COMLAWREV_Catindig 2009 Reviewer

8/3/2019 COMLAWREV_Catindig 2009 Reviewer

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STUDY GUIDE OF THE

SPECIAL COMMERCIAL

LAWS

Prof. Tristan A. Catindig

I. BULK SALES LAWAct 3952 (1932), as amended by RA 111 (1947)

1.1. Topics

A. PurposeTo prevent te de!raud"n# o! cred"tors by te secret sa$e ord"sposa$ or mort#a#e "n bu$% o! a$$ or substant"a$$y a$$ o! mercant&sstoc% o! #oods "n bu$%

'. Types o! a$es "n 'u$%

Sec. 21) Any sa$e, trans!er, mort#a#e or ass"#nment o! a stoc% o! #oods,ares, mercand"se, prov"s"ons, or mater"a$s otherwise than inthe ordinary courseo! trade and te re#u$ar prosecut"on o! tebus"ness o! te vendor, mort#a#or, trans!eror, or ass"#nor* or2) sa$e, trans!er, mort#a#e or ass"#nment o! all, or substantiallyall, o the business or tradetereto!ore conducted by te vendor,mort#a#or, trans!eror, or ass"#nor, or3) o! a$$, or substant"a$$y a$$, o! tei!tures and e"uip#entused "n

and about te bus"ness o! te vendor, mort#a#or, trans!eror, orass"#nor, sa$$ be deemed to be a sa$e and trans!er "n bu$%, "ncontemp$at"on o! t"s Act+

. -ut"es o! Person e$$"n# "n 'u$%

Sec 3, 4, 5 and 91) -e$"ver a sorn r"tten statement o! te names and addresseso! a$$ cred"tors to om te vendor or mort#a#or may be "ndebted,"nd"cat"n# te amount o! "ndebtedness due or o"n#, or to becomedue or o"n# (ec. 3)*2) To app$y te proceeds o! te sa$e or mort#a#e prorata tocred"tors (ec. 4)*

3) At $east 1/ days be!ore sa$e0trans!er0eecut"on o! mort#a#e,ma%e deta"$ed "nventory and to preserve te same so"n# teuant"ty and, to te etent poss"b$e, te cost pr"ce to te vendor,etc. o! eac art"c$e to be "nc$uded "n te sa$e, etc. (ec. 5)*4) "ve not"ce to every cred"tor at $east 1/ days be!ore te sa$e ortrans!er (ec. 5)*5) Re#"strat"on o! te documents "n 'ureau o! Trade Re#u$at"onand onsumer Protect"on (ec. 9).

-. en a not App$"cab$e1) A$$ cred"tors #"ve r"tten a"ver (ec. 2)*2) 6ud"c"a$ sa$es (ec. )

8. onseuences o! noncomp$"ance "t dut"es

From San Beda reviewer

1. 'eteen te part"es a$"d contract2. 'eteen persons oter tan a$"d contract

te cred"tor3. As to e!!ected cred"tors o! tese$$er0mort#a#or

o"d contract

:. ;nterpretat"on o! tatuteTe $a "s pena$ "n nature and "n dero#at"on o! te r"#t to a$"enateproperty "tout restr"ct"on. Tus, "ts prov"s"ons must be str"ct$y

construed a#a"nst te tate and $"bera$$y "n !avor o! te accused.

1.$ %ase

a$e

&E'&LE ( W')* S+U TU)* 1-/0

Te ob>ect o! te sa$e ? a !oundry sop ? "s not covered by teprov"s"ons o! te 'u$% sa$es $a. at as so$d as te sop"tse$!, to#eter "t te #ood"$$ and cred"ts, eu"pment, too$s andmac"nery tereo! ("nc$ud"n# a -od#e truc%), "c are not testoc% o! mercand"se, #oods, ares, prov"s"ons or mater"a$s "n bu$%

re!erred to "n te $a. A !oundry sop manu!actures "ron or%s orprocesses or casts meta$s. ;t does not se$$ mercand"se.

II. *E)EAL B')2E2 WAE3'USE A%TAct 393 (1931), as amended by RA 237 (194)

$.1 Topics

A. Purpose1) re#u$ate te bus"ness o! rece"v"n# commod"t"es !or stora#e*2) to protect persons o may ant to ava"$ o! te serv"ces*3) to encoura#e te estab$"sment o! more areouses.

'. 'us"ness o! rece"v"n# commod"ty !or stora#e

Sec. 21) te areouseman "s ob$"#ated to return te very samecommod"ty de$"vered to "m or to pay "ts va$ue*2) te commod"ty de$"vered "s to be m"$$ed !or te oner tereo!*3) te commod"ty de$"vered "s comm"n#$ed "t te commod"tybe$on#"n# to oter persons, and te areouseman "s ob$"#ate toreturn commod"ty o! te same %"nd or to pay "ts va$ue.

. Reu"rement o! "cense

Sec. 3To ac"eve te purposes ment"oned above, any person o antsto en#a#e "n te bus"ness o! rece"v"n# commod"t"es !or stora#e "sreu"red by te Act to !"rst secure a $"cense tere!ore !rom te -T;

-. -ut"es o! 'onded areouseman1) "nsure te commod"ty rece"ved !or stora#e a#a"nst !"re (ec. @)*2) rece"ve !or stora#e any commod"ty o! te %"nd customar"$ystored by "m "n te areouse, so !ar as "s $"cense and tecapac"ty o! "s areouse "$$ perm"t, "tout ma%"n# anyd"scr"m"nat"on beteen te persons des"r"n# to ava"$ temse$ves o!

areouse !ac"$"t"es (ec. )*3) %eep a comp$ete record o! a$$ commod"t"es rece"ved by "m, o!te rece"pts "ssued tere!ore, o! te "tdraa$s, o! te $"u"dat"on,and o! a$ te rece"pts returned to and cance$$ed by "m (ec. 9)


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$.$ %ases

Rece"pt o! Pa$ay !or "$$"n#

LI45'%' ( 2IE%T' '6 %'44E%E 1-70

:AT+ Pet"t"oner and usband are oners o! a r"ce m"$$. Te

"ssue as eter o! not te enera$ 'onded areouse Act "sapp$"cab$e to er bus"ness. Pet"t"oner ar#ues tat s"nce erbus"ness "s te m"$$"n# o! pa$ay, te de$"very tereo! to er "s mere$y"nc"denta$ to suc bus"ness and does not const"tute stora#e "t"nte mean"n# o! te statute.

B8-+ Te enera$ 'onded areouse Act "s app$"cab$e. 8 2"s too c$ear to perm"t o! any eerc"se "n construct"on or semant"cs.;t does not stop at te bare use o! te ord Cstora#e,C butepress$y prov"des tat any contract or transact"on ere"n tepa$ay de$"vered "s to be m"$$ed !or and on account o! te onersa$$ be deemed "nc$uded "n te bus"ness o! rece"v"n# r"ce !orstora#e !or te purpose o! te Act. ;n oter ords, "t "s enou# tat

te pa$ay "s de$"vered, even "! on$y to ave "t m"$$ed. Te ma"n"ntent"on o! te $ama%er "s to #"ve protect"on to te oner o! tecommod"ty a#a"nst poss"b$e abuses (and e m"#t addne#$"#ence) o! te person to om te pys"ca$ contro$ o! "spropert"es "s de$"vered.

*'+ALES ( *' TI')* 1-80

:AT+ Pr"or to te "ssuance o! te $"cense to o T"on# to operateas bonded areouseman, e ad on severa$ occas"ons rece"vedpa$ay !or depos"t !rom p$a"nt"!! onDa$es, tota$"n# 3@ sac%s, !or"c e "ssued .A!ter e as $"censed as bonded areouseman,o T"on# a#a"n rece"ved var"ous de$"ver"es o! pa$ay !rom p$a"nt"!!,tota$"n# 492 sac%s, !or "c e "ssued te correspond"n# rece"pts,a$$ te #rand tota$ o! @/ sac%s, va$ued at P,@// at te rate o! P1/per sac%.


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c. A read"ness and "$$"n#ness to s"#n an ac%no$ed#ement, ente #oods are de$"vered, tat tey ave been de$"vered "! suc "sreuested by te areouseman.:. "ab"$"ty !or "sde$"very or onvers"on (ec. 1/, 171)1) ere a areouseman de$"vers te #oods to one o "s not "n!act $a!u$$y ent"t$ed to te possess"on o! tem2) Be ou$d a$so be $"ab$e !or m"sde$"very even "! e de$"vers to a

person o$d"n# a nonne#ot"ab$e rece"pt or a ne#ot"ab$e rece"pt, asprov"ded "n 8 9(b) or (c) o! te Act, "! pr"or to suc de$"very ead e"ter+a. 'een reuested, by or on bea$! o! te person $a!u$$y ent"t$ed toa r"#t o! property or possess"on "n te #oods, not to ma%e sucde$"ver* orb. Bad "n!ormat"on tat te de$"very about to be made as to onenot $a!u$$y ent"t$ed to te possess"on o! te #oods.

. R"#ts o! Bo$der o! Rece"pt over"n# oods vs. ust"!"ed "n de$"ver"n# #oods to te !o$$o"n#persons (ec. 9)+a. te person $a!u$$y ent"t$ed to te possess"on o! te #oods, or"s a#ent*b. A person o "s e"ter "mse$! ent"t$ed to de$"very by te terms o!a nonne#ot"ab$e rece"pt "ssued !or te #oods, or o as r"ttenautor"ty !rom te person so ent"t$ed e"ter "ndorsed upon te

rece"pt or r"tten upon anoter paper* orc. A person "n possess"on o! a ne#ot"ab$e rece"pt by te terms o!"c te #oods are de$"verab$e to "m or order, or to bearer, or"c as been "ndorsed to "m or "n b$an% by te person to omde$"very as prom"sed by te terms o! te rece"pt or by "s med"ateor "mmed"ate "ndorser.2) ere a ne#ot"ab$e rece"pt as been $ost or destroyed (ec. 14)a. A court o! competent >ur"sd"ct"on may order te de$"very o! te#oods upon+". sat"s!actory proo! o! suc $oss or destruct"on and"". upon te #"v"n# o! a bond "t su!!"c"ent suret"es to be approvedby te court to protect te areouseman !rom any $"ab"$"ty orepense

b. Te court may a$so "n "ts d"scret"on order te payment o! teareousemanIs reasonab$e costs and counse$ !ees.c. Te de$"very o! te #oods under an order o! te court asprov"ded "n t"s 8, sa$$ not re$"eve te areouseman !rom$"ab"$"ty to a person to om te ne#ot"ab$e rece"pt as been orsa$$ be ne#ot"ated !or va$ue "tout not"ce o! te proceed"n#s or o!te de$"very o! te #oods.3) areouseman cannot set up t"t$e "n "mse$! (ec. 1@)a. =o t"t$e or r"#t to te possess"on o! te #oods, on te part o! teareouseman sa$$ ecuse te areouseman !rom $"ab"$"ty !orre!us"n# to de$"ver te #oods accord"n# to te terms o! te rece"pt.b. 8J88PT+ suc t"t$e or r"#t "s der"ved d"rect$y or "nd"rect$y !roma trans!er made by te depos"tor at te t"me o! or subseuent to

te depos"t !or stora#e, or !rom te areousemanIs $"en,

;. omm"n#$"n# o! oods (ec. 2223)

1) A areouseman must %eep te #oods o! a depos"tor separate!rom te #oods o! oter depos"tors, or !rom te #oods o! te samedepos"tor !or "c a separate rece"pt as been "ssued.2) Rat"ona$e+ perm"t te "nspect"on and rede$"very o! te #oodsdepos"ted at a$$ t"mes3) 8J8PT+a. Te #oods are !un#"b$e, A=-

b. Te comm"n#$"n# "s autor"Ded by a#reement or by custom.

6.


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a. a$$ be $"ab$e severa$$y to eac depos"tor !or te care andrede$"very o! te depos"tor&s sare o! te mass o! comm"n#$ed#oods to te same etent and under te same c"rcumstances as "!te #oods ad been %ept separate7) :or "ssu"n# rece"pts !or #oods not rece"ved (ec. 5/)a. a$$ be #u"$ty o! a cr"me "! e "ssues a rece"pt !or #oods tatave not actua$$y been rece"ved by "m or are not under "s actua$

contro$ at te t"me o! te "ssuance o! te rece"pt) :or "ssu"n# rece"pts conta"n"n# !a$se statements (ec. 51)a. a$$ be #u"$ty o! a cr"me "! e !raudu$ent$y "ssues a rece"pt !or#oods %no"n# tat "t conta"ns any !a$se statement9) :or "ssu"n# dup$"cate rece"pts not so mar%ed (ec. 52)a. u"$ty o! cr"me "! "ssues a dup$"cate or add"t"ona$ ne#ot"ab$erece"pt !or #oods %no"n# tat a !ormer ne#ot"ab$e rece"pt !or tesame #oods or any part o! tem "s outstand"n# and uncance$$ed,"tout p$a"n$y p$ac"n# upon te !ace o! te rece"pt te ordGdup$"cateHb. 8J8PT+ "n te case o! a $ost or destroyed rece"pt a!terproceed"n#s as prov"ded !or "n ec. 141/) :or "ssu"n# rece"pts !or te areouseman&s #oods "c do

not state tat !act (ec. 53)a. u"$ty o! a cr"me "! e "ssues a ne#ot"ab$e rece"pt !or oodsdepos"ted "t or e$d by "m o! "c e %nos tat e "s teoner, so$e$y or >o"nt$y or "n common "t oters, "! e !a"$s to statesuc oners"p "n te rece"pt11) :or de$"very o! #oods "tout obta"n"n# ne#ot"ab$e rece"pt (sec.54)a. u"$ty o! a cr"me "! e de$"vers #ods our o! "s possess"on%no"n# tat a ne#ot"ab$e rece"pt "s oustand"n# and cance$$edb. 8J8PT+". oods ave been $a!u$$y so$d to sat"s!y a areouseman&s $"en."". oods ave been $a!u$$y so$d or d"sposed o! because o! te"rper"sab$e or aDardous nature.

