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A.

CHAPTER 3
Mortgage

Article 2131. The form, extent and consequences of a mortgage, both as to its
constitution, modification and extinguishment, and as to other matters not included
in this Chapter, shall be governed by the provisions of the Mortgage Law and of the
Land Registration Law. (1880a)

Article 2124. Only the following property may be the object of a contract of
mortgage:
(1) Immovables;
B.
(2) Alienable real rights in accordance with the laws, imposed upon
immovables.
Nevertheless, movables may be the object of a chattel mortgage. (1874a)
Article 2125. In addition to the requisites stated in article 2085, it is indispensable,
in order that a mortgage may be validly constituted, that the document in which it
appears be recorded in the Registry of Property. If the instrument is not recorded,
the mortgage is nevertheless binding between the parties.
The persons in whose favor the law establishes a mortgage have no other right than
to demand the execution and the recording of the document in which the mortgage
is formalized. (1875a)
Article 2126. The mortgage directly and immediately subjects the property upon
which it is imposed, whoever the possessor may be, to the fulfillment of the
obligation for whose security it was constituted. (1876)
Article 2127. The mortgage extends to the natural accessions, to the
improvements, growing fruits, and the rents or income not yet received when the
obligation becomes due, and to the amount of the indemnity granted or owing to the
proprietor from the insurers of the property mortgaged, or in virtue of expropriation
for public use, with the declarations, amplifications and limitations established by
law, whether the estate remains in the possession of the mortgagor, or it passes into
the hands of a third person. (1877)
Article 2128. The mortgage credit may be alienated or assigned to a third person,
in whole or in part, with the formalities required by law. (1878)
Article 2129. The creditor may claim from a third person in possession of the
mortgaged property, the payment of the part of the credit secured by the property
which said third person possesses, in the terms and with the formalities which the
law establishes. (1879)
Article 2130. A stipulation forbidding the owner from alienating the immovable
mortgaged shall be void. (n)

REPUBLIC ACT No. 3135


AN ACT REVISING ACT NUMBERED THIRTY-TWO HUNDRED SIXTY-TWO,
OTHERWISE KNOWN AS THE CHARTER OF THE PHILIPPINE AMATEUR
ATHLETIC FEDERATION.
Section 1. Short title. This Act shall be known as the Revised Charter of the
Philippine Amateur Athletic Federation.
Section 2. Original Creation and membership of the Philippine Amateur Athletic
Federation. Manuel L. Quezon, Camilo Osias, Alejandro Albert, H. A. Bordner, R. S.
Fitz, Kenneth Rowntree, Regino R. Ylanan, Jorge R. Varga, E. S. Turner, V.
Buencamino, C. J. Bott, Joaquin Alviar, Fred O. England, C. Preysler, Gabriel Ubago
Geo, R. Summers, Martin Eiguren, Damaso Garcia Bosque, J. A. Murphy, W. N.
Bartholomew, Silvestre Torres, Theo S. Hall, C. John, R. R. Garcia, P. Dulay, H. L.
Noble, J. Truitt Maxwell, Vicente Wenceslao, Adam C. Dorkum, and their successors in
interest and the National Sports' Associations hereinafter provided are hereby
created a body corporate and public in the Philippines, to be known as the
"Philippine Amateur Athletic Federation" with such corporate powers as may be
necessary to carry out the purposes of the Act.
Section 3. Purposes of the Corporation. The purposes of this corporation are: (a) to
encourage physical education and fitness; (b) to promote and improve athletic
sports among amateurs; (c) to establish and maintain a uniform test of amateur
standing and uniform rules for the government of all athletic sports; (d) to develop
the spirit of sportsmanship and fair play; and (e) to encourage and promote the
establishment of sports centers, public playgrounds and recreational facilities.
Section 4. Board of Governors; Composition. The Philippine Amateur Athletic
Federation shall have a Board of Governors to be composed of all surviving
incorporators and three representatives from each National Sports' Association
recognized by the Philippine Amateur Athletic Federation: Provided, however, That
no representative of any National Sports' Association shall represent more than one
association in the Board.

Section 5. Functions, powers and duties of the Board. The Board of governors shall
have the following functions, powers and duties:
1. To adopt a constitution and by-laws;
2. To adopt a uniform set of rules to determine and govern amateur
athletes and sports in the Philippines;
3. To adopt rules and regulations, consistent with administrative due
process, to govern the procedure to be observed by the National Sports'
Association and the executive committee in hearing and deciding cases
before them either on initial hearing or an appeal;
4. To suspend for cause a member-association of the federation by a vote of
two-thirds of the board and withdrawn recognition of an association by a
vote of three-fourths of the board. The reinstatement to active status of the
association affected shall be effected in the same manner;
5. To authorize the executive committee to negotiate and conclude, for and
in behalf of the federation, transactions for the acquisition, disposition, and
encumbrance of real or personal property as well as the raising of funds for
the accomplishment of the purposes of the federation.
Section 6. Meeting, quorum of the Board. The board of governors shall have an
annual general meeting at such time and place as may be provided by its
constitution and by laws. Special meetings may be called by the President either at
his own initiative or upon the request of one-third of the members of the board.

