CIVIL LAW REVIEW 2 REVIEWER by MARX & MON
What does Art. 2118 say?
Art. 2118. If a credit which has been pledged becomes due before
it is redeemed, the pledgee may collect and receive the amount
due. He shall apply the same to the payment of his claim, and
deliver the surplus, should there be any, to the pledgor.
So there is an explicit allowance in the law for the
use of the proceeds of the credit and its application
to the satisfaction the obligation.
REAL ESTATE MORTGAGE (REM)
Real Estate Mortgage is a contract in which the debtor
guarantees to the creditor the fulfillment of a principal
obligation or the faithful compliance therewith,
therewith a real
property in case of non-fulfillment
fulfillment of the obligation at the
time stipulated.
Kinds of REM
• Conventional mortgage – voluntarily constituted by
the parties
• Legal mortgage – one required by law to guaranty
performance
• Equitable mortgage which reveals an intent to make
a property a security even if the contract lacks the
proper formalities of a REM
Example: Deed of sale with a right to repurchase. The
purchase price representing the amount that is due.
Why would a creditor prefer a deed of sale with right of
repurchase over a contract of loan secured by a REM?
It benefits the creditor more than the debtor. If it is
a deed of sale with right of repurchase that means
that the creditor immediately acquires ownership
over the property.
His security is not just a right to proceed against the property
in case of non-payment, his security is actually a conditional
ownership. He becomes the owner and the burden and
problem will lie on the on the mortgagor. The mortgagor
would be the one who would d run after him to get the
property. This is unfair to the mortgagor that is why the law
treats such transactions as equitable mortgages.
Art. 2085. The following requisites are essential to the contracts of pledge
and mortgage:
(1) That they be constituted to secure the fulfillment of a principal
obligation;
(2) That the pledgor or mortgagor be the absolute owner of the thing
pledged or mortgaged;
(3) That the persons constituting the pledge or mortgage have the
free disposal of their property, and in the absence thereof, that
they be legally authorized for the purpose.
Third persons who are not parties to the principal obligation may secure the
latter by pledging or mortgaging their own property.
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What are the characteristics of REM?
a) It is a real right and it is inseparable
i from the real
property on which it is constituted;
b) It is an accessory contract;
c) It is indivisible;
d) It is real property;
e) It is a limitation on ownership;
f) It can secure all kinds of obligations;
It is a real right and it is inseparable from the real property
on which it is constituted;
Note the provisions of Articles 2126 and 2129.
Art. 2126. The mortgage directly and immediately subjects the
property upon which it is imposed, whoever the possessor may
be, to the fulfillment of the obligation for
f whose security it was
constituted.
Art. 2129. The creditor may claim from a third person in
possession of the mortgaged property, the payment of the part of
the credit secured by the property which said third person
possesses, in the terms and with the formalities which the law
establishes.
This, however, presupposes that the mortgage is
either registered or if not, the existence of the
mortgage is known to the present possessor of the
property.
Explain how a pledge is not a real right but a
mortgage is…
Pledge is not a real right? Why?
Because if the thing pledged is found in the
rd
possession of a 3 person, the pledge is
deemed extinguished because of the
presumption in the law that it was returned
by the pledgee.
A real right is something which is enforceable against the
whole world. That is why if you have a mortgage on your
favor, it does not matters how many transfers of ownership
the property undergoes.
Example:
The mortgagor may have been Juan and the
property may have been transferred from to Pedro
to Celso to Cesar to Egay. Egay will still stand to lose
the property to you if you choose to foreclose the
mortgage. He cannot even say that he is not a party
to the loan or he was not a party to the mortgage,
because the mortgage is a lien that subjects the
property and follows it whenever it goes.
It is an accessory contract
 CIVIL LAW REVIEW 2 REVIEWER by MARX & MON
It is indivisible
It is real property by virtue of Art. 415 par. 10. A real right
constituted
uted over a real property is also considered as real
property.
It is a limitation on ownership, but it does not deprive the
owner of his ownership. The owner can still sell the property
subject to the mortgage.
It can secure all kinds of obligations eve
even unenforceable,
natural obligations and voidable obligations.
If you would differentiate REM from CM, their basic
differences would be: REM vs Chattel Mortgage (CM)
Subject matter
REM is constituted on immovable
CM is constituted over movable
Whether future obligation may be secured
REM may guarantee future obligations
CM cannot guarantee future obligations.
