Real MORTGAGE

Aguilar. Alinea. Cabeza. Pineda. Pua

WHAT IS A MORTGAGE?
A real estate mortgage is a contract whereby the d
ebtor secures to the creditor the fulfillment of a princi
pal obligation, specially subjecting to such security im
movable property or real rights over immovable prope
rty in case the principal obligation is not complied wit
h at the time stipulated.

CHARACTERISTICS OF
MORTGAGE

Real
Accessory
Subsidiary
Unilateral

WHO TAKES POSSESSION OF THE MORTGAGED PROPERT

Y?

The MORTGAGOR RETAINS POSSESSION of the

property mortgaged.
However, it is not an essential requisite of the co
ntract of mortgage that the property remains in the
possession of the mortgagor. If the mortgagor delive
rs the property to the mortgagee, it can still be a con
tract of mortgage, plus some other contract.

WHAT IS THE CONSIDERATION IN A CONTRACT OF MORT

GAGE?

Since mortgage is an accessory contract, the c

onsideration is the same as that of the principal con
tract.

WHAT ARE THE KINDS OF

A MORTGAGE MAY BE:

1.VOLUNTARY
2.LEGAL
3.EQUITABLE

MORTGAGE?

WHAT IS THE SUBJECT

MATTER OF A REAL
MORTGAGE?

Art. 2124. Only the following property may be th

e object of a
contract of mortgage:
(1) Immovables;
(2) Alienable real rights in accordance with the la
ws, imposed upon immovables.
Nevertheless, movables may be the object of a ch
attel mortgage.

CAN FUTURE PROPERTY BE

RTGAGED?

MO

GENERAL RULE:
Future property CANNOT be the object of a c
ontract of mortgage. One cannot constitute
a mortgage on any other property he might
have now and those he might acquire in the
future.

EXCEPTION:
A stipulation which says that the mortgage covers fut
ure improvements upon real property already mortga
ged is valid. This is because these future improvement
s are deemed included in the real property by accessio
n; they are not separate from the real property already
subject of the mortgage.

WHAT ARE THE REQUISITES

OF A REAL MORTGAGE?

1.It must be constituted to secure a principal obli

gation.
2.The mortgagor must be the absolute owner of t
he thing mortgaged.
3.He must have free disposal of the thing or other
wise be authorized to do so.
4.When the principal obligation becomes due, th
e property mortgaged may be alienated for the p
ayment to the creditor.
5.To prejudice third persons, the mortgage must
be recorded in the Registry of Property.

If the first four requisites are present, there is already

a VALID mortgage between the parties mortgagor
and mortgagee.
But to affect third persons, there is a need to comply
with the fifth requisite: The document of mortgage m
ust be RECORDED in the Registry of Property.

LEGAL MORTGAGES
One which is in conformity of the with the rule establ
ished under the law on Form of Contracts which giv
es the contracting parties the right to compel each ot
her to observe the form required by law like the execu
tion of a document or other special forms provided th
e contract between them is valid and enforceable.

WHAT HAPPENS IF THE

AGE IS VOID?

MORTG

The principal obligation subsists. What is lost is only th

e right of the creditor to foreclose the mortgage in or
der to satisfy the principal obligation. Moreover, even
if the mortgage itself is void, the mortgage deed rema
ins as proof of the principal obligation.

EFFECTS OF
MORTGAGE

EFFECTS OF MORTGAGE

It creates a REAL RIGHT

It creates an ENCUMBRANCE

Extent of Mortgage

1.Natural accessions
2.Growing fruits
3. Rents or income not yet received when t
he obligation becomes due
4. Amount of Indemnity granted or owing
to the proprietor from:
The insurers of the property manage
d; or
Expropriation for public use (Art. 21
27)

Exceptions:

1.Express stipulation excluding them;

2. There is evidence sufficiently overthrowing the pr
esumption that the mortgagor owns the mortgage
property

Art. 2128 The mortgage credit

may be alienated or assigned to
third person, in whole or in par
t, with the formalities required
by law.