Section 8. Executive committee. There shall be an executive committee which shall


be composed of the President, the two Vice-Presidents, and the executive secretarytreasurer of the federation, one representative from each National Sports'
Association to be appointed by each association from among its representatives in
the Board of Governors, and three members-at-large to be selected by the executive
committee, one from the Senate, one from the House of Representatives and one
from the Office of the President. The executive committee may at its discretion
select two additional members-at-large from the general public.
The National Sports' Association to which the President of the Federation belongs
shall appoint another representative to represent it in the executive committee.
Section 9. Powers, functions and duties of executive committee. The executive
committee shall have the following powers, functions and duties:
1. To implement all the policies and decisions laid down by the Board of
Governors;
2. To prepare an annual budget and submit the same for the approval of the
Board of Governors at the annual meeting;
3. To coordinate and harmonize the activities of all National Sports'
Associations;
4. To administer the common properties and stadia of the Philippine
Amateur Athletic Federation and assist in the maintenance of existing
athletic facilities in regional sports centers, subject to the conditions that it
may impose;

At all meetings of the board, the presence of a majority of the members thereof shall
constitute a quorum for the valid transaction of business. Each member of the Board
shall be entitled to only one vote and no vote by proxy shall be allowed.

5. To adopt such rules and regulations as may be necessary for the


discharge of its functions and consistent herewith;

Section 7. Officers of the Corporations. The Philippine Amateur Athletic Federation


shall have a President, a first and a second Vice-President, and an executive
secretary-treasurer. The officers shall be elected by the Board from among its
members with the exception of the President and the exclusive secretary-treasurer
who may or may not be members of the board: Provided, however, That the
President and the executive secretary-treasurer must be persons who are known for
their dedication to sports in general.

6. To maintain, enforce, and defend the exclusive right of the federation to


the use of the work "The Olympic", Olympic shield, all Olympic insignia, and
all other Philippine Sports' insignia that it or the National Sports'
Associations may design and prescribe for use by Filipino Athletes of
whatever nature, and to confine their use to activities and publicity
concerned with the Olympic games, and with the purposes, powers, and
procedures of the federation;

The President and Vice-Presidents shall serve for a term of two years and the
executive secretary-treasurer for a term of four years beginning on the first day of
the month following their election and until their successors shall have been elected
and qualified: Provided, however, That no officer's position shall be deemed vacated
if he ceases to be the representative of his association in the board and such
vacancy may be filled for the unexpired term by special election at a meeting of the
board called for that purpose.

7. To act and decide on all appeals brought before it regarding


controversies on the amateur status of athletes and teams, as well as those
arising between members of the federation and between the associations
and their members; and
8. To encourage and promote the establishment of sports centers, public
playgrounds and recreational facilities.

Section 10. Formation of Board of Governors and Executive Committee. The Board
of Governors and Executive Committee hereinbefore provided shall be formed and
organized for the effective discharge of their functions herein as soon as nine
National Sports' Associations shall have been fully organized and operating and shall
assume their rights and duties hereunder.

2. To raise funds by donations, benefits, and other means for their


purposes;

Section 11. National Sports' Association; organization and recognition. A National


Association shall be organized for each individual sports in the Philippines in the
manner hereinafter provided to constitute the Philippine Amateur Athletic
Federation.

4. To affiliate with international or regional sports' Association after due


consultation with the executive committee;

Applications for recognition as a National Sports' Association shall be filed with the
executive committee together with, among others, a copy of the constitution and bylaws and a list of the members of the proposed association, and a filing fee of ten
pesos.
The Executive Committee shall give the recognition applied for if it is satisfied that
said association will promote the purposes of this Act and particularly section three
hereof. No application shall be held pending for more than three months after the
filing thereof without any action having been taken thereon by the executive
committee. Should the application be rejected, the reasons for such rejection shall
be clearly stated in a written communication to the applicant. Failure to specify the
reasons for the rejection shall not affect the application which shall be considered as
unacted upon: Provided, however, That until the executive committee herein
provided shall have been formed, applications for recognition shall be passed upon
by the duly elected members of the present executive committee of the Philippine
Amateur Athletic Federation. The said executive committee shall be dissolved upon
the organization of the executive committee herein provided: Provided, further, That
the functioning executive committee is charged with the responsibility of seeing to it
that the National Sports' Associations are formed and organized within six months
from and after the passage of this Act.
Section 12. Nature of Associations. The National Sports' Associations formed herein
shall be autonomous in character and shall have exclusive control over the
development and promotion of the particular sports for which they are organized.
Section 13. Membership. Each National Sports' Association shall, by its constitution
and by-laws, determine its organization and membership: Provided, however, That
no team, school, club, organization, or entity shall be admitted as a voting member
of an association unless 60% of the athletes composing said team, school, club,
organization, or entity are Filipino citizens.
Section 14. Functions, powers and duties of Associations. The National Sports'
Association shall have the following functions, powers and duties:
1. To adopt a constitution and by-laws for their internal organization and
government;