""". ;n te case o! $ost or destroyed rece"pt a!ter proceed"n#s (ec.14)

F. areouseman&s "en (ec. 27, 2, 29, and 31)1) -e!"n"t"ona. A areouseman as a $"en on te #oods depos"ted "t "m oron te proceeds tereo! "n te "s ands !or a$$ $a!u$ car#es !orstora#e and preservat"on o! te #oods, money advanced by "m "nre$at"on to suc #oods suc as te epenses o! transportat"on or$abor, etc.2) A#a"nst at propertya. A$$ #oods be$on#"n# to te person $"ab$e !or te car#esb. A$$ #oods be$on#"n# to oters depos"ted by te person $"ab$e !or

te car#es o as been entrusted "t te possess"on o! te#oods and cou$d ave va$"d$y p$ed#ed te same3) ose "ena. areouseman may $ose $"en by+". surrender"n# te possess"on o! te #oods because "t "spossessory "n nature"". re!us"n# to de$"ver te #oods en a demand "s made "t "ce "s bound to comp$y4) 8!!ect o! sa$e to sat"s!y $"ena. Te areouseman sa$$ not, a!ter te sa$e, be $"ab$e !or !a"$ureto de$"ver te #oods to te depos"tor or oner o! te #oods or tote o$der o! te rece"pt

9.$ %ase

&)B ( 5U2*E BE)IT' %. SE, 5. 1--70

:AT+ P=' !"$ed !or attacment o! severa$ uedans o! su#ar "nte possess"on o! =oa&s Ar% u#ar re!"nery. Te su#ar assecur"ty !or $oans o! P='&s c$"ents "c tey !a"$ed to pay. =oa&sAr% c$a"med tat tey ere te oners o! te su#ar.

B8-+ "$e te P=' "s ent"t$ed to te stoc%s o! su#ar as teendorsee o! te uedans, de$"very to "t sa$$ be e!!ected on$y upon

payment o! te stora#e !ees. ;mperat"ve "s te r"#t o! teareouseman to demand payment o! "s $"en at t"s >uncture,because, "n accordance "t 8 29 o! te areouse Rece"ptsa, te areouseman $oses "s $"en upon #oods by surrender"n#possess"on tereo!. ;n oter ords, te $"en may be $ost ere teareouseman surrenders te possess"on o! te #oods "toutreu"r"n# payment o! "s $"en, because a areouseman&s $"en "spossessory "n nature.

8 14. ost or destroyed rece"pts. M ere a ne#ot"ab$erece"pt as been $ost or destroyed, a court o! competent>ur"sd"ct"on may order te de$"very o! te #oods upon sat"s!actoryproo! o! suc $oss or destruct"on and upon te #"v"n# o! a bond "t

su!!"c"ent suret"es to be approved by te court to protect teareouseman !rom any $"ab"$"ty or epense, "c e or anyperson "n>ured by suc de$"very may "ncur by reason o! te or"#"na$rece"pt rema"n"n# outstand"n#. Te court may a$so "n "ts d"scret"onorder te payment o! te areousemanIs reasonab$e costs andcounse$ !ees.

Te de$"very o! te #oods under an order o! te court as prov"ded"n t"s 8, sa$$ not re$"eve te areouseman !rom $"ab"$"ty to aperson to om te ne#ot"ab$e rece"pt as been or sa$$ bene#ot"ated !or va$ue "tout not"ce o! te proceed"n#s or o! tede$"very o! te #oods.

8 3@. 8!!ect o! sa$e. M A!ter #oods ave been $a!u$$y so$d tosat"s!y a areousemanIs $"en, or ave been $a!u$$y so$d ord"sposed o! because o! te"r per"sab$e or aDardous nature, teareouseman sa$$ not terea!ter be $"ab$e !or !a"$ure to de$"verte #oods to te depos"tor or oner o! te #oods or to a o$der o!te rece"pt #"ven !or te #oods en tey ere depos"ted, even "!suc rece"pt be ne#ot"ab$e.

I(. %3ATTEL 4'T*A*E LAWAct 15/ (19/@), "n re$at"on to Art"c$es 144, 145, 214/and 214/ "v"$ ode

Act 1508Sec. 3atte$ mort#a#e de!"ned. M A catte$ mort#a#e "s acond"t"ona$ sa$e o! persona$ property as secur"ty !or te payment o!a debt, or te per!ormance o! some oter ob$"#at"on spec"!"edtere"n, te cond"t"on be"n# tat te sa$e sa$$ be vo"d upon tese$$er pay"n# to te purcaser a sum o! money or do"n# some oteract named. ;! te cond"t"on "s per!ormed accord"n# to "ts terms temort#a#e and sa$e "mmed"ate$y become vo"d, and te mort#a#ee"s tereby d"vested o! "s t"t$e.

Sec 4a$"d"ty. M A catte$ mort#a#e sa$$ not be va$"d a#a"nst any

person ecept te mort#a#or, "s eecutors or adm"n"strators,un$ess te possess"on o! te property "s de$"vered to and reta"nedby te mort#a#ee or un$ess te mort#a#e "s recorded "n te o!!"ceo! te re#"ster o! deeds o! te prov"nce "n "c te mort#a#orres"des at te t"me o! ma%"n# te same, or, "! e res"des "tout te


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P"$"pp"ne ;s$ands, "n te prov"nce "n "c te property "s s"tuated+Prov"ded, oever, Tat "! te property "s s"tuated "n a d"!!erentprov"nce !rom tat "n "c te mort#a#or res"des, te mort#a#esa$$ be recorded "n te o!!"ce o! te re#"ster o! deeds o! bot teprov"nce "n "c te mort#a#or res"des and tat "n "c teproperty "s s"tuated, and !or te purposes o! t"s Act te c"ty o!an"$a sa$$ be deemed to be a prov"nce.

Sec 5 :orm. M A catte$ mort#a#e sa$$ be deemed to besu!!"c"ent en made substant"a$$y "n accordance "t te !o$$o"n#!orm, and sa$$ be s"#ned by te person or persons eecut"n# tesame, "n te presence o! to "tnesses, o sa$$ s"#n temort#a#e as "tnesses to te eecut"on tereo!, and eacmort#a#or and mort#a#ee, or, "n te absence o! te mort#a#ee,"s a#ent or attorney, sa$$ ma%e and subscr"be an a!!"dav"t "nsubstance as ere"na!ter set !ort, "c a!!"dav"t, s"#ned by tepart"es to te mort#a#e as above stated, and te cert"!"cate o! teoat s"#ned by te autor"ty adm"n"ster"n# te same, sa$$ beappended to suc mort#a#e and recorded tere"t.

:


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mort#a#e "n te manner prov"ded by $a, te person ent"t$ed toredeem may recover o! te person ose duty "t "s to d"scar#ete same tenty pesos !or "s ne#$ect and a$$ dama#es occas"onedtereby "n an act"on "n any court av"n# >ur"sd"ct"on o! te sub>ectmatter tereo!.

Sec. 13en te cond"t"on o! a catte$ mort#a#e "s bro%en, a

mort#a#or or person o$d"n# a subseuent mort#a#e, or asubseuent attac"n# cred"tor may redeem te same by pay"n# orde$"ver"n# to te mort#a#ee te amount due on suc mort#a#e andte reasonab$e costs and epenses "ncurred by suc breac o!cond"t"on be!ore te sa$e tereo!. An attac"n# cred"tor o soredeems sa$$ be subro#ated to te r"#ts o! te mort#a#ee andent"t$ed to !orec$ose te mort#a#e "n te same manner tat temort#a#ee cou$d !orec$ose "t by te terms o! t"s Act.

Sec. 14a$e o! property at pub$"c auct"on*

tereo!, to be so$d at pub$"c auct"on by a pub$"c o!!"cer at a pub$"cp$ace "n te mun"c"pa$"ty ere te mort#a#or res"des, or erete property "s s"tuated, prov"ded at $east ten daysI not"ce o! tet"me, p$ace, and purpose o! suc sa$e as been posted at to ormore pub$"c p$aces "n suc mun"c"pa$"ty, and te mort#a#ee, "seecutor, adm"n"strator, or ass"#n, sa$$ not"!y te mort#a#or orperson o$d"n# under "m and te persons o$d"n# subseuentmort#a#es o! te t"me and p$ace o! sa$e, e"ter by not"ce "n r"t"n#d"rected to "m or $e!t at "s abode, "! "t"n te mun"c"pa$"ty, orsent by ma"$ "! e does not res"de "n suc mun"c"pa$"ty, at $east tendays prev"ous to te sa$e.

Te o!!"cer ma%"n# te sa$e sa$$, "t"n t"rty days terea!ter,

ma%e "n r"t"n# a return o! "s do"n#s and !"$e te same "n te o!!"ceo! te re#"ster o! deeds ere te mort#a#e "s recorded, and tere#"ster o! deeds sa$$ record te same. Te !ees o! te o!!"cer !orse$$"n# te property sa$$ be te same as "n te case o! sa$e oneecut"on as prov"ded "n Act =umbered


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:uture or a!teracu"red property can be sub>ect o! a catte$mort#a#e "!+1) Te propert"es mort#a#ed are+a. Per"sab$e* orb. ub>ect to "nev"tab$e ear and tear* orc. ;ntended to be so$d or used but "t te understand"n# tat teyou$d be rep$aced "t s"m"$ar propert"es to be terea!ter acu"red

by te mort#a#or2) ;n te case o! oter propert"es, "! te "nc$us"on o! suc !uture ora!teracu"red propert"es "s epress$y st"pu$ated and a supp$ementto te mort#a#e spec"!"ca$$y $"st"n# and descr"b"n# suc property "seecuted and re#"stered "n te catte$ mort#a#e re#"ster."%e or subst"tuted property cannot be deemed covered by acatte$ mort#a#e, un$ess te property "s descr"bed "n a supp$ementto te mort#a#e.

A!ter;ncurred

Art. 13A!ter a !"rst mort#a#e "s eecuted, tere rema"ns "n te mort#a#ora mere r"#t o! redempt"on and on$y t"s r"#t passes to te secondmort#a#ee by v"rtue o! te second mort#a#e.

:orec$osure Procedure

Art 14* "rcu$ar =o. 72//2, -ated 6anuary 22, 2//21) 3/ days a!ter te cond"t"on o! a catte$ mort#a#e "s bro%en, temort#a#ee may cause te mort#a#ed property or any part tereo!to be so$d at pub$"c auct"on by a pub$"c o!!"cer at a pub$"c p$ace "nte mun"c"pa$"ty ere te mort#a#or res"des or ere te property"s s"tuated.2) Te app$"cat"on !or te !orec$osure o! te mort#a#e sou$d be!"$ed "t te 8ecut"ve 6ud#e trou# te $er% o! ourt.3) A!ter rece"pt o! te app$"cat"on, te $er% o! ourt sa$$, amon#oter dut"es+

a. Ra!!$e te app$"cat"on amon# te er"!!s* andb. ause te post"n# o! te not"ce o! sa$e.4) =ot"ce o! te t"me, p$ace and purpose o! suc sa$e must beposted, at $east 1/ days be!ore te date o! sa$e, at 2 or more pub$"cp$aces "n te mun"c"pa$"ty ere te mort#a#or res"des or erete property "s s"tuated.5) Te mort#a#ee sa$$ not"!y te mort#a#or and te persons

o$d"n# subseuent mort#a#es o! te t"me and p$ace o! sa$e, at$east 1/ days be!ore te sa$e, e"ter by not"ce "n r"t"n# d"rected to"m or $e!t at "s abode, "! "t"n te mun"c"pa$"ty, or sent by ma"$ "!e does not res"de "n suc mun"c"pa$"ty.@) Te o!!"cer ma%"n# te sa$e sa$$, "t"n 3/ days terea!ter,ma%e "n r"t"n# a return o! "s do"n#s and !"$e te same "n te o!!"ceo! te re#"stry o! deeds ere te mort#a#e "s recorded, and tere#"stry o! deeds sa$$ record te same. Te return sa$$part"cu$ar$y descr"be te art"c$es so$d and state te amountrece"ved !or eac art"c$e.

Redempt"onTere "s no r"#t o! redempt"on "n atte$ ort#a#e. Tere "s on$y

an 8OE;T o! R8-8PT;


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;E8+


9/144


o! anoter. Pr"vate respondent cou$d not no tere!ore, be a$$oedto "mpu#n te e!!"cacy o! te catte$ mort#a#e a!ter "t as bene!"tedtere!rom.

A!terAcu"red Property

T'ES ( LI45A&

:AT+ 6ose '. Benson eecuted "n !avor o! te respondents acatte$ mort#a#e on "s dru# store "n order to secure a $oan. ;n te"nstrument o! te catte$ mort#a#e, "t as st"pu$ated tat temort#a#or as autor"Ded to se$$ te #oods covered tereby and torep$ace tem "t oter #oods terea!ter acu"red.

Pet"t"oner attac%s te va$"d"ty o! te st"pu$at"on and "ns"sts tat ast"pu$at"on autor"D"n# te d"sposa$ and subst"tut"on o! te catte$smort#a#ed does not operate to etend te mort#a#e to a!teracu"red property, and tat suc st"pu$at"on "s "n contravent"on o!te epress prov"s"on o! te $ast para#rap o! 8 7 Act =o. 15/.

;E8+ ust and va$"d ob$"#at"on, and one not entered "nto !or te purposeo! !raud.

T"s reu"rement ma%es "t obv"ous tat te debt re!erred to "n te

$a "s a current, not an ob$"#at"on tat "s yet mere$y contemp$ated.;n te catte$ mort#a#e ere "nvo$ved, te on$y ob$"#at"on spec"!"ed"n te catte$ mort#a#e contract as te Pp3 $oan "cpet"t"oner corporat"on $ater !u$$y pa"d. 'y v"rtue o! 8 3 o! teatte$ ort#a#e a, te payment o! te ob$"#at"on automat"ca$$yrendered te catte$ mort#a#e vo"d or term"nated.

