ANTICHRESIS

(ARTICLES 2132-2139)
Definition of Antichresis

Art. 2132. By the contract of antichresis

the creditor acquires the right to receive the
fruits of an immovable of his debtor, with
the obligation to apply them to the
payment of the interest, if owing, and
thereafter to the principal of his credit. (1881)
Characteristics of the contract
Antichresis is:
1. an Accessory contract
2. a Formal contract
3. a Nominative contract
4. a Consensual contract
Delivery of property

Antichresis requires the delivery by the debtor of the property

given as security to the creditor.
But such delivery is required only in order that the creditor
may receive the fruits and not that the contract shall be binding.

Note: The contract does not cover the immovable but only its fruits.
 ANTICHRESIS PLEDGE

 Refers to the fruits of Real property  Personal property

 Perfected by mere consent  Perfected by the delivery

of the thing pledged
 Consensual contract  Real contract

• Both are similar in that the debtor loses control

of the subject matter of the contract
 ANTICHRESIS and REAL MORTGAGE compared

1. In Antichresis, the property is delivered to the creditor,

while in mortgage, the debtor usually retains possession
of the property;

2. In Antichresis, the creditor acquires only the right to

receive the fruits of the property; hence, it does not produce
a real right, while in mortgage, the creditor does not have any
right to receive the fruits, but the mortgage creates a real right
over the property which is enforceable against the whole world;
3. In antichresis, the creditor, unless there is a stipulation
to the contrary, is obliged to pay the taxes and charges
Upon the estate (Art. 2135.), while in mortgage, the creditor
has no such obligation;

4. In antichresis, it is expressly stipulated that the creditor

given possession of the property shall apply the fruits
thereof to the payment of interest, if owing, and thereafter
to the principal of the credit, while in a mortgage, there is
no such obligation on the part of the mortgagee.
• Both are similar in that the subject matter is real property.
Like pledge and mortgage, antichresis gives a real and not
merely a personal right if it is registered in the
Registry of Property.
 ART. 2133. The actual market value of the fruits at the
time of the application thereof to the interest and principal
shall be the measure of such application.

ART. 2134. The amount of the principal and of the interest

shall be specified in writing; otherwise, the contract of
antichresis shall be void.
 ART. 2135. The creditor, unless there is a stipulation to the contrary, is obliged to pay the
taxes and charges upon
the estate. He is also bound to bear the expenses necessary for
its preservation and repair.

The sums spent for the purposes stated in this article

shall be deducted from the fruits.

Obligations of the antichretic creditor.

1. Payment of taxes and charges upon the estate.
If he does not pay the taxes, he is by law required to pay
indemnity for damages to the debtor. Where the debtor has paid for
the taxes on the property which the creditor should have paid, the
amount is to be applied to the payment of the debt, the debtor is
entitled to return of the property free from all encumbrances if he, in
effect, by advancing the taxes, had already discharge the debt.

2. Application of the fruits of the estate.

 ART. 2136. The debtor cannot reacquire the enjoyment
of the immovable without first having totally paid what he
owes the creditor.
But the latter, in order to exempt himself from the obligations
imposed upon him by the preceding article, may always
compel the debtor to enter again upon the enjoyment of
the property, except when there is a stipulation to the contrary.

Right of antichretic debtor to reacquire enjoyment of property

The property delivered stands as a security for the payment

of the obligation of the debtor in antichresis. Hence, the debtor cannot
demand its return until the debt is totally paid.
However, if the creditor does not want to pay the taxes and
incur the expenses necessary for the preservation and repair of
the property (Art. 2135), he may compel the debtor to reacquire
the enjoyment of the same except when there is a contrary
stipulation. (Art. 2136).
ART. 2137. The creditor does not acquire the ownership of the real
estate for nonpayment of the debt within the period agreed upon.
Every stipulation to the contrary shall be void. But the creditor may
petition the court for the payment of the debt or the sale of the
real property. In this case, the Rules of Court on the foreclosure of
mortgages shall apply.

