MORTGAGE and LEASES

 Under Section 60. Mortgage or lease of registered land. – Mortgage and leases shall be
registered in the manner provided in Section 54 of this Decree. The owner of the registered
land may mortgage or lease it by executing the deed in a form sufficient in law. Such deed of
mortgage or lease and all instruments which assign, extend, discharge or otherwise deal
with the mortgage or lease shall be registered, and shall take effect upon the title only from
time of registration.
 No mortgagee’s or lessee’s duplicate certificate of title shall hereafter be issued by the
Registers of Deeds, and those issued prior to the effectivity of this Decree are hereby
deemed cancelled and the holders thereof shall immediately surrender the same to the
Register of Deed concerned.

 A mortgage is a real right constituted to secure an obligation upon real property or rights.
 A mortgage is regarded as a mere lien, and not as creating a title or estate.
 The essence of a contract of mortgage indebtedness is that a property has been identified or set
apart from the mass of the property of the debtor-mortgagor as a security for the payment of
money or fulfillment of an obligation to answer the amount of indebtedness, in case of default
of payment.
 In Real estate mortgage when the obligation is not paid when due the mortgagee has the right
to foreclose the mortgage and to have the property seized and sold in view of applying the
proceeds to the payment of the obligation.

PARTIES TO A MORTGAGE

 Mortgagor - is the one who constitute a mortgage.

 Mortgagee – is the one in whose favor a mortgage is constituted.

OBJECTS OF MORTGAGE

Immovable
Alienable real rights in accordance with the laws imposed upon immovable.

ESSENTIAL REQUISITES OF MORTGAGE

 Needed for VALIDITY:

1. That they be constituted to secure the fulfillment of a principal obligations;
2. That the mortgagor be the absolute owner of the thing mortgaged;
3. That the mortgagor constituting the mortgage have the free disposal of their property,
and the absence thereof, that they be legally authorized for the purpose;
4. It cannot exist without a valid obligation. Nevertheless, it could be constituted to
guarantee the performance of a voidable or unenforceable contract. It may also
guarantee a natural obligation. (Art. 2052,NCC)

 Needed for ENFORCEABILITY:

5. It must be recorded in the Registry of Property
 Effects of failure to register:
o Failure does not invalidate the mortgage
o The mortgage is nevertheless binding between the parties only, but not
to the third persons who does not have notice of such mortgage
CHARACTERISTICS OF MORTGAGE

1. It is a real right
2. It is an accessory contract
3. It is indivisible
4. It is inseparable

ESSENCE OF A CONTRACT OF MORTGAGE

 When the principal obligation becomes due, the things in which the mortgage consists may be
alienated for the payment to the creditor. The property mortgaged cannot be appropriated by
the creditor, as in the case of pactum commissorium, but must be sold at the public auction in
accordance with the procedure prescribed by law for the satisfaction of the obligation.

EFFECTIVITY

o A mortgage is effective only from the time of registration, as provided for by Sec 60 of
PD No. 1529

PRESCRIPTIVE PERIOD

 Since a mortgage is a written contract, an action for could be brought within 10 years from the
time the right of action accrues or from the default in payment of the loan amortizations. The
prescription is interrupted when:
o The action is filed in the court
o There is a written extrajudicial demand by the creditors, and
o When there is any written acknowledgement of the debt by the debtor.