3. To purchase, sell, lease or otherwise encumber property both real and


personal, for the accomplishment of their purpose;

5. To conduct local, interport and international competitions, other than the


Olympic and Asian Games, they may deem necessary for the promotion of
the sport;
6. To render an annual report to the executive committee regarding their
finances and activities which shall be submitted at least thirty days before
the annual meeting of the Board of Governors;
7. To appoint their representatives to the Board of Governors and the
executive committee;
8. To decide, subject to appeal to the executive committee, all questions on
the amateur status and discipline of the athletes connected with the
associations, as well as the members thereof and all disputes between their
members;
9. To adopt a training program for the development of athletes and their
preparation for international competitions and to defray the expenses for
the same;
10. To select the athletes, coach, and other officials for their national teams
taking into consideration not only their athletic abilities but also their moral
character.
11. To keep accurate records of all official marks attained by the athletes in
the associations in all competitions as well as all results of sports
competitions, recognize and ratify the same, and furnish copies thereof to
the executive committee;
12. To qualify and license referees and umpires and other game officials
who shall officiate in competitions in their respective sports; and
13. To perform such other acts as may be necessary for the proper
accomplishment of their purposes and not inconsistent with this Act.
Section 15. Restriction on holding of office. No person shall be eligible for election
as president or as the head of more than one National Sports' Association.

Section 16. Formation of National Olympic Committee. The National Olympic


Committee shall be composed of the members of the executive committee whose
sports are included in the Olympic program, the three members representing the
Senate, the House of Representatives and the Office of the President, and the
representative of the International Olympic Committee. This committee shall
function in accordance with the rules of the International Olympic Committee.
Section 17. Business location. The Philippine Amateur Athletic Federation and all
National Sports' Association organized hereunder shall have their principal place of
business either in Manila or Quezon City.
Section 18. Properties and funds of the Philippine Amateur Athletic Federation. The
properties and funds of the Federation shall be of two kinds, namely, common and
particular.
Common funds and properties are such monies and real or personal properties that
belong to the Philippine Amateur Athletic Federation for general use by the members
thereof.
Common properties of the federation comprise the Rizal Memorial Stadia and such
other real and personal properties owned and operated by the Philippine Amateur
Athletic Federation created under Act Numbered Thirty-two hundred sixty-two, and
those which the federation may acquire hereafter. Common funds of the federation
comprise the following:
(a) The net receipts from Philippine Charity Sweepstakes races and, for this
purpose, the Philippine Amateur Athletic Federation shall be entitled to the
receipts of three sweepstakes races a year, any law to the contrary
notwithstanding.
(b) Donations, bequests and devises, as well as receipts from benefit
games and other kinds of benefits conducted by the federation.
(c) Annual dues from the National Sports' Associations.
(d) Income realized from its real and personal properties.
(e) Receipts from any other funds.
(f) Stocks, bonds, monies and other forms of credit owned by the Philippine
Amateur Athletic Federation created under Act Numbered Thirty-two
hundred sixty-two and those which the federation may subsequently
acquire.
Particular properties and funds are those revised or acquired by the National Sports'
Associations for their exclusive use and the ownership and control of which shall
remain with them. Should any association be subsequently dissolved or ceased to

exist its properties and funds shall be held in trust by the federation and may be
utilized as in the case of common properties and funds until such time as they shall
again be needed by the successor of the dissolved or defunct association.
Particular properties of National Sports' Associations shall comprise such real and
personal properties as shall be owned by them by purchase, donations, bequests, or
otherwise.
Particular funds of National Sports' Association shall comprise the following:
(a) Monies raised through donations and receipts from benefit games, and
officially conducted competitions.
(b) Annual dues from their respective members, the annual dues to be paid
to the federation by each association shall be determined by the executive
committee after taking into consideration the paying capacity of the
Association concerned, while that to be paid to the National Sports'
Association by their respective members shall be determined by each
association.
Section 19. Presidential Land Grant. The provisions of any existing law to the
contrary notwithstanding, the President, upon the recommendation of the Secretary
of Agriculture and Natural Resources may, by donation, sale, lease or otherwise,
grant to the Philippine Amateur Athletic Federation portions of the land of the public
domain as may be necessary to carry out the purposes of this Act.
Section 20. Expenditures of funds and uses of properties. Common funds of the
federation shall be expended for any or all of the following purposes:
(a) To defray the administrative expenses of the federation.
(b) To defray the expenses for the maintenance, preservation, and
improvement of the common properties of the federation.
(c) To defray the transportation, equipment and board and lodging
expenses of Philippine Athletic delegations and participants to the Olympics
and Asians Games and other International competitions as well as the
preparation for the holding of Olympic competitions and Asian games in the
Philippines: Provided, however,That should the funds not be sufficient for
the purpose, voluntary contributions may be secured from the Associations
but such contribution shall first be applied to defray the expenses of the
Association making the contribution.
Particular funds of the National Sports' Associations shall be expended for the
accomplishment of their respective purposes.

