EN BANC
[A.M. No. 99-10-05-0. August 7, 2001]
(AS FURTHER AMENDED, AUGUST 7, 2001) R!"EDURE #N E$TRA-%UD#"#A& F!RE"&!SURE F !RE"&!SURE !F M!RTGAGE M!RTGAGE In line with the responsibility of an Executive Judge under Administrative Order No !" dated June #$" %&'(" %&'(" for the manage managemen mentt of courts courts within within his admini administr strati ative ve area" area" includ included ed in which which is the tas) tas) of supervising directly the wor) of the Cler) of Court" who is also the Ex-Ofce *heri+" Ex-Ofce *heri+" and his sta+" and the issuance of commissions to notaries public and enforcement of their duties under the law" the following 'o*+u*s are 'o*+u*s are hereby prescribed in *tu+// o*osu* o otgg*s, otgg*s , % A ''/t/o3s o *t-u+// o*osu* o otgg* whether under the +/*t/o3 o t4* s4*/ o 3ot6 'u/ " pursuant to Act #%#(" as amended by Act -%%." and Act %($." as amended" shall be 8*+ /t4 t4* E*ut/:* %u+g*" %u+g* " through the "*; o out who out who is also the E-!</o S4*/ / 0pon **/'t o 3 ''/t/o3 o *t-u+// o*osu* o otgg* " it shall be the +ut6 o t4* "*; o "out to, "out to, a1 **/:* 3+ +o;*t said +o;*t said applicatio application n and to st' thereon st' thereon the corresponding 2le number" date and time of 2ling3 b1 o*t t4* 8/3g **s therefore **s therefore pursuant to rule %-%" *ection '4c1" as amended by A5 No $$6/6$%6*C" and issue the corresponding o7cial receipt3 c1 */3*" */3*" in case of real estate mortgage foreclosure" 4*t4* t4* ''/3t 4s o'/*+ /t4 t4* *=u/**3ts *o* t4* 'u/ ut/o3 /s o3+ut*+ u3+* t4* +/*t/o3 o t4* s4*/ o 3ot6 'u/" 'u/ " pursuant to *ec - of Act #%#(" as amended3 d1 s/g3 3+ /ssu* t4* *t/8t* o s* " sub8ect to the approval of the Executive Judge" or in his absence" the 9ice6Executive Judge No *t/8t* o s* s4 * /ssu*+ /3 :o o t4* 4/g4*st /++* u3t/ **s 'o:/+*+ o /3 t4* o**3t/o3*+ s*t/o3s and in :ule %%-% %" *ecti ection on &4%1 &4%1"" as amend mended ed by A5 5 No No $$ $$6/ 6/66$% $%66*C" *C" shall hav have been een paid3 Provided, that Provided, that in no case shall the amount payable under :ule %-%" *ection &4%1" as amended" exceed ;%$$"$$$$$3 e1 t* t4* *t/8t* o s* 4s **3 /ssu*+ to t4* 4/g4*st /++* " )eep the complete records" records" 4/* /t/3g 36 *+*'t/o3 /t4/3 '*/o+ o o3* (1) 6* o +t* o *g/stt/o3 o t4* *t/8t* o s* /t4 t4* R*g/st* o D**+s o3*3*+ " after which" which" the recor records ds shall shall be archi archived ved Notwit Notwithst hstand anding ing the forego foregoing ing provi provisio sion" n" u/+/ '*so3s whose '*so3s whose property is sold pursuant to an extra68udicial foreclosure" s4 4:* t4* /g4t to *+** t4* 'o'*t6 u3t/, ut 3ot t*, t4* *g/stt/o3 o t4* *t/8t* o o* o* os osu u* * s* s* 4/ 4/4 4 /3 3o s* s* s4 s4 * o o* * t43 t43 t4* t4** * (>) (>) o o3t 3t4s 4s t* t* o*osu*" o*osu*" whichever is earlier" as provided in *ection -' of :epublic Act No .'&% 4as amended" :es Of August '" /$$%1
or and>or chattels chattels mortgaged mortgaged and their their respec respective tive locations" which certi2cate shall serve the purpose of having the application doc)eted with the Cler)s of Court of the places where where the other properties are are located and of allowing the extra8udicial foreclosures foreclosures to proceed thereat # =he 3ot/*s o ut/o3 s* /3 *tu+// o*osu* o 'u/t/o3 6 t4* s4*/ o 6 3ot6 'u/ shall be 'u/s4*+ /3 3*s''* o g*3* /ut/o n pursuant to *ectio *ection n %" ;resi ;residen dentia tiall ?ecre ?ecree e No No %$'&" %$'&" dated dated Janua January ry /" %&''" %&''" and 3o3-o'/3* t4**/t4 s4 o3st/tut* :/ot/o3 o S*t/o3 @ t4**o. - =he E*ut/:* %u+g* shall" %u+g* shall" with the ss/st3* o t4* "*; o "out " ra@e ''/t/o3s o *tu+// o*osu* o otgg* u3+* t4* +/*t/o3 o t4* s4*/ o3g s4*/s" s4*/s" including those assigned to the O7ce of the Cler) of Court and *heri+s I9 assigned in the branches ( =he =he 3*?s o t4* /++*?s s4 * *'ot*+ by the sheri+ or the notary public who conducted the sale to the Cler) of Court before the issuance of the certi2cate of sale =his :esolution :esolution amends or modi2es accordingly accordingly Administrati Administrative ve Order No No # issued issued by then Chief Justice Enriue 5 ernando on %& October %&.- and Administrative Circular No #6&. issued by the Chief Justice Andres : Narvasa on ( ebruary %&&.