"t te !u$$ payment o! te Pp3 $oan, tere as no $on#er anycatte$ mort#a#e tat cou$d cover te ne $oans tat ereconc$uded terea!ter.

pec"!"c Per!ormance

S'UT3E) 4'T'S ( 4'S%'S' 1-710


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:AT+ Pr"vate respondent outern otors, ;nc. so$d topet"t"oner An#e$ oscoso a evro$et truc%. Epon ma%"n# a donpayment, An#e$ eecuted a prom"ssory note and a catte$mort#a#e on te truc%.

Epon te !a"$ure o! An#e$ to pay te "nsta$$ments, outern otors!"$ed a comp$a"nt a#a"nst An#e$, to recover te unpa"d ba$ance o!

te purcase pr"ce. A r"t o! attacment as "ssued by te $oercourt and te evro$et truc% and a ouse and $ot be$on#"n# toAn#e$ ere attaced by te ser"!!. Te ser"!! ten so$d te truc%at a pub$"c auct"on "n "c outern otors as te on$y b"dder.

Te tr"a$ court ten condemned An#e$ to pay outern otors tede!"c"ency.

An#e$ uest"ons t"s order o! te court and a$$e#ed tat teattacment caused to be $ev"ed on te truc% and "ts "mmed"ate sa$eat pub$"c auct"on, as tantamount to te !orec$osure o! te catte$mort#a#e on sa"d truc%.

outern otors counters and c$a"ms tat "n !"$"n# te comp$a"nt, "tcose to eact !u$!"$ment o! te ob$"#at"on (spec"!"c per!ormance)and "s tus ent"t$ed to sue !or te unpa"d ba$ance o! te purcasepr"ce.

;E8+ ud#ment rendered "n "ts !avor on te persona$ andrea$ property o! te $atter not eempt !rom eecut"on su!!"c"ent to

sat"s!y te >ud#ment.

Attacment "s mere$y an "nc"dent to an ord"nary c"v"$ act"on.Tere!ore, te mort#a#e cred"tor may recover >ud#ment on temort#a#e debt and cause an eecut"on on te mort#a#ed propertyand may cause an attacment to be "ssued and $ev"ed on sucproperty, upon be#"nn"n# "s c"v"$ act"on.

=o Recourse A#a"nst Add"t"ona$ ort#a#ed Property

10 esidential house and lot

LE(: 3E4A)'S ( &A%I6I% %'44E%IAL 1-/10

:AT+ ;n add"t"on to a catte$ mort#a#e on te motor ve"c$estat tey bou#t, te Bermanos a$so eecuted a mort#a#e on ares"dent"a$ $ot and ouse o! stron# mater"a$s.

B8-+ Te e$d tat te mort#a#e "s vo"d "nso!ar as "t "nc$uded

te ouse and $ot o! vendees. ;t sa"d tat te vendor cannot bea$$oed to "ns"st on te sa$e o! te ouse and $ot o! te vendees !orto do so ou$d be eu"va$ent to obta"n"n# a r"t o! eecut"ona#a"nst tem concern"n# oter propert"es "c are separate andd"st"nct !rom tose "c are so$d on "nsta$$ment. T"s ou$d becontrary to pub$"c po$"cy $"m"t"n# te vendor&s r"#t to !orec$ose tecatte$ mort#a#e on$y on te t"n# so$d.

$0 &arcel o land #ort=a=ed by third party

%U+ ( 6ILI&I)AS I)(EST4E)T 1-780

:AT+ P$a"nt"!! Ruperto . ruD purcased on "nsta$$ments, !rom:ar 8ast otor orporat"on, an ;suDu -"ese$ 'us, !or "cRuperto eecuted a prom"ssory note and a catte$ mort#a#e on tesame ve"c$e.

As an add"t"ona$ secur"ty, :e$"c"dad da. -e Reyes, "n te !orm o! a8ud"c"a$$y !orec$ose te rea$ estate mort#a#e const"tuted byrs. Reyes on er on $and, as add"t"ona$ secur"ty, !or tepayment o! te ba$ance o! Ruperto&s ob$"#at"on, st"$$ rema"n"n#unpa"d

B8-+ Te remed"es "n Art. 144 o! te = are a$ternat"ve, notcumu$at"ve, tat te eerc"se o! one ou$d bar te eerc"se o! teoters. Te reason !or t"s doctr"ne as to remedy te abuses

comm"tted "n connect"on "t te !orec$osure o! catte$ mort#a#es.To susta"n :"$"p"nas& ar#ument "s to over$oo% te !act tat "! te#uarantor sou$d be compe$$ed to pay te ba$ance o! te purcasepr"ce, te #uarantor "$$ "n turn be ent"t$ed to recover at se as


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pa"d !rom te debtor vendee* so u$t"mate$y, "t "$$ be te vendeeo "$$ be made to bear te payment o! te ba$ance o! te pr"ce,desp"te te ear$"er !orec$osure o! te catte$ mort#a#e #"ven by"m. Tus, te protect"on #"ven by Art. 144 ou$d be "nd"rect$ysubverted, and pub$"c po$"cy overturned.

=e"ter "s tere va$"d"ty to :"$"p"nas& a$$e#at"on tat, s"nce te $a

spea%s o! Gact"onH, te restr"ct"on sou$d be con!"ned on$y to tebr"n#"n# o! >ud"c"a$ su"ts or proceed"n#s "n court.

Te ord Gact"onH "s "tout a de!"n"te or ec$us"ve mean"n#.ons"der"n# te purpose !or "c te pro"b"t"on conta"ned "n Art.144 as "ntended, te ord Gact"onH used tere"n may beconstrued as re!err"n# to any >ud"c"a$ or etra>ud"c"a$ proceed"n# byv"rtue o! "c te vendor may $a!u$$y be enab$ed to eactrecovery o! te supposed unsat"s!"ed ba$ance o! te purcase pr"ce!rom te purcaser or "s pr"vy. erta"n$y, an etra>ud"c"a$!orec$osure o! rea$ estate mort#a#e "s one suc proceed"n#.

R"#t

6ILI&I)AS I)(EST4E)T ( (ITU* 1-7-0

:AT+ 6u$"an R. "tu# eecuted and de$"vered to upreme a$es -eve$opment orp. a prom"ssory note, accompan"ed by a catte$mort#a#e to secure "s purcase o! a 4door consu$ sedan. Ten,upreme a$es ne#ot"ated and ass"#ned a$$ "ts r"#ts, t"t$e, and"nterests to te same to :"$"p"nas ;nvestment :"nance orp., teass"#nment "nd"cat"n# tat "t "s with recourse a#a"nst upremea$es.

6u$"an de!au$ted "n te payment o! 4 "nsta$$ments due "cresu$ted "n te ent"re ob$"#at"on becom"n# due and demandab$e.Pursuant to t"s, :"$"p"nas obta"ned a r"t o! rep$ev"n but t"sbecame unnecessary as 6u$"an vo$untar"$y surrendered possess"ono! te car. Te car as so$d at a pub$"c auct"on but s"nce teproceeds st"$$ $e!t a de!"c"ency, :"$"p"nas ants to o$d upremea$es $"ab$e.

upreme a$es c$a"ms tat te "trecourse prov"s"on "n teass"#nment "s v"o$at"ve o! te Recto a, "c dec$ares nu$$ andvo"d any a#reement "n contravent"on tereo!.

;E8+

S&'USES 'SAI' ( &%I LEASI)* A)2 6I)A)%E, I)%.$>>0

:AT+ pouses Rosar"o purcased an ;suDu 8$! p"c% up ut"$"tyve"c$e !rom ar ercants, ;nc. covered by a PurcaseA#reement. ;n order to pay te ba$ance o! te purcase pr"ce, tespouses contracted a $oan "t P; eas"n# ere"n teyeecuted a prom"ssory note "n !avor o! P; eas"n# a#ree"n# tat"n case o! de!au$t, te sum and "nterest sa$$ "mmed"ate$y becomedue and demandab$e. ;n add"t"on, te spouses a$so eecuted acatte$ mort#a#e "n !avor o! P; eas"n# over te ve"c$e.

"nce te spouses !a"$ed to pay te"r $oan, P; eas"n# "nst"tuted acomp$a"nt tat $ed to te "ssuance o! te tr"a$ court o! a r"t o!rep$ev"n, "n pursuance o! "c te ser"!! se"Ded te ve"c$e andturned over te possess"on to P; eas"n#.

Te spouses ar ercants ad ass"#ned to P; eas"n# "ts r"#tto co$$ect te ba$ance* ence, "t as subro#ated to te r"#ts o! arercants sub>ect to te $"m"tat"ons o! Art. 144=. :urtermore,tey a$$e#e tat s"nce P; eas"n# opted to !orec$ose te catte$mort#a#e, "t as estopped !rom co$$ect"n# te unpa"d ba$ance o!te purcase pr"ce.

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4A*)A 6I)A)%IAL SE(I%ES *'U&, I)%. ( %'LAI)A$>>0

:AT+ 8$"as o$ar"na bou#t on "nsta$$ment a uDu%" u$t"cab!rom a#na :"nanc"a$ erv"ces roup, ;nc. ereby e eecutedan "nte#rated prom"ssory note and deed o! catte$ mort#a#e overte ve"c$e.

"nce o$ar"na !a"$ed to pay te mont$y amort"Dat"on, a#na !"$eda omp$a"nt !or :orec$osure o! atte$ ort#a#e "t Rep$ev"n.:rom te comp$a"nt, "t "$$ so tat a#na ava"$ed "tse$! o! te !"rstand t"rd remed"es under Art. 144 o! te =.

A r"t o! rep$ev"n as "ssued by te court and upon serv"ce o! tesame to o$ar"na, e vo$untar"$y surrendered possess"on o! teve"c$e to te ser"!!, o "n turn, surrendered possess"on toa#na.

o$ar"na po"nts to te "ncons"stency o! te remed"es or re$"e!ssou#t by te a#na "n "ts omp$a"nt ere "t prayed !or te

custody o! te catte$ mort#a#e and at te same t"me as%ed !or tepayment o! te unpa"d ba$ance on te motor ve"c$e.

;E8+ ects te mort#a#ed property to tesat"s!act"on o! te ob$"#at"on to secure tat !or "c te mort#a#eas #"ven.

:orec$osure may be e!!ected e"ter >ud"c"a$$y or etra>ud"c"a$$y, tat"s, by ord"nary act"on or by !orec$osure under poer o! sa$econta"ned "n te mort#a#e. 8tra>ud"c"a$ !orec$osure, as cosen byte pet"t"oner, "s atta"ned by caus"n# te mort#a#ed property to bese"Ded by te ser"!!, as a#ent o! te mort#a#ee, and ave "t so$dat pub$"c auct"on "n te manner prescr"bed by 8 14 o! Act =o.15/, or te atte$ ort#a#e a. T"s ru$e #overns etra>ud"c"a$!orec$osure o! catte$ mort#a#e.

;n sum, s"nce te pet"t"oner as unden"ab$y e$ected a remedy o!!orec$osure under Art"c$e 144(3) o! te "v"$ ode, "t "s bound by"ts e$ect"on and tus may not be a$$oed to can#e at "t asopted !or.

;E8+ ectve"c$e

B8-+ =


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(a) :or entry or presentat"on o! any document "n te pr"mary entryboo%, !"ve pesos. upport"n# papers presented to#eter "t tepr"nc"pa$ document need not be car#ed any entry or presentat"on!ee un$ess te party "n "nterest des"res tat tey be $"%e"seentered.(b) :or !"$"n# and record"n# eac catte$ mort#a#e, "nc$ud"n# tenecessary cert"!"cates and a!!"dav"ts, te !ees estab$"sed "n te

!o$$o"n# scedu$e sa$$ be co$$ected+C1. en te amount o! te mort#a#e does not eceed s"tousand pesos, seven pesos !or te !"rst !"ve undred pesos or!ract"ona$ part tereo!, and tree pesos !or eac add"t"ona$ !"veundred pesos or !ract"ona$ part tereo!.C2. en te amount o! te mort#a#e "s more tan s" tousandpesos but does not eceed t"rty tousand pesos, !ortye"#t pesos!or te "n"t"a$ amount not eceed"n# e"#t tousand pesos, ande"#t pesos !or eac add"t"ona$ to tousand pesos or !ract"ona$part tereo!.C3. en te amount o! te mort#a#e "s more tan t"rty tousandpesos but does not eceed one undred tousand pesos, oneundred !"!ty pesos !or "n"t"a$ amount not eceed"n# t"rty!"ve

tousand pesos, and !ourteen pesos !or eac add"t"ona$ !"vetousand pesos or !ract"ona$ part tereo!.C4. en te amount o! te mort#a#e "s more tan one undredtousand pesos but does not eceed !"ve undred tousandpesos, tree undred !"!tyto pesos !or te "n"t"a$ amount noteceed"n# one undred ten tousand pesos and tenty pesos !oreac add"t"ona$ ten tousand pesos or !ract"ona$ part tereo!.C5. en te amount o! te mort#a#e "s more tan !"ve undredtousand pesos, one tousand one undred s"tyto pesos !orte "n"t"a$ amount not eceed"n# !"ve undred tenty tousandpesos, and t"rty pesos !or eac add"t"ona$ tenty tousand pesosor !ract"ona$ part tereo!+ Prov"ded, oever, Tat re#"strat"on o!te mort#a#e "n te prov"nce ere te property "s s"tuated sa$$

be su!!"c"ent re#"strat"on+ And prov"ded, !urter, Tat "! temort#a#e "s to be re#"stered "n more tan one c"ty or prov"nce, tere#"ster o! deeds o! te c"ty or prov"nce ere te "nstrument "s!"rst presented !or re#"strat"on sa$$ co$$ect te !u$$ amount o! te!ees due "n accordance "t te scedu$e prescr"bed above, andte re#"ster o! deeds o! te oter c"ty or prov"nce ere te same"nstrument "s a$so to be re#"stered sa$$ co$$ect on$y a sumeu"va$ent to tenty per centum o! te amount o! !ees due andpa"d "n te !"rst c"ty or prov"nce, but "n no case sa$$ te !eespayab$e "n any re#"stry be $ess tan te m"n"mum !"ed "n t"sscedu$e.C(c) :or record"n# eac "nstrument o! sa$e, conveyance, or trans!ero! te property "c "s sub>ect o! a recorded mort#a#e, or o! te

ass"#nment o! mort#a#e cred"t, te !ees estab$"sed "n tepreced"n# scedu$e sa$$ be co$$ected on te bas"s o! ten percentum o! te amount o! te mort#a#e or unpa"d ba$ance tereo!+Prov"ded, Tat te $atter "s stated "n te "nstrument.C(d) :or record"n# eac not"ce o! attacment, "nc$ud"n# tenecessary "nde and annotat"ons, e"#t pesos.C(e) :or record"n# eac re$ease o! mort#a#e, "nc$ud"n# tenecessary "nde and re!erence, te !ees estab$"sed "n tescedu$e under para#rap (b) above sa$$ be co$$ected on tebas"s o! !"ve per centum o! te amount o! te mort#a#e.C(!) :or record"n# eac re$ease o! attacment, "nc$ud"n# te properannotat"ons, !"ve pesos.C(#) :or record"n# eac ser"!!Is return o! sa$e, "nc$ud"n# te "nde

and re!erence, seven pesos.C() :or record"n# a poer o! attorney, appo"ntment o! >ud"c"a$#uard"an, adm"n"strator, or trustee, or any oter "nstrument "n"c a person "s #"ven poer to act "n bea$! o! anoter "nconnect"on "t a mort#a#e, ten pesos.

