Certainly, let's delve further into the Philippine laws governing real estate mortgage as outlined in Articles

2124-2131 of the Civil Code under the category of Obligations and Contracts.

Philippine Laws on Real Estate Mortgage:

1. Object of Mortgage:

 Immovables and Alienable Real Rights (Article 2124):

 Immovables, such as land and buildings, can be the primary objects of a

mortgage.

 Alienable real rights imposed on immovables, such as easements or servitudes,

can also be subject to mortgage.

 Chattel Mortgage (Article 2124):

 Chattel mortgages are permissible for movables (personal property) as per

Philippine law.

 This allows individuals to use movable assets, like vehicles or machinery, as

collateral for a loan.

2. Definition:

 Contract Securing Fulfillment (Article 2124):

 A mortgage is defined as a contract that secures the fulfillment of a principal

obligation.

 It is considered a real, accessory, unilateral, and subsidiary contract.

3. Possession:

 Mortgagor's Retention of Possession (Article 2124):

 The mortgagor (borrower) retains general possession and use of the mortgaged
property.

 The property, while subject to a lien, remains under the ownership of the
mortgagor.

4. Interest Payment:

 Antichresis Creditor (Article 2124):

 The mortgagee (lender) is subject to the obligations of an antichresis creditor for

fruits or interest.

 Antichresis involves the right to use and enjoy the property in lieu of interest
payment.

5. Subject Matter:

 Limited to Immovables (Article 2124):

 The subject matter of a mortgage is primarily limited to immovables.

  Alienable real rights over immovables can also be mortgaged.

 Exception for Future Property (Article 2124):

 Future property cannot be the direct object of a mortgage unless a valid

stipulation is made.

6. Requisites of a Valid Mortgage (Article 2125):

 Secure Fulfillment of Principal Obligation:

 The mortgage must secure the fulfillment of a principal obligation.

 Mortgagor Absolute Owner:

 The mortgagor must be the absolute owner of the property.

 Free Disposal of Mortgaged Thing:

 The mortgagor should have the legal capacity to freely dispose of the property.

 Alienation Possible:

 The mortgaged property may be alienated when the principal obligation becomes
due.

 Recorded in Registry of Property:

 For a mortgage to be valid and affect third parties, it must be recorded in the
Registry of Property.

7. Effect of Unregistered Mortgage (Article 2125):

 Binding Between Parties:

 Even if the mortgage is not registered, it remains binding between the parties.

 Actual Knowledge Equivalent to Registration:

 Actual knowledge on the part of the buyer is considered equivalent to

registration.

8. Procedure for Mortgage Contract:

 Execution and Notarization:

 Parties must execute the mortgage document, and the document must be
notarized.

 Stamp Tax and Registration Fees:

 Documentary stamp tax must be paid within the first five days of the succeeding
month.

 Registration fees are paid at the Office of the Register of Deeds, and the
mortgage is annotated on the property title.

9. Effects of Mortgage's Invalidity on Principal Obligation (Article 2126):

  Principal Obligation Remains Valid:

 Even if the mortgage is invalid, the principal obligation (debt) remains legally
enforceable.

 Mortgage Deed as Evidence:

 The mortgage deed serves as evidence of the existence of the principal

obligation.

10. Effects of Mortgage (Article 2126):

 Creates a Real Right:

 Property Remains Subject:

 The property remains subject to the fulfillment of the principal obligation.

 Reliance on Certificate of Title:

 The mortgagee relies on the information in the mortgagor's certificate of title.

 Ownership Until Expropriation:

 Ownership remains with the registered owner until expropriation is completed.

 Encumbrance (Article 2127):

 Extension to Accessions and Improvements:

 The mortgage extends to natural accessions, improvements, growing fruits,

rents, and income.

 Express Stipulation to Exclude:

 To exclude certain items, there must be an express stipulation to that effect.

11. Alienation of Mortgage Credit (Article 2128):

 Alienation Possible with Formalities:

 The mortgage credit may be alienated or assigned to a third person with the formalities
required by law.

12. Creditor's Rights Against Transferee (Article 2129):

 Claiming Payment from Third Person:

 The mortgage creditor may claim payment from a third person in possession of the
mortgaged property.

 Prior demand for payment from the debtor is necessary.

13. Stipulations Regarding Mortgage (Article 2130):

 Void Stipulation Prohibiting Alienation:

 Any stipulation forbidding the owner from alienating the immovable mortgaged is void.
 14. Mortgage Regulation (Article 2131):

 Governed by Mortgage Law and Land Registration Law:

 The form, extent, and consequences of a mortgage are governed by the provisions of the
Mortgage Law and Land Registration Law.

Additional Points:

15. Prohibition of Alienation:

 Void Stipulation:

 A stipulation prohibiting alienation is considered void.