Section 21. Use of facilities. Subject to regulations of the federation, its


playgrounds and stadia shall be available for the use of the association and their
members in preference to all others and, for such use, they shall be charged a rental
to be determined by the executive committee.

Section 27. Separability clause. In the event any provision of this Act or the
application of such provision to any person or circumstance is declared
unconstitutional, the remainder of this Act or the application of said provision to
other persons or circumstances shall not be affected thereby.

Section 22. Exemption of income and properties from taxes. Any laws to the
contrary notwithstanding, all income, properties, and importation of sports
equipment and materials by the Philippine Amateur Athletic Federation and the
members shall be exempt from amusement, real property, specific taxes and all
other taxes and duties: Provided, however, That the sports equipment and material
imported herein shall be for the exclusive use of the federation, the associations and
their athlete members and are not to be disposed of for commercial purposes or for
profit.

Section 28. This Act shall take effect upon its approval.

Section 23. Effect of non-membership in the federation. From and after the date of
the approval of this Act, no individual athlete, team, club, or organization engaged in
sports activities who is not a member of an association as formed hereunder shall be
allowed to participate in the national open championships and represent the
Philippines in any competition at home or abroad or to enjoy the privileges
hereunder.
Section 24. Penal Clause. A penalty of not exceeding one year imprisonment or a
fine of not more than one thousand pesos or both at the discretion of the court shall
be imposed upon any person who:
a. Shall solicit funds for any of the purposes mentioned in this Act without
being authorized to do so hereunder or by the Philippine Amateur Athletic
Federation or its member Associations;
b. Shall, without authority, use the word "Olympic", the Olympic shield,
Olympic insignia and such other emblem designed and prescribed by the
federation or any association for the exclusive use of Filipino Athletic
members.
c. Shall sell or otherwise dispose of the sports equipment and material
mentioned in section eighteen hereof for commercial purposes or for profit.
Section 25. Appropriation for the formation of National Sports' Associations. There
shall be appropriated from thousands of the National Treasury not otherwise
appropriated the sum of One hundred thousand pesos for the purpose of defraying
the expenses in the formation of National Sports' Associations as provided herein.
Section 26. Repealing clause. Act Numbered Three thousand two hundred and
sixty-two and all other Acts, Executive orders, rules and regulations or parts thereof
inconsistent herewith are hereby repealed.

Approved: June 17, 1961


C.
RULE 68
Foreclosure of Real Estate Mortgage
Section 1. Complaint in action for foreclosure. In an action for the foreclosure of
a mortgage or other encumbrance upon real estate, the complaint shall set forth the
date and due execution of the mortgage; its assignments, if any; the names and
residences of the mortgagor and the mortgagee; a description of the mortgaged
property; a statement of the date of the note or other documentary evidence of the
obligation secured by the mortgage, the amount claimed to be unpaid thereon; and
the names and residences of all persons having or claiming an interest in the
property subordinate in right to that of the holder of the mortgage, all of whom shall
be made defendants in the action. (1a)
Section 2. Judgment on foreclosure for payment or sale. If upon the trial in such
action the court shall find the facts set forth in the complaint to be true, it shall
ascertain the amount due to the plaintiff upon the mortgage debt or obligation,
including interest and other charges as approved by the court, and costs, and shall
render judgment for the sum so found due and order that the same be paid to the
court or to the judgment obligee within a period of not less than ninety (90) days nor
more than one hundred twenty (120) days from the entry of judgment, and that in
default of such payment the property shall be sold at public auction to satisfy the
judgment. (2a)
Section 3. Sale of mortgaged property; effect. When the defendant, after being
directed to do so as provided in the next preceding section, fails to pay the amount
of the judgment within the period specified therein, the court, upon motion, shall
order the property to be sold in the manner and under the provisions of Rule 39 and
other regulations governing sales of real estate under execution. Such sale shall not
affect the rights of persons holding prior encumbrances upon the property or a part
thereof, and when confirmed by an order of the court, also upon motion, it shall
operate to divest the rights in the property of all the parties to the action and to vest
their rights in the purchaser, subject to such rights of redemption as may be allowed
by law.