C(") :or record"n# eac "nstrument or order re$at"n# to a recordedmort#a#e, "nc$ud"n# te necessary "nde and re!erence, !or "cno spec"!"c !ee "s prov"ded above !"ve pesos.C(>) :or cert"!"ed cop"es o! records, suc !ees as are a$$oed by $a!or cop"es %ept by te re#"ster o! deeds.C(%) :or "ssu"n# a cert"!"cate re$at"ve to, or so"n# te e"stence ornone"stence o!, and entry "n te re#"strat"on boo%, or a document

on !"$e, !or eac suc cert"!"cate conta"n"n# not more tan toundred ords, !"ve pesos* "! "t eceeds tat number, an add"t"ona$!ee o! one peso sa$$ co$$ected !or every one undred ords or!ract"ona$ part tereo!, "n ecess o! te !"rst to undred ords.C($) :or serv"ces rendered "n attend"n# to reuests !or re!erencesto, or researces on any document on !"$e "n te re#"stry, teresa$$ be co$$ected a !ee o! to pesos per document.CSE% $.T"s decree sa$$ ta%e e!!ect upon "ts approva$.-one "n te "ty o! an"$a, t"s 9t day o! 6une, "n te year o!

Adm"n"strator to prepare te #u"de$"nes !or te en!orcement o! A..=o. 991//5/ on te etra>ud"c"a$ !orec$osure o! mort#a#es.ec. 1. A$$ app$"cat"ons !or etra>ud"c"a$ !orec$osure o! mort#a#e,eter under te d"rect"on o! te er"!! or a notary pub$"cpursuant to Art. =o. 3135, as amended, and Act 15/, asamended, sa$$ be !"$ed "t te 8ecut"ve 6ud#e, trou# te$er% o! ourt, o "s a$so te 8ud"c"a$ !orec$osure o! te rea$property "s e"ter "nserted "nto or attaced to te deed o! rea$estate mort#a#e (Act =o. 3135, ec. 1, as amended)*b. "ve a ! "$e number to te app$"cat"on and endorse tedate and t"me o! "ts !"$"n# and terea!ter doc%et te same, %eep"n#,"n t"s connect"on, separate doc%et boo%s !or etra>ud"c"a$!orec$osure sa$es conducted by te er"!! and tose conducted bynotar"es pub$"c*c. :or te conduct o! etra>ud"c"a$ !orec$osure o! rea$ estateor catte$ mort#a#e under te d"rect"on o! te ser"!!, co$$ect teappropr"ate !"$"n# !ees and "ssues te correspond"n# o!!"c"a$ rece"ptpursuant to te !o$$o"n# scedu$e+;! te amount o! te "ndebtedness or te mort#a#ee&s c$a"m "s+(1) ess tan P5/,///.// LLLLLLL..P275.//(2) P5/,///.// or more but $ess tanP1//,///.// LLLLLLLLLLL..... 4//.//(3) P1//,///.// or more but $ess tanP15/,///.// LLLLLLLLLLLL. 5//.//(4) P15/,///.// or more but $ess tanP2//,///.// LLLLLLLLLLLL. @5/.//


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(5) P2//,///.// or more but $ess tanP25/,///.// LLLLLLLLLLL.. 1,///.//(@) P25/,///.// or more but $ess tanP3//,///.// LLLLLLLLLL.L. 1,25/.//(7) P3//,///.// or more but $ess tanP4//,///.// LLLLLLLLLLL.. 1,5//.//() P4//,/// or more but $ess tan

P5//,///.// LLLLLLLLLLL.. 1,75/.//(9) P5//,///.// or more but not more tanP1//,///,///.// LLLLLLLL..L. 2,///.//(1/) :or eac P1,///.// "n ecess o!P1,///,///.//LLLLLLLLLLLL.. 1/.//(8 7 (c), Ru$e 141, Ru$es o! ourt, as amended by A.. =o. //2/1, :ebruary 1, 2///).ooperat"ves, tr"!t ban%s, and rura$ ban%s are not eempt !rom tepayment o! !"$"n# !ees and oter !ees under tese #u"de$"nes (A..=o. 992/RT, eptember 29, 199* A.. =o. 99393RT,Apr"$ 2/, 1999* and A.. =o. 9294//).d. ;n case te app$"cat"on "s !or te etra>ud"c"a$ !orec$osure o!mort#a#es o! rea$ estates and0or catte$s "n d"!!erent $ocat"ons

cover"n# one "ndebtedness, "ssue, apart !rom te o!!"c"a$ rece"pt !orte !ees, a cert"!"cate o! payment "nd"cat"n# te amount o!"ndebtedness, te !"$"n# !ees co$$ected, te mort#a#es sou#t to be!orec$osed, te rea$ estates and0or catte$s mort#a#ed and te"rrespect"ve $ocat"ons, !or purposes o! av"n# te app$"cat"ondoc%eted "t te $er%s o! ourt "n te p$aces ere te oterpropert"es are $ocated and o! a$$o"n# te etra>ud"c"a$ !orec$osureto proceed tereat. (A.. =o. 991//5/, par. 2(e)).ec. 3. Te app$"cat"on !or etra>ud"c"a$ !orec$osure sa$$ be ra!!$edunder te superv"s"on o! te 8ecut"ve 6ud#e, "t te ass"stanceo! te $er% o! ourt and 8

te case as been ra!!$ed sa$$ be ec$uded "n te succeed"n#ra!!$es and sa$$ part"c"pate a#a"n on$y a!ter a$$ oter er"!!s sa$$ave been ass"#ned a case by ra!!$e (Adm"n"strat"ve "rcu$ar =o. 39, :eb. 5, 199).ec. 4. Te er"!! to om te app$"cat"on !or etra>ud"c"a$!orec$osure o! mort#a#e as ra!!$ed sa$$ do te !o$$o"n#+a. Prepare a =ot"ce o! 8tra>ud"c"a$ a$e us"n# te!o$$o"n# !orm+G=ud"c"a$ !orec$osure sa$e ?a. Te b"dd"n# sa$$ be made trou# sea$ed b"ds "cmust be subm"tted to te er"!! o sa$$ conduct te sa$ebeteen te ours o! 9 a.m. and 4 p.m. o! te date o! te auct"on(Act 3135, ec. 4). Te property mort#a#ed sa$$ be aarded tote party subm"tt"n# te "#est b"d and, "n case o! a t"e, an open

b"dd"n# sa$$ be conducted beteen te "#est b"dders. Paymentso! te "nn"n# b"d sa$$ be made e"ter "n cas or "n mana#er&scec%, "n P"$"pp"ne currency, "t"n !"ve (5) days !rom not"ce.b. Te sa$e must be made "n te prov"nce "n "c te rea$property "s s"tuated and, "n case te p$ace "t"n te sa"d prov"nce"n "c te sa$e "s to be made "s te sub>ect o! st"pu$at"on, sucsa$e sa$$ be made "n sa"d p$ace "n te mun"c"pa$ bu"$d"n# o! temun"c"pa$"ty "n "c te property or part tereo! "s s"tuated (Act=o. 3135, as amended, ec. 2)*"n case o! a catte$ mort#a#e, te sa$e sa$$ be made at a p$ace "nte mun"c"pa$"ty ere te mort#a#or res"des or ere te property"s s"tuated (ec. 14, Act =o. 15/, as amended).ec. @. A!ter te sa$e, te $er% o! ourts sa$$ co$$ect te

appropr"ate !ees pursuant to ec. 9(1), Ru$e 141, as amended byA. =o. //2/1, computed on te bas"s o! te amountactua$$y co$$ected by "m, "c !ee sa$$ not eceed P1//,///.//(A.. =o. 991//5/, arc 1, 2//1, 2Sd). Te amount pa"d sa$$not be sub>ect to a re!und even "! te !orec$osed property "ssubseuent$y redeemed.ec. 7. ;n case o! !orec$osure under Act =o. 15/, te er"!! sa$$,"t"n t"rty (3/) days !rom te sa$e, prepare a return and !"$e tesame "n te ud"c"a$ !orec$osureconducted under te d"rect"on o! te ser"!!, co$$ect P3//.// as


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prov"ded "n 8 2/(d), Ru$e 141, as amended, and "n etra>ud"c"a$!orec$osure sa$es conducted under te d"rect"on o! a notary pub$"c,co$$ect te appropr"ate !ees pursuant to Ru$e 141, U2/(e), "camount sa$$ not eceed P1//,///.// ("nute Res., A.. =o. 991//5/, Au#ust 7, 2//1).ec. 1/. A!ter te ert"!"cate o! a$e as been "ssued, te $er% o!ourt sa$$ %eep te comp$ete records !or a per"od o! one (1) year

!rom te date o! re#"strat"on o! te cert"!"cate o! sa$e "t teRe#"ster o! -eeds, a!ter "c te records sa$$ be arc"ved.=ot"tstand"n# te !ore#o"n#, >ur"d"ca$ persons ose property "sso$d pursuant to an etra>ud"c"a$ !orec$osure sa$$ ave te r"#t toredeem te property unt"$, but not $ater tan, te re#"strat"on o! tecert"!"cate o! !orec$osure sa$e "c "n no case sa$$ be more tantree (3) monts a!ter !orec$osure, "cever "s ear$"er (R.A. 791,8 47). ;n case te property "s redeemed, te $er% o! ourt sa$$assess te redempt"oner&s !ee as prov"ded "n 8 7 (%), Ru$e 141,as amended. ;! te property "s not redeemed, te $er% o! ourtsa$$, as a reu"s"te !or te "ssuance o! te !"na$ -eed o! a$e,assess te "#est b"dder te amount o! P3//.// as prov"ded "n8 2/(d), Ru$e 141, as amended.

ec. 11. Tese #u"de$"nes sa$$ ta%e e!!ect on Apr"$ 22, 2//2.;ssued t"s 22ndday o! 6anuary 2//2

(. A) A%T T' E*ULATE T3E SALE '6&'&ET: U)2E S&E%IAL &'WES I)SETE2I) ' A))Eud"c"a$$y or etra>ud"c"a$$y.

Autor"ty To :orec$ose ort#a#e 8tra>ud"c"a$$y1) Te on$y "nstance en an etra>ud"c"a$ !orec$osure may bee!!ected "s en a sa$e "s made and a pec"a$ Poer o! Attorney toetra>ud"c"a$$y !orec$ose "s "nserted or attaced to te Rea$ 8stateort#a#e (R8).

2) ;! te R8 "s s"$ent as to te manner o! !orec$os"n# temort#a#e, etra>ud"c"a$ !orec$osure may not be e!!ected and Ru$e@ o! te Ru$es o! ourt "n 6ud"c"a$ :orec$osure sa$$ app$y.

Procedure

!ere to &i-eQ App$"cat"on sou$d be !"$ed "t te 8ecut"ve 6ud#e trou# te$er% o! ourt.Q A!ter te rece"pt o! te app$"cat"on, te $er% o! ourt sa$$+1) eam"ne te same to ensure tat te spec"a$ poer "! attorneyautor"D"n# te 86: o! te rea$ property "s e"ter "nserted orattaced to te deed o! rea$ estate mort#a#e.

2) ra!!$e te app$"cat"on amon# te er"!!s3) cause te post"n# and 0or pub$"cat"on o! te not"ce o! sa$e

!ere to )e-->p$ace ere eac o! te mort#a#ed property "s $ocated.

Q Te sa$e must be made "n te prov"nce ere te property to beso$d "s s"tuated. a$e outs"de te prov"nce "s "$$e#a$.Q ;! te mort#a#e deed speciied a place"n te mun"c"pa$"ty "n teprov"nce ere te sa$e ou$d be made, suc sa$e sa$$ be made"n suc p$ace.Q ;! te p$ace o! sa$e "n te mun"c"pa$"ty as not st"pu$ated, te sa$esa$$ be made "n te #unicipal buildin= o! te mun"c"pa$"ty "n

"c te property or part tereo! "s s"tuated.

Po)tin" (e>irement? P-ication (e>irement1) =ot"ces o! te sa$e sa$$ be posted or not less than $> daysin at least 9 public places"n te c"ty or mun"c"pa$"ty ere teproperty "s s"tuated.2) ;! property "s ort more tan P4//, te not"ce o! te sa$e sa$$a$so be published once a wee? or 9 consecuti@e wee?s in anewspaper o =eneral circulation"n te c"ty or mun"c"pa$"ty.

