KINDS OF REDEMPTION
Equity of redemption is the right of the
mortgagor in case of JF to redeem the
property but before the confirmation of
the sale of the mortgage property
Right of redemption is the right of the
mortgagor in case of EJF to redeem the
property after it was sold for satisfaction
of debt.
EQUITY OF REDEMPTION
Available for JF
Exercised before confirmation of sale
Can be acquired by second mortgagee
Taking physical possession of the property
is not necessary in order to levy
The mortgagors equity of redemption can
be levied upon by means of a writ of
execution.
RIGHT OF REDEMPTION
Available for EJF
Can be exercised at any time within 1 year
from and after the date of sale.
If no redemption was made within the
period prescribed the purchaser becomes
the absolute owner.
Effects in the exercise of right to redeem:
a. Eliminates the lien created by the levy
or attachment or judgement or
registration of the mortgage.
b. Defeats the inchoate right of the
purchaser and restores the property to
the same condition as if no sale has
been made.
c. Exercise of the right is implied
admission of regularity of the
foreclosure sale.
A sale by the mortgagor of the property to
a third person during the period of
redemption transfers only his right to
redeem, posses, enjoy during the period.
An EJF affected by fraud is void.
NATURE OF MORTGAGORS RIGHT
It is an absolute privilege and the exercise
of which depends upon the will of the
redemption
It is a mere statutory privilege and must
be exercised within the bounds of law
REQUISITES FOR A VALID REDEMPTION
It must be made within 1 year from the
date of the registration of the certificate of
sale, not from the date of foreclosure sale.
Payment of the purchase price plus 1%
interest per month together with the taxes
thereon.
Written notice of the redemption must be
served on the officer who made the sale
and a duplicate filed with the proper
register of deeds
In JF the rule is that the mortgagor of real
estate can no longer exercise his right of
redemption after the sale is confirmed by
the court.
The mortgagor and his assignee is
required to tender payment within the
prescribed period to make the said
redemption valid or preserve the right of
redemption for future enforcement beyond
such period of redemption.
The rule on redemption is liberally
construed in favour of the original owner
of the property
PAYMENT OF REDEMPTION MONEY
Payment shall be made to the purchaser
or redemption or to the officer who made
the sale or the sheriff.
The payment of debt in money shall be
made in the currency stipulated and if it is
not so possible to deliver such, then in the
currency which is legal tender in the
Philippines.
AMOUNT PAYABLE
The amount payable as a rule is no longer
the judgement debt but the purchase
price at the auction sale.
In case if EJF the redemptioner is bound to
pay 1% interest per month.
The purchaser is entitled for
reimbursement of necessary expense
made in order to preserve the property.
RIGHTS OF PERSON WITH SUBORDINATE
INTEREST
A second mortgagee has to wait until after
the debtors obligation to the first
mortgagee has been fulfilled because a
second mortgagee only acquire the right
of the equity of redemption vested in the
mortgagor, and the second mortgagors
right are strictly subordinate to the
superior lien of the first mortgage.
After foreclosure sale, the right of
redemption remains in the second
mortgagee; and only this right passes to
him by virtue of second mortgage. His
remedy is only his right to redeem by
virtue of paying off the debt secured by
the first mortgage
The second mortgagee is entitled to the
payment of his credit the excess of the
proceeds of the auction sale, after
covering the mortgagors obligation of the
first mortgage.
CONFIRMATION BY THE COURT OF AUCTION SALE
IN JUDICIAL FORECLOSURE
Equity of redemption exists only in EJF. No
such right is recognized in a judicial
foreclosure sale except only where the
mortgagee is a banking institution.
Equity of redemption is the right of the
mortgagor to extinguish the mortgage and
retain ownership of the property by paying
the secured debt within 120days from the
entry of judgement in accordance to the
ROC. However, such procedure can be
modified by a valid agreement of the
parties.
As a general rule, in JF of real estate
mortgage, the mortgagor cannot exercise
his right of redemption after the sale is
confirmed.
In order for a foreclosure sale to be validly
confirmed by the court, it is necessary
that hearing be given to the interested
parties, at which they may have an
opportunity to show causes why sale
should not be confirmed.
Notice and hearing of a motion for
confirmation of sale are essential to the
validity of the order of confirmation.
 An order of confirmation is void for lack of
notice and hearing.
EQUITY OF REDEMPTION IN JUDICIAL
FORECLOSURE
In a JF there is no right to redeem after the
judicial sale is confirmed.
There is only the equity of redemption of
the mortgagor to redeem the mortgaged
property within 90days from the order of
foreclosure or even after but before
confirmation of sale.
The 90 day period granted, is counted
from the date of the service of the order.
PERSON ENTITLED TO EXERCISE THE RIGHT TO
REDEMPTION
Mortgagor
Successor-in-interest
Judgement debtor
Creditor having a lien
REGISTRATION AND TRANSFER OF RIGHT OF
REDEMPTION
Transfer of the right of redemption form
the debtor-mortgagor need not be
registered with the registry of deeds. To
enable the transferee to exercise the
same.
If redemption is proper, the purchaser
cannot refuse to allow the same,
considering that his right to the property is
only inchoate until period of redemption
has elapsed.
