Chapter VIII Involuntary Dealings (1) Involuntary dealings: notice of lis pendens, attachments, adverse claims and sale

e on attachment or for taxes or for any assessment. (2) Lis pendens is that legal process in a suit regarding land which amounts to legal notice to all the world that there is a dispute as to the title of the same. It is an announcement to the whole world that a particular real property is in litigation, and serves as a warning that one who ac uires an interest over said property does so at his own ris! or that he gam"les on the result of the litigation. (#) Lis pendens may lie only where there is an action or proceeding in court, which affects title to, or possession of real property such as: (a) recovery of possession of real estate, (") uieting of title, (c) removing cloud, (d) partition ($) Lis pendens imposes o"ligation only on prospective "uyer% it is not a lien or encum"rance so as to impose o"ligation on owner. &or it to have effect, such notice should "e annotated on the "ac! of the certificate of title in the name of the grantor, as any other lien on the land sold. It must contain: (a) statement of institution of action or proceeding and the court where it is pending% (") date of institution thereof% (c) reference to num"er of certificate of title of land, description of land and registered owner thereof. (') (ancellation of lis pendens, "efore final )udgment: (a) upon order of court after showing that notice is for purpose of molesting adverse party or that it is not necessary to protect rights of the party who caused it registered% (") "y *+ upon verified petition of party who caused registration. ,fter final )udgment: (a) upon registration of certificate of cler! of court in which the action or proceeding was pending stating the manner of disposal thereof. (-) ,ssignee in insolvency proceedings% registration of eminent domain% transmission "y descent or devise. (.) ,ttachment is a writ issued at the institution or during the progress of an action commanding the sheriff or other pu"lic officer to attach the property rights, credit or effects of defendant to satisfy demands of plaintiff. It may "e: (a) preliminary attachment / that issued at institution or during progress of an action% (") garnishment / attachment "y means of which plaintiff see!s to su")ect his claim, property of defendant in the hands of a third person called the garnishee% (c) levy on execution / attachment after final )udgment in satisfaction thereof. (10) If attachment or lien in involuntary dealing and duplicate certificate is not presented at time of registration, *+ shall within #- hour thereafter send notice "y mail to the registered owner, stating that such paper has "een registered and re uesting him to send or produce his duplicate so that memorandum may "e made thereon. If owner neglects or refuses to comply within reasona"le time, *+ shall report matter to court, and it shall after notice, enter an order to owner to produce his certificate at time and place named therein, and may enforce the order "y suita"le process (1ection 21, 3+ 1'2.).

(11) In involuntary registration, such as attachment and lis pendens, entry thereof in day "oo! is a sufficient notice to all persons of such adverse claim. (12) ,ttached property may "e sold, "ut the sale is inferior to attachment. (1#) +ischarge of attachment may "e had "y presenting a certificate of entry of order of court under its seal "y cler! of court to *+. (1$) 4ethod of registration of other liens is same as that of lis pendens (num"er $). (1') 5henever there is execution sale, any execution or copy of execution or any other pertinent document must "e filed with *+, entered in registration "oo! and a memorandum is made upon the proper certificate of title as a lien or encum"rance. (1-) *ead case digest of Lavides vs 3re, pp. $'26$'#. (12) In proceedings for partition, copy of final )udgment certified "y cler! of court shall "e filed. If land is set to owners in severalty, each owner entitled to have certificate of title and owner7s duplicate copy. If land is ordered to "e sold, purchaser or assigns entitled to certificate of title entered, upon presenting certified copy of )udgment confirming sale. If land is ordered to "e assigned to one of parties upon payment to others of sum, the party whom it is assigned entitled to certificate of title upon presenting certified copy of )udgment. In any case that new certificate entered pursuant to partition proceedings, certificate shall contain reference memorandum to final )udgment of partition. 8hereafter, any person holding certificate may file petition to cancel memorandum relation to such )udgment, and court, after due notice and hearing, grant petition. (19) 8ax sale is proceeding in rem, such that persons interested in property which is sold need "e served with personal notice to give them chance to "e heard. (1.) &amily home constitutes the house and the land. :ence, the land is exempt from attachment and execution. (20) ,dverse claim is (a) claim on any part or interest in registered land adverse to registered owner, (") arising su"se uent, and not prior, to date of original registration, and (c) no other provision is made in the decree for the registration of such right or claim. 8he purpose of annotation of an adverse claim is to protect the interest of a person over a piece of real property where the registration of such interest or right is not otherwise provided for "y L*,. 4ere registration of adverse claim does not ma!e such adverse claim valid nor is it permanent in character. (21) ,dverse claim re uisites: (a) the following in writing: alleged interest or right, how and under whom such alleged right or interest is ac uired, description of land% (") signed and sworn under oath% (c) state claimant7s residence. &ailure to comply means adverse claim is non6 registra"le and ineffective. (22) ;ffective only for #0 days, after lapse of period, annotation of adverse claim may "e cancelled upon filing of verified petition therefore "y party in interest. <o second adverse claim "ased on same ground shall "e registered.