#@$#P'/% to t!e re>irement o& new)+a+er +-ication even "! mort#a#ed property "s ort more tan P4//+Q :or rea$ estate mort#a#es cover"n# $oans not eceed"n#

P1//,///, ec$us"ve o! "nterests due and unpa"d, #ranted by rura$or tr"!t ban%s, pub$"cat"on "n a nespaper sa$$ be d"spensed "t,"t be"n# su!!"c"ent tat not"ces o! !orec$osure are posted !or a per"odo! @/ days "mmed"ate$y preced"n# te pub$"c auct"on "n te mostconsp"cuous areas at te prem"ses o! te rura$ ban% or tr"!t ban%,as te case may be, and at te mun"c"pa$ bu"$d"n#, mun"c"pa$ pub$"cmar%et, baran#ay a$$ and baran#ay pub$"c mar%et "! any or erete $and "s s"tuated

n-e)) ot!erwi)e )ti+-ated * t!e +artie) in t!e mort"a"econtract,te debtor0mort#a#or need not be persona$$y served acopy o! te not"ce o! etra>ud"c"a$ !orec$osure.=o persona$ not"ce "s reu"red because an 86: "s an act"on in rem

reu"r"n# on$y te pub$"cat"on o! te not"ce o! te sa$e to b"nd tepart"es "nterested.Q :a"$ure to post not"ce "s =


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!act te property may be so$d !or $ess tan "ts : because te$esser te pr"ce te eas"er !or te oner to e!!ect redempt"on.(a$monte v A)Q ;! te proceeds o! te sa$e are "n ecess o! te amount c$a"medby te mort#a#ee, te ecess sa$$ be turned over to temort#a#or.5) red"tor may be barred !rom part"c"pat"n# "n te b"dd"n#, on$y ;:

so prov"ded "n te mort#a#e deed. Bence, cred"tor or any o! "srepresentat"ves may part"c"pate absent any epress prov"s"on "nte mort#a#e or trust deed barr"n# "m.@) ert"!"cate o! sa$e "ssued by te c$er% o! court must be approvedby te eecut"ve >ud#e or "n "s absence te v"ceeecut"ve >ud#e.=o cert"!"cate o! sa$e sa$$ be "ssued "n !avor o! te "#est b"dderunt"$ a$$ !ees ave been pa"d

Possess"on 'y Purcaser

1. Drin" redem+tion +eriodTe purcaser o! te !orec$osed property "s not automat"ca$$yent"t$ed to possess"on o! te property. Be must !"$e an e parte

app$"cat"on and #"ve a bond "n te amount eu"va$ent to te use o!te property !or a per"od o! 12 monts. Epon approva$ o! te bond,te court sa$$ order te "ssuance o! a r"t o! possess"on.Boever, a r"t o! possess"on may be "ssued "n an 86: o! R8,on$y "! te debtor "s "n possess"on and no t"rd party as"ntervened. (P=' vs. A)

2. A&ter t!e -a+)e o& t!e redem+tion +eriodonso$"dat"on o! te t"t$e becomes a matter o! r"#t on te part o!te purcaser and te "ssuance o! a cert"!"cate o! sa$e "n "s !avorbecomes m"n"ster"a$ upon te Re#"stry o! -eeds.To obta"n possess"on, te purcaser may e"ter as% !or a r"t o!possess"on or br"n# an "ndependent act"on suc as a su"t o!

e>ectment.

Remedy ust"!"ed, "t sa$$d"spose "n "s !avor o! a$$ or part o! te bond "c te part"es may

ave !urn"sed by te person o obta"ned te possess"on. 8"tero! te part"es may appea$ !rom te order o! te >ud#e "naccordance "t 8 14 o! Act 49@ (no 8 33 o! P- 1529), butte order o! possess"on sa$$ cont"nue "n e!!ect dur"n# tependency o! te appea$.

Redempt"on

!o ma* redeem1) te debtor

2) "s successor "n "nterest3) any >ud"c"a$ cred"tor av"n# an "nterest4) any person av"n# a $"en on te property subseuent to temort#a#e under "c te property "s so$d.

Period o& (edem+tionud"c"a$ sa$e "s made under tespec"a$ poer ere"nbe!ore re!erred to, te debtor, "s successors"n "nterest or any >ud"c"a$ cred"tor or >ud#ment cred"tor o! sa"ddebtor, or any person av"n# a $"en on te property subseuent to

te mort#a#e or deed o! trust under "c te property "s so$d,may redeem te same at any ti#e within the ter# o one yearro# and ater the date o the sale, and suc redempt"on sa$$ be#overned by te prov"s"ons o! 8s 2931 and 35 o! te Ru$es o!ourt.

Date o& Sa-eas been construed by te upreme ourt as tedate o! re#"strat"on o! te ser"!!&s cert"!"cate o! !orec$osure sa$e "nte o!!"ce o! te Re#"ster o! -eeds concerned.ere te mort#a#ed property so$d to t"rd party by te mort#a#or+trans!ers on$y te r"#t to redeem te property and te r"#t topossess, use and en>oy te same dur"n# te redempt"on per"od.ere te mort#a#ed property so$d to t"rd party by mort#a#ee

a!ter te !orec$osure+ te mort#a#or may st"$$ redeem "t at teamount o! te pr"nc"pa$ ob$"#at"on p$us "nterest unt"$ te t"me o!actua$ redempt"on and not o! te purcase pr"ce.

(e>i)ite) For A a-id #erci)e %& (i"!t %& (edem+tion1) Te redempt"on must ave been made "t"n a year !rom tedate o! re#"strat"on o! te cert"!"cate o! sa$e.2) Payment o! te Purcase pr"ce o! te property p$us 1V "nterestper mont "t te taes, "! pa"d by te purcaser and te amounto! "s pr"or $"en, "! any computed !rom te date o! te re#"strat"on o!te sa$e up to te t"me o! redempt"on.3) r"tten not"ce o! te redempt"on must be served on te o!!"cero made te sa$e and a dup$"cate !"$ed "t te proper Re#"stry o!

-eeds.4) Te redempt"on must be made be!ore te sa$e "s con!"rmed byte court.5. Tender o! payment must be made !or te !u$$ amount o! tepurcase pr"ce, oter"se, to a$$o payment by "nsta$ments ou$dbe to a$$o te etens"on o! te redempt"on per"od.

2 Cind) o& (edem+tion1) 8u"ty o! Redempt"on ? r"#t o! te mort#a#or "n case o! audicial oreclosureto recover te mort#a#ed property a!ter "sde!au$t "n te per!ormance te cond"t"ons o! te mort#a#e butbe!ore te con!"rmat"on o! sa$e o! te mort#a#ed property.2) R"#t o! redempt"on ? r"#t o! te mort#a#or "n case o!

e!traudicial oreclosure to redeem te mort#a#ed property"t"n a certa"n per"od a!ter "t as so$d !or te sat"s!act"on o! temort#a#e debt. T"s "s te %"nd o! redempt"on contemp$ated "n AT3135.

E"uity o ede#ption i=ht o ede#ption*o@ernin= Lawoverned by Ru$e @ o! teRu$es o! ourt

overned by 8 2931 o!Ru$e 39

Applicability1. "n >ud"c"a$ !orec$osure o!R8*2. "n 86: o! R8 "nvo$v"n# aban% as a mort#a#ee and a>ur"d"ca$ person as a mort#a#or

1. "n >ud"c"a$ !orec$osure o! R8"nvo$v"n# a ban% as amort#a#ee, eter temort#a#or "s a natura$ or a>ur"d"ca$ person*2. "n 86: o! R8Boever, no r"#t o! redempt"one"sts "! "t "nvo$ves a ban% as a


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mort#a#ee and a >ur"d"ca$person as a mort#a#or.

To who# conerredon!erred by $a on$y to temort#a#or but acu"red bysecond mort#a#ee s"nce "sr"#t "s subord"nate to te !"rst

mort#a#ee.

on!erred by $a to temort#a#or, "s successors"n"nterest or any >ud#mentcred"tor o! te mort#a#or.

&eriodan be eerc"sed "t"n aper"od o! not $ess tan 9/ daysnor more tan 12/ days !romentry o! >ud#ment or even a!ter!orec$osure o! sa$e but pr"or tocon!"rmat"on.

an be eerc"sed "t"n 1 year!rom date o! re#"strat"on o!cert"!"cate o! sa$e.

When E!ercisedan be eerc"sed a!ter entry o!>ud#ment but be!ore !orec$osuresa$e and a!ter !orec$osure sa$ebut pr"or to con!"rmat"on o! sa$e.

an be eerc"sed ud#ment o! te court as tote amount due to p$a"nt"!! uponmort#a#e debt "t "nterest andcar#es approved by te courtand costs.

Redempt"on pr"ce depends onte purcase pr"ce as !"ed "nec 2@ Ru$e 39 R

%ALTE< &3ILS @ IA% 1-8-0

ere a debt "s secured by a mort#a#e and tere "s a de!au$t "npayment on te part o! te mort#a#or, te mort#a#ee as a co"ceo! one (1) o! to (2) remed"es, but e cannot ave bot. Temort#a#ee may+ 1) !orec$osure te mort#a#e* or 2) !"$e an ord"naryact"on to co$$ect te debt.

en te mort#a#ee cooses te !orec$osure o! te mort#a#e as a

remedy, e en!orces "s $"en by te sa$e on !orec$osure o! temort#a#ed property. Te proceeds o! te sa$e "$$ be app$"ed to tesat"s!act"on o! te debt. "t t"s remedy, e as a pr"or $"en on teproperty. ;n case o! a de!"c"ency, te mort#a#ee as te r"#t toc$a"m !or te de!"c"ency resu$t"n# !rom te pr"ce obta"ned "n te sa$eo! te rea$ property at pub$"c auct"on and te outstand"n# ob$"#at"onat te t"me o! te !orec$osure proceed"n#s

ud#ment "n teact"on to co$$ect "s !avorab$e to "m, and "t becomes !"na$ andeecutory, e can en!orce sa"d >ud#ment by eecut"on. Be can

even $evy eecut"on on te same mort#a#ed property, but e "$$not ave pr"or"ty over te $atter and tere may be oter cred"torso ave better $"en on te propert"es o! te mort#a#or.

AT8J subm"ts tat te pr"nc"p$es enunc"ated "n te Bachrachcase are not app$"cab$e nor determ"nat"ve o! te case at bar !or tereason tat te !actua$ c"rcumstances obta"ned "n te sa"d case aretota$$y d"!!erent !rom te "nstant case. ;n te Bachrach case, tep$a"nt"!! "nst"tuted an act"on to !orec$ose te mort#a#e a!ter temoney >ud#ment "n "ts !avor rema"ned unsat"s!"ed ereas "n tepresent case, AT8J "n"t"a$$y !"$ed a comp$a"nt !or co$$ect"on o! tedebt and dur"n# te pendency tereo! !orec$osed etra>ud"c"a$$y temort#a#e.

e d"sa#ree. A$tou# te !acts "n te 'acrac case and "n tepresent case are not "dent"ca$, tere "s s"m"$ar"ty "n te !act tat tep$a"nt"!!s "n tese to cases ava"$ed o! bot remed"es a$tou# teyare ent"t$ed to a co"ce o! on$y one.

BA)K '6 A4EI%A )T C SA ( A4EI%A) EALT: %'&1---0

Anent rea$ propert"es "n part"cu$ar, te ourt as $a"d don te ru$etat a mort#a#e cred"tor may "nst"tute a#a"nst te mort#a#e debtore"ter a persona$ act"on !or debt or a rea$ act"on to !orec$ose te

mort#a#e.;n our >ur"sd"ct"on, te remed"es ava"$ab$e to te mort#a#e cred"torare deemed a$ternat"ve and not cumu$at"ve. =otab$y, an e$ect"on o!one remedy operates as a a"ver o! te oter. :or t"s purpose, aremedy "s deemed cosen upon te !"$"n# o! te su"t !or co$$ect"onor upon te !"$"n# o! te comp$a"nt "n an act"on !or !orec$osure o!mort#a#e, pursuant to te prov"s"on o! Ru$e @ o! te o! te 1997Ru$es o! "v"$ Procedure. As to etra>ud"c"a$ !orec$osure, sucremedy "s deemed e$ected by te mort#a#e cred"tor upon !"$"n# o!te pet"t"on not "t any court o! >ust"ce but "t te

;n te case at benc, pr"vate respondent AR const"tuted rea$estate mort#a#es over "ts propert"es as secur"ty !or te debt o! tepr"nc"pa$ debtors. 'y do"n# so, pr"vate respondent sub>ected "tse$!to te $"ab"$"t"es o! a t"rd party mort#a#or. Ender te $a, t"rdpersons o are not part"es to a $oan may secure te $atter by


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p$ed#"n# or mort#a#"n# te"r on property. =ot"tstand"n#, tere"s no $e#a$ prov"s"on nor >ur"sprudence "n our >ur"sd"ct"on "cma%es a t"rd person o secures te !u$!"$$ment o! anoterIsob$"#at"on by mort#a#"n# "s on property, to be so$"dar"$y bound"t te pr"nc"pa$ ob$"#or. Te s"#natory to te pr"nc"pa$ contract $oan rema"ns to be pr"mar"$y bound. ;t "s on$y upon de!au$t o! te$atter tat te cred"tor may ave recourse on te mort#a#ors by

!orec$os"n# te mort#a#ed propert"es "n $"eu o! an act"on !or terecovery o! te amount o! te $oan.

SUI%' ATTA) C BUI I)TEI'S ( %A $>>70

Te remedy o! etra>ud"c"a$ !orec$osure "s deemed cosen not onte day o! te sa$e but on te day o! te !"$"n# o! a pet"t"on !or!orec$osure "t te o!!"ce o! te Prov"nc"a$ "e!. "nce te !"$"n# o!pet"t"on !or !orec$osure as ear$"er tan te !"$"n# o! act"on !or sumo! money, te remedy o! !orec$osure as cosen !"rst, even "! teactua$ !orec$osure sa$e as conducted a!ter te !"$"n# o! act"on !orsum o! money.

