ANTICHRESIS

ART 2132. ​By the contract of antichresis the creditor acquires the right to receive the fruits of an
immovable of his debtor, with the obligation to apply them to the payment of the interest, if
owing, and thereafter to the principal of his credit

Definition Contract wherein the ​creditor acquires the right to receive the
fruits of an immovable of his debtor, with the obligation apply to
them to payment of interest​ and t​ hereafter to the principal of his
credit

Characteristics (1) Accessory​: it secures the performance of a principal obligation

(2) Formal​: must be in specified form to be valid
(3) Nominate
(4) Consensual​: does not require delivery of the immovable to the
creditor (but amount of principal and interest should be
specified in writing)
(a) If consensual vs. real = CONSENSUAL
(b) If consensual vs. formal = FORMAL

Parties (1) Debtor

(2) Creditor

Essential requisites (1) Consent

● given by those who have capacity
(2) Object
(3) Cause
● Unlike pledge, antichresis is NOT A REAL CONTRACT.
Hence, delivery of the property is not required for perfection

Delivery ● Requires the delivery​ by the debtor of the property given as

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

Right of the creditor ● Covers ​all the fruits of the encumbered property
to the fruits ○ BUT law gives the parties the freedom to stipulate
otherwise
● The reduction of the amount of fruits available to the creditor
does not vary the nature of the contract

Obligation to pay ● Obligation to pay interest is not essential (similar to the interest
interest NOT in contract of loan)
ESSENTIAL ● Words “If owing” (interest) reveal that it is not essential that the
loan should interest in order of that it can be guaranteed with a
contract of antichresis there being nothing in the Code to show
that antichresis, is only applicable to secure it the susceptible
of guaranteeing all kinds of obligations, pure or conditional
 A. Antichresis v. Pledge v. REM
ANTICHRESIS PLEDGE

Object Fruits of real property Personal property

Perfection By mere consent (provided that is in By delivery

writing) - 2135
REAL CONTRACT
CONSENSUAL CONTRACT

Similarities Debtor loses control of the subject matter

ANTICHRESIS REM

Possession Creditor acquires possession; property Debtor usually retain possession

is delivered to creditor

Rights acquired Only the right to receive fruits of the No such right; but it creates a real right
property; no real right created enforceable against the whole world

Obligation to pay YES (unless there is a stipulation to the NO (Creditor has no such obligation)
taxes and charges contrary)
upon the property

Obligation to apply YES NO (no such obligation on the part of

fruits to payment of Expressly stipulated that the creditor the mortgagee)
debt given possession should apply the
fruits to the payment and thereafter to
the principal credit

If a contract of loan w security does not

stipulate payment of interest but
provides for the delivery of the real
property as security for the payment
WITHOUT stating that the fruits are to
be applied to the payment of interest =
NOT antichresis

Obligations of the creditor

1. Pay taxes and charges upon the
property
2. Apply fruits to payment of the
debt
● In addition to these 2, creditor is
also bound to bear the
expenses necessary for
preservation and repair

Similarities Subject matter is real property

 B. Application of fruits to interest and principal

ART 2133. ​The ​actual market value of the fruits at the time of the application ​thereof to the
interest and principal ​shall be the measure of such application​.

Measure of application ● The ​contract does not cover immovable property

of fruits to interest and ONLY ITS FRUITS
principal ● Fruits of the immovable MUST BE APPRAISED at their
actual market value at the time of the application (2138)

C. Form of the antichresis contract

ART 2134. ​The amount of the principal and of the interest​ shall be specified in writing;
otherwise the contract of antichresis shall be void.

Form of the contract
● Art 2134 r​equires that a contract be in some form
in order that it may be valid ​(NOT ONLY TO
AFFECT 3RD PERSONS)
● Even if the antichresis is void, principal obligation
still valid
● Intended to prevent antichresis from being used for
purpose of usury
 D. Obligations of the creditor

ART 2135. ​The creditor unless there is a stipulation to the contrary is obliged to pay the taxes
and charges upon the estate.
He is also bound to bear the expenses necessary for its preservation and repair.
The sums spent for the purposes stated in this article shall be deducted from the fruits.