=he Court Administrator may issue the necessary guidelines for the e+ective enforcement of this :esolution =he Cler) of Court shall cause the publication of this :esolution in a nuewspaper of general circulation not later than August %-" /$$% and furnish copies thereof to the Integrated Bar of the ;hilippines =his :esolution shall ta)e e+ect on the % st day of *eptember of the year /$$% ;romulgated this ' th day of August /$$% in the City of 5anila 5O:=AE" O:ECDO*0:E AN? :E?E5;=ION Darry ; Ignacio REA& ESTATE M!RTGAGE A * *stt* otgg* is a contract in 4/4 t4* +*to gu3t**s to t4* *+/to t4* u8*3t o '/3/' o/gt/o3, su*t/3g o t4* /t4u o'/3* t4**/t4 * 'o'*t6 /3 s* o 3o3-u8*3t o s/+ o/gt/o3 t t4* t/* st/'ut*+ 4Manresa1 It is a /*3 o3 s'*/8 o /+*3t/8*+ /o:* 'o'*t6 It directly and immediately sub8ects the property upon which it is imposed" whoever the possessor may be" to the ful2llment of the obligation for whose security it was constituted #t *t*s * /g4t *3o** g/3st t4* 4o* o+ 4DBP v. NLRC, 183 SCRA 38 !1""#$ 1 oreclosure of mortgage Fo*osu* o otgg* is the process by 4/4 'o'*t6 o:**+ 6 * su*t*+ to s* to '6 +*3+ o 4/4 otgg*s st3+ s s*u/t6 4Paci%c Co&&ercia' Co. v. A'vare(, 38 O) *+81 oreclosure is the 3**ss6 o3s*=u*3* o 3o3-'6*3t o otgg* /3+*t*+3*ss =he otgg* 3 * o*os*+ only when the +*t */3s u3'/+ t t4* t/* /t /s +u* 4Prodcers Ban v. CA, )R No. 111+8, 1* Se/0. ##1 )ov20 o 04e P5 v. Es/e6o, +* P4i' "7 1 or in case of default in the payment of obligation 4PNB v. CA, )R No. 17"#8, 17 an. ##3 C4ina9an v. CA, 7+ SCRA 3* !1""7$1 ?emand is essential for default ?emand" however" is necessary for default to exist and which gives the right to collect debt and foreclose the mortgage T4* tu/t6 +t*s /3 t4* 'o/sso6 3ot*s o t4* **t/o3 us* 4!i$n case o non-/a:&en0 o 04is no0e or an: /or0ion o i0 on de&and, ;4en de, on accon0 o 04is no0e, 04e en0ire o9'iCPB vs. Be'so, ).R. No. 1+""1, A<s0 1*, ##*1 ?emand" however" is not necessary where the law or the obligations expressly declare it unnecessary 4Pre&iere Dev20. Ban v. Cen0ra' Sre0: ? 5nsrance Co&/an:, 5nc., +*" SCRA 3+", 13 =e9rar: ##"1 Mo so:*3+/ o +*tos +*ut /s +*83*+ s +*6 /3 t4* u8*3t o 3 o/gt/o3, 6 *so3 o us* /'ut* to t4* +*to =here are three reuisites necessary for a 2nding of default F/st, t4* o/gt/o3 /s +*3+* 3+ /=u/+t*+B s*o3+, t4* +*to +*6s '*o3*B t4/+, t4* *+/to u+//6 o *tu+//6 *=u/*s t4* +*tos '*o3* 4Se'eCPB, )R No. 17+77, #3 Ma: ##7 1 ;rohibition against Pac0& Co&&issori& A stipulation in a deed of mortgage which states that upon failure of the mortgagor to pay the debt within the agreed period" the land covered by the mortgage shall become property of the mortgagee or the transaction shall become a sale and the consideration shall be considered as payment of the price of the land is /ac0& co&&issori& and is null and void 4Re:es v. Ne9re6a, "8 P4i' 73" !1"+7$1 *uch stipulation is void since it enables the mortgagee to acuire ownership of the mortgaged property without need of foreclosure 4O'ea v. CA, * SCRA * !1""+$ 13 it is a nullity being contrary to the provisions of Article /$.. of the Civil Code 4 L&a:a< v. @eirs o acin0o Ne&eno, +7 SCRA 31+ !##*$ 1 =wo modes of foreclosure of real estate mortgage oreclosure of real estate mortgage is either done extra68udicially or 8udicially =he provisions of :ule !. of the %&&' :ules of Civil ;rocedure govern 8udicial foreclosure =he extra68udicial foreclosure of real estate mortgage" on the other hand" is carried out in the procedure governed by the provisions of At >1>5" as amended" otherwise )nown as An Ac0 0o Re<'a0e 04e Sa'e o Pro/er0: >nder S/ecia' Po;ers 5nser0ed in or Annexed 0o Rea' Es0a0e Mor01>5, AS AMENDED C REDEMT#!N Essential reuirements under Act #%#( 0nder Act #%#(" as amended and settled 8urisprudence" the following essential reuirements must be met,