(2#) =efore lapse of #0 days, party in interest may file "efore court of cancellation of adverse claim. 8here will "e speedy hearing to determine validity of adverse claim. If invalid, it is cancelled. If frivolous, claimant may "e fined. +uring said period, claimant may withdraw adverse claim "y filing with *+ sworn petition to that effect. (2$) >overnment machineries related to L8+: (a) Land *egistration ,uthority, (") Lands 4anagement =ureau, (c) *egistry of +eeds, (d) Land *egistration (ourts% (e) =ureau of 8reasury (in relation to <ational 8reasurer7s duty as custodian of ,ssurance &und). Chapter IX Cadastral System / Act 2259 (1) (adastral system is esta"lished for purpose to serve pu"lic interest, of expediting settlement and ad)udication of titles to properties. 5hen 3resident is of opinion that pu"lic interest so re uires that tile to unregistered land "e ad)udicated, he may direct +irector of Lands, represented "y 1ol>en to cause a cadastral survey. ?riginal registration proceedings shall "e filed with *8(. 3roceedings shall "e same as to that of original registration under 8orrens 1ystem "y virtue of 1ection 11. (2) 3roceedings under ,ct $.- vs (adastral 3roceedings ,ct $.-@3+1'2. ,ct 22'. <ature Aoluntary (ompulsory Initiated =y ?wner of land +irector of or legal Lands, representative represented "y the 1olicitor >eneral Lands 3rivate lands ,ll lands Involved and pu"lic lands with imperfect title ?wners ,pplicants (vs (laimants ?pponent) ,ction 3rayed (onfirm title 1ettle and &or and order ad)udicate the registration title 1urvey ,t the re uest of 4ade "y the owner >overnment &ailure to +ismissal *es )udicata 3rove without pre)udice, no res )udicata (#) 8he 1tate may criminally prosecute for per)ury any party who o"tains or fails to o"tain registration through fraud. (onviction of per)ury is an action personam. 8here must still "e direct attac! for validity of cadastral title. ($) (adastral court has no )urisdiction to decree again the registration of land already decreed in an earlier land registration case. (') ;xpenses. If survey is executed "y government surveyors, <ational >overnment, provincial government and municipal government pay each 1@10 of cost of registration proceedings, survey and monumenting, and remaining 2@10 are taxed against all lots and are apportioned in accordance with s uare foot of area of lots. If survey is executed "y private surveyors, remaining 2@10 shall constitute a first lien on the land of occupants or