Te ru$e "s tat te remed"es o! act"on !or sum o! money and!orec$osure are a$ternat"ve and not cumu$at"ve. Bence, te act"on!or sum o! money by etroban% as va$"d$y d"sm"ssed because "ta$ready !"$ed a pet"t"on !or !orec$osure be!ore "t !"$ed te act"on. ;! "tad !"$ed an act"on !or recovery o! de!"c"ency "nstead o! co$$ect"on o!sum o! money, "t ou$d not ave been d"sm"ssed. ('ecauserecovery o! de!"c"ency "s a$$oed !or Rea$ 8state ort#a#e "t"n1/ years a!ter !orec$osure)

ort#a#e "nva$"d "! mort#a#or not te property oner* doctr"ne o!mort#a#ee "n #ood !a"t not app$"cab$e

EE)A ( DUEEKAU664A) $>>70

RT ordered te annu$ment and sett"n# as"de o! te !orec$osureproceed"n#s and auct"on sa$e on the =round that there was lac?o publication o the notice o sale. Pet"t"oner appea$ed to teA. A d"sm"ssed pet"t"oner&s appea$ "t re#ard to te :orbesPar% property as te same as a$ready te sub>ect o! a -eed o!

Reconveyance eecuted by pet"t"oner "n !avor o! respondents ase$$ as a omprom"se A#reement dated beteen te samepart"es. As to te a$u#ay property, A a!!"rmed te RTdec"s"on.

;E8+ ud"c"a$!orec$osure o! mort#a#es on rea$ property "s spec"!"c "t re#ard tote post"n# and pub$"cat"on reu"rements o! te not"ce o! sa$e, to"t+Gec. 3. =ot"ce sa$$ be #"ven by post"n# not"ces o! te sa$e !or not

$ess tan tenty days "n at $east tree pub$"c p$aces o! temun"c"pa$"ty or c"ty ere te property "s s"tuated, and "! sucproperty "s ort more tan !our undred pesos, suc not"ce sa$$a$so be pub$"sed once a ee% !or at $east tree consecut"ve


19/144


ee%s "n a nespaper o! #enera$ c"rcu$at"on "n te mun"c"pa$"ty orc"ty.H

ur"sd"ct"ona$

de!ect, "c "nva$"dates te sa$e. Pet"t"oner and respondentsave abso$ute$y no r"#t to a"ve te post"n# and pub$"cat"onreu"rements o! Act =o. 3135. "$e "t "s estab$"sed tat r"#tsmay be a"ved, Art"c$e @ o! te "v"$ ode ep$"c"t$y prov"des tatsuc a"ver "s sub>ect to te cond"t"on tat "t "s not contrary to $a,pub$"c order, pub$"c po$"cy, mora$s, or #ood customs, or pre>ud"c"a$to a t"rd person "t a r"#t reco#n"Ded by $a.

Te pr"nc"pa$ ob>ect o! a not"ce o! sa$e "n a !orec$osure o! mort#a#e"s not so muc to not"!y te mort#a#or as to "n!orm te pub$"c#enera$$y o! te nature and cond"t"on o! te property to be so$d,and o! te t"me, p$ace, and terms o! te sa$e. =ot"ces are #"ven tosecure b"dders and prevent a sacr"!"ce o! te property. $ear$y, te

statutory reu"rements o! post"n# and pub$"cat"on are mandated,not !or te mort#a#or&s bene!"t, but !or te pub$"c or t"rd persons.;n !act, persona$ not"ce to te mort#a#or "n etra>ud"c"a$ !orec$osureproceed"n#s "s not even necessary, un$ess st"pu$ated. As suc, "t "s"mbued "t pub$"c po$"cy cons"derat"ons and any a"ver tereonou$d be "ncons"stent "t te "ntent and $etter o! Act =o. 3135.oreover, statutory prov"s"ons #overn"n# pub$"cat"on o! not"ce o!mort#a#e !orec$osure sa$es must be str"ct$y comp$"ed "t ands$"#t dev"at"ons tere!rom "$$ "nva$"date te not"ce and render tesa$e at te very $east vo"dab$e.

Tus, "n te recent case o! -eve$opment 'an% o! te P"$"pp"nes v.A#u"rre, te !orec$osure sa$e e$d more tan to (2) monts a!ter

te pub$"sed date o! sa$e as cons"dered vo"d !or $ac% o!repub$"cat"on. "m"$ar$y, "n te "nstant case, te $ac% o! repub$"cat"ono! te not"ce o! te sub>ect !orec$osure sa$e renders "t vo"d.

'UA)' ( %A $>>90

:AT+ 6u$"eta .


20/144


Te ob>ect o! a not"ce o! sa$e "s to "n!orm te pub$"c o! te natureand cond"t"on o! te property to be so$d, and o! te t"me, p$ace and

terms o! te sa$e. =ot"ces are #"ven !or te purpose o! secur"n#b"dders and to prevent a sacr"!"ce o! te property. ;! tese ob>ectsare atta"ned, "mmater"a$ errors and m"sta%es "$$ not a!!ect tesu!!"c"ency o! te not"ce* but "! m"sta%es or om"ss"ons occur "n tenot"ces o! sa$e, "c are ca$cu$ated to deter or m"s$ead b"dders, todeprec"ate te va$ue o! te property, or to prevent "t !rom br"n#"n# a!a"r pr"ce, suc m"sta%es or om"ss"ons "$$ be !ata$ to te va$"d"ty o!te not"ce, and a$so to te sa$e made pursuant tereto.

;n te "nstant case, te a!oresa"d ob>ect"ve as atta"ned s"ncetere as su!!"c"ent pub$"c"ty o! te sa$e trou# te nespaperpub$"cat"on. Tere "s comp$ete$y no so"n# tat te property asso$d !or a pr"ce !ar be$o "ts va$ue as to "ns"nuate any bad !a"t, nor

as tere any so"n# or even an "nt"mat"on o! co$$us"on beteente ser"!! o conducted te sa$e and respondent ban%. T"sbe"n# so, te a$$e#ed noncomp$"ance "t te post"n# reu"rement,even "! true, "$$ not >ust"!y te sett"n# as"de o! te sa$e.


21/144

COMLAW REVIEWER 2009 james-deng-carol-mario-des-ria-marvin-reizel-chris-ric!-o"en-so# 2$ o% $&&

:orec$osure o"d ;! a$e -oes =ot Ta%e P$ace >10

:a"$ure to post not"ce "s not per se a #round !or "nva$"dat"n# tesa$e, prov"ded not"ce "s du$y pub$"sed "n a nespaper o! #enera$

c"rcu$at"on. ;n ur"sd"ct"ona$

de!ect "c "nva$"dates te sa$e. asanto$ suare$y app$"es.A$tou# $ac% o! repub$"cat"on o! not"ce o! sa$e as not been ra"sed, may ru$e on te re$evant "ssue o! -'P&s $ac% o! >ur"sd"ct"on too$d te !orec$osure sa$e.

Repub$"cat"on

Te ourt a$so ru$ed "n

ud#ment debtor asa$ays ad te cance to redeem and reacu"re te property. ;n!act, te property may be so$d !or $ess o! "ts !a"r mar%et va$ueprec"se$y because te $esser te pr"ce, te eas"er !or te oner toe!!ect redempt"on.

;ssuance

SA4S') ( I(EA $>>/0

T"s ourt as cons"stent$y e$d tat te duty o! te tr"a$ court to#rant a r"t o! possess"on "s m"n"ster"a$. uc r"t "ssues as amatter o! course upon te !"$"n# o! te proper mot"on and teapprova$ o! te correspond"n# bond. =o d"scret"on "s $e!t to te tr"a$court. Any uest"on re#ard"n# te re#u$ar"ty and va$"d"ty o! te sa$e,as e$$ as te conseuent cance$$at"on o! te r"t, "s to be

determ"ned "n a subseuent proceed"n# as out$"ned "n 8 o!Act 3135. uc uest"on cannot be ra"sed to oppose te "ssuanceo! te r"t, s"nce te proceed"n# "s e parte. Te recourse "sava"$ab$e even be!ore te ep"rat"on o! te redempt"on per"odprov"ded by $a and te Ru$es o! ourt.

Te purcaser, o as a r"#t to possess"on tat etends a!terte ep"rat"on o! te redempt"on per"od, becomes te abso$uteoner o! te property en no redempt"on "s made. Bence, at anyt"me !o$$o"n# te conso$"dat"on o! oners"p and te "ssuance o! ane trans!er cert"!"cate o! t"t$e "n te name o! te purcaser, e orse "s even more ent"t$ed to possess"on o! te property. ;n suc acase, te bond reu"red under 8 7 o! Act 3135 "s no $on#er

necessary, s"nce possess"on becomes an abso$ute r"#t o! tepurcaser as te con!"rmed oner.

T"s ourt as $on# sett$ed tat a pend"n# act"on !or annu$ment o!mort#a#e or !orec$osure does not stay te "ssuance o! a r"t o!


22/144


possess"on. Tere!ore, te content"on o! pet"t"oners tat te RTsou$d ave conso$"dated "v"$ ase =o. /1@219 "t R ase=o. /12@9 and reso$ved te annu$ment case pr"or to te"ssuance o! te r"t o! Possess"on "s unava"$"n#.

2B& ( S&'USES *ATAL $>>0

4ET'&'LITA) BA)K A)2 TUST %'4&A): ( S&'USESBA)%E $>>80

Te r"t o! possess"on as not "rre#u$ar desp"te te !act tatpet"t"oner d"d not post a bond. Te post"n# o! a bond as acond"t"on !or te "ssuance o! te r"t o! possess"on becomesnecessary on$y "! "t "s app$"ed !or "t"n one year !rom tere#"strat"on o! te sa$e "t te re#"ster o! deeds, i.e., dur"n# te

redempt"on per"od "nasmuc as oners"p as not yet vested onte cred"tormort#a#ee. A!ter te oneyear per"od, and noredempt"on as made, te mort#a#or $oses a$$ "nterest over "t. ;nt"s case, respondents ere a$ready str"pped o! te"r r"#ts overte propert"es en tey !a"$ed to redeem te same "t"n oneyear !rom ay 3, 1999, te date o! re#"strat"on o! te sa$e. Bence,en pet"t"oner app$"ed !or te r"t a!ter te ep"rat"on o! teredempt"on per"od tere as even more reason to "ssue te r"t.

8cept"on To Te Ru$e Tat ;ssuance

Te spouses oDada, av"n# succeeded PP; "n te possess"on o!En"t =o. 4/2, cannot be cons"dered a t"rd party o$d"n# te sa"dproperty adverse$y to PP;, te de!au$t"n# debtor0mort#a#or.Resu$tant$y, te #enera$ ru$e, and not te ecept"on, app$"es to te"nstant Pet"t"on. ;t as te mandatory and m"n"ster"a$ duty o! tea%at" "ty RT to #rant te ex partepet"t"on o! ' and orderte "ssuance o! a r"t o! possess"on "n te $atter&s !avor over En"t=o. 4/2. ;t as $"%e"se mandatory and m"n"ster"a$ !or te $er% o!ourt to comp$y "t te a%at" "ty RT order by "ssu"n# te r"t

o! possess"on, and !or te er"!! to "mp$ement te r"t by !"rst"ssu"n# a not"ce to vacate to te occupants o! En"t =o. 4/2.

=ature

S&'USES LA)2IT' ( %A $>>0

;n aDo v. Repub$"c urety ;nsurance o., ;nc., t"s ourt asmade "t c$ear tat "t "s on$y ere, by vo$untary a#reement o! tepart"es, cons"st"n# o! etens"ons o! te redempt"on per"od, !o$$oedby comm"tment by te debtor to pay te redempt"on pr"ce at a !"eddate, "$$ te concept o! $e#a$ redempt"on be converted "nto one o!

convent"ona$ redempt"on.Bere, tere "s no so"n# atsoever tat pet"t"oners a#reed topay te redempt"on pr"ce.


23/144

COMLAW REVIEWER 2009 james-deng-carol-mario-des-ria-marvin-reizel-chris-ric!-o"en-so# 2' o% $&&

prescr"bed by $a and may terea!ter br"n# an act"on to en!orceredempt"on. ;!, on te oter and, te per"od "s a$$oed to $apsebe!ore te r"#t o! redempt"on "s eerc"sed, ten te act"on toen!orce redempt"on "$$ not prosper, even "! te act"on "s brou#t"t"n te ord"nary prescr"pt"ve per"od. oreover, te per"od "t"n"c to redeem te property so$d at a ser"!!&s sa$e "s notsuspended by te "nst"tut"on o! an act"on to annu$ te !orec$osure

sa$e. ;t "s c$ear, ten, tat pet"t"oners ave $ost any r"#t or "nterestover te sub>ect property pr"mar"$y because o! te"r !a"$ure toredeem te same "n te manner and "t"n te per"od prescr"bedby $a. Te"r be$ated attempts to uest"on te $e#a$"ty and va$"d"tyo! te !orec$osure proceed"n#s and pub$"c auct"on must accord"n#$y!a"$.

E:ES ( )'BLE5AS 1-7;0

Redempt"on "s not te concern mere$y o! te auct"onvendee andte mort#a#or, but a$so o! te $atter&s successors "n "nterest or any>ud"c"a$ cred"tor or >ud#ment cred"tor o! sa"d mort#a#or, or anyperson av"n# a $"en on te property subseuent to te mort#a#eunder "c te property as been so$d. ;t "s prec"se$y !or t"sreason tat te cert"!"cate o! sa$e sou$d be re#"stered, !or on$yupon suc re#"strat"on may "t $e#a$$y be sa"d tat proper not"ce,tou# construct"ve, as been served unto poss"b$e redempt"onerscontemp$ated "n te $a. ;t "s !or t"s reason tat te date o! sa$ement"oned "n 8 @ o! Act 3135 sou$d be construed to mean tedate o! re#"strat"on o! te cert"!"cate o! sa$e "n te o!!"ce o! tere#"ster o! deeds concerned. Te and Re#"strat"on omm"ss"oneras r"#t "n order"n# te Re#"ster o! -eeds o! R"Da$ to deny tere#"strat"on o! te -eed o! a$e and te A!!"dav"t o! onso$"dat"ono! LA+' ( E&UBLI% SUET: 1-;>0

Te part"es ad abandoned ent"re$y te concept o! $e#a$redempt"on "n t"s case and converted "t "nto one o! convent"ona$redempt"on, "n "c te on$y #overn"n# !actor as te a#reementbeteen tem.