Upon the finality of the order of confirmation or upon the expiration of the period of
redemption when allowed by law, the purchaser at the auction sale or last
redemptioner, if any, shall be entitled to the possession of the property unless a
third party is actually holding the same adversely to the judgment obligor. The said
purchaser or last redemptioner may secure a writ of possession, upon motion, from
the court which ordered the foreclosure. (3a)
Section 4. Disposition of proceeds of sale. The amount realized from the
foreclosure sale of the mortgaged property shall, after deducting the costs of the
sale, be paid to the person foreclosing the mortgage, and when there shall be any
balance or residue, after paying off the mortgage debt due, the same shall be paid
to junior encumbrancers in the order of their priority, to be ascertained by the court,
or if there be no such encumbrancers or there be a balance or residue after payment
to them, then to the mortgagor or his duly authorized agent, or to the person
entitled to it. (4a)
Section 5. How sale to proceed in case the debt is not all due. If the debt for
which the mortgage or encumbrance was held is not all due as provided in the
judgment as soon as a sufficient portion of the property has been sold to pay the
total amount and the costs due, the sale shall terminate; and afterwards as often as
more becomes due for principal or interest and other valid charges, the court may,
on motion, order more to be sold. But if the property cannot be sold in portions
without prejudice to the parties, the whole shall be ordered to be sold in the first
instance, and the entire debt and costs shall be paid, if the proceeds of the sale be
sufficient therefor, there being a rebate of interest where such rebate is proper. (5a)
Section 6. Deficiency judgment. If upon the sale of any real property as provided
in the next preceding section there be a balance due to the plaintiff after applying
the proceeds of the sale, the court, upon motion, shall render judgment against the
defendant for any such balance for which, by the record of the case, he may be
personally liable to the plaintiff, upon which execution may issue immediately if the
balance is all due at the time of the rendition of the judgment; otherwise; the
plaintiff shall be entitled to execution at such time as the balance remaining
becomes due under the terms of the original contract, which time shall be stated in
the judgment. (6a)
Section 7. Registration. A certified copy of the final order of the court confirming
the sale shall be registered in the registry of deeds. If no right of redemption exists,
the certificate of title in the name of the mortgagor shall be cancelled, and a new
one issued in the name of the purchaser.
Where a right of redemption exists, the certificate of title in the name of the
mortgagor shall not be cancelled, but the certificate of sale and the order confirming
the sale shall be registered and a brief memorandum thereof made by the registrar
of deeds upon the certificate of title. In the event the property is redeemed, the
deed of redemption shall be registered with the registry of deeds, and a brief
memorandum thereof shall be made by the registrar of deeds on said certificate of
title.

If the property is not redeemed, the final deed of sale executed by the sheriff in
favor of the purchaser at the foreclosure sale shall be registered with the registry of
deeds; whereupon the certificate of title in the name of the mortgagor shall be
cancelled and a new one issued in the name of the purchaser. (n)
Section 8. Applicability of other provisions. The provisions of sections 31, 32 and
34 of Rule 39 shall be applicable to the judicial foreclosure of real estate mortgages
under this Rule insofar as the former are not inconsistent with or may serve to
supplement the provisions of the latter. (8a)
D.
Republic of the Philippines
SUPREME COURT
Manila
A.M. No. 99-10-05-0

August 7, 2001

(AS FURTHER AMENDED, AUGUST 7, 2001)


PROCEDURE IN EXTRA-JUDICIAL FORECLOSURE OF MORTGAGE
In line with the responsibility of an Executive Judge under Administrative Order No.
6, dated June 30, 1975, for the management of courts within his administrative area,
included in which is the task of supervising directly the work of the Clerk of Court,
who is also the Ex-Office Sheriff, and his staff, and the issuance of commissions to
notaries public and enforcement of their duties under the law, the following
procedures are hereby prescribed in extrajudicial foreclosure of mortgages:
1. All applications for extra-judicial foreclosure of mortgage whether under
the direction of the sheriff or a notary public, pursuant to Act 3135, as
amended by Act 4118, and Act 1508, as amended, shall be filed with the
Executive Judge, through the Clerk of court who is also the Ex-Officio
Sheriff.
2. Upon receipt of an application for extra-judicial foreclosure of mortgage,
it shall be the duty of the Clerk of Court to:
a) receive and docket said application and to stamp thereon the
corresponding file number, date and time of filing;
b) collect the filing fees therefore pursuant to rule 141, Section
7(c), as amended by A.M. No. 00-2-01-SC, and issue the
corresponding official receipt;
c) examine, in case of real estate mortgage foreclosure, whether
the applicant has complied with all the requirements before the

public auction is conducted under the direction of the sheriff or a


notary public, pursuant to Sec. 4 of Act 3135, as amended;
d) sign and issue the certificate of sale, subject to the approval of
the Executive Judge, or in his absence, the Vice-Executive Judge.
No certificate of sale shall be issued in favor of the highest bidder
until all fees provided for in the aforementioned sections and in
Rule 141, Section 9(1), as amended by A.M. No. 00-2-01-SC, shall
have been paid; Provided, that in no case shall the amount
payable under Rule 141, Section 9(1), as amended, exceed
P100,000.00;
e) after the certificate of sale has been issued to the highest
bidder, keep the complete records, while awaiting any redemption
within a period of one (1) year from date of registration of the
certificate of sale with the Register of Deeds concerned, after
which, the records shall be archived. Notwithstanding the
foregoing provision, juridical persons whose property is sold
pursuant to an extra-judicial foreclosure, shall have the right to
redeem the property until, but not after, the registration of the
certificate of foreclosure sale which in no case shall be more than
three (3) months after foreclosure, whichever is earlier, as
provided in Section 47 of Republic Act No. 8791 (as amended, Res.
Of August 7, 2001).