claimants the payment of which shall "e o"ligatory for each of them in conformity with terms of pro)ect concerned. Chapter X u!lic "and Act / CA #$# (1) 3u"lic lands include lands devoted for pu"lic use, pu"lic service and development of national wealth. Lands not devoted to any of these are patrimonial property of the state, e.g. friar lands. 3rivate lands of government are not su")ect to provisions of 3u"lic Land ,ct. (2) +isposa"le pu"lic lands: (a) agricultural, commercial, residential and industrial lands% (") educational, charita"le and similar purposes% (c) reservation for town sites and for pu"lic and uasi6pu"lic purposes. <on6disposa"le pu"lic lands: (a) tim"er lands% (") mineral lands% (c) national par!s. 8he classification is descriptive of its legal nature or status and does not have to "e descriptive of what the land actually loo!s li!e. (#) 3rincipal concession of pu"lic agricultural lands: (a) homestead settlement% (") sale% (c) lease% (d) confirmation of imperfect or incomplete titles% (e) free title. ($) (harged with carrying out (, 1$1: +;<* 1ecretary. (ontrol and disposition (lease, sale, etc) of pu"lic land: +irector of lands. (') , woman may apply for any form of concession independently if ualified (*, 21.2 or 5omen in <ation =uilding and +evelopment ,ct). (-) In every case of cancellation of grant or patent or any action which may "e pre)udicial to applicant or grantee, there must always "e due process. (2) Bnless and until the land is reverted to 1tate "y virtue of )udgment of court of law in direct proceedings for reversion, the 8orrens certificate thereto remain valid and "inding against the whole world. (9) (ertificate of title issued under administrative proceeding as indefeasi"le as certificate issued under )udicial registration. (.) =ona fide applicant may "e considered as having vested right, hence he may file actions such as forci"le entry or unlawful detainer. (10) ,fter award and "efore issuance of patent in homestead, applicant may transfer right if he cannot continue re uirements for valid reason with approval of +;<* 1ecretary. (11) <o homestead application on "ehalf of another. (12) Bnlawful transfer deemed void. Aoid contracts, imprescripti"le. In certain cases, even if in pari delicto, the heir may recover in line of fundamental pu"lic policy or interest. (1#) Limitations on grants: (a) regalian doctrine% (") easements and servitudes. (1$) *eclaimed lands, foreshores, and marshy lands may "e disposed of only "y lease. (1') >overnment instrumentalities may ac uire lands for educational, charita"le or other similar purposes, not to exceed .- hectares. 3rivate entities are entitled to grant for founding of cemetery, church, college, university or other educational, philanthropically or scientific institutions.

(1-) ?nly government may assail sale made within five6 year prohi"itory period. (12) ,lienation or conveyance shall "e su")ect to the right of repurchase "y free patent grantee or homesteader, his widow or heirs within ' years. (19) :omestead is considered con)ugal property if re uirements of the law have "een completed during the marriage. (1.) 3roceedings for ac uisition of homestead patent not in rem% homestead patent issued deemed su")ect to vested and accrued rights. (20) In case of extra)udicial foreclosure of mortgage, there is 1 year (under ,ct #1#') C ' years (under (, 1$1) D years total of redemption period. (21) 1igning and approving authority for homestead and free patents: (a) up to ' hectares / 3rovincial ;nvironment and <atural *esources ?fficer (3;<*?)% (") more than ' hectares to 10 hectares / +;<* *egional ;xecutive +irector% (c) more than 10 hectares / +;<* 1ecretary. (22) *, 2#0 permits sale without pu"lic auction of aliena"le and disposa"le lands of the pu"lic domain for residential purpose. 8he patent is called 4iscellaneous 1ales 3atent. *e uirements: (a) applicant must "e &ilipino citiEen of lawful age, married% or if single, applicant must "e head or "read winner of the family% (") not owner of home lot in municipality or city where the land applied for is located% (c) occupied in good faith the land applied for and constructed a house thereon where he@she and family is actually residing. 4aximum area is 1000 s . meters. 3+ 200$ amended the act lifting any restriction on alienation or encum"rance thereof. Chapter XI %egistration under Act &&$$ (1) *egistration under this law shall "e made with office of *+ where land lies. (2) 8he esta"lishment of a system of registration relative to unregistered lands is for the temporary protection of rights of the parties to contract affecting the same. (#) *egistration of any instrument under the law will not pre)udice a third party with a "etter right. ($) *egistration validates instrument against rights or interest ac uired su"se uent to registration. (') 5here property registered under the 8orrens system is registered not under the 3roperty *egistration +ecree "ut under ,ct ##$$, the sale is considered not registered and effective for purposes of ,rticle 1'$$, <(( on dou"le sales and dou"le donations. Chapter XII %eal 'ortgage (162) , real estate mortgage is a contract in which de"tor guarantees to creditor the fulfillment of principal o"ligation a real property in case of non6fulfillment of said o"ligation at the time stipulated. (#) (haracteristics of *;4: (a) a real right / it is enforcea"le against the whole world% (") accessory contract / it exists only "ecause of principal o"ligation% (c) indivisi"le / it continues to "e a lien until full payment of o"ligation% (d) real property / ,rticle $1'(10)% (e) insepara"le 6 it attaches to the property.