Alienation or Assignment of
Mortgage
1. Said assignment is valid and assignee may forecl
ose the mortgage in case of nonpayment of the
mortgage indebtedness.
2. An assignee cannot acquire greater rights than t
hose pertaining to an assignor

Rights of the Mortgagor

To alienate the mortgaged property but the mort
gage shall remain attached to the property. (Art.
2130)
To take a second or subsequent mortgage on a p
roperty already mortgaged.

Will this provision apply to all third person in

possession of the property?
NO. It only applies to those in possession o
f the mortgaged property
in the concept of owner.

Mortgage credit is a real right, which follows the pr

operty wherever it goes, even if its ownership chan
ges.
However, before the creditor can collect from the t
hird person, he must have made a demand on the
debtor, and the latter should have failed to pay.

Article 2131
THE FORM, EXTENT AND CONSEQUENCE OF A MOR
TGAGE, BOTH AS TO ITS CONSTITUTION, MODIFICATI
ON AND EXTINGUISHMENT, AND AS TO THE OTHER
MATTERS NOT INCLUDED IN THIS CHAPTER, SHALL B
E GOVERNED BY THE PROVISIONS OF THE MORTGA
GE LAW AND OF THE LAND REGISTRATION LAW.

Laws Governing Mortgage

Land Registration Law (Act No. 496 as amended)
Revised Administrative Code - Section 194 as amen
ded by Act 3344
Mortgage Law

Foreclosure
DEFINITION - the remedy available to the mortgage
e by which he subjects the mortgaged property to t
he satisfaction of the obligation to secure which the
mortgage was given where the mortgagor is in def
ault in the payment of the obligation

Foreclosure is a necessary consequence of non-pay

ment of a mortgage indebtedness.
RULE:
Mortgage can be foreclosed only when the debt re
mains unpaid at the time it is due.
A demand before foreclosure is essential.

Validity and Effect of Foreclosure

Kinds
of Foreclosure
JUDICIAL - an ordinary action for foreclosure under
Rule 68 of the ROC.

A proceeding for judicial foreclosure of mortgage is an action

quasi in rem
It is a result or incident of failure to pay indebtedness
It survives the death of the mortgagor

Kinds of Foreclosure
EXTRAJUDICIAL - when mortgage is given a special p
ower of attorney to sell the mortgaged property by pu
blic auction under Act No. 3135

Conferred for the mortgagees pr

otection
Initiated by filing a petition within
the office of the sheriff
It is an ancillary stipulation
It is a prerogative of the mortgage
e

JUDICIAL

EXTRAJUDICIAL

AS TO COURT
INTERVENTION

There is court intervention

No court intervention

AS TO THE RIGHT TO
APPEAL

Decisions are appealable

Decisions are
immediately executory

AS TO THE CUTTING
OFF OF RIGHTS

Order of the court cuts off all

rights of the parties
impleaded

Does not cutt off the

rights of the parties
involved

AS TO THE RIGHT OF
REDEMPTION

There is equity of redemption

There is a right of
redemption

AS TO THE PERIOD OF
REDEMPTION

Starts from the finality of

judgement until order of
confirmation

Starts from the date of

registration of the
certificate of sale

AS TO THE NECESSITY
OF A SPECIAL POWER
OF ATTORNEY

No need

SPA in favor of
mortgagee is needed

GOVERNING RULE

Rule 68 of ROC

Article 3135

Can you mortgage to a foreign

er?
Foreigners are only prohibited from owning real pro
perty in the Philippines, not from being mortgagee
s. The situation is governed by RA 133.
HOWEVER, if the mortgagor defaults, the foreigner
cannot foreclose extra-judicially. He can only forecl
ose judicially. Moreover, he cannot bid or take part
in any sale of the real property in case of foreclosur
e.

* As to aliens becoming mortgagees, the pertinent l

aw is RA 4882

Check if there is a stipulation that it is

a private sale or not
If there is, it will be
sold as a private
sale.