Remedy of creditor in case of nonpayment of debt

(1) to bring an action for specific performance; or

(2) to petition for the sale of the real property as
in a foreclosure of mortgages under
Rule 68 of the Rules of Court.
The parties, however, may agree on an extrajudicial foreclosure
in the same manner as they are allowed in contracts of mortgage
and pledge.

Acquisition by creditor of property by prescription.

The creditor in antichresis and his successors-in-interest

cannot ordinarily acquire by prescription the land given to him,
any agreement to the contrary being void.(Valencia v. Alcala)
 Q: Is the prescription as a mode of acquiring ownership
available to the creditor in antichresis?

A: NO. His possession of the property is not in the concept of an

owner but that of a mere holder during the existence
of the contract. (Ramirez v. CA)
ART. 2138. The contracting parties may stipulate that the interest
upon the debt be compensated with the fruits of the property
which is the object of the antichresis, provided that if the value of
the fruits should exceed the amount of interest allowed by the
laws against usury, the excess shall be applied to the principal.

Interest in antichresis subject to the Usury Law

Note: The rate of interest on loan or forbearance of money,

goods, or credit is no longer subject to any ceiling prescribed
under the Usury Law.
 ART. 2139. The last paragraph of Article 2085, and Articles
2089 to 2091 are applicable to this contract.

Applicability of certain articles.

Art. 2085. The following requisites are essential to the

contracts of pledge and mortgage:

(1) That they be constituted to secure the fulfillment of a principal obligation;

(2) That the pledgor or mortgagor be the absolute owner of the thing pledged
or mortgaged;
(3) That the persons constituting the pledge or mortgage have the
free disposal of their property, and in the absence thereof, that they be
legally authorized for the purpose.

Third persons who are not parties to the principal obligation may secure
the latter by pledging or mortgaging their own property.
Art. 2089. A pledge or mortgage is indivisible, even though the debt may be divided
among the successors in interest of the debtor or of the creditor. Therefore, the
debtor’s heir who has paid a part of the debt cannot ask for the proportionate
extinguishment of the pledge or mortgage as long as the debt is not completely satisfied.

Neither can the creditor’s heir who received his share of the debt return the pledge
or cancel the mortgage, to the prejudice of the other heirs who have not been paid.
From these provisions is expected the case in which, there being several things given
in mortgage or pledge, each one of them guarantees only a determinate portion
of the credit.

The debtor, in this case, shall have a right to the extinguishment of the pledge or
mortgage as the portion of the debt for which each thing is specially answerable is satisfied.

Art. 2091. The contract of pledge or mortgage may secure all kinds of obligations,
be they pure or subject to a suspensive or resolutory condition. (1861)
 Olivia owns a vast of mango plantation which she can no longer
properly manage due to a lingering illness. Since she is indebted to Peter
in the amount of 500.000.00 she asks Peter to manage the plantation
and apply the harvest to the payment of her obligation to him, principal
and interest, until her indebtedness shall have been fully paid. Peter agrees.

Q: What kind of contract is entered into by Olivia and Peter?

A contract of Antichresis was entered into by the parties.

Under Art. 2132 of the New Civil Code, by a contract of
Antichresis the creditor acquires the right to receive the fruits
of an immovable of his debtor, with the obligation to apply them
to the to the payment of the interest, and thereafter to the
principal of his credit.
2. What specific obligations are imposed by law on Peter as a
consequence of their contract?

A: Peter must pay taxes and charges upon the land and bear the
necessary expenses for the preservation and repair which he may
deduct from the fruits. (Art.2315,NCC)

3. Does the law requires any specific form for the validity of their
contract?

A: The amount of the principal and the interest must be specified

in writing, otherwise the antichresis will be void.
 4. May Olivia re-acquire the plantation before her entire
indebtedness shall have been fully paid?

NO. Art. 2136 specifically provides that the debtor can not
re- acquire the immovable with out first having totally paid what
he owes the creditor. However, it is potestative on the part
of the creditor to do so in order to exempt him from his obligation
under Art. 2135, NCC.
The debtor cannot re-acquire the enjoyment unless Peter compels
Olivia to enter again the enjoyment of the property.