• DIFFERENCES OF PLEDGE, MORTGAGE AND ANTICHRESIS

PLEDGE MORTGAGE (Real) ANTICHRESIS

Definition
An accessory contract whereby a
debtor delivers to the creditor or
It is a contract whereby A contract whereby the
a third person a movable or the debtor secures to the CR acquires the right to
personal property, or document creditor the fulfillment of receive the fruits of an
evidencing incorporeal rights, toa principal obligation, immovable of the dedtor,
secure the fulfillment of a specially subjecting to with the obligation to
principal obligation with the such apply them to the
condition that when the
security, immovable payment of interest, if
obligation is satisfied, the thingproperty or real rights owing, and thereafter to
delivered shall be returned to over immovable the principal of his credit.
the pledgor with all its fruits and
property, in case the
accessions, if any. principal obligation is not
paid or complied with at
the time stipulated.
Object of the contract
movable or personal immovable property or
property, or document real rights over fruits of an immovable
evidencing incorporeal rights immovable property

As To Pledge Chattel Real Mortgage Antichresis

Mortgage
Object On movables On movables On immovables On immovables
Possession By the creditor By the debtor By the debtor By the creditor
Perfection Real contract Formal contract Formal contract Formal contract
Form to bind Public Recorded Recorded Recorded
third parties instrument public public public
containing instrument instrument instrument
description of
the thing
pledged and the
date thereof

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. (1857)

Art. 2086. The provisions of Article 2052 are applicable to a pledge or mortgage. (n)

Art. 2087. It is also of the essence of these contracts that when the principal obligation
becomes due, the things in which the pledge or mortgage consists may be alienated for the
payment to the creditor. (1858)

• Q: What is pledge?
o A: A contract where debtor delivers to creditor or 3rd person a movable or
document evidencing incorporeal right for the purpose of securing fulfillment
of a principal obligation with the understanding that when the obligation is
fulfilled, the thing delivered shall be returned w/ all its fruits and accessions.

• Q: What is real estate mortgage (REM)?

o A: It is a contract whereby the debtor secures to the creditor the fulfillment of
the principal obligation, specially subjecting to such security immovable
property or real rights over immovable property in case the principal obligation
is not fulfilled at the time stipulated

Note: Registration is necessary to bind third persons but not for the validity of the contract.

Being an accessory contract, its consideration is one and the same as that of the principal
obligation.

• SIMILARITIES pledge and mortgage?

1. Both are accessory contracts;
2. Both pledgor and mortgagor must be the absolute owner of the property;
3. Both pledgor and mortgagor must have the free disposal of their property or be
authorized to do so; and
4. In both, the thing proffered as security may be sold at public auction, when the
principal obligation becomes due and no payment is made by the debtor.

• Q: what is the difference between free disposal and capacity to dispose?

o free disposal of the property—property must not be subject to any claim of a
third person
o capacity to dispose—pledgor or mortgagor has the capacity or authority to
make a disposition of the property

• Are the contracts of pledge, mortgage or antichresis indivisible?
o GR: A pledge, mortgage or antichresis is indivisible.

Note: Indivisibility may be waived. Indivisibility only applies to the contracting parties.
o XPNs:
1. Where each one of several things guarantees determinate portion of the
credit
2. Where only a portion of the loan was released
 3. Where there was failure of consideration

• Q: What are the obligations that can be secured by pledge, mortgage and antichresis?
o Constituted to secure the fulfillment of a valid principal obligation.
o Pledgor or mortgagor must be the absolute owner of the thing pledged or
mortgaged.
o They must have the free disposal of their property, and in the absence thereof,
that they be legally authorized for such purpose.
o Debtor retains ownership of the thing given as a security.

• Q: May property acquirable in the future be mortgaged?

o No. Where the mortgagor mortgaged a property and in the contract he agreed to
mortgage additional properties which he may acquire in the future, there was no
valid mortgage as to the latter because he was not yet the owner of the properties
at the time of the mortgage (Dilag v. Heirs of Ressurrecion, No. 48941, May 6,
1946).

• Q: Is mortgage constituted to secure future advances valid?

o A: Yes. It is a continuing security and not discharged by repayment of the
amount named in the mortgage, until the full amount of the advances is paid. A
chattel mortgage can only cover obligations existing at the time the mortgage is
constituted and not to obligations subsequent to the execution of the mortgage.

• Q: Is a third person who pledged and mortgaged his property liable for any
deficiency?
o GR: No.
o XPN: If the third party pledgor or mortgagor expressly agreed to be bound
solidarily with the principal debtor.

• Q: What is the right of an owner of personal property pledged without

authority?
o A: He may invoke Art. 559, NCC. The defense that pawnshop owner acquired
ownership of the thing in good faith is not available.

Note: Art. 559 – The possession of movable property acquired in good faith is equivalent to a
title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof,
may recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been unlawfully deprived, has
acquired it in good faith at a public sale, the owner cannot obtain its return without
reimbursing the price paid therefore.

• Q: What is the nature of an assignment of rights to guarantee an obligation of a

debtor?
o A: It is in effect a mortgage and not an absolute conveyance of title which
confers ownership on the assignee (Manila Banking Corp. v. Teodoro, Jr.,
G.R. No. 53955, Jan. 13, 1989)
ACCOMMODATION MORTGAGE

• Q: Who is an accommodation mortgagor?

o A: He is a third person who is not a party to a principal obligation and secures
the latter by mortgaging or pledging his own property.

• Q: What is the extent of the liability of an accommodation mortgagor?

o A: It extends up to the loan value of their mortgaged property and not to the
entire loan itself.

PACTUM COMMISSORIUM

• Q: What is pactum commisorium?

• A: It is a stipulation whereby the thing pledged or mortgaged or subject of
antichresis shall automatically become the property of the creditor in the event
of non-payment of the debt within the term fixed. Such stipulation is null and
void.
• Q: What are the elements of pactum commissorium?
1. There is a pledge, mortgage or antichresis of a property by way of security; and
2. There is an express stipulation for the automatic appropriation by the creditor of
the property in case of non-payment

Note:
• What are prohibited are those stipulations executed or made simultaneously with the
original contract, and not those subsequently entered into.
• In pactum commissorium, the acquisition is automatic without need of any further
action. In the instant problem another act is required to be performed, namely, the
conveyance of the property as payment (dacion en pago).