($) *e uisites of *;4: (a) elements of contract% (") constituted to secure fulfillment of o"ligation% (c) mortgagor a"solute owner of thing mortgaged (mortgagor may "e a third person and not de"tor)% (d) person constituting mortgage have free disposal of property. (') Finds: (a) voluntary / "y consent% (") legal / "y operation of law% (c) )udicial / results from court )udgment% (d) e uita"le / one which lac!s some formality, form of words or other re uisites prescri"ed "y statute, shows real intention of parties to charge real property as security de"t (*ead 1-02, <(( for "adges of e uita"le mortgage in pacto de retro sales)% (e) open / can "e paid off at anytime "efore maturity% (f) closed / to "e paid off only at expiration date. (-) 1u")ect matter of *;4: (a) generally, real properties (,rticle $1')% (") property already mortgage% (c) aliena"le real rights in accordance with law% (d) after ac uired properties (2) 3roperties not su")ect to *;4: (a) personal properties (,rticles $1- and $12)% (") pu"lic offices% (c) state "onds% (d) servitudes. (9) 1tipulation for"idding owner from alienating immova"le mortgaged shall "e void. 1tipulation re uiring consent of first mortgagee "efore su"se uent mortgage is valid (8am"unting vs *eha"ilitation &inance), "ut invalid if in case of alienation for said stipulation practically gives the mortgagee the sole prerogative to prevent any sale of the mortgaged property to a third party (Liton)ua vs L and * (orp). (.) ;xecution of second mortgage over the property has the effect of su")ecting the same property to the payment of two o"ligations. =oth mortgage de"ts had to "e paid "y the mortgagor. In case of failure, "oth mortgagees may loo! after the property "ut the second mortgagee7s right is inferior and su"ordinate to the first. (10) 4ortgagor may alienate the mortgaged property "ut the mortgage shall remain attached to the property, unless a different agreement has "een entered into "y parties. (11) In *;4, present and su"se uent improvements thereon are included, a"sent any stipulation to the contrary. (12) 3actum commissorium is automatic appropriation of creditor of things given "y way of mortgage or dispose of them. 8here is no pactum commissorium if there is only a promise to assign said property in payment of o"ligation if upon maturity, it is not paid. (1#) , stipulation in contract fixing a tipo or upset price at which property is to "e sold at foreclosure proceeding is null and void. (1$) 4ortgagee in "ad faith is one who !nows of defects in title of mortgagor or failed to exercise due diligence re uired to ascertain whether said title is clean. =an!s which are in the "usiness of lending money secured "y *;4 are expected to o"serve greater diligence "y actual investigation of premises "efore said mortgage is executed. (1') Innocent mortgagee for value are those who exercised due diligence in the grant of the loan and in the execution of mortgage.

(1-) 4ortgage credit may "e assigned, in whole or in part, to third person through pu"lic instrument, notice given to de"tor and recorded in *+. (12) If mortgagor dies, mortgagee may either: (a) a"andon security and go after testate or intestate proceedings% (") foreclose mortgage with estate administrator as defendant% or (c) rely exclusively on terms of mortgage and foreclose the same at anytime within period of statute of limitations. *emedies are alternative, not cumulative. (19) , married woman may mortgage her property without marital consent. 1he may mortgage con)ugal property if the administration has "een legally transferred to her and only if with consent of court. (1.) Bnregistered sale is more superior over a mortgage "ecause if the original owner has parted with his ownership of thing sold then he no longer had ownership and free disposal thereof so as to "e a"le to constitute a mortgage (+ela 4erced vs >1I1). (20) 4ortgage shall "e registered "y filing with *+ of city or province where land lies the instrument which creates such interest and "y a "rief memorandum thereof made "y *+ upon certificate of title and signed "y him. 1imilar memorandum shall also "e made on owner7s duplicate. If mortgage involves parcels of land which lie in different provinces, instrument should "e registered in each of said provinces. (21) 4ortgage not registered is not "inding against third persons "ut "inding "etween parties. (22) &orged power of attorney D void mortgage% mortgagee is duty "ound to in uire into scope and validity of power of attorney. (2#) In the a"sence of anything to excite or arouse suspicion, said mortgagee is under no o"ligation to loo! "eyond the certificate and investigate the title of the mortgagor appearing on the face of said instrument. (2$) If mortgage is without fixed period, go to court to fix the date of maturity, ta!ing into consideration the circumstances. (2') 4ortgage may "e discharged "y creditor executing a pu"lic instrument cancelling or releasing the mortgage and thereafter the instrument is presented to *+ of city or province where land lies, together with owner7s duplicate title for registration. (2-) &oreclosure is the remedy availa"le to mortgagee "y which he su")ects the mortgaged property to satisfaction of o"ligation, to secure which the mortgage was given. >rounds: (a) when principal o"ligation is not paid when due% (") when any condition is violated "y mortgagor. (22) In )udicial foreclosure, a certified copy of final order of court confirming sale shall "e registered with *+. If no right of redemption exists, certificate of title of mortgagor shall "e cancelled and new certificate issued in name of purchaser. If right of redemption exists, certificate of mortgagor shall not "e cancelled, "ut certificate of sale and order confirming sale shall "e registered "y "rief memorandum thereof "y *+ upon certificate of title. (29) If redeemed, present to *+ certificate of deed of redemption and "rief memorandum thereof shall "e made on certificate of title. If not redeemed, final deed of sale shall "e registered with *+, and title of mortgagor shall