5. The name/s of the bidder/s shall be reported by the sheriff or the notary
public who conducted the sale to the Clerk of Court before the issuance of
the certificate of sale.
This Resolution amends or modifies accordingly Administrative Order No. 3 issued by
then Chief Justice Enrique M. Fernando on 19 October 1984 and Administrative
Circular No. 3-98 issued by the Chief Justice Andres R. Narvasa on 5 February 1998.
The Court Administrator may issue the necessary guidelines for the effective
enforcement of this Resolution.
The Clerk of Court shall cause the publication of this Resolution in a nuewspaper of
general circulation not later than August 14, 2001 and furnish copies thereof to the
Integrated Bar of the Philippines.
This Resolution shall take effect on the 1st day of September of the year 2001.
Promulgated this 7th day of August 2001 in the City of Manila.
Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban,
Quisumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr.,
JJ., concur.
Sandoval-Gutierrez J., on leave.

Where the application concerns the extrajudicial foreclosure of mortgages


E.
of real estates and/or chattels in different locations covering one
indebtedness, only one filing fee corresponding to such indebtedness shall
be collected. The collecting Clerk of Court shall, apart from the official
CIRCULAR NO. 7-2002
receipt of the fees, issue a certificate of payment indicating the amount of
indebtedness, the filing fees collected, the mortgages sought to be
TO: ALL EXECUTIVE JUDGES, CLERKS OF COURT, SHERIFFS IN THE OFFICE
foreclosed, the real estates and/or chattels mortgaged and their respective
OF THE CLERK OF COURT AND BRANCH SHERIFFS IN THE REGIONAL
locations, which certificate shall serve the purpose of having the application
docketed with the Clerks of Court of the places where the other properties
TRIAL COURTS
are located and of allowing the extrajudicial foreclosures to proceed
SUBJECT: GUIDELINES FOR THE ENFORCEMENT OF SUPREME COURT RESOLUTION
thereat.
OF DECEMBER 14, 1999 IN ADMINISTRATIVE MATTER NO. 99-10-05-0
(RE: PROCEDURE IN EXTRA-JUDICIAL FORECLOSURE OF MORTGAGE), AS
AMENDED BY THE RESOLUTIONS DATED JANUARY 30, 2001 AND AUGUST 7,
3. The notices of auction sale in extrajudicial foreclosure for publication by
2001
the sheriff or by a notary public shall be published in a newspaper of
These guidelines are issued pursuant to the Supreme Court En Banc Resolution
general circulation pursuant to Section 1, Presidential Decree No. 1079,
dated January 2, 1977, and non-compliance therewith shall constitute a
violation of Section 6 thereof.

of December 14, 1999 in Administrative Matter No. 99-10-05-0, as amended by the

4. The Executive Judge shall, with the assistance of the Clerk of Court, raffle
applications for extrajudicial foreclosure of mortgage under the direction of
the sheriff among all sheriffs, including those assigned to the Office of the
Clerk of Court and Sheriffs IV assigned in the branches.

Administrator to prepare the guidelines for the enforcement of A.M. No. 99-10-05-0

resolutions of January 30, 2001 and August 7, 2001, directing the Office of the Court

on the extra-judicial foreclosure of mortgages.

Sec. 1. All applications for extra-judicial foreclosure of mortgage, whether

(Section 7 (c), Rule 141, Rules of Court, as amended by A.M. No. 00-2-01-SC,

under the direction of the Sheriff or a notary public pursuant to Art.No. 3135, as

February 1, 2000).

amended, and Act 1508, as amended, shall be filed with the Executive Judge,

Cooperatives, thrift banks, and rural banks are not exempt from the payment of

through the Clerk of Court, who is also the Ex-Officio Sheriff (A.M. No. 99-10-05-0, as

filing fees and other fees under these guidelines (A.M. No. 98-9-280-RTC, September

amended, March 1, 2001).


