DEFINITION OF TERMS:

Real Mortgage it is a contract in which the debtor guarantees to the creditor the fulfillment of a principal obligation, subjecting for the faithful compliance therewith a real property in case of non-fulfillment of said obligation at the time stipulated.

NATURE OF CONTRACT OF REAL ESTATE MORTGAGE:

Immovables; Alienable real rights in accordance with the laws, imposed upon immovables.

Kinds of real estate mortgage

Voluntary or conventional created by the parties Legal mortgage one required by law to guarantee performance

Equitable mortgage one w/c reveals an intent to make property a security, even if the properties lacks the proper formalities of a real estate mortgage

Requisites:
1. To secure the fulfillment of a principal obligation 2. The mortgagor should be the absolute owner of thing mortgaged 3. The mortgagor should have free disposal of the thing 4. When the principal obligation becomes due, the thing mortgaged may be alienated to secure payment 5. For a mortgage to be validly constituted and to prejudice third persons, the mortgage should be recorded with the Registry of Property

Characteristics:
1. It is a real right 2. It is an accessory contract 3. It is indivisible 4. It is inseparable 5. It is real property

Parties Involved and Obligations of parties

a. If the mortgagor sells the encumbered property, the property remains subject to the fulfillment of the principal obligation secured by it b. The mortgagee has a right to rely in good faith on what appears on the certificate of title of the mortgagor of the property given as security and in the absence of anything to excite suspicion, he is under no obligation to look beyond the certificate c. Until the action for expropriation has been

completed, ownership over the property remains with the registered owner

d. Banking institution must exercise due diligence before entering contract of mortgage e. If a person is the first mortgagee over a property

which was sold in an auction by the second mortgagee, the only right left to him is to collect his mortgage credit from the purchaser thereof during the sale conducted f. In a suit to nullify a certificate of title, the

mortgagee is an indispensable party

Other important provisions on said special contract:

Provision of mortgage law and the land registration law

Definition of terms
Antichresis is a contract by which a creditor acquires the right of reaping the fruit or other revenues of the immovables given to him in pledge, on condition of deducting, annually, their proceeds

from the interest, if any is due to him, and afterwards from the principal of his debt.

Characteristics:
1) Accessory contract secures the performance of

principal obligation 2) Formal contract must be in writing to be valid

Measure of Application of Fruits to Interest and Principal

The fruits of the immovable which is the object of the antichresis must be appraised at their actual market value at the time of the application.

Form of the Contract

The amount of the principal and of the interest shall be specified in writing; otherwise, the contract of antichresis shall be void. Art. 2134 is an instance when the law requires that a contract be in some form in order that it may be

valid, not only to affect third persons. However, even if the antichresis is void the principal obligation may still be valid.

Obligations of the Antichretic Creditor

The creditor acquires the right to enjoy the fruits of the property delivered to him. This right carries two (2) obligations: 1) He is obliged to pay the taxes and charges upon

the estate;and 2) He is bound to bear the expenses necessary for

the preservation and repair.

Obligation of the Antichretic Debtor

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.