% =here must be a s'*/ 'o* o tto3*6 /3s*t*+ /3 o tt4*+ to t4* * *stt* otgg* authoriGing the sale pursuant to the provisions of Act" #%#(" as amended 4 Sec0ion 1 Pa<:o v. )a09n0on, +3 SCRA 1+7 !##*$1 / =he s* ust * +* /t4/3 t4* 'o:/3* 4** t4* 'o'*t6 o 36 't t4**o /s ot*+ " unless otherwise stipulated 4Sec0ion 3 S/ena v. de 'a Rosa, 7* SCRA 11 # =here must be 3ot/* o s* to be posted in t4** 'u/ '*s o t4* u3//'/t6 o /t6 4** t4* 'o'*t6 /s s/tut*+ If the property is worth more than ;-$$$$" t4* 3ot/* s4 so * 'u/s4*+ o3* **; o t4** o3s*ut/:* **;s /3 3*s''* o g*3* /ut/o3 /3 t4* /t6 o u3//'/t6 4Sec0ion 31 - =he sale shall be +* t 'u/ ut/o3 between the 4ous o 3/3* /3 t4* o3/3g 3+ ou /3 t4* t*3oo3" and shall be under the +/*t/o3 o t4* s4*/ o t4* 'o:/3*" the 8ustice or u//6 ust/* o t4* '** 4now municipal 8udge1 of the municipality in which such sale shall be made" or a 3ot6 'u/ o s/+ u3//'/t6 4Sec0ion 1 o*+u* o *tu+// o*osu* u3+* At >1>5 In Administrative 5atter No &&6%$6$(6$ 4as further amended on $' August /$$%1" the *upreme Court prescribed the following 'o*+u*s /3 t4* *t-u+// o*osu* o otgg* , % All applications for extra68udicial foreclosure of mortgage whether under the direction of the sheri+ or a notary public" pursuant to Act #%#(" as amended" shall be 2led with the Executive Judge" through the Cler) of Court who is also the Ex6O7cio *heri+ / 0pon receipt of an application for extra68udicial foreclosure of mortgage" it shall be the duty of the Cler) of Court to, a1 receive and doc)et said application and to stamp thereon the corresponding 2le number" date and time of 2ling3 b1 collect the 2ling fees therefore pursuant to :ule %-%" *ection '4c1 as amended by A5 No $$6/6$%6*C" and issue the corresponding o7cial receipt3 c1 examine" in case of real estate mortgage foreclosure" whether the applicant has complied with all the reuirements before the public auction is conducted under the direction of the sheri+ or a notary public" pursuant to *ec - of Act #%#(" as amended3 d1 sign and issue the certi2cate of sale" sub8ect to the approval of the Executive Judge" or in his absence" the 9ice6Executive Judge No certi2cate of sale shall be issued in favor of the highest bidder until all fees provided in the aforementioned sections and in :ule %-%" *ection &4%1 as amended by A5 $$6/6$%6*C" shall have been paid3 Provided" that in no case shall the amount payable under :ule %-%" *ection &4%1" as amended" exceed ;%$$"$$$$$3 e1 after the certi2cate of sale has been issued to the highest bidder" )eep the complete records" while awaiting any redemption within a period of one 4%1 year from date of registration of the certi2cate of sale with the :egister of ?eed concerned" after which" the records shall be archived Notwithstanding the foregoing provision" 8uridical persons whose property is sold pursuant to an extra8udicial foreclosure" shall have the right to redeem the property until" but not after" the registration of the certi2cate of foreclosure sale which in no case shall be more than three 4#1 months after foreclosure" whichever is earlier" as provided in *ection -' of :epublic Act No .'