16. Mortgagee's Right to Regulate:

 Regulation vs. Prohibition:

 The mortgagee has the right to regulate but not prohibit encumbrances without prior
consent.

 This allows the mortgagee to have a say in additional burdens on the mortgaged
property.

17. Concerns of Mortgagee:

 Monitoring Financial Condition:

 Mortgagees may monitor the financial condition of the mortgagor to ensure the ability to
fulfill obligations.

 Avoiding Litigious Situations:

 Regulating encumbrances can help the mortgagee avoid legal disputes and ensure the
property's value is maintained.

Chattel Mortgage Overview:

1. Definition and Characteristics:

 Definition (Article 2140):

 A chattel mortgage is a contract by virtue of which personal property is recorded in the

Chattel Mortgage Register as security for the performance of an obligation.

 Characteristics:

1. Accessory Contract:

 Chattel mortgage is an accessory contract, meaning its existence and validity are
dependent on the principal obligation it secures.

2. Formal Contract:

 It is a formal contract, and specific requirements, such as registration, must be

met.
2. Distinction from Pledge:

 What Makes it Different from a Pledge?

1. No Delivery Required:

 Unlike a pledge, there is no need to deliver the personal property to the

mortgagee.

2. Registration Requirement:

 Chattel mortgage requires registration in the Chattel Mortgage Register,

distinguishing it from a pledge.

3. Procedure for Sale:

 The procedure for the sale of the mortgaged property is different.

4. Excess and Deficiency:

 In case of foreclosure, if there is excess, it goes to the debtor; if there is

deficiency, the creditor may recover it.

 When to Choose Chattel Mortgage or Pledge?

 Opt for a chattel mortgage when the debtor needs to retain possession of the property.

3. Applicability of Pledge Provisions:

 Applicability of Pledge Provisions (Article 2141):

 The provisions of the Civil Code on pledge are applicable to chattel mortgages, insofar as
they are not in conflict with the Chattel Mortgage Law.

4. Laws Governing Chattel Mortgage:

 Laws Governing Chattel Mortgage:

1. Chattel Mortgage Law (Act 1508)

2. Civil Code provisions

3. Revised Administrative Code

4. Revised Penal Code

5. Offenses Involving Chattel Mortgage:

 Offenses:

1. Knowingly Removing Property:

 Knowingly removing mortgaged property to a different location without written

consent.

2. Selling or Pledging Mortgaged Property:

 Selling or pledging mortgaged property without the necessary consent.

6. Registration Requirements:
  Registration:

 Must be done in the Register of Deeds where the mortgagor resides.

 If the property is situated elsewhere, it needs to be registered in the Register of Deeds of

that area.

 Registration is crucial for the validity and enforceability of the chattel mortgage against
third parties.

 If the property is a car, registration with the Land Transportation Office (LTO) is also
required.

7. Formal Requirements and Affidavit of Good Faith:

 Form of Contract and Affidavit of Good Faith:

 The contract must be signed by both parties, and the affidavit of good faith is required.

 The affidavit of good faith states that the chattel mortgage is constituted to secure a
principal obligation and not for fraudulent purposes.

8. Description of Property and Foreclosure:

 Formal Requirement of Description:

 A description or schedule of the mortgaged properties must be attached to the contract.

 Payment of registration fees and documentary stamp taxes is also required.

 Foreclosure (Section 14, Chattel Mortgage Law):

1. 30-Day Cooling Off Period:

 There is a 30-day period before the public auction after the condition is broken.

2. Notice:

 At least 10 days' notice must be given to interested parties.

3. Possession by Sheriff:

 The sheriff must possess the property for delivery to the winning bidder. If the
mortgagor refuses, legal action may be necessary.

4. 30-Day Equity of Redemption:

 The mortgagor has a 30-day equity of redemption period to settle the obligation.

5. Recovery of Deficiency:

 After foreclosure, there could be a recovery of deficiency, subject to legal

provisions.

9. Application of Proceeds and Specific Performance:

 Application of Proceeds of Foreclosure:

1. Costs:
  Costs of foreclosure.

2. Obligation Itself:

 Payment of the obligation, including interest and penalties.

3. Junior Encumbrances:

 Payment of junior encumbrances.

4. Owner:

 Surplus, if any, goes to the owner.

 Specific Performance:

 An action for specific performance is considered an abandonment of the mortgagee's

rights.

This comprehensive overview provides insights into the legal framework, requirements, and procedures
governing chattel mortgages in the Philippines. The Chattel Mortgage Law, along with relevant provisions
from the Civil Code and other statutes, ensures the proper execution, registration, and enforcement of
chattel mortgages while safeguarding the interests of both debtors and creditors.