If theres none, there will be either

judicial or extra-judicial foreclosure
Is the mortgagee a
foreigner?

If yes, it is automatically a
JUDICIAL FORECLOSURE

If not, check if the mortgagee has special power

of attorney to foreclose it extra-judicially under
ACT 3135

If theres no stipulation,
JUDICIAL FORECLOSURE
will apply under Rule 68 of
ROC

If he/she has, EXTRA-JUDICIAL

FORECLOSURE PROCEEDINGS will apply

Who is foreclosing?
BANK- it is subject to Section
47 of General Banking Act

Natural or Juridical Person Governed by Act 3135

PROCEDURE OF JUDICIAL F
ORECLOSURE

STEP 1: FILE A PETITION

FOR JUDICIAL
FORECLOSURE

STEP 2: TRIAL,
JUDGMENT, PAYMENT
WITHIN 90-120 DAYS
FROM FINALITY

STEP 3: EQUITY
REDEMPTION PERIOD

STEP 4: PUBLIC
AUCTION IF MORTGAGOR
DEFAULTS

STEP 5: JUDICIAL
CONFIRMATION

STEP 6: DISPOSAL OF
PROCEEDS OF SALE OF
THE PROPERTY

Why you should stay away from judicial foreclosure?

Judicial foreclosure is costly since the parties would
need to hire lawyers.
The parties have little control over the sale because
there is court intervention.
More susceptible to stalling/dilatory tactics by the m
ortgagor since he can file all sorts of motions in cou
rt to prevent the sale.

EXTRAJUDICIAL FORECLOS
URE
ACT NO. 3135,
As amended by Act No. 4118
&
A.M. No. 99-10-05-0

When is extrajudicial foreclos

ure proper?
When a sale is made under a special power inserted or attached to any real estate mortgage hereafter made as security for the payment of money or the fulfillment of any other obligation xxx

(Section 1, Act No. 3135, as amended)

Where should the sale be mad

e?
Said sale cannot be made legally outside of the province in which the property sold is situated; and in case the place within said province in which the sale is to be made is the subject of stipulation, suc
h sale shall be made in said place in the municipal building of the municipality in which the property or part thereof is situated.

(Section 2, Act No. 3135, as amended)

PROCEDURE
1. File a complaint with the Executive Judge.

2. Notice of the Sale.

3. Public Auction.
4. Possession of the Property.
5. Redemption.

Step 1. File a complaint with t

he Executive Judge.
(1) All applications for extrajudicial foreclosure of mortgage whether under the direction of the sheriff or a notary public, pursuant to Act 3135, as amended by Act 4118, and Act 1508, as amended, sh
all be filed with the Executive Judge, through the Clerk of Court who is also the Ex-Officio Sheriff.

(A.M. No. 99-10-05-0, as amended)

Step 2. Notice of the Sale

Notice shall be given by posting notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated and if such property is worth more
than Four hundred pesos, such notice shall also be published once a week for at least three consecutive weeks in a newspaper of general circulation in the municipality or city.
(Section 3, Act No. 3135, as amended)

Step 2. Notice of the Sale

What it should contain:
1. Description of the property to be sold;
2. Date, time and place of the sale; and
3. The principal obligation to be satisfied by the sale of the mortgaged property.
(Section 3, Act No. 3135, as amended)

Step 3. Public Auction

The sale shall be made at public auction, between the hours of nine in the morning and four in the afternoon, and shall be under the direction of the sheriff of the province, the justice or auxiliary justice of
the peace of the municipality in which such sale has to be made, or of a notary public of said municipality, who shall be entitled to collect a fee of Five pesos for each day of actual work performed, in additi
on to his expenses.
(Section 4, Act No. 3135, as amended)

Step 3. Public Auction

Who may bid?

At any sale, the creditor, trustee, or other person, authorized to act for the creditor, may participate in the bidding, and purchase under the same conditions as any other bidder, UNLESS the contrary has been expressly provided in th
e mortgage or trust deed under which the sale is made.
(Section 5, Act No. 3135, as amended)

Step 3. Public Auction

Can the parties stipulate the minimum price at which the property shall be sold?