This is how CM is different from a pledge,
REM, and antichresis.
Requisites of a valid mortgage
1) It is constituted to secure a principal obligation;
2) The mortgagor is the absolute owner of the thing
pledged;
3) The person constituting the mortgage has the free
disposal of the thing mortgaged,
ged, or in the absence
thereof, that he be legally authorized to make the
mortgage;
4) The mortgage must appear in a public instrument;
5) The mortgage must be recorded in the Registry of
Property.
The mortgage must appear in a public instrument.
Take note of the provisions of Articles 1357 and 1358. This
would explain that the purpose of the requirement of
registration
ation is not really for the validity of the mortgage but
for its binding effect upon 3rd person.
You can have a REM that is embodied in a private instrument
and what’s more, you can compel the mortgagor to reduce
the mortgage in a public instrument.
Art. 1357. If the law requires a document or other special form, as
in the acts and contracts enumerated in the following article, the
contracting parties may compel each other to observe that form,
once the contract has been perfected. This right may be exercised
e
simultaneously with the action upon the contract. (1279a)
Art. 1358. The following must appear in a public document:
(1) Acts and contracts which have for their object the
creation, transmission, modification or extinguishment
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of real rights over imm
immovable property; sales of real
property or of an interest therein a governed by
Articles 1403, No. 2, and 1405;
(2) The cession, repudiation or renunciation of hereditary
rights or of those of the conjugal partnership of gains;
(3) The power to administer proper
property, or any other power
which has for its object an act appearing or which
should appear in a public document, or should
prejudice a third person;
(4) The cession of actions or rights proceeding from an act
appearing in a public document.
All other contracts where the amount involved exceeds five
hundred pesos must appear in writing, even a private one. But
sales of goods, chattels or things in action are governed by
Articles, 1403, No. 2 and 1405
Art. 2125. In addition to the requisites stated in Article 208 2085, it is
indispensable, in order that a mortgage may be validly constituted, that the
document in which it appears be recorded in the Registry of Property. If the
instrument is not recorded, the mortgage is nevertheless binding between
the parties.
The persons in whose favor the law establishes a mortgage have no other
right than to demand the execution and the recording of the document in
which the mortgage is formalized.
Although Art 2125 says that registration is indispensable to
the validity of a real
al mortgage, the fact remains that the
unregistered mortgage is nonetheless binding between the
parties. Thus, registration is only required to bind third
persons.
Art. 2125. In addition to the requisites stated in Article 2085, it is
indispensable, in order
rder that a mortgage may be validly constituted, that the
document in which it appears be recorded in the Registry of Property. If the
instrument is not recorded, the mortgage is nevertheless binding between
the parties.
The persons in whose favor the law establishes a mortgage have no other
right than to demand the execution and the recording of the document in
which the mortgage is formalized.
Manresa (vol. 12, 3d ed., p. 513), commenting on
the above-quoted
quoted second paragraph of article
1875, states as fo
follows:
"We then likewise state that before the publication
of the Mortgage Law, legal mortgages were
classified according to their nature into implied,
necessary and general mortgages, which, without
being evidenced by any document and without
referring to determinate or known properties,
subjected all that a person owned in favor of
another, creating an odious privilege which
was highly prejudicial to business transactions
in the sense that under said system the
purchaser or mortgage creditor was always
exposed
posed to the risk that a hidden mortgage
would appear, the existence of which there
was no means of knowing. But with the
promulgation of the aforesaid law, the old ways
were abandoned, although special care was taken
 CIVIL LAW REVIEW 2 REVIEWER by MARX & MON
to preserve the benefit conceded by the
th old laws
to persons in whose favor said mortgages were
constituted, without prejudice, however, to the
publicity which the property must have in order to
attain the ends of the Mortgage Law.
"Its effect was the continuance of legal mortgages,
but of a new ew nature, for hidden and general
encumbrances had to be converted into public and
special ones through the exercise of the right
granted for the purpose to the holders thereof.
"The second paragraph of the article under
consideration therefore provides tthat the persons
in whose favor the law creates a mortgage shall
have no other right than to demand the execution
and registration of the instrument by which the
mortgage is to be evidenced. Thus at the present
time, as well as from January 1, 1863, when th the
original Mortgage Law became effective, to have a
legal mortgage is to have, not the real
encumbrance or charge on the properties of
the debtor whose obligation is secured by it or
the mortgage already constituted, but solely
the right to compel another to execute the
same . . .." (Italics ours.)