Te p$a"nt"!!sI repeated reuests !or t"me "t"n "c to redeem,eac "t a de!"n"te date o! ep"rat"on, #enerated b"nd"n# contractsen approved by te de!endant company. A contract, need$ess tosay, as te !orce o! $a beteen te part"es. ;n any event, tepr"nc"p$e o! estoppe$ ou$d step "n to prevent te p$a"nt"!!s !rom#o"n# bac% upon te"r on acts and representat"ons to tepre>ud"ce o! te oter party o re$"ed upon tem. T"s "s apr"nc"p$e o! eu"ty and natura$ >ust"ce, epress$y adopted "n our"v"$ ode (Arts. 1431 et se.) and art"cu$ated as one o! teconc$us"ve presumpt"ons "n Ru$e 31, ec. 3(a), o! our Ru$es o!ourt as !o$$os+

enever a party as, by "s on dec$arat"on, act, or om"ss"on,"ntent"ona$$y and de$"berate$y $ed anoter to be$"eve a part"cu$art"n# true, and to act upon suc be$"e!, e cannot, "n any $"t"#at"onar"s"n# out o! suc dec$arat"on, act, or om"ss"on, be perm"tted to!a$s"!y "t.

IBAA) UAL BA)K ( %A 1---0

en pet"t"oner rece"ved a copy o! te ert"!"cate o! a$ere#"stered "n te

Te doctr"ne "n aDo vs. Repub$"c urety and ;nsurance o., ;nc.does not app$y "n t"s case. ;n tat case te court e$d tat te one

year per"od o! redempt"on prov"ded "n Act =o. 3135 "s on$yd"rectory and can be etended by a#reement o! te part"es. 'ut "tbears not"n# tat "n aDo te part"es vo$untar"$y a#reed to etendte redempt"on per"od. Tus, te concept o! $e#a$ redempt"on asconverted by te part"es "n aDo "nto convent"ona$ redempt"on.T"s "s not so "n te "nstant case. Tere as no vo$untarya#reement. ;n !act, te ser"!! un"$atera$$y and arb"trar"$y etendedte per"od o! redempt"on to to (2) years "n te ert"!"cate o! a$e.Te part"es ere not even pr"vy to te etens"on made by teser"!!. =onete$ess, as above d"scussed, te ban% cannot a!terte $apse o! to years "ns"st tat te redempt"on per"od as oneyear on$y.

Add"t"ona$$y, te ru$e on redempt"on "s $"bera$$y "nterpreted "n !avoro! te or"#"na$ oner o! a property. Te !act a$one tat e "sa$$oed te r"#t to redeem c$ear$y demonstrates teso$"c"tousness o! te $a "n #"v"n# "m anoter opportun"ty, sou$d"s !ortune "mprove, to recover "s $ost property.

R"#t

3UETA ALBA ES'T ( %A $>>>0

:rom te var"ous dec"s"ons, reso$ut"ons and orders a uo "t can be#$eaned tat at pet"t"oner as been ad>ud#ed to ave as on$y

te eu"ty o! redempt"on over sub>ect propert"es.


24/144

COMLAW REVIEWER 2009 james-deng-carol-mario-des-ria-marvin-reizel-chris-ric!-o"en-so# 2& o% $&&

ere a mort#a#e "s !orec$osed etra>ud"c"a$$y, Act 3135 #rants tote mort#a#or te r"#t o! redempt"on "t"n one (1) year !rom tere#"strat"on o! te ser"!!&s cert"!"cate o! !orec$osure sa$e.

ere te !orec$osure "s >ud"c"a$$y e!!ected, oever, no eu"va$entr"#t o! redempt"on e"sts. Te $a dec$ares tat a >ud"c"a$!orec$osure sa$e, Xen con!"rmed by an order o! te court, sa$$

operate to d"vest te r"#ts o! a$$ te part"es to te act"on and tovest te"r r"#ts "n te purcaser, sub>ect to suc r"#ts o!redempt"on as may be a$$oed by $a.& uc r"#ts ecept"ona$$yXa$$oed by $a& (".e., even a!ter con!"rmat"on by an order o! tecourt) are tose #ranted by te carter o! te P"$"pp"ne =at"ona$'an% (Acts =o. 2747 and 293), and te enera$ 'an%"n# Act(R.A. 337). Tese $as con!er on te mort#a#or, "s successors "n"nterest or any >ud#ment cred"tor o! te mort#a#or, te r"#t toredeem te property so$d on !orec$osure a!ter con!"rmat"on by tecourt o! te !orec$osure sa$e "c r"#t may be eerc"sed "t"na per"od o! one (1) year, counted !rom te date o! re#"strat"on o!te cert"!"cate o! sa$e "n te Re#"stry o! Property.

'ut, to repeat, no suc r"#t o! redempt"on e"sts "n case o! >ud"c"a$!orec$osure o! a mort#a#e "! te mort#a#ee "s not te P=' or aban% or ban%"n# "nst"tut"on. ;n suc a case, te !orec$osure sa$e,Xen con!"rmed by an order o! te court. sa$$ operate tod"vest te r"#ts o! a$$ te part"es to te act"on and to vest te"rr"#ts "n te purcaser.& Tere ten e"sts on$y at "s %non aste eu"ty o! redempt"on. T"s "s s"mp$y te r"#t o! te de!endantmort#a#or to et"n#u"s te mort#a#e and reta"n oners"p o! teproperty by pay"n# te secured debt "t"n te 9/day per"od a!terte >ud#ment becomes !"na$, "n accordance "t Ru$e @, or evena!ter te !orec$osure sa$e but pr"or to "ts con!"rmat"on.

T"s "s te mort#a#or&s eu"ty (not r"#t) o! redempt"on "c, as

above stated, may be eerc"sed by "m even beyond te 9/dayper"od X!rom te date o! serv"ce o! te order,& and even a!ter te!orec$osure sa$e "tse$!, prov"ded "t be be!ore te order o!con!"rmat"on o! te sa$e. A!ter suc order o! con!"rmat"on, noredempt"on can be e!!ected any $on#er.

Redempt"on Pr"ce To 'e Pa"d 'y Accommodat"on ort#a#ors

BEL' ( &)B $>>10

8duardo 'e$o, ass"#nor o! te pet"t"oners, "s an accommodat"onmort#a#or. Accommodat"on mort#a#ors as suc are not "n any

ay $"ab$e !or te payment o! te $oan or pr"nc"pa$ ob$"#at"on o! tedebtor0borroer. Te $"ab"$"ty o! te accommodat"on mort#a#oretends on$y up to te $oan va$ue o! te"r mort#a#ed property andnot to te ent"re $oan "tse$!. Bence, "t "s on$y >ust tat tey bea$$oed to redeem te"r mort#a#ed property by pay"n# on$y tewinnin= bid price plus interestat te pub$"c auct"on sa$e "trespect on$y to te property be$on#"n# to te accommodat"onmort#a#or.

Te pr"nc"p$e o! "nd"v"s"b"$"ty o! mort#a#e contracts does not app$yto te r"#t o! redempt"on o! an accommodat"on mort#a#or and erass"#nees. ;nd"v"s"b"$"ty ar"ses on$y ere tere "s a debt, tat "s,tere "s a debtorcred"tor re$at"ons"p. 'ut, t"s re$at"ons"p "s

ant"n# "n te case at bar "n te sense tat pet"t"oners areass"#nees o! an accommodat"on mort#a#or and not o! a debtormort#a#or. Bence, "t "s !a"r and $o#"ca$ to a$$o te pet"t"oners toredeem on$y te property be$on#"n# to te"r ass"#nor, 8duardo'e$o.

"t respect to te 4 parce$s o! $and be$on#"n# to 8s$abonpouses, pet"t"oners be"n# tota$ stran#ers to sa"d $ots $ac% $e#a$persona$"ty to redeem te same. :a"r p$ay and >ust"ce demand tatrespondent P='&s "nterest o! recover"n# "ts ent"re ban% c$a"msou$d not be at te epense o! pet"t"oners, as ass"#nees o! 'e$o,o "s not "ndebted to "t.

Preserv"n# Te R"#t

Accord"n# to >ur"sprudence, te redempt"oner !aced "t suc aprob$em may preserve "s r"#t o! redempt"on trou# >ud"c"a$act"on "c "n every case must be !"$ed "t"n te oneyear per"odo! redempt"on. Te !"$"n# o! te court act"on to en!orce redempt"on,be"n# eu"va$ent to a !orma$ o!!er to redeem, ou$d ave te e!!ecto! preserv"n# "s redempt"ve r"#ts and C!reeD"n#C te ep"rat"on o!te oneyear per"od. T"s "s a !a"r "nterpretat"on prov"ded teact"on "s !"$ed on t"me and "n #ood !a"t, te redempt"on pr"ce "s!"na$$y determ"ned and pa"d "t"n a reasonab$e t"me, and te r"#tso! te part"es are respected.

tated oter"se, te !ore#o"n# "nterpretat"on, as app$"ed to tecase at bar, as tree cr"t"ca$ d"mens"ons+ (1) t"me$y redempt"on orredempt"on by ep"rat"on date (or, as at appened "n t"s case,te redempt"oner as !orced to resort to >ud"c"a$ act"on to C!reeDeCte ep"rat"on o! te redempt"on per"od)* (2) #ood !a"t as a$ays,mean"n#, te !"$"n# o! te pr"vate respondent&s act"on on Au#ust 13,1993 must ave been !or te so$e purpose o! determ"n"n# teredempt"on pr"ce and not to stretc te redempt"ve per"od"nde!"n"te$y* and (3) once te redempt"on pr"ce "s determ"ned "t"na reasonab$e t"me, te redempt"oner must ma%e prompt payment"n !u$$.

;n te "nstant case, te respondents d"d not tender payment "t"nte per"od set by te tr"a$ court. ;nstead, tey as%ed !or a 45dayetens"on to tender payment. uc 45day etens"on !or paymentmust be den"ed.

Te pendency o! te r"#t o! redempt"on depresses te mar%et

va$ue o! te $and unt"$ te per"od ep"res. Perm"tt"n# pr"vaterespondent to !"$e a su"t !or redempt"on, "t e"ter party unab$e to!oresee en !"na$ >ud#ment "$$ come, renders mean"n#$ess teper"od !"ed by te statute !or e!!ect"n# te redempt"on. ;t ma%este redempt"ve per"od "nde!"n"te and cr"pp$es any e!!ort o! te$andoner to rea$"De te va$ue o! "s $and. ;n te same ay, tebuyer cannot "mmed"ate$y recover "s "nvestment. Tus, un$essand unt"$ te redempt"on "s reso$ved "t !"na$"ty, bot te$andoner&s and buyer&s needs cannot be met. Pet"t"oner andpr"vate respondent ere"n ere tus bas"ca$$y posed on s"m"$ar!oot"n# be!ore redempt"on. 'ut oever o! tem stands to be"rreparab$y "n>ured "n te $on# run deserves te ourt&s eu"tab$eprotect"on.

;n te "nstant case, te !act tat pr"vate respondent made a !orma$o!!er to redeem be!ore te ep"rat"on o! te per"od to redeem asnot suare$y at "ssue. Te !oca$ "ssue ere "s eter or not teetens"on o! te redempt"ve per"od by te tr"a$ court as e$$ "t"n


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pr"vate respondent&s preserved r"#t to redeem. Tec"rcumstances c$ear$y so "t as not.

Te opportun"ty to redeem te sub>ect property as never den"edto pr"vate respondent. B"s t"me$y !orma$ o!!er trou# >ud"c"a$ act"onto redeem as $"%e"se reco#n"Ded. 'ut tat "s ere "t ends. ecannot sanct"on and #rant every succeed"n# mot"on or pet"t"on

spec"a$$y "! !r"vo$ous or unreasonab$e !"$ed by "m because t"sou$d man"!est$y and unreasonab$y de$ay te !"na$ reso$ut"on o!oners"p o! te sub>ect property.

;n t"s case, no de!"n"te tender o! payment as made s"nce tere "sno cons"#nat"on. ons"#nat"on sou$d ave been made to so#ood !a"t and !"nanc"a$ capab"$"ty to redeem. :a"$ure to cons"#nas donr"#t re!$ect"ve o! :ranc"sco&s "ncapab"$"ty to pay !rom tevery start

ase :or 6ud"c"a$ Redempt"on =ot :"$ed ;n ood :a"t 'ut :or TePurpose ud"c"a$redempt"on. Pet"t"oner ad been !urn"sed updated tatements o!Account spec"!y"n# te redempt"on pr"ce even pr"or to teconso$"dat"on o! te t"t$e o! te !orec$osed property "n te ban%Isname. Te "nc$us"on o! $ate payment car#es, !orec$osureepense, attorneyIs !ees, $"u"dated dama#es, !orec$osure !ee, and"nterests tere"n as pursuant to te oan A#reement. ons"der"n#tat te oan A#reement as read and !ree$y adered to bypet"t"oner, te st"pu$at"ons tere"n are b"nd"n# on er. 'ased on te!ore#o"n#, "t "s c$ear tat pet"t"oner d"d not !"$e te "nstant case !or>ud"c"a$ redempt"on "n #ood !a"t. ;t as not !"$ed !or te purpose o!determ"n"n# te correct redempt"on pr"ce but to stretc teredempt"on per"od "nde!"n"te$y, "c "s not a$$oed by $a.

X

(I. BA)*K' SE)TAL )* &ILI&I)AS LAWRA 7@53

7.1 Topics

tate Po$"c"es

SE% 1 2eclaration o &olicy. M Te tate sa$$ ma"nta"n acentra$ monetary autor"ty tat sa$$ !unct"on and operate as an"ndependent and accountab$e body corporate "n te d"scar#e o!

"ts mandated respons"b"$"t"es concern"n# money, ban%"n# andcred"t. ;n $"ne "t t"s po$"cy, and cons"der"n# "ts un"ue !unct"onsand respons"b"$"t"es, te centra$ monetary autor"ty estab$"sedunder t"s Act, "$e be"n# a #overnmentoned corporat"on, sa$$en>oy !"sca$ and adm"n"strat"ve autonomy.