No, because the property must be sold to the highest bidder.

Step 4. Possession of the Pro

perty
In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance (now RTC) of the province or place where the property or any part thereof is sit
uated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months xxx
(Section 7, Act No. 3135, as amended)

Step 4. Possession of the Pro

perty
xxx and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute sa
id order immediately.
(Section 7, Act No. 3135, as amended)

Step 4. Possession of the Pro

perty
EXCEPTION:
If the party foreclosing is a BANK.
(Section 47, General Banking Law)

Step 4. Possession of the Pro

perty
The debtor may, in the proceedings in which possession was requested, but not later than thirty (30) days after the purchaser was given possession, petition that the sale be set aside
and the writ of possession cancelled xxx
(Section 8, Act No. 3135, as amended)

Step 5. Redemption
xxx the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed o
f trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale xxx
(Section 6, Act No. 3135, as amended)

Step 5. Redemption
EXCEPTION:
If the mortgagee foreclosing is a BANK, and the mortgagor is a JURIDICAL PERSON.

(Section 6, Act No. 3135, as amended)

Step 5. Redemption
Right of Redemption

Equity of Redemption

The right of the mortgagor to

redeem the mortgaged
property within a certain
period (in most cases,
within 1 year) AFTER the
sale of the property in
satisfaction of the mortgage
debt.

The right of the mortgagor in

a judicial foreclosure to pay
the amount of his obligation
BEFORE the confirmation of
the sale of the mortgaged
property.

It is available to the
mortgagor only when the
mortgage is foreclosed
extrajudicially.
It is not available in judicial
foreclosures, except when

Step 5. Redemption
EXAMPLE:
M, as mortgagor, mortgaged a house and lot to A. Later, M also mortgaged it to B.
A foreclosed the mortgage and bought the house and lot at the auction.

Q: What is the right of B?

Step 5. Redemption
A: In this case, upon the sale of the property to A, the only right that B as second mortgagee has is the right to redeem. He may exercise the right by p
aying off the debt secured by the first mortgage. Bs exercise of mortgagors equity of redemption is equivalent to foreclosure of the junior mortgage.

Step 5. Redemption
How much should the one exercising the right of redemption pay?

PURCHASE PRICE OF THE PROPERTY

+
INTEREST OF 1% / month
(Rule 39, Section 28 of the Rules of Court)

Step 5. Redemption
How much should the one exercising the right of redemption pay?

Exception: If the mortgagee foreclosing is a BANK.

AMOUNT OF THE ORIGINAL OBLIGATION
+
INTEREST AT THE ORIGINAL RATE STIPULATED IN THE CONTRACT
+
ALL COSTS & EXPENSES INCURRED BY THE BANK FROM THE SALE OF THE PROPERTY
(Section 47, General Banking Law)

Step 5. Redemption
What happens if the debtor/mortgagor fails to redeem the property within the prescribed period?

The purchaser has the absolute right to a writ of possession.

Step 5. Redemption
What is the effect of the timely exercise of the right of redemption?

He does not really recover property since he does not lose ownership until after the expiration of the redemption period.
HE MERELY FREES IT OF THE ENCUMBRANCE CREATED BY THE MORTGAGE.

Step 5. Redemption
What happens if the mortgagor sells the property to a third person within the redemption period?

The third person, in buying the property, is actually buying not the property itself but the right to redeem to redeem the property and the right to possess it within the redem
ption period.

Step 5. Redemption
PROBLEM:

X mortgaged property to a Bank to secure a P1M loan at 17% interest. The mortgage was foreclosed. At the sale, the property was sold to the Bank as the highest bidder for P800K. The bank then sold the property to Y for P1.5M.

Q: If X wants to redeem the property, to whom should he pay and how much?

Step 5. Redemption
A: X should pay to the Bank. He should pay only P1M - the amount of the principal obligation plus interest at 17%, plus costs.
Y would then have a right to seek reimbursement from the Bank.