The mortgage must be recorded in the registry of property.
This is for your protection as mortgagee, because if it is a real
property covered by the Torrens System,, any buyer in good
faith or any mortgagee in good faith takes the property free
from liens and encumbrances apart from those which appear
on the certificate of title.
So it is not a requirement for validity but for your protection
as mortgagee.
On the topic of registration with the register of deeds, we
may want to consider the 2nd paragraph of Art 2125
Art. 2125. In addition to the requisites stated in Article 2085, it is
indispensable, in order that a mortgage may be validly
constituted, that the document in which it appears be recorded in
the Registry of Property. If the instrument is not recorded, the
mortgage is nevertheless binding between the parties.
The persons in whose favor the law establishes a mortgage have
no other right than to demand the execution and the recording of
the document in which the mortgage is formalized.
What are these legal mortgages that are referred to in Art
2125?
These refer to those properties that are made
subject to lien under the rules on concurrence and
preference of credits.
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The purpose of the requirement of registration is to be able
to give notice to the public that this property is subject to a
mortgage, because you wouldn’t know that the purchase
price on this parcel of land remains unpaid. In which case case,
there is a lien that is constituted for the unpaid portion of the
purchase price on that property.
How would you know? There would be no tell tale signs. That
is why you need registration with the registry of deeds to give
notice that such legal mortgage is in existence, but
registration does not create the legal mortgage. It is created
by law.
What is the extent of a REM?
1) the natural accessions, to the improvements,
growing fruits and the rents or income not yet
received when the obligation becomes due;
2) the amount
mount of the indemnity granted or owing to
the proprietor from the insurers f the property
mortgaged, or in virtue of expropriation for public
use. (Art. 2127.)
Example:
A mortgaged his land on which an old building stands. The old
building was destroyed by fire. A decided to build a factory
where the old build used to stand. 2 years after, the debt fell
due and B proceeded to foreclose the land and the factory. Is
B correct to proceed even against the factory considering it
was build after the mortgage was constituted on the land?
Art. 2127. The mortgage extends to the natural accessions, to the
improvements, growing fruits, and the rents or income not yet
received when thee obligation becomes due, and to the amount of
the indemnity granted or owing to the proprietor from the
insurers of the property mortgaged, or in virtue of expropriation
for public use, with the declarations, amplifications and
limitations established by law, whether the estate remains in the
possession of the mortgagor, or it passes into the hands of a third
person.
From art 2127, the
he mortgagee has the right to proceed even
against the factory that was built after the constitution of the
mortgage because this represents improvement introduced
upon the property before the obligation became due.
If there is an intention for the parties to exclude any of these
items from the scope of the mortgage, then they must so
stipulate.
Just like in a contract of pledge
ple property in mortgage is given
for one purpose only, that is to secure the satisfaction of the
obligation such that should there be non-payment
non of the
obligation, then the mortgagee
mort looks to the remedy of
foreclosure.
Foreclosure – the remedy made available by law to the
mortgagee by which he subjects the mortgaged property to
 CIVIL LAW REVIEW 2 REVIEWER by MARX & MON
the satisfaction of the obligation for which the mortgage was
given.
How do you foreclose the mortgage?
You have 2 options:
• Extrajudicial Foreclosure
• Judicial Foreclosure
Judicial foreclosure involves court intervention and anything
that goes to court, takes a lot of time to be completed. You
would be better off with extrajudicial foreclosure.
What takes place in judicial foreclosure?
This is governed by the Rule 68 of the Rules of Court.
It is an action quasi-in
in rem because it is based on
personal claim against a specific property.
It survives the death of the mortgagor and
may be prosecuted outside the proceedings
for the settlement of the estate of the
deceased mortgagor.
There can be no redemption of the property once
the sale has been confirmed.
The mortgagee has the right to claim deficiency.
Extrajudicial Foreclosure
This is governed by Act 3135 as amended by
Administrative Order 99-10-05-0
This can only be availed of if there is a clause
expressly granting the mortgagee the power to
extra-judicially foreclose.