&% 4as amended" :es of August '" /$$%1 or chattels in di+erent locations covering one indebtedness" only one 2ling fee corresponding to such indebtedness shall be collected =he collecting Cler) of Court shall" apart from the o7cial receipt of the fees" issue a certi2cate of payment indicating the amount of indebtedness" the 2ling fees collected" the mortgages sought to be foreclosed" the real estates and>or chattels mortgaged and their respective locations" which certi2cate shall serve the purpose of having the application doc)eted with the Cler)s of Court of the places where the other properties are located and of allowing the extra8udicial foreclosures to proceed thereat # =he notices of auction sale in extra8udicial foreclosure for publication by the sheri+ or by a notary public shall be published in a newspaper of general circulation pursuant to *ection %" ;residential ?ecree No %$'&" dated January /" %&''" and non6compliance therewith shall constitute a violation of *ection ! thereof - =he Executive Judge shall" with the assistance of the Cler) of Court" ra@e applications for extra8udicial foreclosure of mortgage under the direction of the sheri+ among all sheri+s" including those assigned to the O7ce of the Cler) of Court and *heri+s I9 assigned in the branches ( =he name>s of the bidder>s shall be reported by the sheri+ or notary public who conducted the sale to the Cler) of Court before the issuance of the certi2cate of sale =ime when to conduct auction sale Issue,
any time from &,$$ am until -,$$ pm1 is valid" without regard to the duration or length of time it too) the auctioneer to conduct the proceedings 4PNB v. Ca9a0in1>5, s *3+*+. *ection % of ;? %$'&" as amended provides, A'' no0ices o ac0ion sa'es in ex0ra-6dicia' orec'osre o rea' es0a0e &or0or interpretation are too narrow and very limited that it virtually defeats the purpose and intention of the law If this is the case" the leading dailies" li)e the ;hilippine ?aily Inuirer 4;?I1 4with head o7ce in 5a)ati City1 and 5anila Bulletin 4with head o7ce in 5anila1" which en8oys a wide circulation nationwide" cannot publish notice of extra68udicial sales of properties located in ueGon City simply because it is outside their place of publication ies to be foreclosed is>are located In a line of cases" the Highest Court declared that publication of the extra68udicial sale in a newspaper of general circulation is more than su7cient compliance with the notice6posting reuirement of the law 4 =or0ne Mo0ors v. Me0ro9an, 7+ SCRA * Cris0o9a' v. CA, 38 SCRA +7 Conce/cion v. CA, * SCRA 71 Bo4anan v. CA, +7 SCRA 3++ O'i(on v. CA, 37 SCRA 18 )ravina v. CA # SCRA 1*8 1 ;? %$'& and Act #%#( do not reuire that the newspaper which publishes 8udicial notices should be a daily newspaper 4=or0ne Mo0ors, 7+ SCRA *1 In O'i(on a0 1+7" it was ruled that, x x x 04e /9'ica0ion o 04e no0ice o sa'e in 04e ne;s/a/er o
