CredTrans JSP Sept 26, 2017

Dizon - 2:24:01 to 2:42:00

First application, then you can have it on the next day. Now if you look at it, it is not the
complete 21 days because the law only requires that the publication be done, once a week.
So if there is publication in one week, you can do it once per week, the option can be done
on the 3rd Tuesday. If you read the appendix, there is a citation there on the case as
authority for that interpretation of the law.

Question by student: Sir in that case, for example there is a stipulation that there must be a
personal notice, then the contract will be breached because of that stipulation. For example
the mortgagee did not personally notify, will such stipulation and the mortgage be valid?

JSP: Technically speaking the mortgage will be registered. That stipulation will be part of
that registration of mortgage, so who ever will be dealing with the property should be
given noticed, if there is a violation, it invalidates the mortgage.

Section 4, in an auction there is a period for time within with to conduct the option,
between 9am-4pm. So again, if you are dealing with the sheriff, you have to tell the sheriff
to conduct the auction quickly. What if there is an auction then a publication parties may be
interested, even the mortgagor be aware and participate, what do you do, you are the
mortgagee and if you have there the mortgagor trying to participate, you hold of the
auction because the window is 9am-4pm. You wait for lunch time until the mortgagor has
left. Is that fair? It happened one to my friend. They were there from the start to check for
irregularities, when they came back the option is done. (laughter) By the way, this period is
important, whatever is posted in the notice must be followed, so if the auction is conducted
outside that is an irregularity which will invalidate the auction.

In an auction of a mortgage property, one bidder only even if the mortgagee that is valid,
why is that so? Because if the mortgagee tenders a very low bid, in an extrajudicial
foreclosure there is a right to redeem, you can just redeem base on that low price. The
redemption price is the purchase price or the winning bid.

I said earlier, can a foreigner be a mortgagee? Can a foreigner extrajudicially foreclose?

Without buying the property, the answer is no. Act 133, states that if the mortgagee is not
qualified to own land, the foreclosure must always be judicially, and possession there is a
period which purpose is to make sure there is no circumvention of law, example:
foreigners. How do you circumvent it? You can have a bona fide lease with the mortgage.

In an extrajudicial foreclosure what is the right of the mortgagor and the other junior
encumbrances, meaning mortgagees for other creditors, whose rights are subordinate to
the rights of the mortgagee, what can they do? All of them have the right to redeem. Take
not in extrajudicial foreclosures, under Act 3135 there is a right to redeem. Section 6, one
year from the date of the sale, what do you mean date of the sale? Registration of the sale.
One year from the date of registration of the sale. The title will not be transferred to the
winning bidder, it will be annotated as a sale so I is registered there. After one year, if there
is no redemption, you will not proceed to consolidation of title, the title will not be
transferred to the winning bidder.

What is the redemption price? It shall be the purchase price tendered during the auction,
how do you know? That is why I told you to read Act 3135 in its original version, if you look
at Section 6, there is a mention there of a redemption period, but there is a clause without
stating how redemption shall be made, it just says there will be a redemption period of one
year from registration. There is reference to the code of civil procedure, that is why I
assigned to you Rule 39 of civil procedure. Rule 39 you have to know section 27-33. Section
27: who may redeem property sold? In Rule 39 it is a sale on execution of the judgement, an
award is given to the complainant who won, the defendant cannot pay so there will not be
an execution of the assets of the defendant. This execution is what is refereed to rule 39, in
cross reference to Act 3135 which state the rules of court will govern the
redemption. Section 27: who may redeem property sold? As said in Act 3135 it can be the
debtor-mortgagor or any junior claimant or encumbrances, which means creditors who
may have a right subordinate to the right of the mortgagee, they are all called
redemptioner.

How do you redeem? The period is one year from the date of registration of the sale. What
is the redemption price? The winning bid of the bidder. So let us assume, you have a
mortgagee1 and you have the owner-mortgagor, you have the mortgagee2 and the
mortgagee3, we will assume they are indeed determine by the court as appropriate
redemptioners. Day 1 is the registration of sale, mortgagee1 was the winning bidder, from
day 1 there is a period of 1 year for within which to redeem. Let us say owner has no
money, mortgagee2 will redeem within one year. So let us say in 30 days there is a
redemption. What is the redemption price? Let us say in the mortgagee1 tendered 1
million. Redemption price will be 1 million plus interest of 1% per month plus taxes. We
will not add this sum as sum A, mortgagee2 now has the property, in the hands of
mortgagee2, what is the period to redeem?