The mortgagor has the right to redeem the property
mortgaged within 1 year from the registration of the
certificate of sale.
The mortgagee
rtgagee has the right to recover deficiency
but by stipulation.
Equity of Redemption and Right of Redemption
In judicial foreclosure there is equity of redemption,
but there is no right of redemption except where the
mortgagee happens to a banking institu
institution.
In extra-judicial foreclosure, there is a right of
redemption within the period of 1 year from the
time of registration of the certificate of sale.
Period of equity of redemption
With regard to Equity of Redemption, the
reckoning period is “from thee date of service of the
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order issued by the court requiring the debtor to
pay the judgment within 90 days.” However,
jurisprudence thus nonetheless recognized that
this equity of redemption may still be exercised
even beyond the 9090-day period, so long as it is
exercised before the sale has been confirmed by
the court.
How is equity of redemption different from right of
redemption?
Equity of redemption is available in judicial
foreclosure
Right of redemption is available in extra-judicial
foreclosure
Equity of redemption is exercised after the
mortgagor defaults
default in the performance of the
obligation but before the sale of the mortgage
property or confirmation of the sale by the court
Right of redemption is exercised at any time
within 1 year after the date of the registration of the
certificate of sale
While the law specifies a period of 1 year as the time within
which the right of redemption may be exercised, in reality,
reality
this translates to more than 1 year,
year especially when the
mortgagee is remised in his obligation to have the sale
registered. It may happen that more than a year has passed
since the sale of the property and the certificate has not been
registered yet. In that case,
case the period is deemed not to have
commenced the period of redemption.
redemption
What are the requisites of right of redemption?
1) The redemption must be exercised within one year
from the date of registration of the certificate of
sale.
2) There must be actual and simultaneous tender of
payment of the redemption price.
pric
3) There must be payment of:
The purchase price plus 1% interest per
month thereon;
Assessments and taxes paid by the
purchaser after the sale plus 1% interest per
month.
4) Written notice of the redemption must be served on
the officer who made the same and a duplicate filed
with the proper Register of Deeds.
The redemption must be exercised within one year from the
date of registration of the certificate of sale.
Act 3135 in relation to Secs. 464 to 466 of the Code
of Civil Procedure (now, Section 28 of Rule
Rul 39 of the
Revised Rules of Civil Procedure.
 CIVIL LAW REVIEW 2 REVIEWER by MARX & MON
Time and manner of, and amounts payable on,
SECTION 28.Time
successive redemptions; notice to be given and filed. — The
judgment obligor, or redemptioner, may redeem the property
from the purchaser, at any time within one (1) year from the date
of the registration of the certificate of sale, by paying the
purchaser the amount of his purchase, with one per centum per
month interest thereon in addition, up to the time of redemption,
together with the amount of any assessments or taxes which the
purchaser may have paid thereon after purchase, and interest on
such last named amount at the same rate; and if the purchaser be
b Filing of a judicial action by the redemptioner and
also a creditor having a prior lien to that of the redemptioner,
other than the judgment under which such purchase was made,
the amount of such other lien, with interest.
What will be the effect of the exercise of the right of
redemption? Does it amountt to recovery of ownership by the
mortgagor? Has the mortgagor lost the ownership of his
property because of its sale?
No, the mortgagor remains to be the owner of the
property, notwithstanding its sale in the public
auction.
Throughout the period of redemption,
emption, he remains to
be the owner. He cannot be evicted from the
property. He cannot be required to pay rent on the
theory that he has lost ownership.
So when he effects redemption by exercising it
within the 1 year period, he does not recover
ownership. He is simply removing
moving the lien on his
property.
Any sale of the property during the period of redemption is
valid. What basis will the buyer of the property be bound by
the previous foreclosure sale?
The buyer will just step into the shoes of the
mortgagor. What he acquires is the right to redeem
the property as well
What happens if there is failure to exercise the right of
redemption?
In this case, we can now say that the mortgagor has
lost the right over his property and the purchaser is
entitled
d as a matter of right to consolidate title and
this time around to possess the property. He is now
entitled to evict the mortgagor from the property
How does the mortgagee consolidate its title and obtain
possession? Must the mortgagee initiate a new proproceeding in
court? Must he file an action for unlawful detainer or an
action reinvindicatoria?