=he <+:/t o 'u/t/o3 executed by the publisher" business>advertising manager that a newspaper is a newspaper of general circulation constitutes '/ /* *:/+*3* o o'/3* /t4 t4* *=u/s/t* 'u/t/o3 4Bonnevie v. CA, 1+ SCRA 1 !1"83$ Sadan< v. )S5S, 18 SCRA "1 1 A single act of posting the notice of auction sale satis2es the reuirements of law =he burden of proving that the posting reuirement was not complied with is shifted to the o3* 4o *g*s 3o3o'/3* 4Bonnevie v. CA, 1+ SCRA 1 !1"83$1 / T4* 'u'os* o 3ot/* 3+ 'u/t/o3 =he ob8ect of a notice of sale is to /3o t4* 'u/ o t4* 3tu* 3+ o3+/t/o3 o t4* 'o'*t6 to * so+, 3+ /3o o t4* t/*, '* 3+ t*s o t4* s* Notices are given for the purpose of s*u/3g /++*s 3+ to '*:*3t s/8* o t4* 'o'*t6 4O'i(on v. CA, 37 SCRA 181 ;ublication" therefore" is reuired to give the foreclosure sale a reasonably wide publicity such that those interested might attend the public sale 4 Oano v. CA, 1"*", # Marc4 ##31 # =he notice and publication reuirement are 3+to6 3+ /u* to o'6 /s u/s+/t/o3 +**t t4t :/t/t*s t4* o*osu* ut/o3 s* Non6compliance with the notice and publication reuirement in Act #%#(" as amended is a 8urisdictional defect that vitiates the auction sale 4 a&9n0in< v. CA, 17* SCRA 171 4e r'e is 04a0 s0a00or: /rovisions 1>5, s *3+*+ 4PNB v. Ne/o&ceno, s/ra. 1 =o reuest postponement of the sale is one thing3 to reuest it without need of compliance with the statutory reuirements is another =herefore" a party is not estopped from uestioning the validity of the foreclosure sale for non6compliance with Act #%#( 4 PNB v. Ne/o&ceno, s/ra.1 ;ublication" therefore" is reuired to give the foreclosure sale a reasonably wide publicity such that those interested might attend the public sale =o allow the parties to waive this 8urisdictional reuirement would result in converting into a private sale what ought to be a public auction 4 Oano v. CA, )R No. 1"*", # Marc4 ##31 In the case of DPB v. CA, )R No. 1+838, 1# ne ##3 " the *upreme Court clari2ed that, 4e or& o 04e no0ice o ex0ra6dicia' sa'e is no; /rescri9ed in Circ'ar No. *-## issed 9: 04e Ofce o 04e Cor0 Ad&inis0ra0or on anar: ##. Sec0ion FaG o Circ'ar No. *-## /rovides 04a0 x x x 4e 'as0 /ara
auction sale without reposting or republication of the notice . @o;ever, 04e resc4ed'ed ac0ion sa'e ;i'' on': 9e va'id i 04e resc4ed'ed da0e o ac0ion is clearly specied in the prior notice of sale. 4e a9sence o 04is inor&a0ion in 04e /rior no0ice o sa'e ;i'' render 04e rescheduled auction sale void for lack of reposting or republication . 5 04e no0ice o ac0ion sa'e con0ains 04is /ar0ic'ar inor&a0ion, ;4e04er or no0 04e /ar0ies aCPB, )R No. 13"3*, #8 Dece&9er ### O'i(on v. CA, 37 SCRA 18 Bo4anan v. CA, +7 SCRA 3++ 1 No
'*so3 3ot/* /s 3**ss6 to t4* otggo 4Bonnevie v. CA, 1+ SCRA 1 =or0ne Mo0ors v. Me0ro9an, 7+ SCRA *1 u3*ss st/'ut*+ u'o3 6 t4* 't/*s 4PNB v. 5n0erna0iona' Cor/ora0e Ban, 1"" SCRA +#8 Co&&ni0: and Savindebtor is to redeem the property =he period to redeem property sold *tu+//6 following the foreclosure of mortgage is o3* (1) 6* o t4* *g/stt/o3 o t4* s4*/s *t/8t* o o*osu* s*4Bernarde( v. Re:es, #1 SCRA 78 Sec0ion 7, Ac0 313+, as a&ended 1 In case the mortgagor is a u/+/ '*so3 Sec0ion *, RA 8*"1, 04e )enera' Banin< La; o ### provides, No0;i04s0andin< Ac0 313+, 6ridica' /ersons x x x s4a'' 4ave 04e ri<40 0o redee& 04e /ro/er0: in accordance ;i04 04is /rovision until, but not after, the registration of the certicate of foreclosure sale with the applicable Register of Deeds which in no case shall be more than three (3) months after the foreclosure, whichever is earlier :edemption period not suspended by =:O or a separate civil case T4* '*/o+ to *+** s 3ot sus'*3+*+ 6 t4* /3st/tut/o3 o s*'t* /:/ s* o 33u*3t o otgg*, o*osu*" etc 4S&erari( v. DBP, 1 SCRA 13*3 >nion9an v. CA, )R No. 13#78, + ne /$$%1 3+ NE#THER /s /t sus'*3+*+ 6 t4* /ssu3* o TR! 6 t4* outs 4Peo/'es =inancin< Cor/. v. CA, 1" SCRA 3 1 :edemption price In case of redemption" a /tt*3 3ot/* o *+*'t/o3 must be served on the o<* 4o +* t4* s* 3+ +u'/t* 8*+ /t4 t4* ''/* R*g/st* o D**+s 4Rosa'es v. I9oa, 1# SCRA 87" Sec0ion 8!