Sec. 2. Upon receipt of the application, the Clerk of Court shall:
a. Examine the same to ensure that the special power of attorney authorizing the extrajudicial foreclosure of the real property is either inserted into or attached to the deed
of real estate mortgage (Act No. 3135, Sec. 1, as amended);
b. Give a file number to the application and endorse the date and time of its filing and
thereafter docket the same, keeping, in this connection, separate docket books for
extra-judicial foreclosure sales conducted by the Sheriff and those conducted by
notaries public;
c. For the conduct of extra-judicial foreclosure of real estate or chattel mortgage under
the direction of the sheriff, collect the appropriate filing fees and issues the
corresponding official receipt pursuant to the following schedule:

29, 1998; A.M. No. 99-3-93-RTC, April 20, 1999; and A.M. No. 92-9-408-0).
d. In case the application is for the extra-judicial foreclosure of mortgages of real
estates and/or chattels in different locations covering one indebtedness, issue, apart
from the official receipt for the fees, a certificate of payment indicating the amount
of indebtedness, the filing fees collected, the mortgages sought to be foreclosed, the
real estates and/or chattels mortgaged and their respective locations, for purposes
of having the application docketed with the Clerks of Court in the places where the
other properties are located and of allowing the extra-judicial foreclosure to proceed
thereat. (A.M. No. 99-10-05-0, par. 2(e)).
Sec. 3. The application for extra-judicial foreclosure shall be raffled under the
supervision of the Executive Judge, with the assistance of the Clerk of Court and ExOficio Sheriff, among all Sheriffs including those assigned to the Office of the Clerk
of court and Sheriffs assigned in the branches of the court. A Sheriff to whom the

If the amount of the indebtedness or the mortgagees claim is:

case has been raffled shall be excluded in the succeeding raffles and shall

(1)

Less than P50,000.00 .. P275.00

participate again only after all other Sheriffs shall have been assigned a case by

(2)

P50,000.00 or more but less than

raffle (Administrative Circular No. 3-98, Feb. 5, 1998).

P100,000.00 ..... 400.00


(3)

P100,000.00 or more but less than

P150,000.00 . 500.00
(4)

P150,000.00 or more but less than

Sec. 4. The Sheriff to whom the application for extra-judicial foreclosure of


mortgage was raffled shall do the following:
a. Prepare a Notice of Extra-judicial Sale using the following form:
NOTICE OF EXTRA-JUDICIAL SALE

P200,000.00 . 650.00
(5)

P200,000.00 or more but less than

Upon extra-judicial petition for sale under Act 3135 / 1508 filed __________________

P250,000.00 .. 1,000.00

against (name and address of Mortgator/s) to satisfy the mortgage indebtedness

(6)

P250,000.00 or more but less than

which as of ___________ amounts to P _________________, excluding penalties, charges,

P300,000.00 .. 1,250.00

attorneys fees and expenses of foreclosure, the undersigned or his duly authorized

(7)

deputy will sell at public auction on (date of sale) _______________ at 10:00 A.M. or

P300,000.00 or more but less than


P400,000.00 .. 1,500.00

(8)

P400,000 or more but less than

P500,000.00 .. 1,750.00
(9)

soon thereafter at the main entrance of the ___________ (place of sale) to the highest
bidder, for cash or managers check and in Philippine Currency, the following
property with all its improvements, to wit:
(Description of Property)

P500,000.00 or more but not more than

P100,000,000.00 ... 2,000.00

All sealed bids must be submitted to the undersigned on the above stated time and

(10) For each P1,000.00 in excess of

date.

P1,000,000.00.. 10.00

In the event the public auction should not take place on the said date, it shall be

exceed P100,000.00 (A.M. No. 99-10-05-0, March 1, 2001, 2[d]). The amount paid

held on _______________, _______________ without further notice.

shall not be subject to a refund even if the foreclosed property is subsequently

________________ (date)
SHERIFF
b. (1) In case of foreclosure of real estate mortgage, cause the publication of the notice
of sale by posting it for not less than twenty (20) days in at least three (3) public
places in the municipality or city where the property is situated and if such property
is worth more than four hundred (P400.00) pesos, by having such notice published
once a week for at least three (3) consecutive weeks in a newspaper of general
circulation in the municipality or city (Sec. 3, Act No. 3135, as amended). The
Executive Judge shall designate a regular working day and definite time each week
during which said notice shall be distributed personally by him for publication to
qualified newspapers or periodicals as defined in Sec. 1 of P.D. No. 1079, which
distribution shall be effected by raffle (A.M. No. 01-1-07-SC, Oct. 16, 2001). Unless
otherwise stipulated by the parties to the mortgage contract, the debtor-mortgagor
need not be personally served a copy of the notice of the extra-judicial foreclosure.
For real estate mortgages covering loans not exceeding P100,000.00, exclusive of
interests due and unpaid, granted by rural banks (RA No. 7353, Sec. 6) or thrift
banks (RA No. 7906, Sec. 18),publication in a newspaper shall be dispensed with, it
being sufficient that the notices of foreclosure are posted for a period of sixty (60)
days immediately preceding the public auction in the most conspicuous areas of the
municipal building, the municipal public market, the rural bank, the barangay hall,
and the barangay public market, if any, where the land mortgaged is situated. Proof
of publication shall be accomplished by an affidavit of the Sheriff and shall be
attached to the records of the case.
(2) In case of foreclosure of a chattel mortgage, post the notice for at least ten (10)
days in two (2) or more public places in the municipality where the mortgagor
resides or where the property is situated (Sec. 14, Act No. 1508, as amended).
Sec. 5. Conduct of the extra-judicial foreclosure sale
a. The bidding shall be made through sealed bids which must be submitted to the
Sheriff who shall conduct the sale between the hours of 9 a.m. and 4 p.m. of the
date of the auction (Act 3135, Sec. 4). The property mortgaged shall be awarded to
the party submitting the highest bid and, in case of a tie, an open bidding shall be
conducted between the highest bidders. Payments of the winning bid shall be made
either in cash or in managers check, in Philippine currency, within five (5) days from
notice.
b. The sale must be made in the province in which the real property is situated and,
in case the place within the said province in which the sale is to be made is the
subject of stipulation, such sale shall be made in said place in the municipal building
of the municipality in which the property or part thereof is situated (Act No. 3135, as
amended, Sec. 2);
in case of a chattel mortgage, the sale shall be made at a place in the municipality
where the mortgagor resides or where the property is situated (Sec. 14, Act No.
1508, as amended).
Sec. 6. After the sale, the Clerk of Courts shall collect the appropriate fees
pursuant to Sec. 9(1), Rule 141, as amended by A.M No. 00-2-01-SC, computed on
the basis of the amount actually collected by him, which fee shall not