Equity
Kinds
ofof Redemption
Redemption

Judicial foreclosure
Right of Redemption

Extrajudicial foreclosure

Exercised before confirmation of sale

Acquired by second mortgagee
Taking physical possession not necessary for levy
Levy by means of a writ of execution (Rule 39 of R
OC)
Remedy of mortgagee to obtain possession
Extinguish the mortgage and retain ownership by
paying the secured debt within a prescribed period
Judicial Foreclosure

Equity of Redemption

PERIOD OF REDEMPTION

It is exercised before confirmati

on of the sale by the court.

n of foreclosure of sale
Subsists for one year from registration of certificate s
ale
Exercised by offer with tender (an action to repurcha
se has been construed as such offer)
Extrajudicial Foreclosure
After the lapse of redemption period, purchaser is en
titled to consolidate title by Affidavit of Consolidation
at Register of Deeds and obtain possession by Writ of
Possession or other action

Right of Redemption

NATURE OF MORTGAGORS RIGH

T OFAbsolute
REDEMPTION
Privilege
Statutory Privilege

REQUISITES OF A VALID RIGHT

OF REDEMPTION
Must be made within one year from the date of regis
tration of the certificate of sale not from the date of t
he foreclosure sale;
Payment of the purchase price of the property plus
1% interest per month together with the taxes thereo
n, if any, paid by the purchaser and amount of his pri
or lien, if any, with the same rate of interest compute
d from the date of registration of the sale, up to the ti
me of redemption;

Written notice of the redemption must be served o

n the officer who made the sale and a duplicate file
d with the proper Register of Deeds; and
The mortgagor or his assignee is required to tender
payment within the prescribed period.

1.Natural Person- one (1) year from the RE

GISTRATION of SALE with Register of Deed
s
2.Juridical Person- one (1) year from the RE
GISTRATION of SALE with Register of Deed
s
3.Juridical Person, when mortgagee is a BA
NK- three (3) months after foreclosure or b
efore registration of certificate of foreclosu
re, whichever is earlier

PERIOD OF REDEMPTION

 Restores the mortgagor a new title freed

of the encumbrance of the lien foreclose
d.
Implied admission of the regularity of the
foreclosure sale and estops the mortgag
or from later impugning its validity.

Right of Redemption

Effect when not exercised

Purchaser becomes the absolute owner o
f the property

Allowing
redemption after the lapse of the sta
Take
NOTE:

tutory period when the buyer at the foreclosu

re sale does not object but even consents to
the redemption, will uphold the policy of the l
aw which is to aid rather than defeat the right
of redemption.

Persons
Entitled
to
Exercise
Rig
Mortgagor
or one in privity of title
ht of
Redemption
with
mortgagor
Successor-in-interest
Under Rules Of Court
Judgment debtor or successor-in-interest
Creditor who has lien over the property

Right of redemption
Exercised BEFORE the CONFIRMATION OF SALE
Judicial

Extra-Judicial
Exercised within one year from
the date of the sale, reckoned from
date of execution of the certificate of sale since it is only from that d
ate
that
the
sale
takes
effect
as
a
conveyance.
Exception: If the mortgagee foreclosing is a BANK and the mortgago
r is a JURIDICAL PERSON, the juridical person shall have the right to r
edeem the property BEFORE the registration of the certificate of sale
but NOT EXCEEDING 90 DAYS FROM THE DATE OF THE FORECLOSU
RE.

Registration of Transfer of Right of

Redemption
Process:
After the auction, a certificate of sale is issued by the s
heriff. That certificate will be registered in Registry of
Deeds. After registration, wait for 12 months. After th
e lapse of 12 months, a confirmation of sale is issued.
Thereafter, the Registry of Deeds will now cancel the t
itle and a new title in the name of the highest bidder
will be issued.

WHAT IF THE MORTGAGED PROPERTY

WASTransfer
SOLD TO
THIRD
theAright
to PARTY?
redeem the pro
perty and the right to possess, use an
d enjoy the same during the said per
iod.

