Professional Documents
Culture Documents
January 5, 1998
And it was also indicated in the provisions of the promissory note executed by Cuba, that the her
assigned leasehold rights were referred to as mortgaged properties and the instrument itself a
mortgagecontract.2&3. The act of DBP under condition No. 12 of the Assignment of Leasehold Rights did
not constitute as a case of pactum commissorium, when appropriated for itself Cubas leasehold rights
over the subject fishpond, because condition No. 12 only gave DBP the authority to sell the said
property and use the proceeds of the sale to satisfy Cubas obligation, it did not operate as an automatic
transfer of ownership of the said property to DBP. However, DBP exceeded its authority granted under
condition No. 12, when it appropriated for itself such rights without judicial or extrajudicial foreclosure,
thereby making his acts violative of Article 2088 of the Civil Code, which forbids a creditor from
appropriating, or disposing of, the thing given as security for the payment of a debt.