redeemed.
Sec. 7. In case of foreclosure under Act No. 1508, the Sheriff shall, within thirty
(30) days from the sale, prepare a return and file the same in the Office of the
Registry of Deeds where the mortgage is recorded.
Sec. 8. The Sheriff or the notary public who conducted the sale shall report the
name/s of the bidder/s to the Clerk of Court.
Sec. 9. Upon presentation of the appropriate receipts, the Clerk of Court shall
issue and sign the Certificate of Sale, subject to the approval of the Executive Judge
or, in the latters absence, the Vice-Executive Judge. Prior to the issuance of the
certificate of Sale, the Clerk of court shall, in extra-judicial foreclosure conducted
under the direction of the sheriff, collect P300.00 as provided in Section 20(d), Rule
141, as amended, and in extra-judicial foreclosure sales conducted under the
direction of a notary public, collect the appropriate fees pursuant to Rule 141,
20(e), which amount shall not exceed P100,000.00 (Minute Res., A.M. No. 99-10-050, August 7, 2001).
Sec. 10. After the Certificate of Sale has been issued, the Clerk of Court shall
keep the complete records for a period of one (1) year from the date of registration
of the certificate of sale with the Register of Deeds, after which the records shall be
archived. Notwithstanding the foregoing, juridical persons whose property is sold
pursuant to an extra-judicial foreclosure shall have the right to redeem the property
until, but not later than, the registration of the certificate of foreclosure sale which in
no case shall be more than three (3) months after foreclosure, whichever is earlier
(R.A. 8791, Section 47). In case the property is redeemed, the Clerk of Court shall
assess the redemptioners fee as provided in Section 7 (k), Rule 141, as amended. If
the property is not redeemed, the Clerk of Court shall, as a requisite for the issuance
of the final Deed of Sale, assess the highest bidder the amount of P300.00 as
provided in Section 20(d), Rule 141, as amended.
Sec. 11. These guidelines shall take effect on April 22, 2002.
Issued this 22nd day of January 2002.

(Sgd.) PRESBITERO J. VELASCO, JR.


Court Administrator
F.
RA 8791 (General Banking of Law of 2000)
Section 47. Foreclosure of Real Estate Mortgage. - In the event of foreclosure,
whether judicially or extra-judicially, of any mortgage on real estate which is security
for any loan or other credit accommodation granted, the mortgagor or debtor whose
real property has been sold for the full or partial payment of his obligation shall have
the right within one year after the sale of the real estate, to redeem the property by
paying the amount due under the mortgage deed, with interest thereon at rate
specified in the mortgage, and all the costs and expenses incurred by the bank or

institution from the sale and custody of said property less the income derived
therefrom. However, the purchaser at the auction sale concerned whether in a
judicial or extra-judicial foreclosure shall have the right to enter upon and take
possession of such property immediately after the date of the confirmation of the
auction sale and administer the same in accordance with law. Any petition in court
to enjoin or restrain the conduct of foreclosure proceedings instituted pursuant to
this provision shall be given due course only upon the filing by the petitioner of a
bond in an amount fixed by the court conditioned that he will pay all the damages
which the bank may suffer by the enjoining or the restraint of the foreclosure
proceeding. Notwithstanding Act 3135, juridical persons whose property is being
sold pursuant to an extrajudicial foreclosure, shall have the right to redeem the
property in accordance with this provision until, but not after, the registration of the
certificate of foreclosure sale with the applicable Register of Deeds which in no case
shall be more than three (3) months after foreclosure, whichever is earlier. Owners
of property that has been sold in a foreclosure sale prior to the effectivity of this Act
shall retain their redemption rights until their expiration. (78a)