WHAT IF THE SALE WAS NOT REGISTERED AND MAD

E WITHOUT
THE CONSENT
OF THE
MORTGAGEE?
The buyer
was not
validly
substit

uted as debtor thus, he had no r

ight to redeem.

WHAT IF THE BANK FORECLOSED THE MORTGAGE

D PROPERTY
AND
SUBSEQUENTLY,
OF REDE
The bank
has
no right overRIGHT
the prop
MPTION WAS EXERCISED?

erty because by exercising the right o

f redemption, the property reverts to
the previous owner or the person wh
o exercised it.

Take NOTE:
AFTER FORECLOSURE AND SALE OF THE MORTGAGE
D PROPERTY, THE MORTGAGE INDEBTEDNESS IS EXT
INGUISHED EXCEPT TO THE EXTENT THAT THERE IS A
DEFICIENCY. WHAT REMAINS IS THE RIGHT VESTED B
Y LAW IN FAVOR OF THE MORTGAGOR TO REDEEM T
HE PROPERTY WITHIN THE PRESCRIBED PERIOD.

Rights and obligations

Mortgagee in
Possession

Vendee

Against Third
Persons

1. Similar to those
of an antichresis
creditor.

1. Right to
possession.

1. Claimants with
interest adverse to
mortgagor.

2. Without right to
reimbursement for
useful expenses.

2. Right to writ of
possession.

2. Successor-ininterest of
mortgagor

3. Right to aid of
court.

3. Agricultural
lessees.

What are the rights and obligation

s of 1.Similar
a
to those of an antichresis creditor (Art. 21
32).
mortgagee
in possession?
2.Without right to reimbursement for useful expens
es.

Vendees right to possession

of mortgaged property sold.
1.Before the expiration date of the redemption perio
d. The vendees right to possession of the property sol
d is contingent upon the failure of the mortgagor to r
edeem.
2.After the redemption period is terminated. The mor
tgagor is divested of his rights to the mortgaged prop
erty sold, and the vendees right of possession of the
property becomes final.

A writ of possession is generally understood to be an

order by a court
whereby the sheriff is commanded to place in possessi
on of
real or personal property the person entitled thereto x
xx either
within the one-year redemption period upon the filing
of a bond or
after the lapse of the redemption period without nee
d of a bond, or
a separate and independent action.

What is a writ of possession?

Nature of a writ of posses

1.The issuance of the writ to a purchaser in an extra
sion
judicial foreclosure is merely a ministerial function.
2.An injunction to prohibit the issuance of the writ i
s entirely out of place.

Right before lapse of rede

Section 7 of Act No. 3135 (in cases of extrajudicial f
oreclosure sales
of real estate mortgages) allows th
mption
period
e purchaser to take possession of the foreclosed pr
operty during the period of redemption upon:
1.Filing of an ex parte application; and
2.Approval of a bond.

Right after lapse of redemption

period
The purchaser at public auction has only to file a pe
tition for issuance of the writ pursuant to Section 3
3, Rule 39 of the Rules of Court; without need of a
bond.

1.It is ex-parte and summary in nature and a non-liti

gious proceeding authorized in an extrajudicial fore
closure of mortgage pursuant to Act No. 3135, as a
mended.
2.It is filed with the office of the sheriff of the place
where the sale is to be made.
3.It is brought for the benefit of one party only.
4.There is no necessity of giving notice to the mortg
agor.

What is the nature of a petition /

Motion for issuance of writ?

What is the nature of order

order is simply an incident in the transfer of ti
for 1.The
the
issuance of the writ?
tle in the name of the purchaser.
2.The writ is not a judgment on the merits that can
amount to res judicata.

Right of purchaser to aid of

The purchaser of the property sold is entitled to the
court
aid of the court in effecting its delivery.
Upon proper application and proof of title, the issu
ance of the writ of possession becomes a ministerial
duty of the court.