Bo tate Po$"c"es Are To 'e Ac"eved

SE% $ %reation o the Ban=?o Sentral. M Tere "s erebyestab$"sed an "ndependent centra$ monetary autor"ty, "c sa$$be a body corporate %non as te 'an#%o entra$ n# P"$"p"nas,

erea!ter re!erred to as te 'an#%o entra$. Te cap"ta$ o! te'an#%o entra$ sa$$ be :"!ty b"$$"on pesos (P5/,///,///,///), tobe !u$$y subscr"bed by te overnment o! te Repub$"c, erea!terre!erred to as te overnment, Ten b"$$"on pesos(P1/,///,///,///) o! "c sa$$ be !u$$y pa"d !or by teovernment upon te e!!ect"v"ty o! t"s Act and te ba$ance to bepa"d !or "t"n a per"od o! to (2) years !rom te e!!ect"v"ty o! t"sAct "n suc manner and !orm as te overnment, trou# teecretary o! :"nance and te ecretary o! 'ud#et andana#ement, may terea!ter determ"ne.

SE% 7. %o#position o the 4onetary Board. M Te poers and!unct"ons o! te 'an#%o entra$ sa$$ be eerc"sed by te 'an#%o

entra$ onetary 'oard, erea!ter re!erred to as te onetary'oard, composed o! seven (7) members appo"nted by tePres"dent o! te P"$"pp"nes !or a term o! s" (@) years.

Te seven (7) members are+(a) te overnor o! te 'an#%o entra$, o sa$$ be te a"rmano! te onetary 'oard. Te overnor o! te 'an#%o entra$ sa$$be ead o! a department and "s appo"ntment sa$$ be sub>ect tocon!"rmat"on by te omm"ss"on on Appo"ntments. enever teovernor "s unab$e to attend a meet"n# o! te 'oard, e sa$$des"#nate a -eputy overnor to act as "s a$ternate+ Prov"ded,Tat "n suc event, te onetary 'oard sa$$ des"#nate one o! "tsmembers as act"n# a"rman*

(b) a member o! te ab"net to be des"#nated by te Pres"dent o!te P"$"pp"nes. enever te des"#nated ab"net ember "sunab$e to attend a meet"n# o! te 'oard, e sa$$ des"#nate anEndersecretary "n "s -epartment to attend as "s a$ternate* and

(c) !"ve (5) members o sa$$ come !rom te pr"vate sector, a$$ o!om sa$$ serve !u$$t"me+ Prov"ded, oever, Tat o! temembers !"rst appo"nted under te prov"s"ons o! t"s sub8,tree (3) sa$$ ave a term o! s" (@) years, and te oter to (2),tree (3) years. =o member o! te onetary 'oard may bereappo"nted more tan once.

SE% -. 2is"ualiications. M ;n add"t"on to te d"sua$"!"cat"ons"mposed by Repub$"c Act =o. @713, a member o! te onetary'oard "s d"sua$"!"ed !rom be"n# a d"rector, o!!"cer, emp$oyee,consu$tant, $ayer, a#ent or stoc%o$der o! any ban%, uas"ban% orany oter "nst"tut"on "c "s sub>ect to superv"s"on or eam"nat"onby te 'an#%o entra$, "n "c case suc member sa$$ res"#n!rom, and d"vest "mse$! o! any and a$$ "nterests "n suc "nst"tut"onbe!ore assumpt"on o! o!!"ce as member o! te onetary 'oard.

Te members o! te onetary 'oard com"n# !rom te pr"vatesector sa$$ not o$d any oter pub$"c o!!"ce or pub$"c emp$oymentdur"n# te"r tenure. =o person sa$$ be a member o! te onetary'oard "! e as been connected d"rect$y "t any mu$t"$atera$ban%"n# or !"nanc"a$ "nst"tut"on or as a substant"a$ "nterest "n anypr"vate ban% "n te P"$"pp"nes, "t"n one (1) year pr"or to "sappo"ntment* $"%e"se, no member o! te onetary 'oard sa$$ beemp$oyed "n any suc "nst"tut"on "t"n to (2) years a!ter te


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ep"rat"on o! "s term ecept en e serves as an o!!"c"a$representat"ve o! te P"$"pp"ne overnment to suc "nst"tut"on.

SE% 11. 4eetin=s. M Te onetary 'oard sa$$ meet at $eastonce a ee%. Te 'oard may be ca$$ed to a meet"n# by teovernor o! te 'an#%o entra$ or by to (2) oter members o! te'oard.

Te presence o! !our (4) members sa$$ const"tute a uorum+Prov"ded, Tat "n a$$ cases te overnor or "s du$y des"#nateda$ternate sa$$ be amon# te !our (4).

En$ess oter"se prov"ded "n t"s Act, a$$ dec"s"ons o! te onetary'oard sa$$ reu"re te concurrence o! at $east !our (4) members.

Te 'an#%o entra$ sa$$ ma"nta"n and preserve a comp$ete recordo! te proceed"n#s and de$"berat"ons o! te onetary 'oard,"nc$ud"n# te tapes and transcr"pts o! te steno#rap"c notes,e"ter "n te"r or"#"na$ !orm or "n m"cro!"$m.

SE% 1. E!ercise o Authority. M ;n te eerc"se o! "ts autor"ty,te onetary 'oard sa$$+(a) "ssue ru$es and re#u$at"ons "t cons"ders necessary !or tee!!ect"ve d"scar#e o! te respons"b"$"t"es and eerc"se o! tepoers vested upon te onetary 'oard and te 'an#%o entra$.Te ru$es and re#u$at"ons "ssued sa$$ be reported to te Pres"dentand te on#ress "t"n !"!teen (15) days !rom te date o! te"r"ssuance*

(b) d"rect te mana#ement, operat"ons, and adm"n"strat"on o! te'an#%o entra$, reor#an"De "ts personne$, and "ssue suc ru$es andre#u$at"ons as "t may deem necessary or conven"ent !or t"spurpose. Te $e#a$ un"ts o! te 'an#%o entra$ sa$$ be under te

ec$us"ve superv"s"on and contro$ o! te onetary 'oard*

(c) estab$"s a uman resource mana#ement system "c sa$$#overn te se$ect"on, "r"n#, appo"ntment, trans!er, promot"on, ord"sm"ssa$ o! a$$ personne$. uc system sa$$ a"m to estab$"spro!ess"ona$"sm and ece$$ence at a$$ $eve$s o! te 'an#%o entra$"n accordance "t sound pr"nc"p$es o! mana#ement.

A compensat"on structure, based on >ob eva$uat"on stud"es anda#e surveys an sub>ect to te 'oardIs approva$, sa$$ be"nst"tuted as an "nte#ra$ component o! te 'an#%o entra$Is umanresource deve$opment pro#ram+ Prov"ded, Tat te onetary'oard sa$ ma%e "ts on system con!orm as c$ose$y as poss"b$e

"t te pr"nc"p$es prov"ded !or under Repub$"c Act =o. @75+Prov"ded, oever, Tat compensat"on and a#e structure o!emp$oyees ose pos"t"ons !a$$ under sa$ary #rade 19 and be$osa$$ be "n accordance "t te rates prescr"bed under Repub$"cAct =o. @75.

ud#ed "n suc act"on or proceed"n# to be $"ab$e !orne#$"#ence or m"sconduct.

;n te event o! a sett$ement or comprom"se, "ndemn"!"cat"on sa$$be prov"ded on$y "n connect"on "t suc matters covered by tesett$ement as to "c te 'an#%o entra$ "s adv"sed by eterna$counse$ tat te person to be "ndemn"!"ed d"d not comm"t anyne#$"#ence or m"sconduct.

Te costs and epenses "ncurred "n de!end"n# te a!orement"onedact"on, su"t or proceed"n# may be pa"d by te 'an#%o entra$ "nadvance o! te !"na$ d"spos"t"on o! suc act"on, su"t or proceed"n#upon rece"pt o! an underta%"n# by or on bea$! o! te member,o!!"cer, or emp$oyee to repay te amount advanced sou$d "tu$t"mate$y be determ"ned by te onetary 'oard tat e "s notent"t$ed to be "ndemn"!"ed as prov"ded "n t"s sub8.

SE% 17. esponsibility. M embers o! te onetary 'oard,o!!"c"a$s, eam"ners, and emp$oyees o! te 'an#%o entra$ o"$$!u$$y v"o$ate t"s Act or o are #u"$ty o! ne#$"#ence, abuses oracts o! ma$!easance or m"s!easance or !a"$ to eerc"se

etraord"nary d"$"#ence "n te per!ormance o! " dut"es sa$$ be e$d$"ab$e !or any $oss or "n>ury su!!ered by te 'an#%o entra$ or oterban%"n# "nst"tut"ons as a resu$t o! suc v"o$at"on, ne#$"#ence,abuse, ma$!easance, m"s!easance or !a"$ure to eerc"seetraord"nary d"$"#ence.

"m"$ar respons"b"$"ty sa$$ app$y to members, o!!"cers, andemp$oyees o! te 'an#%o entra$ !or+(1) te d"sc$osure o! any "n!ormat"on o! a con!"dent"a$ nature, or any"n!ormat"on on te d"scuss"ons or reso$ut"ons o! te onetary'oard, or about te con!"dent"a$ operat"ons o! te 'an#%o entra$,un$ess te d"sc$osure "s "n connect"on "t te per!ormance o!o!!"c"a$ !unct"ons "t te 'an#%o entra$, or "s "t pr"or

autor"Dat"on o! te onetary 'oard or te overnor* or

(2) te use o! suc "n!ormat"on !or persona$ #a"n or to te detr"mento! te overnment, te 'an#%o entra$ or t"rd part"es+ Prov"ded,oever, Tat any data or "n!ormat"on reu"red to be subm"tted tote Pres"dent and0or te on#ress, or to be pub$"sed under teprov"s"ons o! t"s Act sa$$ not be cons"dered con!"dent"a$.

SE% 18. epresentation o the 4onetary Board and theBan=?o Sentral. M Te overnor o! te 'an#%o entra$ sa$$ bete pr"nc"pa$ representat"ve o! te onetary 'oard and o! te'an#%o entra$ and, "n suc capac"ty and "n accordance "t te"nstruct"ons o! te onetary 'oard, e sa$$ be empoered to+

(a) represent te onetary 'oard and te 'an#%o entra$ "n a$$dea$"n#s "t oter o!!"ces, a#enc"es and "nstrumenta$"t"es o! teovernment and a$$ oter persons or ent"t"es, pub$"c or pr"vate,eter domest"c, !ore"#n or "nternat"ona$*


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(b) s"#n contracts entered "nto by te 'an#%o entra$, notes andsecur"t"es "ssued by te 'an#%o entra$, a$$ reports, ba$anceseets, pro!"t and $oss statements, correspondence and oterdocuments o! te 'an#%o entra$.

Te s"#nature o! te overnor may be "n !acs"m"$e eneverappropr"ate*

(c) represent te 'an#%o entra$, e"ter persona$$y or trou#counse$, "nc$ud"n# pr"vate counse$, as may be autor"Ded by teonetary 'oard, "n any $e#a$ proceed"n#s, act"on or spec"a$"Ded$e#a$ stud"es* and

(d) de$e#ate "s poer to represent te 'an#%o entra$, asprov"ded "n sub8s (a), (b) and (c) o! t"s 8, to oter o!!"cersupon "s on respons"b"$"ty+ Prov"ded, oever, Tat "n order topreserve te "nte#r"ty and te prest"#e o! "s o!!"ce, te overnor o!te 'an#%o entra$ may coose not to part"c"pate "n pre$"m"naryd"scuss"ons "t any mu$t"$atera$ ban%"n# or !"nanc"a$ "nst"tut"on onany ne#ot"at"ons !or te overnment "t"n or outs"de te

P"$"pp"nes. -ur"n# te ne#ot"at"ons, e may "nstead berepresented by a permanent ne#ot"ator.

SE% /;. Appoint#ent and &ersonnel. M Te a"rman o! teomm"ss"on on Aud"t sa$$ act as te e o!!"c"o aud"tor o! te'an#%o entra$ and, as suc, e "s empoered and autor"Ded toappo"nt a representat"ve o sa$$ be te aud"tor o! te 'an#%oentra$ and, "n accordance "t $a, !" "s sa$ary, and to appo"ntand !" sa$ar"es and number o! personne$ to ass"st sa"drepresentat"ve "n "s or%. Te sa$ar"es and oter emo$umentssa$$ be pa"d by te omm"ss"on. Te aud"tor o! te 'an#%oentra$ and personne$ under "m may be removed on$y by tea"rman o! te omm"ss"on.

Te representat"ve o! te a"rman o! te omm"ss"on must be acert"!"ed pub$"c accountant "t at $east ten (1/) years eper"enceas suc. =o re$at"ve o! any member o! te onetary 'oard or tea"rman o! te omm"ss"on "t"n te s"t de#ree o!consan#u"n"ty or a!!"n"ty sa$$ be appo"nted suc representat"ve.

Bo Te 'P Band$es ;n -"stressW

$on)ervator)!i+ (A 7653 S#$ 29 and (A 8971 S#$ 67:

SE% $-. Appoint#ent o %onser@ator. M enever, on tebas"s o! a report subm"tted by te appropr"ate superv"s"n# oream"n"n# department, te onetary 'oard !"nds tat a ban% or auas"ban% "s "n a state o! cont"nu"n# "nab"$"ty or un"$$"n#ness toma"nta"n a cond"t"on o! $"u"d"ty deemed adeuate to protect te"nterest o! depos"tors and cred"tors, te onetary 'oard mayappo"nt a conservator "t suc poers as te onetary 'oardsa$$ deem necessary to ta%e car#e o! te assets, $"ab"$"t"es, andte mana#ement tereo!, reor#an"De te mana#ement, co$$ect a$$mon"es and debts due sa"d "nst"tut"on, and eerc"se a$$ poersnecessary to restore "ts v"ab"$"ty. Te conservator sa$$ report andbe respons"b$e to te onetary 'oard and sa$$ ave te poer tooverru$e or revo%e te act"ons o! te prev"ou

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