DEFINITIONS
PLEDGE A contract by virtue of which the
debtor delivers to the creditor or
to a third person a MOVABLE or
instrument evidencing
incorporeal rights for the purpose
of securing the fulfilment of a
principal obligation with the
understanding that when the
obligation is fulfilled, the thing
delivered shall be returned with
all its fruits and accessions.
Real contract which requires
delivery for its perfection.
Pactum A stipulation whereby the thing
Commissorium pledged or mortgaged or under
antichresis shall automatically
become under the property of the
debt within the term fixed.
Forbidden by law and declared
NULL and VOID.
Estafa Committed by a person who
pretending to be the owner of
any real property, shall convey,
sell, encumber or mortgage the
same or knowing that the real
property is encumbered shall
dispose of the same as
unencumbered.
MORTGAGE “real estate mortgage”/ “real
mortgage”
A contract by whereby the debtor
secures to the creditor the
fulfilments of a principal
obligation, especially subjecting
to such security, immovable
property or real rights over
immovable property in case the
principal obligation is not
complied with at the time
stipulated.
Doctrine of
mortgagee in
good faith
Mortgage credit A real right and directly and
(right of the immediately subjects the
mortgagee) mortgaged property to the
fulfilment of the principal
obligation.
Foreclosure The remedy available to the
mortgagee by which he subjects
the mortgaged property to the
satisfaction of the obligation to
secure which the mortgage was
given through the sale of property
at public auction and the
application of the proceeds
thereof to the payment of his
claim.
Judicial By bringing an action for that
foreclosure purpose in the RTC (Regional Trial
Court) of the province or city
where the real property or any
part thereof lies.
Deficiency If there be a balance due to the
Judgment mortgagee after applying the
proceeds of the sale ordered by
the court (The mortgagee is
entitled to recover the
deficiency).
Extrajudicial Where there is inserted in the
Foreclosure contract, a clause giving the
mortgagee the power upon
default of the creditor, to
foreclose the mortgage by an
extrajudicial sale of the
mortgaged property.
Redemption A transaction by which the
(foreclosed mortgagor-owner of mortgaged
property0 property reacquires or buys back
the property within a certain
period and for a certain amount
after his default or after the
foreclosure sale of the property
for satisfaction of the mortgaged
debt.
Equity The right of the mortgagor to
redemption redeem the mortgaged property
after his default in the
performance of the conditions of
the mortgage but before the sale
of the property for the
satisfaction of the mortgaged
debt.
Right of The right of the mortgagor to
redemption redeem the mortgaged property
within a certain person after it
DEFINITIONS
was sold for the satisfaction of
the mortgaged debt.

ANTICHRESIS The creditor acquired 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.

CHATTEL The contract by virtue of which

MORTAGE PERSONAL property is recorded in
the CHATTEL MORTGAGE
REGISTER as a security for the
performance of an obligation.
Affidavit of An oath in a contract of chattel
good faith mortgage wherein the parties “
severally swear that the mortgage
is made for the purpose of
securing the obligations specified
in the conditions thereof and for
no other purposes and that the
same is a just and valid obligation
and one not entered into for the
purpose of fraud.