He does not have to. He only has to ask the court for
the issuance of a writ of possession and once it is
issued he can enforce this against the mortgagor. He
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can now have the possession and enjoyment of the
property.
There must be actual and simultaneous tender of payment
of the redemption price.
Is there an exception to the requirement that there should be
tender of redemption price?
the purpose is supposedly
suppose to fix the redemption
price, the redemptioner
edemptioner would make it appear that
there is some kind of confusion or vagueness with
just how much by way of redemption price should
be paid.
In reality, this is resorted
resor to obtain an extension of
the period to redeem.
In a way you can also understand the predicament of the
mortgagor
agor because he stands to lose property that may be
valuable to him. He may want to redeem but he does not
have the capacity to do so. So to forestall
f the lapsing of the
period he resorts to an action for judicial redemption.
How much is the redemption price?
In this instance, it is important to know who your
mortgagee is, because as a general rule the
redemption price would be simply the purchase
price + 1% interest per month, assessments and
taxes paid by the purchaser after the sales + 1% per
month
This can be relatively lower than the amount due
under the obligation under the contract.
Why so?
This is because the property is sold at a public
auction. The purchase price would be controlled by
the public bidding. So it is possible that you can
actually acquire the property for a fraction of its
value.
If your mortgagee happens to be a bank or a credit institution
the rules would be different.
ferent.
You may be required to pay a higher amount by way
of redemption price because even expenses for
litigation,, if litigation has to be resorted to, expenses
for attorney’s fees may also be charged as part of
the redemption price.
Take note, the amount nt fixed by the court in the order of
execution and the amount due on the mortgage deed. In this
item alone, it is already possible that the
th figure may already
be bloated. We are speaking of the amount due under the
 CIVIL LAW REVIEW 2 REVIEWER by MARX & MON
mortgage contract. And a mortgage contract act prepared by a
banking institution may have provisions for add-ons
add on top of
the amount loaned. You have penalty charges, bank charges.
All of these may be included in the award made by the court.
If not, it would be included in the amount due under the
mortgage deed.
Interest would also be recoverable; and then, then the most
substantial would be, all costs, judicial and other expenses.
This would include attorney’s fees.
All of these may be recovered from you, if you choose to
redeem the property. So it pays to know who your mortgagee
is. This will have a direct bearing on the amount of the
redemption price that will have to pay.
Banking institution or Financial Institution (purchase price)
• Principal payment – the original debt as t he same is
describe in the mortgage deed or such amount as
may be directed by the court to be paid in its
judgment
• Interest – it has the potential of ballooning the
purchase price because we will be following the
interest imposed by the bank. We follow the interest
imposed by the bank because the law says that the
interest that will be applied is the interest in the
mortgage.
• Penalties, surcharges
• Cost - litigation expenses and attorney’s fees
The notice of redemption must be served to the officer who
made the same and the duplicate filed with the proper
register of deeds
Judicial Redemption
In theory, it is deemed to be equivalent to a formal offer to
redeem.. It has the effect of fixing the redemption period and
preserving the right of the mortgagor to redeem the property
foreclosed.
Where the right to redeem is exercised through judicial
action within the reglementary period, the offer to redeem
accompanied by bona fide tender of the redemption price,
while proper, may be unessential. This is what makes a
judicial action for redemption attractive for the mortgagor,
who do not have the capacity to pay the redemption price. So
this is prone to abuse. So it must be always remember that a
valid action for judicial redemption has 3 critical dimensions:
dimensions
(1) Timeliness
(2) Good faith meaning that the filing to the action must
have been for the sole purpose of determining the
redemption price and not to stretch the redemption
period.
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(3) Once the redemption price is determined
determi within in a
reasonable time, the redemptioner must make
prompt payment
ent in full
Sample Problem:
Foreclosure sale was conducted on 19 June 1984 and the
Certificate of Sale was registered on 20 June 1984. On 11
December 1984,, the Spouse Mortgagors (“SMs”) filed an
action to annul the foreclosure sale. On 02 February 1985,
and while the annulment case was pending, the SMs wrote
the Mortgagee Bank a letter proposing to redeem the
property on installment. The Bank refused. In the meantime,
the foreclosure sale was sustained as valid by the Supreme
Court on 14 September 1995.
The SMs then filed a complaint for specific performance
against the Bank in 1997. Should the complaint prosper?
The complaint should not prosper. The SMs did not
exercise their right of redemption validly.