Obligations of the antichretic credito​r

(1) Payment of the taxes ● Unless there is a contrary stipulation

and charges upon ● If he does not pay taxes, he is required by law to
the estate pay indemnity for damages​ to the debtor
● If debtor pays for taxes which should have been
paid by creditor, the amount is to be applied to
the payment of the debt
○ Debtor is entitled to the return of the property
IF such payment discharged the whole debt

(2) Application of the ● Duty of the creditor is to render an account of said

fruits of the estate fruits to the debtor
● Then apply said fruits

E. Rights of the creditor

ART 2136. ​The ​debtor​ ​cannot reacquire the enjoyment of the immovable without first
having totally paid what he owes the creditor.

But the latter, in order to exempt himself from the obligations imposed upon him by the
preceding article, ​may always compel the debtor to enter again upon the enjoyment of the
property,​ except when there is a stipulation to the contrary.

Right of the antichretic
creditor
(to reacquire enjoyment)
● Debtor cannot demand the return of the property until
the debt is totally paid since the property stands a
security for the payment of the obligation of the debtor
● If the creditor does not want to pay the taxes and
incur the expenses necessary for the preservation
and repair of the property he may compel the debtor
to reacquire the enjoyment of the same except when
there is a contrary stipulation.
 F. Remedies available to the creditor

ART 2137. ​The creditor does not acquire the ownership of the real estate for non-payment of
the debt within the period agreed upon.

Every stipulation to the contrary shall be void. But the creditor may petition the court for the
payment of the debt or the sale of the real property. In this case, the Rules of Court on the
foreclosure of mortgages shall apply.

Remedy of creditor in case of non payment of debt

(1) To bring an action ● If the debt is not paid, the creditor does not acquire
for specific ownership of the real estate since what is transferred
performance is not the ownership but merely the right to receive
fruits
● A stipulation allowing for the automatic appropriation
of the property to the antichretic creditor is void. But,
a stipulation authorizing the creditor to take actual or
constructive possession of the property is valid.

(2) Petition for judicial ● The parties, however, may agree on an extrajudicial
foreclosure under foreclosure in the same manner as they are allowed
rule 68 in contracts of mortgage and pledge.

Acquisition by creditor of property by prescription

Creditor and his ● The creditor and his successors-in-interest cannot

successors-in-interest
cannot ordinarily acquire by
prescription
ordinarily acquire by prescription the land given to
him, ​any agreement to the contrary being void.
● Possession in acquisitive prescription must be in
concept of an owner; in antichresis, the creditor is not
in the concept of the owner
○ Creditor is a mere holder placed in possession
by debtor
● He ​cannot acquire the ownership of the real
estate unless he repudiates his status as an
antichretic creditor
 G. Antichresis subject to Usury Law

ART 2138. ​The contracting parties may stipulate that the interest upon the debt be
compensated with the fruits of the property which is the object of the antichresis, provided that if
the value of the fruits should exceed the amount of interest allowed by the laws against usury,
the excess shall be applied to the principal.

Interest in antichresis ● The creditor is under obligation to apply the fruits of

subject to the Usury Law the property in satisfaction of:
(1) Whatever interest of the debt (first)
(2) To the payment of the principal (second)
● The fruits must be appraised on the basis of their
actual market value at the time of the application. If
their value should exceed the amount of interest
allowed by Usury Law → Excess applied to the
principal

H. Provisions on pledge and REM applicable

ART 2139. ​The last paragraph of article 2085, and articles 2089 to 2091 are applicable to this
contract.

Provisions on pledge and REM applicable

ART 2085 (4) Third persons may secure the obligation by

pledging/mortgaging their own property

ART 2089 Indivisibility of pledge/mortgage

ART 2090 Indivisibility is not affected by the fact that the debtors are not
solidarily liable

ART 2091 May secure all kinds of obligations

• Pure or Conditional

● Since an antichresis is constituted so that the creditor can receive the fruits and apply
them to the payment of interest and principal, an antichresis secures an obligation to pay
a sum of money