1. Greater care and diligence is required of mortgagee-banks.

Reason is it is
impressed with public interest. Careful examination of the title. Physical and
on the spot investigation of the land intself.
2. Financial lenders under secured mortgages are also required to observe same
degree of diligence as that of banks
3. Right to comple each other to observe the form required by law
4. It is a matter of right for the mortgagee to demand execution of the mortgage
in the public document as a matter of right
5. Execution of mortgage is voluntary but registration of mortgage may be done
by RD even without the consent of parties
6. Registration is not equivalent to validity of mortgage. It is merely a ministerial
act. It is not a declaration that such inscription is valid. It merely says that it
appears to be encumbered
7. Even if it is already registered, any party may contest it and assert that it has
no force and effect
8. The protection that mortgage gives is that the land is protected from third
parties that may acquire the land through sale. It serves as a notice to them.
9. Registration must be allowed and the validity litigated after.
10.Even if a mortgage has been registered, it is defeated by a earlier sale
although unregistered
a. Reason is if the owner has already sold the property, then he cannot
mortgage it later, since he does not own it anymore
11.Registration is without prejudice to the better rights of third parties
12.A registered mortgage, however, defeats a subsequent contract to sell.
Reason is, the ownership is still with the owner at the time he mortgage it.
13.The benefit of having registered the mortgage is that the mortgagee does not
need to produce the mortgage deed when another encumbrance like
leasehold aspires to be also annotated in the document title. Such mortgage
deed is deemed existent
14. If the mortgage annotation prohibits further annotation in the title wihout its
consent, those annotation cannot be considered as adverse to the interest of
mortgagee.
15.The wife can mortgage one half of the conjugal property when her husband
dies. It cannot affect the husbands creditor or interest of heirs. Their share is
limited to the other half of estate not covered by mortgage.
16.It cannot also affect the debts of conjugal partnership. The debts are
deducted first before arriving to the value of conjugal property.
17.A mortgage validly registered defeats those which were later registered
18.Annotation of lis pendens made after registration of mortgage is inferior to
the mortgage. It cannot operate as an adverse claim against the mortgage.
More so after the conclusion of the foreclosure sale
19.When the mortgage becomes invalid as for instance it was executed by a
person who is not the owner of the subject property or the consideration is
simulated, the principal obligation is not affected. It remains valid. What is
lost is the right to foreclose the mortgage. The registered mortgage may be

used as evidence of indebtedness, and it may be enforced in an ordinary civil

action.
20.When the stipulated interest in the principal obligation is invalid, the principal
obligation as well as the mortgage still remains effective.
21.Mortgage is a real right. It immediately subjects the property to the lien
whoever its possessor may be. It is inseparable from the property. It is
enforceable against the whole world. It follows the property wherever it goes.
It will only be discharged upon payment of the obligation.
22. Consequently, if the mortgagor sells the property, the mortgage goes with it.
The property remains encumbered until the fulfillment of the obligation
secured by it. It subsists notwithstanding the change of ownership.
23.All subsequent buyers must respect the mortgage. The requirement is the
mortgage must be registered or if not registered, the buyer must be aware of
its existence.
24.Knowledge of a prior unregistered mortgage has the effect of registration as
to him.
25.When a person knows that a subject property is mortgage, even though the
lien is unregistered, his knowledge of the encumbrance has the effect of
registration as to him.
26.The mortgagor may not be a principal debtor.
27.As a matter of right the mortgagee can rely upon what appears on the face of
the certificate. No obligation to look behind it and investigate, in the absence
of anything to excite suspicion. Even if the mortgagor used fraud, the same
cannot prejudice the right of the mortgagee who relied in good faith on what
appears in the face of the instrument. The remedy of a person who has been
injured by fraudulent act of mortgagor is to bring an action for damages
against the one who caused the fraud and if the latter is insolvent, an action
against the Treasurer of the Philippines may be filed for recovery of damages
against the assurance fund.
28.If a property is subject to an ongoing expropriation proceeding, the registered
owner may still mortgage, sell or dispose it. Expropriation proceeding unless
completed does not vest upon the state ownership of the subject property.
But anyone who deals with a property subject of expropriation does so at his
own risk, since the registered owner may lose it in favor of the state.
29.If there is an action to nullify a TCT upon which a mortgage is constituted, the
mortgagee becomes an indispensable party and the court cannot pass upon
judgment without impleading the former. The court does not acquire
jurisdiction to pass upon judgment unless the mortgagor is joined in the
action. Reason: the mortgage affects the land itself, not only the TCT.
Mortgaged is a real right and a real property in itself. If the TCT is nullified
without the participation of mortgagee, the respect accorded to them by third
persons is deemed lost without due process
30.A lessor or his successor in interest cannot eject a lessee on the ground that
the property has been already sold or subjected to mortgage.

31.The owner mortgagor can still dispose his property even after the same has
been mortgaged. Mortgage is only an encumbrance. It does not divest the
owner of his ownership and his right to dispose the property
32.The law considered it void any stipulation in the mortgaged prohibiting the
mortgagor to dispose or alienate his property
33.Mortgage is only a lien upon a property. It is not a transfer, cession or
conveyance.
34.Mortgagee has no right to possess the property unless it is stipulated.
Consequently, mortgagee cannot eject the tenants on the mortgagors
property
35.Possession is an attribute of ownership (jus disponendi).
36.Disposal is not prohibited but only restricted in view of the lien of third person
the mortgagee
37.The only right of the mortgagee is to foreclose the property when the
mortgagor is in default of fulfillment of his obligation. And later on sell the
mortgaged property to satisfy the indebtedness.
38.Pactum comissorium is prohibited. It is the automatic transfer of ownership to
mortgagee or right to dispose or sell it upon default of the mortgagor to fulfill
the principal obligation at the time stipulated.
39.During the redemption period, mortgagor has the right to dispose his
property since he is still the owner thereof
40.Selling it during the redemption period may be the last recourse of the
mortgagor to redeem the property
41.Subsequent mortgage will free it from an earlier mortgage and another one
will be constituted, so that the loan may the payment for the earlier principal
obligation
42.Assignment involves no transfer of ownership
43.Assignee cannot acquire better right than the assignor
44.Once the mortgage debt has been paid, mortgagee has to return the TCT.
There is no reason for him to retain it anymore.
45.Mortgagor can initiate a personal action to compel mortgagee to accept the
payment and to cancel the TCT which mortgagee refuse to return. It is a
personal action since there is no question on the title of the mortgagor.
46.A sale with assumption of mortgage is a condition that before a sale may be
perfected; the mortgagee has to approve it first. Without such approval, sale
is invalid. But even in this instance, seller remains the owner and mortgagor
of the property. Such stipulation is valid. It does not amount to pactum
commisorium.
47.2137