1) The action for specific performance was wa
only filed
ed in 1997, more than twelve years
after the registration of the certificate of
sale.
2) The offer to redeem was not accompanied
by an actual and simultaneous tender of
payment.
The action for specific performance was only filed in 1997,
more than twelve years after the registration of the
certificate of sale.
Their right to redeem expired on 20 June 1985, or
one year after the registration of the sale on 20 June
1984. It must be noted that the case filed by the
mortgagors here was not an action for judicial judici
redemption which would have tolled the running of
the period.
What if the mortgagors insist that their action to
annul the foreclosure sale operated to toll the one-
one
year period?
No, settled is the rule that the period within
which to redeem the property
proper sold at a
sheriff’s sale is not suspended by the
institution of an action to annul the
foreclosure sale. (Metrobank vs. Sps. Tan,
G.R. No. 178449, 17 October 2008.)
The period to redeem is not tolled by the
filing of an action to annul the foreclosure
sale. (Metrobank vs. Spouses Tan, G.R. No.
178449, 17 October 2008.)
The offer to redeem was not accompanied by an actual and
simultaneous tender of payment.
 CIVIL LAW REVIEW 2 REVIEWER by MARX & MON
The general rule in redemption is that it is not
sufficient that a person offering to redeem manifests
man
his/her desire to do so. The statement of intention
must be accompanied by an actual and simultaneous
tender of payment. This constitutes the exercise of
the right of repurchase. There is no cogent reason
for requiring the vendee to accept payment by
installments from the redemptioner, as it would
ultimately result in an indefinite extension of the
redemption period.
Can the mortgagors argue that the complaint they
filed in 1984 for the annulment of the foreclosure
sale amounted to a judicial redemption
mption that had the
effect of freezing the redemption period and
dispensing with the need for simultaneous tender of
payment?
An action for judicial redemption is an
action to enforce the correct redemption
price. (1) It is deemed to be equivalent to a
formal
rmal offer to redeem. It has the effect of
freezing the redemption period and
preserving the right of the mortgagor to
redeem the property foreclosed. (2) Where
the right to redeem is exercised through
judicial action within the reglementary
period, the offerfer to redeem, accompanied
by a bona fide tender of the redemption
price, while proper, may be unessential.
(Heirs of Quisumbing vs. PNB, 20 January
2009.)
The 1984 action was not for redemption but
for nullification of the foreclosure sale.
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.
What is exactly is an antichresis? What exactly is involved in
the contract of antichresis?
The situation contemplated by law is one where
there is a period for the payment of the loan, and in
the interim that the loan remains to be unpaid,
unpaid the
creditor is given possession of the real property with
the right to make use of its fruits.
The security actually pertains to the fruits of the
immovable, not on the immovable itself.
The purpose of the right given to him with regard to the fruits
is very specific. He is supposed to apply the fruits towards the
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obligation 1st , he must satisfy this to the
satisfaction of the obligation.
interests, if any, is owing; and then to the principal
He is entitled to retain the property in his possession until it is
fully satisfied.
So, those will be the mechanics of antichresis
It is much different from a mortgage because here you are
given the immediate access to the satisfaction of the
obligation owing to you through the fruits of the immovable.
Characteristics of an Antichresis
• It is an accessory contract
• It is a real right
• It is a formal contract
Why is it a formal contract?
Because the
he law prescribes specific form for its
validity.
Art. 2134. The amount of the principal and of the interest shall be
specified in writing; othe
otherwise, the contract of antichresis shall be
void.
Supposing you are able to put the amount of the principal in
writing but you failed to stipulate on the amount of interest,
what would be the consequence?
Under Art. 1956, the effect would simply either to
apply the legal rate of interest, if the stipulation
expressly provides for payment of interest; or
disallow the payment of interest altogether, but
allowing the obligation to subsist.
subs
But, it appears that
th under Art.2134 the entire
contract of antichresis is rendered null and void.
How should the amount of interest be stipulated?
By specifying the amount of interest
Does this mean that the specific rate or interest is
indispensable?
Not necessarily, because
be under Art. 2138, the parties
can simply provide that the interest due on the
obligation shall be equivalent to the fruits of the
property. In other words, the interest may be made
to be equal to the fruits produced by the property.
Art. 2138. The contracting
ntracting 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.