Public policy demands that the original
debtor-mortgagor or his successor-in-
interest should, as much as possible be
allowed to redeem the property.
RIGHTS AND OBLIGATION OF MORTGAGEE IN
POSSESSION
A mortgagee in possession is one who
awfully acquired actual or constructive
possession of the premises mortgaged to
him.
He is entitled to retain such possession
until the debt is satisfied and the property
is redeemed.
Has no right to reimbursement of any
useful expenses because the holder as a
scheme might put so much improvements
that the debtor-mortgagor would fail to
pay the redemption costs because of the
improvements made.
VENDEEES RIGHT TO POSSESSION OF
MORTGAGED PROPERTY SOLD
Before the expiration date of the
redemption period, the vendees right to
possession of the property sold is
contingent upon the failure of the
mortgagor to redeem.
During the period of redemption, the right
of the purchaser to redeem is inchoate.
The act of purchase and certificate sale
dont confer any right to possession of the
property or the right to use thereof.
After redemption period is terminated, the
right to redeem is barred, the mortgagor is
divested of his rights to the mortgaged
property sold, and the vendees right of
possession of the property becomes final.
RIGHT OF PURCHASER TO WRIT OF POSSESSION
A writ of possession is an order by the
court whereby the sheriff is commanded
to place in possession of real or personal
property the person entitled there to such
when a property is EJF, within the 1 year
redemption period upon filing a bond or
after the time of redemption period has
elapsed
Issuance of a writ of possession is
ministerial in an EJF. No discretion is left to
the court. During and after the period of
redemption the purchaser at the
foreclosure sale is entitled as of right to
writ of possession.
Any question regarding the validity of the
mortgage or its foreclosure is not a legal
ground for refusing the writ.
Any question or objecting the regularity
and validity of the writ shall be
determined in a subsequent proceeding in
accordance to Act 3135. Such question
shall not be raised to oppose the issuance
ot the writ.
The request for the issuance of the writ
never prescribes.
RIGHT BEFORE LAPSE OF REDEMPTION PERIOD
The issuance of writ of possession is
governed by Act 3135 in cases of EJF
Act 3135 allows the purchaser to take
possession of the foreclosed property
during the period of redemption upon
filing an application and approval bond.
The bond is required to protect the rights
of the mortgagor so that he may be
indemnified in case it is shown that the
foreclosure sale was not justified.
RIGHT AFTER LAPSE OF REDEMPTION PERIOD
A writ of possession cannot be issued after
the time of the redemption period has
expired, without redemption having been
made.
NATURE OF PETITION/MOTION FOR ISSUANCE OF
WRIT
An issuance of writ is not an ordinary suit
filed in the court.
It is filed in the office of the sheriff where
the place of sale is made
It is an ex parte and summary in nature
It is non-litigious proceeding
NATURE OF OREDER FOR THE ISSUANCE OF WRIT
The order is simply an incident in the
transfer of title in the name of the
purchaser
The possession of the property becomes
an absolute right of the purchaser, who, as
confirmed owner, can demand any time.
The writ is not a judgement on the merits
that can amount to res judicata.
RIGHT OF PURCHASER TO A CONVEYANCE AND
TO POSSESION
After redemption period has expired, as a
rule, the purchaser of the property has the
right to a conveyance and to be placed in
the possession thereof.
The right to possession is based on the
purchasers ownership of property.
RIGHT OF PURCHASER TO AID OF COURT
The purchaser of the property is entitled
to the aid of the court in effecting its
deliver, the reason being that upon
expiration of redemption period the
ownership of the property is transferred to
him.
SUSPENSION OF IMPLEMENTATION OF WRIT
 If a writ of possession has been issued by
the court, it is the inescapable duty of the
sheriff to enforce the writ.
Sheriff has no authority to give a grace
period
Once the writ of possession has been
issued, the court has no alternative but to
enforce it.
WHEN WRIT OF POSSESSION NOT AVAILABLE
Where the mortgaged property is under
lease, a mortgagee who foreclosed it and
has purchased the same in the foreclosure
sale can be granted of writ of possession
regardless of the fact that the property is
still in the possession of the lessee and
that the contract of lease has not been
terminated.
Where the mortgagor refuses to surrender
the property sold, the purchaser cannot
merely file petition for a writ of
possession. The property remedy is to file
ordinary action for the recovery of
possession.
Where third party is in actual possession.
NATURE OF PETITION FOR ANNULMENT OF
FORECLOSURE PROCEEDINGS
It is an ex parte petition
It is a non-litigious proceeding.
It is a judicial proceeding for the
enforcement of ones right of possession
as purchaser in a foreclosure sale.
Not an ordinary suit filed in the court.
By its nature, a petition for annulment of
foreclosure proceedings contests the
presumed right of ownership of the buyer
in a foreclosure sale and puts issue such
presumed right of ownership.
The proceedings for the issuance of a writ
of possession should not be consolidated
with the case for the declaration of nullity
of a foreclosure sale.
ISSUANCE OF WRIT BEFORE LAPSE OF
REDEMPTION PERIOD