/ar. 3$, R'e 3", R'es o Cor0 1 =he *+*'t/o3 '/* shall be, the 'u4s* '/* /t4 o3* '**3t (1) '* o3t4 /3t**stB ss*ss*3t o t*s '/+ /t4 1 '* o3t4 /3t**st ( !ection "#, Rule 3$). nion9an v. CA, )R No. 13#78, + ne ##1 Ponce de Leon v. R=C, 37 SCRA 8" S: v. CA, 1* SCRA 1+1 =he redemption amount includes the assessment of taxes paid by the purchaser and the interest on the auction price that should be computed from the date of the registration of the certi2cate of sale 4 S/s. Es0anis'ao, r. v. CA, )R No. 1378*, 31 ': ##1 1 E+ect of failure to redeem # 3o *+*'t/o3 /s +* /t4/3 t4* '*s/*+ '*/o+, t4* u6* t o*osu* s* *o*s t4* sout* o3* o t4* 'o'*t6 'u4s*+ 4 oven v. CA, 1 SCRA *## PNB v. Adi', 118 SCRA 11#1 =he purchaser then has the sout* /g4t to /t o 'oss*ss/o3 t4t /s t4* 83 'o*ss to 6 out o o3sut* t4* *tu+// o*osu* Henceforth" the mortgagor>debtor loses his right over the property 4 Bernarde( v. Re:es, #1 SCRA 78 Sec0ion 7, Ac0 313+, as a&ended1 "o3so/+t/o3 o t/t* /;*/s* *o*s tt* o /g4t on the part of the auction buyer" and t4* /ssu3* o *t/8t* o t/t* /3 :o o t4* 'u4s* *o*s /3/st*/ u'o3 t4* R*g/st* o D**+s 4>nion9an v. CA, )R No. 133377, #+ A<s0 1""" 1 R*+*'t/o3 :s. *'u4s* =he /g4t to *+** 4a foreclosed property1 becomes nc0s o%cio on the date of its expiry" and its exercise after the period is not really one of redemption but of repurchase ?istinction must be made because redemption is by force of law3 the purchaser at public auction is bound to accept redemption R*'u4s* however of a foreclosed property" after redemption period" imposes no such obligation After expiry" the purchaser may or may not resell the property but no law will compel him to do so And" he is not bound by the bid price3 it is entirely within his discretion to set a higher price" for after all" the property already belongs to him as owner 4 Prdencio v. CA, 31 SCRA +771
%UD#"#A& F!RE"&!SURE !F REA& ESTATE M!RTGAGE UNDER RU&E @, RU&ES !F "!URT Judicial foreclosure of real estate mortgage is governed by the provisions of :ule !. of the :ules of Court It is li)e any o+/36 /:/ t/o3 8*+ /3 out that shall be 'o:*3 6 '*'o3+*3* o *:/+*3* o*+u* % 1 . *'t/o3 3+ 8/3g o o'/3t which shall set forth the following allegations 4 Sec. 1, R'e 781, a1 ?ate and due execution of the mortgage and its assignments" if any3 b1 Names and residences of the mortgagor and mortgagee3 c1 ?escription of the mortgaged property>ies3 d1 ?ocumentary evidence>s of the obligation>s secured by the mortgage and the unpaid obligation3 e1 Names and residences of all persons having or claiming an interest in the mortgaged property>ies %
2 =he t/ out s4 *3+* u+g*3t s*+ o3 t4* ts 'o:*3 3+ s4 s*t/3 t4* ou3t +u* s*+ o3 t4* otgg* +*t o o/gt/o3 " /3u+/3g /3t**sts, 4g*s 3+ osts =he court shall then direct the defendant to '6 s/+ ou3t /t4/3 '*/o+ o 3ot *ss t43 3/3*t6 (90) +6s 3o o* t43 o3*-4u3+*+ t*3t6 (120) +6s 4Sec. , R'e 781
%