"e cancelled and new certificate shall "e issued in name of purchaser. Gudicial &oreclosure (ourt intervention +ecisions appeala"le ?rder of court cuts off all rights of parties impleaded ,s general rule, e uity of redemption only 3eriod of redemption starts from finality of )udgment until order of confirmation <o need for special power ;xtra)udicial &oreclosure <o court intervention <ot appeala"le "ecause it is immediately executory &oreclusre douse not cut off right of all parties involved *ight of redemption 3eriod to redeem starts from date of registration of certificate of sale 1pecial power for foreclosure

(2.) 4ortgage which may "e foreclosed extra)udicially (special power to sell in contract) may "e foreclosed )udicially, "ut not vice versa. In "oth, mortgagee may participate in "idding. (#0) If foreclosed extra)udicially, certificate of sale shall "e filed with *+ who shall ma!e "rief memorandum thereof on certificate of title. In event of redemption, same rule as to )udicial foreclosure. In case of non6redemption, purchaser shall file with *+ either a final deed of sale of person authoriEed "y virtue of power of attorney or his sworn statement attesting to fact of non6redemption, where *+ shall issue new certificate after owner7s duplicate of certificate has "een previously delivered and cancelled. (#1) *edemption period: (a) extra)udicial / 1 year from date of sale% (") )udicial / no redemption period, except if mortgaged to "an!, and if mortgagor is natural person, 1 year from date of sale% if mortgagor is )uridical person, "efore certificate is registered with *+ or #0 days after date of sale whichever is earlier. 8his is without pre)udice to redemption periods provided under special laws. (#2) Gudicial foreclosure is an action uasi in rem. Gurisdiction is with *8( of province where land lies or as may "e agreed "y in mortgage contract. If mortgage covers various parcels of land located in different provinces, first *8( which ta!es cogniEance of case excludes others. (##) 4ortgagee may (a) foreclose mortgage or (") file suit for collection of principal o"ligation. *emedy is alternative "ecause he is not permitted to split a single cause of action. In case of mortgage foreclosure, *ule -9 of *ules of (ourt governs. (#$) 1ection 1, *ule -9. (omplaint in action for foreclosure must contain essential contents: mortgage details, description of properties, amount claimed. (#') 1ection 2, *ule -9. (ourt, upon trial, shall ascertain mortgage de"t with interest and other costs, and order mortgagor to pay the same within a period of not less than .0 days nor more than 120 days from entry of )udgment (e uity in redemption), otherwise, property shall "e sold at pu"lic auction. (#' / ,) ,n e uity in redemption is right of mortgagor to redeem mortgaged property after his default in