May the implementation of the

writNO.be
suspended?
Where a writ of possession has been issued by
a court, it is the inescapable duty of the sheriff to e
nforce the writ.

What1.Where
are the
instances
when
a lease
writthat:
of possession is
mortgaged
property
is under
a. Had been previously registered in the Registry of Property; or
not available?
b. Despite non-registration, the mortgagee had prior knowledge
of the existence and duration of the lease.
2.Where mortgagor refuses to surrender property sold.
a. Remedy of the purchaser: To file an ordinary action for the rec
overy of possession.
3.Where third party is in actual possession.
a. Remedy: To bring the appropriate judicial action, i.e., ejectme
nt suit or reivindicatory action

What is the nature of a petitio

A petition
for nullification or
annulment
of foreclos
n for
annulment
of
foreclosure
ure proceedings contests the assumed right of own
ership of the buyer in a foreclosure sale and puts in
proceedings?
issue such presumed right of ownership.
Exception: Active Wood Products, Co., Inc. v Court
of Appeals

Active Wood Products, Co., Inc. v.

Court of Appeals
It is true that a petition for a writ of possession is ma
de ex-parte to facilitate proceedings, being founded o
n a presumed right of ownership. Be that as it may, w
hen this presumed right of ownership is contested an
d made the basis of another action, then the proceedi
ngs for a writ of possession would also become seemi
ngly groundless. The entire case must be litigated and
if need be as in the case at bar, must be consolidated
with a related case so as to thresh out thoroughly all r
elated issues.

The purchaser at the auction sale is entitled to a wri

t of possession pending the lapse of the redemptio
n period upon petition in the form of an ex parte m
otion and upon the posting of a bond.
Remedy of mortgagor. To question the validity of th
e sale (Section 8, Act No. 3135).
Grounds:
1. That the mortgage was not vi
olated; and
2. That the sale was not made in accor
dance with the provisions of Act No.
3135.

Issuance of writ before lapse of

redemption period.

Where rights of third persons invol

ved.
1. Claimants with interest adverse to mortgagor. The ministerial
obligation of the court to issue an ex parte writ of possession in
favor of the purchaser in a foreclosure sale of a mortgaged pro
perty ceases to be ministerial once it appears that there is a thir
d party in actual possession of the foreclosed property who is cl
aiming a right adverse to that of the debtor-mortgagor xxx
Elements:
1. The property must be possessed by a third
party; and
2. Such possession must be adverse to the de
btor-mortgagor.
Remedies of a third-party claimant:
1. Terceria against the sheriff or officer effecti
ng the writ; or
2. An independent separate action

Where
rights of third
persons
invol
2. Successor-in-interest
of mortgagor.
The purchase
absolute owner, is entitled to the possession of
ved.r,theasproperty
bought and cannot be excluded theref
rom by any one who merely claims to be a successo
r-in-interest of the mortgagor xxx UNLESS, it is adju
dged that the alleged successor has a better right t
o the property than the purchaser.

Where rights of third persons invol

ved.
Lessee of agricultural land. The agricultural lessees pr
e-emptive right to buy the land xxx as well as his right
to redeem the land, if sold to a third person without h
is knowledge xxx is statutory in character and attache
s to the particular landholding by operation of law.
(Sections 11 & 12, Code of Agrarian Reforms)

Remedy of the mortgagee: Against the mortgagee-la

ndowner.

Where rights of third persons invol

ved.
Buyer of condominium unit. Upon full payment by the
buyer, the seller is duty-bound to deliver the title of th
e unit to the buyer.
Even with a valid mortgage on the lot, the seller is still
bound to redeem said mortgage without any cost to t
he buyer apart from the balance of the purchase price
if any, and registration fees.
(Section 25, P.D. No. 957)

Remedy of the loan funder: To annul the mortgag

e foreclosure sale and the condominium certificate of
title issued in favor of the highest bidder, where the b
uyer is found to have superior right to the unit over th
e loan funders and the mortgage in favor of the latter
xxx is found to be contrary to the law (Sec. 18).

THE END