>. In the event of /u* to '6 as directed within &$ to %/$ days" t4* otgg* *t6?/*s s4 * so+ t 3 ut/o3 s* " the proceeds of which shall be applied to the mortgage debt" pursuant to :ule #& of the :ules of Court 4 Sec. 3, R'e 781 #% Before the sale of the real property>ies" notice must be given, a1 By posting for 20-+6s /3 t4** (>) 'u/ '*s If the assessed value is more than ;($"$$$$$" by publishing a copy of the notice o3* **; o to (2) o3s*ut/:* **;s in one newspaper s**t*+ 6 * 4Sec. 1+c, R'e 3"1 b1 I/tt*3 3ot/* to t4* u+g*3t o/go t *st t4** (>) +6s *o* t4* s* 4Sec. 1+d, R'e 3"1 #/ =he 4/g4*st /++* s4 * /ssu*+ *t/8t* o s* 4Sec. +, R'e 3"1
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J. U'o3 ot/o3 3+ t* 3ot/* 3+ 4*/3g, t4* t/ out / /ssu* 3 o+* o o38t/o3 o t4* s* 4Rra' Ban o Oroie0a v. CA, 1#1 SCRA + !1"8#$ 1 -% T4* 83 o+* o o38t/o3 s4 * *g/st**+ /t4 t4* R*g/st6 o D**+s 4Sec. *, R'e 781 a1 If 3o /g4t o *+*'t/o3 */sts" the *t/8t* o t/t* /3 t4* 3* o t4* otggo s4 * 3**+ 3+ 3* o3* /ssu*+ /3 t4* 3* o t4* 'u4s* b1
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( If the 'o**+s o t4* ut/o3 s* o t4* 'o'*t6 * 3ot su</*3t " the trial court" upon motion" shall *3+* +*8/*36 u+g*3t against the defendant 4Sec. 7, R'e 781 E=u/t6 o R*+*'t/o3
Euity of redemption is the right of the mortgagor to redeem the mortgaged property t* 4/s +*ut /3 t4* '*o3* o t4* o3+/t/o3s o t4* otgg* ut *o* t4* s* o t4* 'o'*t6 o t4* o38t/o3 o t4* s* after u+// o*osu* thereof 45n0erna0iona' Services, 5nc. v. 5AC, 1 SCRA 7* !1"87$ 1 =his is the right of the defendant mortgagor to *t/3gu/s4 t4* otgg* 3+ *t/3 o3*s4/' o t4* 'o'*t6 6 '6/3g t4* s*u*+ +*t /t4/3 90-+6 '*/o+ t* t4* u+g*3t *o*s 83 o t* t4* o*osu* s* ut '/o to /ts o38t/o3 4)S5S v. C=5, 1*+ SCRA 1" !1"8"$1 No /g4t o *+*'t/o3 /3 u+// o*osu*. =here is no right of redemption from a 8udicial foreclosure of mortgage" **'t o*osu* o otgg* 6 3;s o 3;/3g /3st/tut/o3s 4)S5S v. C=5, 1*+ SCRA 1" !1"8"$ @er0a A'9a Resor0, 5nc. v. CA, 33" SCRA +3 !###$1 E=u/t6 o *+*'t/o3 :s. /g4t o *+*'t/o3. =he *upreme Court already ruled on the distinction between the *=u/t6 o *+*'t/o3 and the /g4t o *+*'t/o3 as follows, =he e%uity of redemption is" to be sure" di+erent from and should not be confused with the ri<40 o rede&/0ion =he right of redemption in relation to a mortgage u3+*stoo+ /3 t4* s*3s* o '*ogt/:* to *-=u/* otgg*+ 'o'*t6 t* *g/stt/o3 o t4* o*osu* s* exists only in the case of the e&tra'udicial o*osu* of the mortgage No su4 /g4t /s *og3/K*+ /3 'udicial o*osu* except only where the mortgagee is the 4//''/3* Nt/o3 L3; o 3; o 3;/3g /3st/tut/o3 ni0ed P'an0ers SPS>MCOG v. CA, +* SCRA 337 !##*$ 1 Etu+// o*osu* (E%F) :s. u+// o*osu* (%F) % On the governing law EJ is governed by the provisions of Act #%#(" as amended" while J is by the provisions of :ule !. of the :ules of Court
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On the publication reuirement In EJ" the auction sale shall be published once a wee) for three 4#1 consecutive wee)s in a newspaper of general circulation In J" the publication shall only be for two 4/1 consecutive wee)s
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On the notice reuirement ;ersonal notice to the mortgagor is not reuired in EJ as a rule" 0NDE** stipulated upon In J" written notice to the 8udgment obligor at least three 4#1 days before the auction sale is reuired