performance of conditions of mortgage "ut "efore sale of mortgaged property. , right of redemption means right of mortgagor to repurchase property within a certain period after it was sold for the purpose of paying the mortgage de"t. (#-) 1ection #, *ule -9. &ailure to pay amount will cause property to "e sold at pu"lic auction. 1uch sale shall not affect rights of persons holding prior encum"rances, and if confirmed "y court, it operates to divest the rights in property of all parties and divest them in purchaser, su")ect to right of redemption. 3urchaser or redemptioner has right to as! for writ of possession. (#2) 1ection $, *ule -9. 3roceeds of sale are disposed in order: (a) deduct costs of sale, (") mortgagee for the de"t, (c) )unior encum"rancers in order of priority, (d) mortgagor or person entitled to it. (#9) 1ection ', *ule -9. If de"t is not all due (as in installment), only portion of property sufficient to cover de"t shall "e sold. If property cannot "e sold in portions, whole shall "e sold in first instance and entire de"t and costs shall "e paid, with re"ate of interest if proper. (#.) 1ection -, *ule -9. If foreclosure did not cover all de"t, court, upon motion, shall render deficiency )udgment against o"ligor (not necessarily to the mortgagor who may "e a third person). &oreclosure sale is a condition sine ua non. ($0) 1econd mortgagee is not a necessary party. (ourt may grant relief to first mortgagee without affecting rights of second mortgagee. &oreclosure is valid as "etween parties to the suit. ($1) *ight of action to foreclose mortgage and suit for recovery of deficiency )udgment prescri"e after 10 years from accrual thereof (,rticles 11$2 and 11$$). ($2) If upon showing the mortgage is insufficient to cover de"t and mortgagor is a"out to dispose property with intent to defraud creditor, mortgagee may petition for foreclosure of mortgage and attachment. ($#) If two mortgages, and first mortgagee foreclosed mortgage, second mortgage is extinguished "ut second mortgagee has right of redemption as may "e permitted "y law and right to proceeds of sale in his proper ran!. If second mortgage is foreclosed "efore first mortgage, it cannot "e. , su"ordinate lien holder cannot "e enforced upon property until all legal claims of superior lien holder have "een satisfied. ($$) (ancellation of foreclosure sale may "e had on ground of fraud, collusion, accident, mista!e, "ut not on inade uacy of price unless such inade uacy is shoc!ing to conscience. ($') If second mortgagee is not )oined as party defendant with mortgagor, an independent foreclosure proceeding should "e maintained against him, in which court should re uire second mortgagee to redeem within # months the property. ($-) ;xtra)udicial foreclosure is governed "y ,ct #1#', as amended. It re uires special power inserted in contract. ($2) =uyer in foreclosure sale ac uires title free from rights of su"se uent mortgagee (;l :ogar &ilipino vs 3<=).

($9) 3rocedure in extra)udicial foreclosure: (a) 1ale is made in province where land lies% if there "e stipulation as to specific place, it may "e made there or at municipal "uilding of municipality where land lies. (") 3osting of notices of sale for not less than 20 days in at least three pu"lic places and pu"lication once a wee! for at least three consecutive wee!s in newspaper of general circulation in municipality% personal notice to mortgagor not necessary. (c) 1ale made in pu"lic auction "y notary pu"lic or sheriff (application filed with ?ffice of (ler! of (ourt) "etween .am and $pm. ($.) If extra)udicial foreclosure sale is insufficient to cover the whole de"t, mortgagee may institute a personal action against de"tor (not necessarily the mortgagor) for deficiency. ('0) If mortgagee won in "idding, the right of redemption may "e exercised "y paying the mortgagee all the amount de"tor owed the latter on the date of sale, with interest on total inde"tedness at the rate agreed upon the o"ligation from said date (not only the amount paid "y purchaser at pu"lic auction), unless the "idder has ta!en material possession of the property or unless this has "een delivered to him, in which case the proceeds of the property shall compensate the interest (+=3 vs 5est <egros (ollege). ('1) :omestead or free patents pending issuance of titles "ut already approved, where owner can show ' years of peaceful, continuous uninterrupted possession in concept of owner, may "e mortgage only to rural "an!s and right of redemption is only 1 year from date of foreclosure sale (*, 2#'#). ('2) ;xtra)udicial foreclosure sale may "e impugned on grounds similar to )udicial foreclosure and that sale was not made in accordance with ,ct #1#' (e.g. lac! of pu"lication), "ut possession of property will still "e with purchaser for sale is valid until annulled. ('#) In extra)udicial foreclosure, possession may "e given to purchaser during redemption period upon furnishing of "ond e uivalent to the use of property for period of twelve months. ,t expiration of period, he is entitled to writ of possession without filing a "ond for his ownership over property has "ecome a"solute, unless a third person is actually holding property adverse to mortgagor. ('$) If purchaser is in possession and property is redeemed, any rental o"tained is deducted from price of redemption. If property is used gainfully, redeemer may deduct from price interest of 1H per month. ('') Innocent mortgagee for value is "ased on facts of case (read pp. -90 / -91 a"out the "rothers7 case). Chapter XIII Chattel 'ortgage (1) , chattel mortgage is a transaction where personal property is recorded in (hattel 4ortgage *egistry as security for the performance of an o"ligation. If mova"le, instead of "eing recorded, is delivered to the creditor or third person, the contract is pledge and not chattel mortgage. (2) (hattel mortgage is governed "y (hattel 4ortgage Law or ,ct 1'09 and <ew (ivil (ode.

(#) *e uirements: (1) form with sufficient content, e.g. details of mortgage, (2) affidavit in good faith stating that mortgage is made for securing a valid o"ligation. ($) 1u")ects of chattel mortgage: (a) personal property (,rticles $1- and $12)% (") ungathered products% (c) vessels% (d) house erected on land of another. (') *egistration, as a general rule, is in *+ either where the mortgagor resides or where the property is situated. ;xception: (a) vessel / (ollector of (ustoms at port of entry% (") vehicle / *+ and L8?% (c) shares of stoc!s / *+ where principal office of corporation is located. (-) <o registration D void as to third persons. (2) 4ortgagor may again mortgage the chattel to another person with written consent of mortgagee endorsed on the "ac! of mortgage and n the margin of the record thereof in *+. (9) *edemption may "e made after "reach of contract "ut "efore the sale of chattel. (.) ,rticle #1., *3( / any person who !nowingly removes personal property mortgaged to province in which it was located or sell or pledge personal property already mortgaged under chattel mortgage law without written consent of mortgagee. (10) (hattel mortgagee may: (a) possess property if mortgage is not registered% (") assign his mortgage credit% (c) foreclose the mortgage% (d) file action of replevin to have property surrendered for sale% (e) a"andon mortgage and file an action to recover de"t% (f) file deficiency )udgment or independent civil action to recover deficiency. (11) ,fter settlement of o"ligation, it is duty of mortgagee to discharge mortgage in accordance with law. :is failure to do so, 10 days after "eing re uested, may cause him to "e held lia"le for damages. (12) 8he right of )unior mortgagee is limited to mortgagee7s right of redemption "efore the mortgaged property is sold pursuant to foreclosure proceedings "y paying amount due to first mortgagee and expenses incurred preparatory to sale. (1#) &oreclosure may "e: (a) extra)udicial / special power in contract% (") )udicial / process is as follows: (1) posting of notices for at least 10 days prior in at least 2 pu"lic places in municipality where thing is to "e sold, and notice in writing to mortgagor for at least 10 days prior to sale% (2) pu"lic auction "y pu"lic officer or notary pu"lic% (#) return to *+ of details of auction% ($) distri"ution of proceeds in same way as that in *;4. (1$) 3lace of auction: pu"lic place in municipality where mortgagor resides or where property is situated, or as may "e agreed "y parties. (1') *ecto Law or ,rticle 1$9$, if property is sold on installment "asis and chattel mortgage is constituted on the property, the mortgagee6seller may foreclose the mortgage if mortgagor6"uyer fails to pay two installments. In this case, mortgagee6seller cannot recover deficiency, if there is any. It applies only to direct mortgagee6 seller@dealer, and not to those who shouldered the financing, such as "an!s.

(1-) 8axes are preferred, such that if there is prior registered mortgage and the property is su"se uently sold for tax deficiencies, the latter is preferred.

*eal ;state 4ortgage <ew (ivil (ode, 1panish 4ortgage Law, ,ct #1#' *egistered from time it is recorded in entry "oo!. (an secure all !inds of o"ligations, including future o"ligations (amendment or new contract is directory).

(hattel 4ortgage <ew (ivil (ode, ,ct 1'09 *egistered from time it is recorded in entry "oo! and chattel mortgage register. (annot secure future o"ligations (amendment or new contract is needed).

I*ead the following: (a) full text of 3+ 1'2.% (") differences as to need of presentation of owner7s copy in voluntary and involuntary proceedings% (c) proceedings under 3+ 1'2. and (adastral ,ct% (d) my 4idterm *eviewer for this su")ect.

4,J 8:; &?*(; =; 5I8: J?BK