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On redemption =here is a right of redemption in EJ" which is one year from registration of the certi2cate of sale If the mortgagor is a 8uridical person the redemption period is until" but not after" the registration of the certi2cate of foreclosure sale with the applicable :egister of ?eed which in no case shall be more than three 4#1 months after the foreclosure" whichever is earlier . In J" there is no right of redemption but only euity of redemption" unless the mortgagee is a ban) or ban)ing institution In the latter instance" the redemption period shall be one 4%1 year from the date of registration of the certi2cate of sale "HATTE& M!RTGAGE Chattel mortgage is a security for the performance of obligation e+ected by the recording of the personal property mortgaged in the chattel mortgage register 4 Ar0. 1#, Civi' Code Nor04ern Mo0ors, 5nc. v. Coia, 77 SCRA 1+ !1"*+$1 !36 '*so3 'o'*t6 6 * t4* o*t o 4tt* otgg* 4Sec. , Ac0 No. 1+#81
In *ection %- of Act No %($." it is a condition precedent before foreclosure that the conditions of the chattel mortgage be bro)en and at *st >0-+6s *+6 *'s*+ ;rocedure S*t/o3 1J o At No. 150" provides the oo/3g 'o*+u* /3 t4* *tu+// o*osu* o 4tt* otgg* % ost/3g o t4* 3ot/* o ut/o3 s* t *st 10 +6s *o* ut/o3 " indicating time" place and purpose of sale" at two or more public places in the municipality where the mortgagor resides" or where the property is situated %
Not/8t/o3 o t4* otggo o 4/s ss/g3s " of the time and place of sale" t *st 10-+6s '*:/ous to t4* s*, either in writing if a resident of the municipality" or by registered mail if a resident outside of the municipality
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Aut/o3 s* o t4* otgg*+ 'o'*t6 by a public o7cer at a public place in the municipality where the mortgagor resides" or where the property is situated
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=he o7cer ma)ing the sale shall" /t4/3 >0-+6s t4**t*" ma)e in /t/3g *tu3 o 4/s +o/3gs 3+ 8* t4* s* /3 t4* o<* o t4* *g/st* o +**+s 4** t4* otgg* /s *o+*+" and the register of deeds shall record the same =he return shall particularly describe the articles sold" and state the amount received for each article" and shall operate as a discharge of the lien thereon created by the mortgage
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=he proceeds of the sale shall be applied in the following order, a1 b1 c1 d1
"osts 3+ *'*3s*s of )eeping the sale3 ;ayment of the +*3+ o o/gt/o3 s*u*+ 6 su4 otgg* 3 :esidue shall be paid to persons holding subseuent mortgages in their order3 Balance" if any" shall be paid to the mortgagor or persons holding him on demand
D*8/*36 u+g*3t /3 4tt* otgg*. If in an *tu+// o*osu* o 4tt* otgg* +*8/*36 */sts " an /3+*'*3+*3t /:/ t/o3 may be instituted for recovery of said de2ciency" t4* 4tt* otgg* */3g g/:*3 o36 s s*u/t6 3+ 3ot s '6*3t o +*t /3 s* o /u* o '6*3t 4Bico' Savinreal properties Only movables>personal properties may be the ob8ect of a chattel mortgage %
5odes of foreclosure, =here are two modes of foreclosure in a :E5 extra8udicial under Act No #%#(" as amended or 8udicial under :ule !. of the :ules of Court In a C5" only extra8udicial foreclosure under *ec %- of Act No %($. is now available
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On redemption, =here is NO right of redemption in C5 In :E5" there is right of redemption in case of extra8udicial foreclosure" and when the mortgagee is a ban) or ban)ing institution in case of 8udicial foreclosure In C5" the purchaser at an auction sale becomes the owner of the property
